Animal Spirits Podcast - How Much is $1 Trillion? (EP. 469)

Episode Date: June 17, 2026

On episode 469 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss: the desire to call an AI top, the SpaceX IPO frenzy, taking profits, why value is beating growth, why EM is beating the US, the markets were right about the war, agentic trading, 3% mortgages vs. 4% inflation, the politics of AI, the Rule of 55, a Knicks title for Michael and more. This episode is sponsored by WisdomTree and YCharts. Learn more about the WisdomTree Quantum Computing Fund at https://www.wisdomtree.com/us/strategies/quantum-computing Visit https://go.ycharts.com/animal-spirits to learn more and get 20% off your initial YCharts Professional subscription to take Y for a spin (new customers only). Compound Merch: https://idontshop.com/ Follow us on Instagram: https://www.instagram.com/animalspiritspod/ Follow us on Twitter: https://x.com/TheCompoundNews Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ WisdomTree Disclosure: Before investing, carefully consider a fund’s investment objectives, risks, charges and expenses along with other information contained in the prospectus available at WisdomTree.com/investments. Read it carefully. Learn more about your ad choices. Visit megaphone.fm/adchoices

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That's for new customers only. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the security.

Securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, I want to talk about unsatisfying conclusions. Because I think since the Great Financial Crisis, a lot of people have wanted a satisfying conclusion to the market. Right? They want somebody to be definitive. And we haven't had that.

2020 was a bare market. It wasn't a definitive bear market. Right? It was just, it happened. We moved on. COVID was a crash. It wasn't definitive. We moved on. Everything has happened since the great financial crisis we moved on from.

So I think when the SpaceX IPO, people wanted there to be a definitive, this is it. They wanted to see like a 500% pop or whatever, like a dot-com IPO or a crash. And I know that the stock took off and it's taking off a little more today. But we're not getting anything definitive. And so I'm just throwing out the potential for an unsatisfying conclusion to the whole AI thing. Right? Some people want this to be a bubble like the dot-com thing that crashes. Right? Other people want it to be this life-changing thing that's going to take economic growth to 14% per year or something.

The unsatisfying conclusion is we get a washout at some point, but it's not an end-of-the-world crash. And the world moves on because AI is a life-changing technology, and that's probably a buying opportunity. Thoughts. From your lips to God's ears, that would be- And no one's satisfied with that conclusion. Unlike the end of Root to Perdition, I don't know why I just thought of that movie as an unsetable. satisfying conclusion. Boy, that was...

You know, that part of that movie was filmed on the coast in Lake Michigan. Okay. Yeah, that would be fantastic. No bubble, no crash. I think most reasonable people would like to avoid both of those outcomes. But I still think, like, this is going to lead...

There's going to be a washout at some point. There's probably going to be a bare market from this. But I don't necessarily think that that means it has to be this, like, life-altering crash. Maybe. But I'm just... I'm throwing that potential. out there for people who, let's say we had a 25 to 30% bear market.

And the world didn't fall apart. And it was a great buying opportunity. And the market recovered in a year and a half or two. And all the people who were screaming bubble would go, man, really? That was it? Ben, I think two weeks ago, you said something to the effects of this has to end badly. And I said, I was going to take the other side of that next week. True.

I never did that because, you know, whatever, we forgot. everything that we know about investing, the history of investing, and some of the immutable laws of stock market driven by fear and greed and human behavior. And that's the part of it that has never changed and will never change. It doesn't matter if you're talking about 1923, 1946. I mean, whatever. We were human beings 100 years ago. We'll be human beings 500 years from now.

And so everything in the back of our brain wants to go to the place that this has to end in a bubble. It just has to. But maybe it doesn't. Maybe it doesn't. Like that stock market stat that we discuss all the time from Peter Bernstein, where he spoke about when he came into the business, I think in the 1950s, there was a whole generation of investors that was obviously still scarred from the stock market crash in 1929. And forever and ever, stocks had a higher dividend yield than the coupon that you would have

received on bonds because stocks were riskier. And nobody thought about price appreciation or total return. It was, what is the stock going to pay you? What is a bond going to pay you? It was sort of an apples to apples comparison. Right. Stock dividends were much higher because they had to compete with bonds in the past. Correct.

And then it changed where yields on stocks went below the interest rate on bonds. And these old timers were telling young Peter Burdstein, listen, kid, we've seen this movie before. Anytime they get close, stocks are too expensive. They crash. And it's been, you know, 75 years, and we haven't looked back. And so things do and can change and nothing is forever and ever. And I know that's like a specific thing versus.

is a human behavior thing. But I think you have to at least be open-minded to the idea that maybe this isn't the dot-com bubble again, even though it's so easy to go there and you can't rule it out. I mean, certainly we'll talk about the SpaceX IPO. There are similarities more than one or two. Here's my thinking on this. We think of this in a range of outcomes because how could you possibly be certain? But my point is you don't need to call the top.

Okay. So the New York Times had this piece this week. mega IPO frenzy could be a harbinger of stock market bubble. Okay, Meb Faber's show this week. He had Jim Grant. AI is one of the greatest bubbles of all time. Jim Chanos was on a video yesterday. This is bigger than the dot-com bubble.

And to be fair, there's more context involved in these headlines. Of course. Jim Chanos was talking about the CapEx side of things. But if you talk about Jim Grant and Ray Dalio and Jim Chanos, their job is to call the top on these things. That is their livelihood, essentially. This is what they do. You, the Royal You, the Royal We, don't have to call these like this.

You don't have to be a pundit. You don't have to be a hedge fund manager. You don't have to call the top. I looked at this. I wrote a piece in 2017 about how financial market, the financial media has been calling stuff for a while now. Look at all these headlines I put in here. From August 5th, 2017, when will the tech bubble burst?

May 2016, is the tech bubble bursting? September 2015. Is Silicon Valley in another tech bubble? People have tried to call this for so, so long that anyone who does quote-unquote call it is going to be lucky because they timed it right and they've been calling it for 12 years.

That's it. You don't have to call it. Ben, remember the show Silicon Valley? It was early. Do you know when that debuted? What was it? 2014, maybe? That's exactly right.

Oh, nailed it. 2014. If ever, if ever there were a, they ring the belt at the top, it was a freaking show about Silicon Valley after Silicon Valley had a pretty damn good run. There was an article in the journal over the weekend by Spencer Jacob, who I think does great work. He said, the headline was, a sign of the market top. Tell us your shoes shine boy story. So they're soliciting reader emails.

I was outside of Starbucks. on the morning of the IPO of SpaceX. And the guy next to me was at a table with his wife and kid. And he said, oh, I got 75 shares. He got 75 shares of SpaceX. He wanted 250 shares. And my point is, there are no more Shushine Boy stories. It's over.

Everybody knows everything. Everybody likes to talk about that Joseph Kennedy story back in 1929. There's too many anecdotes now. What's that? There's too many anecdotes now. Everybody knows everything. And you might hear from a friend or a family member and think, oh, wow, by the time they're asking about it. And yeah, that's probably fair.

But you don't know what anecdote they came across or who spoke to them. Like, there's just so many different ways to get information. Everybody knows anything. There are no more shoeshine boy indicators. Now... No one knew anything back then. When Joseph Kennedy was investing in the 20s, no one knows. knew anything and no one invested in the stock market.

Nobody knew anything. So if you want to point to the space, so if you're saying like, guys, are you drunk? All right. If you want to point to the SpaceX IPO as your mental signal to reduce your AI concentration in your own portfolio, fine, fine. I'm not going to say that this is not a potential point in time that we can't. look back on as the top. Maybe we will.

Maybe we won't. But what's going on in SpaceX is explainable lunacy. So the IPO was on Friday. It ended up doing $85 billion in volume, according to Eric Bautchunis, easily a record for an IPO. And in the top 10, all time for any stock on any day. As of this morning, the company is basically within spitting distance of having the same market cap is Amazon. Now, as we discussed last week, and I'm not saying this makes sense at all, I'm just trying to explain the mechanics of how this even happens. There are just not a lot of shares

out there. And so nobody who's buying today, for the most part, is thinking about, is SpaceX worth more than Amazon? Who gives a shit? They're trying to make 20% in 24 hours. And guess what? They did. Right. So there's more sorts of disconnects and narratives than I get it. And yeah, the SpaceX thing is crazy. Yeah, with that much money moving, it's kind of easy to push around the price right now. Right. Easy-ish for a company this big, obviously. Yeah, so, like, there was a stat that yesterday, SpaceX added the most market cap ever

of any company of any day ever outside of Nvidia, which definitely makes you take, I don't know, take stock of what's going on. But it's not, it's not, it's sort of apples to oranges a little bit. Elon did say yesterday on Twitter or on X that SpaceX could get to a trillion dollars in Avenue by 2030. I feel like there's some, I don't know, I'm not a lawyer, but isn't that like a material statement? Whatever.

There are, there are you kidding me? There's no security laws anymore. That was the past. Doc Brown, roads? We don't need roads. There's no SEC anymore. All right. Let's look at the other side of this.

Taking profits. I got a call last week from someone at Marketplace saying, hey, we've got a bunch of normal investors. And we saw this headline on Bloomberg. from Bank of America, it said, B of A warns it's time to take profits as red flags multiply. And this isn't from some, like, Permanager. This is very good. She's great at what she does. She's very well respected.

She's talking about how there's some bear market signposts, and there's a lot of red flags. And this guy from Marketplace said, okay, what does it mean to take profits? For a normal investor, what does that actually mean? Right? So they sell their stocks. Then do they sell them all? Do they sell a little bit? Then what do they do with it?

Do they sit in cash? Do they put it in other investments? Like, what does it mean to take profits? And I thought that was a perfectly legitimate question. It is. My read of this is very simple. If you are one of those fortunate investors that had the foresight, whatever, credit where credit is due, I don't care. It doesn't matter.

If you made money in a lot of these memory names or the semi-names or the AI adjacent names and you're up 800%, does it make sense to maybe take your money off the table? Yeah, it doesn't make sense to sell 20-f it? Whatever it is, yeah, it probably does. You know what sort of bothers me? And I'm not, I'm not accusing Seveda and her team of doing this because I agree. I'm a huge fan of their work. But for the general person on the internet, the average pundit who is telling people to take profits or like, you know, sort of scolding them or whatever, hey, did you make money?

If you've been, if you've embarrassed the whole way up, who cares what you say? You have no right to tell anybody what to do about their portfolio. But do I think take profits if you've been in these names as well? probably put into advice. Not probably? Yeah, I do. Of course I do. Right. That, so what she's saying, and the big one that people took was, she said the spread between the top performers of the bottom performers and tech rivals the dot-com bubble. So the, it's the, there's dispersion now. That's the Wall Street jargon term for this. There's dispersion between the top and bottom performers. And she's saying, listen, this happened in the tech bubble. This is, this is actually bad.

So it's funny because for years, we worried about concentration. Now we're worried about the opposite of concentration. I personally, now this is n equals one for the sample, right? That's one of my problems with this analysis. My thing, I personally think this is a great thing that we're seeing some dispersion in stock prices. And it's not just the Mag 7 anymore. We talked about last week, the Mag 7 and then are performing. And the fact, these memory names and these other companies are coming up. I think that's a good thing. Isn't that what you want to see in a bull market? The market is picking winners and losers. Yeah, that's good. I think that's, yes, I think. I think the degree to this dispersion. Yeah, I'm not dismissing this only in the sense that

right now it really is AI and everything else. Now, I'm not saying that AI is the only thing that's winning because it's not. But if you look at the top performing names here to date, it is for the most part all AI adjacent. Yes, it is just, it's funny how the goalposts move from this AI is going to be a problem

because they're going to put all this money and nothing's going to work. And now it's like AI is the only thing that's working. Right. And so I feel like the goalposts have moved. It's funny too because this year, value is beating growth. So the Vanguard value index

Wait, hold on, just before we, I'm sorry, before we move away from this, I think a very easy way to, if you were going to dismiss this chart and provide more context that might make you feel less nervous, what this is showing is AI versus software.

That's all this is showing. Yeah. Because AI is at the top, this is showing the top quintile on the bottom, it's AI and it's software. So it's Micron versus Salesforce. That's all this chart is showing. Well, no, that's all this chart is showing.

It's the top quintile versus the bottom quintile. And in the top is all the AI names. Yeah, AI is creating losers and winners. So that's what I think. But again, sorry, the losers are software. Right. It's software versus AI. That's the entirety of this chart.

Right. That's why it doesn't worry me that much. And it's funny. I think it's good to see it broadening out. And it's not just the hyperscalers that are winning. even if this is all one big AI trade. So it's funny because value is whipping growth this year. I can remember who showed me this,

but Vanguard Value, which is VTV, is beating Vanguard growth, VUG by I think 7% or 8% this year. Now people go, wait a minute, that's because of the memory stocks because they're so cheap, but I guess I'm just sick of people trying to do the yeah-buts, but caveats this. So what? These stocks are still cheap on their earnings value,

so it makes them value stocks. What do you want? First, it was value stocks stink because they have no fundamentals. Now it's, no, no, no, no. These stocks have fundamentals, but it's all because of AI. People keep changing the narrative.

Yes. What do you want? I think, I think, um, the reality is that Micron is the biggest weight in this index. I think it's like 5%. The second biggest is like two. So yes, it's fair that Micron and Intel. It's 4%.

Okay. But to your point, to your point, guess what? The S&PRA. P-493 are outperforming the Mac 7 by a lot. Right. So it's not just, yeah, the story is changing. It's not just the hyperscalers. It's more things that work.

And this is a global thing, obviously. Meb at the Idea Farm had these slides from Schroeder, which is really good. They had this whole global investment deck. It was like 100 slides. I thought it was really good. So it says 2026 equity gains are all about earnings. EM equities are up 26% year-to-date. This is through the end of May.

And it's showing the earnings, income and the valuations. Like what in the, and that member, remember last year when international outperformers like, well, that's because of the dollar. And this year, look at, look at the earning for emerging markets. It's kind of crazy. It's just dwarfing everything else, obviously. And they have all these charts that show the earnings for emerging markets are just blowing everything out of the water, even for the U.S., even for Japan, even for all these other in China. This is a crazy one to me. Wait, you know what's funny about that? Because back to your point about people making excuses or

whatever, like, oh, if LeBron wasn't on the Cavs, they wouldn't win. If Jaylon wasn't, well, yeah, but that's what happens. Of course. So if, if S.K. Heinex and Samsung weren't an EM, the fundamentals were way different. But they are. What does that even mean if this wasn't then that? They are. It is. It is. Right. And the whole point was, emerging markets are just left for dead because they don't have a tech sector. Now they do. you're like, well, that's part of the A-Try. This one kind of shocked me. So in 2021, not that long ago, China was almost 40% of the EM index. Korea and Taiwan were 12 to 15%. Korea and Taiwan are now bigger than China. China has essentially got cut in half in the index. In Korea and Taiwan, if picked up a slack,

this to me is the beauty of diversification, that you don't know where these winners are going to come from. In any of these, in value stocks, in emerging markets, in the U.S., any of this stuff, this is the beauty. You talked about Peter Bernstein before. He said something along the lines of it, I'm paraphrasing. Diversification, yes, it's a risk management strategy, but it's also an aggressive strategy because sometimes you don't know where those big winners are going to come from. That's the point.

If you cast a wide enough net, you get these winners, and they're unexpected often. No one expected this to happen. No one. No one was saying emerging markets. That's the big winner of AI. No one said that. When Chad GPT came out,

the question is, okay, fine. You're worried this is all, one big trade, right? It's just one big, huge pot. Everything's in this pot. What do you do if you're worried about it? So last week we were talking about some of the low volatility stocks that are very underweight tech. Jason Zawiguaite a piece about this in the journal. And he quoted Yuri and Timmer asking about this question, like, if you want to reduce your exposure to the one big trade, which is a, you know, it's fair. Uri and Timor from Fidelity said, European stocks may not shoot the lights out. But if the S&P 500 goes down, they will probably go down less because there's

less price buildup that would get undone. They can be a port in the storm. So outside of ASML, the Dutch semiconductor equipment company, they are severely, severely underway tech. It's a backhanded compliment at Europe. It's an old economy stock market. Right. And that's diversification, that Europe could be the one that, because Europe had a good year last year and they're having a kind of a not as good of year this year. But you're right, that makes sense to me. Find those places where it's hard to find them places now, but if you're worried, that's it. All right, I want to talk about oil. Because markets were right again. And I think this has been a big theme this entire decade that we've been talking about. So oil is back down to $80 a gallon or $80 a barrel because it sounds like for the 56th of 10. we have a deal with Iran. This time is going to stick. This is the real deal this time. And oil crashed again, and it's back down to 80. And the energy analysts were ripping their hair out for weeks saying the straight of Hormuz is closed. This is disrupting the supply chain in significant ways. Oil should be 150 dollars a barrel, 175, $200 a barrel. It never got close to there.

And I'm sure if you're an energy analyst, I'm sure it was really hard because you're looking at all of the correct metrics in going, the markets don't make sense. Why are they not following these metrics? These metrics show oil prices should be higher. And the market said, we know this is not going to last very long. So we're not going to go to those levels. What's the point? And the markets were right again about oil. It's pretty impressive that markets are now, markets are like their own form of AI. The intelligence for, the intelligence for markets are growing over time. Think about how many things we've looked past this decade where the markets were right in the end

that they never would have looked past in the previous, I don't know, 20 years ago or something. So is this saying the same thing? Because you've been saying this for a while and I think you've been right. If the average investor is getting smarter, is that the same thing is saying the market is getting smarter? Is the average investor impact in the market?

Yes. Bingo. There's less panic for headline events than there was in the past because markets move so much quicker and it just digest them faster. And I think it's something you really have to consider about how markets function now. And that if there ever is this AI blowup, it's going to happen in the blink of an eye.

We're going to get, I think if there is like an AI whatever, it's going to be like down 20, 25% in like three weeks. I really think the market's going to say, all right, you know what? Let's just take our medicine. Rip the bandit off. Do it now. That's what's going to happen.

I will, there's nothing you could say to remove me off of this fact that at some point, and this is not a prediction or a hot take or whatever, we will have a four-year bear market. Like, it's not just going to be up only for the rest of our entire lives. Yeah, there'll be a financial crisis at some point. The millennial generation will cause some sort of financial crisis. There will be, I don't know if lost decade, who knows, but there will be a multi-year bare market. The fact that I even, that I even have to, like, say this as if I'm going out on a limb,

tells you all you need to know about where we are. This is a bull market. It's a long bull market. We haven't had a recession. We haven't had a financial crisis. Allow me to be so brave as to suggest that there will be their market again. Right. Listen, we're due for a pullback. Yeah, of course. We're always due for a pullback. All right, so let's talk about what SpaceX is doing to the market. Todd's zone has a chart showing the rolling 65-day sum of money into thematic ETFs. And of course, Kathy Wood and the Ark Complex in 2020, the Ark Mania, we might never see anything like that again. Maybe we will, maybe we won't. That's amazing.

It's a monster outlier. Especially when you consider the flows into everything these past few years, the fact that the Arc, whatever, mania dwarfs that is pretty impressive. Yeah. So anyway, it's back. And Todd says, you know, it's space or nuclear or another thing. theme, whatever it is, the thematic theme is absolutely surging. So we keep talking about this. It's still a 50% drawdown from those highs. Yeah, we'll get them in a second. We keep talking about all of the potential distractions and things that want to like bump you off the horse.

If you think about this bull market as you're riding a buck and bronco, it's really hard to stay on because there's been so many reasons to sell along the way. Have you been on a horse in your life? I've never been on a horse. No offense. I can't see you being a horse person. I've never been on a horse. Okay.

Not up in your cabin up north? There's no horse. There's horses, but... We did a horse thing a couple years ago with the kids, just a ride around a big field and streams, and it's kind of fun. So one of the... One of the... Buck and Bronco features of this market is,

oh my God, it's a bubble. Look at all this ridiculous behavior. Right. Right. All the D-Gens. You have to tune them out. They're never leaving. So I say that because...

That was a mini bubble in 2021. It really was. Yeah, but they never left. But it was self-contained. They never left. Right. So the SpaceX on the launch day, I think it might have been the next day.

I don't know. Levered, there's a... There's levered shares for SpaceX, both long and short. And the levered long on 615. All right. that was yesterday. On Monday, the levered long traded $282 million worth of shares,

and the leverage short, I don't know who is doing this, $219 million worth of shares. By far, by far, by far, by far the largest one-day volume on trading. So these levered ETFs for SpaceX are going to have $5 billion in like the blink of an eye. Yeah. Right? They're going to have so much money roll in. All right, so, ARC.

SpaceX is the, she owns $325 million worth of SpaceX in ARKK alone. I believe she owns them in all the other vehicles as well, but this is the biggest position. I don't know, I don't know how this works. I don't know if she got them at the IPO price. I don't know if she bought them at the open at 150 or 160 or whatever traded. I just don't know what her cost basis is. You don't think that they got some sort of allocation to the private? I have no idea.

Okay. I don't know if ETF's got an allocation. I don't know how it works like that. They can, yes. They can? Okay. Over the last five years, ARC is in a 30% drawdown.

I'm sorry, not drawdown. Over the last five years, ARKK has returned, ARKK has returned negative 30%. The cues are up 124%. Okay, actually, these stories are all saying that, yes, Arc bought SpaceX shares on the IPO. So maybe they didn't have the price.

private shares. The level of underperformance now, it's been much better in recent years. So, you know, this is, this is skewed way lower by the results of 2021, where all those COVID bubble names like DocuSign and T-Doc and whatever blew up. They've had a little bit of a comeback, but you're right. It's done much better. The fact that funded this bad in this environment would be shocking to people who were so into this for the innovation story. So I hate, I hate like blaming whatever, because there's plenty of blame to the extent that there's blame at all to go around. If you piled into ARC in 2021, hopefully that was a learning experience, I'm sure it was. I think if there's any blame on Kathy Wood, and obviously she's doing the best she can, she's not, you know, she's trying to,

she's trying to get it right. Missing the AI, you know, for an innovation fund, missing the AI trade is she set some very unreasonable expectations. Yeah, that was tough. You're right. The thing is, If you would have seen these numbers from Arc, you would have gone, oh, well, tech blew up, right? That's what happened. Tech finally blew up, and that's why Arc is down so much. You wouldn't say, no, tech, we had the biggest technological innovation of this century, and they missed it. That's a surprising part. That's really hard.

One of the features of this Bull Run is that every time, really, every time the market falls a little, fear comes back so fast. It comes back so fast. Like, people get bared up so fast, which is wonderful because that's, you know, that's fuel. Like, there is still a lot of disbelief. We were talking to Encore yesterday, Ankur Crawford for a talk about episode. And in conversations that she's having, and I would agree with you, like, it's more, when is this going to end? Not what should I buy. Yeah.

Yeah, you're right. So Jason Geppert from Sentiment Trader tweeted, man, tiny option traders really got spooked last week. one of the highest proportions of hedging activity in 25 years. And the market barely fell. But to the point that we opened the show with or spoke about with Savita taking profits, that caused a pretty fast sell-off. Micron, I don't know how much it fell from its high and whatever. It was only a three-day sell-off.

Did it fall 18%, 20%? I don't know. But anytime there's a little dip, people just have one foot out the door. Yeah, which is like you said, the bigger the gain, the quicker the trigger on these things, right? I mean, there have to be a number of people who have just set stop losses, right? I'm up 500%. I'm going to set a stop loss 20% lower or 10% lower or whatever it is. Well, people that have wrote the gains of Micron on Sandisk and Western Ditch and all these names, I give them a lot of credit.

Like, it's hard. You're right. Micron was down 20% in like three days. Was it? Okay. And again, I know I've said this on the show now five times, but I'm going to keep saying it because it's, it did happen. Micron fell 30% in like three weeks in March. after I blow out earnings number. And we just, like, all of these declines, we just pretend they never happened.

So your idea about people changing their minds really quickly, I think that is going to be one of the problems with this new AI trading. So Robin Hood put out a tweet this week. Egentic trading is live for all customers. Connect any AI agent through the Robin Hood MCP server, fund a dedicated agentic account, let it research trade and rebalance on your term.

So I watched the, they had a little video that showed how it works. and I watched it. And it looked pretty cool. It was like, pick 10 stocks that are somehow related to the biggest private companies. And then, oh, if a stock is down 10%, sell it. Or it's talking about rebalancing. And it's showing these prompts putting in it. And what happens is you set the rules for AI, but then you have to sign off on it, too.

Right? It doesn't, I think it can do it automatically for you, but a lot of times there is checks and balances. So AI is not just running rampant. And I think this is very cool. It just, you know, at the end of the day, this kind of just takes back testing to the next level. It's not really like something brand new. Back testing has existed forever. Formulate trading has existed forever.

Am I interrupting something? Sorry. Actually, yes. Talking to your Knicks fans, okay. But I think the problem with this, it's really cool. I'm sure there's going to be a lot of people who can make their own, you know, rules up, and it's going to be very helpful for them. but I think people are going to be constantly tinkering

and changing their own rules and the whole point of a back test is in the back test you don't go and change it every time it doesn't work you stick with it no matter what so true so so so true so so true so I think that's going to be hard for people

to like fingers off the keyboard I'm not changing something even if it's not working right now that's going to happen all the time that's what's going to happen with this is the changes are going to be constant and AI is going to go Oh, great idea. Really? All right. You used to buy small cap growth stocks? Now you don't want to remember? Good. Good for you.

The market is open. Let's see what SpaceX is up to. Oh, my God. $212 a share. So it's going to pass Amazon and market cap maybe today. Again, the numbers are sort of phony baloney. But, you know, this is something. I guess if it ends up having a huge, huge pop, and then it just comes back down to Earth a little bit and settles in where it was the IPO. It's like, was the small float really worth it? I'm not saying that's going to happen. Worth it for the company. I don't know. Well, I think part of the reason why they did this this way is because, I know the details in front of me, there are escalations and triggers about if the shares are up X percent, then they are allowed to unlock more shares and sell into it. So, I mean, that's a whole Like, that's, you know, that's part of the reason why people are upset. It's like, you're gaming the system so that you can dump more liquidity on us.

But yeah, but people are buying it. So you can't, you know, I don't know what it is what it is. Right? And a lot of it is retail. Eyes wide open. Everybody, you know, they've been very transparent. You might not like it, but they've laid out the rules. All right.

Ben, last week I spoke about how incredibly the resilient, incredibly resilient the economy has been. And I started, I started, I think, with tariffs. Like, I didn't even go back to COVID, right? But Jonathan Gray had a quote that I pulled from the transcript. And he actually said the exact same thing. He went back a little bit further. So COVID, of course. And that was, you know, the government helped us get through that.

And part of the reason I guess why the consumer is still, to a certain extent, spending. But there was the Russia-Ukraine invasion, which impacted us, I guess, just, you know, gas prices, got through that. Gas prices went up. Oil prices went up. inflation went up even more because of that. The Silicon Valley Bank shock. Yep. Like that was contained in.

But like there's just been, there's just been so much. There's just been so much. Liberation day, all that, yeah. So I know we do this a lot, what I'm about to do. And I'm going to keep doing it until it no longer, until it's no longer the truth. Because it bears repeating because it is the truth. Capital One, CEO. I would say if we didn't read any news and all we did was just really look at the data that we see in the economy and the data that we see on our portfolio, we have a really quite positive view.

I think the consumer is really the strong shoulders the economy stands on. Unemployment continues to be very strong. Now, I promise, as soon as this turns, as soon as the CEOs of these gigantic financial companies that serve, everyone, not talking about Amex, talking about Capital One. As soon as they start to say that the consumer is weakening, that spending is pulling back, I promise, I'm not cherry picking. I will share it. But the economy continues to push through. It is interesting that this company is still in like a 23% drawdown. The CEO's not trying to like blame inflation or gas prices for the reason their stock prices down. They're still saying, no, things are looking good still.

It wasn't too long ago then that we were worried about. The company did. go crazy. What did? The stock went crazy, so it's in a 20% drawn on, but it went, it was up a lot. Last week, last week we got CPI data. Man, the market is moving so fast. So we had the, you know what, let's not forget. Because, you know, we've bounced since.

But Friday, two Fridays ago, was the worst day of the worst day of the, year by far. Small cap tax fell 6%. And then the next week, we got CPI data on Wednesday. Yeah. It's not great, Bob. And the market opened down, rallied to Indyaday, and got slammed into the close. I think it fell 1%. And this was after three consecutive days of selling. And I said to Chart Kid, Matt and Sean, I was in the office with them when the, I think the S&P was down 1% that maybe more. I said, guys, imagine if inflation came in hotter than expected. Because it was actually, like I said, inflation numbers came out at 8.30. The market popped. It was not as bad as we feared. And then nothing but selling for the rest of the afternoon and closing the lows of the day.

And I said to them, what if inflation was hot today? And we all looked at each other and said, ooh, would the S&P have been down 3%? The, my point is, that was a week ago. And we're up, we're 4% higher than we were there. The narratives change. so fast. So here's the thing. It's so inflation went from 2.4% in February to 4.2% by the end of May. And I think this, it is surprising to me that the market didn't freak out. But I think this is another case of the market going, all right, just like oil markets,

we're not going to freak out because we know that this is, this is oil prices. This is, hopefully this will come back down and not completely reverse itself. But it is kind of crazy. I was thinking about this. We talked about this for years after mortgage rates went from sub 3% to 8% and now have settled in at 6 for a long, long time. Like, what is the reason for the consumer being so strong? One of the big reasons is because 35% of all household budgets is spending on your housing. Okay?

It's the biggest part of everyone's household budget, in aggregate. And so many people locked in not only low interest rates, but low home prices, right? So they locked in a low monthly stipend for their housing, right? That's what gave them all this disposable income for years and years and years. Because it's like you're giving yourself a raise every year, that you're not paying more in housing. Now, you took that raise off the table. You bought a new house, right? You traded in for a new mortgage payment.

But think about this. I was thinking about this. The inflation rate at 4.2%. That's, I'm borrowing for free for my house at 3%. on a real basis right now. It's kind of insane when you think about it that way. That still, we talk about this for a long time I think, but I'm just, it's coming back to me like, oh, yes, of course.

And there have been people who have traded up like you, right? Who went from three to five or six or whatever and moved on. And there aren't nearly as many people with 3% mortgages. But that was a, that's a big piece of this. Huge. It can't be overstated. If everybody, if everybody who's locked in at 3 was, was at 5.5%. it 100%

1 million percent would impact consumer spending. Think about it if you think about it if you had to right size your mortgage payment for the current housing prices right now. Right. So I'm saying.

How many people couldn't afford their own house? A lot of them. I did have an inflation moment and I said when inflation hit 9% in 2022. People like you and me, we don't get to complain about inflation.

There are people who are hurting for inflation. Don't get the complaint. This is not a complaint. This is just an eye opener. I filled up my boat for the first time this week. And, uh,

There's a lot. Way more than I have ever done before, right? I'm not a boat guy, but I'm like, what did I pay last year? Oh, it's way more money. And I asked the girl, you know, they have the people who come and fill your tank up for you. She said that there's been a lot of complaints. I'm like, how have people been dealing with? Because if, you know, I have a pontoon.

I don't know, a 30-gallon tank or something. And it cost me 220 bucks or something to fill up. It was a lot. But there's enormous boats, right, that take, I don't know how many gallons to fill up. And she said, yeah, there's been a lot of people complaining. It's like, I think gas prices for boats want up even more than regular gas. And not slowing down spending one a lot of. No, yeah, right.

Is that going to change my behavior? Absolutely not. Kids got a tube. All right. We better, might as well mention your outfit. And then I think we're going to have a moratorium on Nick's conversations for the next month. Is that fair? I promise.

I will not say anything until next season. I give you, listen, you had a once in a lifetime experience. You were at the game in San Antonio, right, which had to be awesome. I told my kids with 10 minutes left in the game, the Spurs are still up by 12. I said, the Knicks are going to win this game. Either the Spurs are going to win by 10 or the Knicks are going to win a close one. And that's how it went.

So you got to celebrate the championship in San Antonio, which is probably a good thing, because New York may have burned down to the ground if it happened in the city, correct? So let me just say a few things. And of course, I could speak for 19 hours about the wrong we just went on. This is not a next podcast. And most people don't give a shit, so I will spare you.

You know, we talk about being wrong all the time in the market. Just like all the time, that's just the nature of predicting anything. It doesn't matter if you're trying to predict what the box office is going to do or the weather or the stock market or sports. We're always wrong at predicting. Or the dot plots. I was the number one. And I was the number one this team will never win with Jalen Brunson and Carl Anthony Towns.

And I'm only talking about from the defensive point of view. Jaylen at the top, Carl underneath. I never thought that we could win with them on defense. And I am the biggest Jaylen fan. I was never, now, I didn't know how good he was. But as soon as he got here, as soon as he got here, I never thought that we could not win a championship with him. He is that guy.

And watching him every night for the last four years, I'm not surprised. I know the rest of the world might be, but I think Knicks fans knew that he was that guy. So I've never, like I wanted to trade Carl for Janus recently. I've never been, and now there was a, there's something happened in this defense. I don't, I don't know what happened. Something changed.

And I've never, ever, ever been more happy, obviously to be more wrong. I'm just feeling the streak of gratefulness that I'm feeling is continued. Winning is really hard. Like winning a championship is, is really hard. And eating, eating shit for so many years. Like, I went through. I was on NBA reference the other day. I will give you credit because there's a lot of bandwagon Knicks fans, obviously.

You took me into a Charlotte game like two seasons ago. It was a meaningless regular season game. And like you're an actual fan. You're not one of these fair weather people who just jumped on the bandwagon. So I'll give you credit there. I never stopped. Like I never stopped through when it started with Don Cheney after Van Gundy left through Derek Fisher and Fisdale and Hornacek and Dantone and Isaiah Thomas and Larry

Brown, and I'm sure I'm missing a coach or two. Kurt Ramas, Herb Williams. Oh, my God. I never stopped, and it was so bad. Like, it was so, so, so dark. So to be eating this fruit tastes really sweet. And I'm happy for this team and the players and the organization and the fans. And I don't, listen, the bandwagon fans, whatever. Like, it's cool. It's unites the city. I don't know. I think New York was by far the better story for the win. Like, it was so cool to see. For me, not having any, any carry, whoever won, New York is by far the better story. I'm not one of those like, oh, they're not a real fan. I mean, it's great.

The more the merrier, like the more the merrier. And what Jalen did, so since he came to the Knicks four years ago, this is where he ranks in the playoffs, second and wins, second in points per game, first and 30 point games, first and 35 point games, first and 40 point games. I can't believe that I never think. thought that anybody would replace Eli as my favorite athlete of all time, but Jalen did. He's a very likable guy. Doesn't seem to have ego or talk to the refs all the time. Yes. I like it. I'm almost done. I'm almost done.

Okay. But I think for real sports fans that understand how much of your life, your time, your energy, your emotions you give to your team, like it's very special to win because it's just, it's nothing but misery, right? There's only one team that wins every year. And most of years, you're not close, but some of the years you're not close, but some of the years are closer. It's nothing about misery punctuated hopefully by a few brief moments of euphoria, which I am currently living through. So I'm happy for the city. It's obviously been like some pretty dark years for Manhattan. Obviously, I hate some of the stuff that has happened with Spurs fans

getting beat up and burning the buses. And it's really shitty that this happens. Listen, Manhattan is a gigantic city. There's millions of people there. There's assholes everywhere. And I that this happens. So that makes me sad. I'm exhausted. I'm happy it's over. Like, game five was weirdly in San Antonio. By the way, the San Antonio fans were great for the most part.

Although when you said to me, like, were you interrupting something? So my friend was texting me that a father and son, like a father got hurt really bad, like brain bleeding on the riverwalk. I think I might be done going to traveling for the Knicks. It's just like not worth it. I don't want to get, I had a close call, which I won't really share, but no fault of my own. Hey, you probably got to feel a little nervous wearing the enemy's colors in, you know. And next year, like the target, you know, people don't like New York to begin with.

So I think I might be, I think I might be good there. Anyway, anyway, the whole thing, the whole, the whole, it's been two months. It's so exhausting. Just so exhausting, mentally and emotionally. I can't, I can't even imagine what it's. like to be an actual player or coach a player or their family so anyway i'll i'll leave it here i am i'm taking uh robin and the boys to the parade on thursday and man it's been it's been special and and uh actually i will end it here here i really do appreciate all the emails and all the texts

and i know it's not easy to root for a new york sports team anything that's not your own especially one from new york you know we're obnoxious were loud but people that reached out and there was like an outpouring like so so, so many texts and emails. I thought it was a likable team. I feel the love. So thank you. Thank you, everybody.

Yeah. And every fan base has annoying fans. Like, no one, everyone has people like that. They're everywhere. And if anyone, you're exhausted, but if anyone deserves a vacation, it's your wife, not you. She's been something else.

All right. So Nicole had an idea for us. She said, hey, the last one of the next one is in 1973, correct? I guess they called the top in the market because there was a big bear market after that. She said, let's do an inflation thing for this. And it's funny, they put it in Nix colors for me.

I had Claude Wemagnana. Wemagnana do this for me, my little assistant, Claude. So this is prices that they do nominal and real, okay? So inflation is up six times since 1973, which is kind of crazy to think about. That's just compounding, right? It's three and a half percent. Homes are up 15 times in that time.

New cars are up 12 times. The cost of college is up 24 times. Health insurance is up 50 times. And groceries are up four times. It's kind of crazy. groceries actually are the only big thing that has grown less than the rate of inflation since the 1970s. I guess I should have Claudeau wages too. I wonder what the tickets were back then.

Oh, that's a good guy. $5 probably, $10? It had to be really, really low. Because no one cared about the NBA as much either. I actually have my final tickets from 1999. I didn't bring him out. He sent me a picture of a playoff game. Oh, okay, round one. Yeah, I was like, what? Round one. Section 119, row D. Oh, it was row D's back then. So fourth row, it was, where's the price? $96 in 2004.

Okay, here's interesting. So wages, according to Claude, so inflation's up six times since 1933. Wages are up eight times. But as we said, prices for a lot of stuff, stuff even more. All right. Are we good with the Knicks? I'm good. Okay. Nice outfit, by the way. My son loves the chains. My son has a Michigan chain, a lion chain. That's the thing. Oh, you have the championship chain. I mean, I bought this for the kids, obviously. I'm not a jersey guy. I've never worn really jerseys, but I bought two finalist jerseys. I bought a turtle from Entourage right now. By the way, these hats are ridiculous. I feel like the biggest asshole wearing this. I'm never wearing this again. This is going to go on the shelf. But like my head just... That's a 12-gallon hat. It's huge. I wore it. I would look like an idiot. It doesn't fit in his head. It looks so silly. That is a heat head. All right, let's talk about the politics of AI.

So Anthropic last week said the U.S. government studying national security authorities has issued an export control directive to spend all access to Fable 5 and Mythl's 5 by any foreign national, whether inside or outside the United States. So Anthropica is starting to get regulated. Now, here's the thing. Whatever happens, whatever kind of regulation politicians put on AI, it's not going to be good, probably.

I don't think politicians understand this. whatever kind of regulation they do, it's not going to be helpful. But these AI companies deserve it because all they've been spouting off is about how crazy bad things are going to get and we can't even release this because the damage it could do.

And we, Dario said on a few podcasts like, hey, listen, we need regulation and they ask them, what should it be? I don't know, it's up to the government officials. Like, the fact that they've not self-regulated at all in many ways, like they deserve whatever's coming to them. Like, they'll complain them out of it, but whatever happens, if you've been saying we're going to destroy 50% of white-collar jobs and, like, this could ruin the world because of biological weapons or something, like, you don't get to complain about whatever the government does, because the government is not going to probably have the best regulations they're going to like, but so what? They've made their bed, right? Now they have to lay in it.

let's talk about AI's impact on on the economy and the job market. So this is a pretty, this is a pretty depressing email, but I'll share it anyway. Somebody said the conversation on jobs has been binary. I will add jobs or I will take jobs. That's not the way this is working out. Every company I am working for is hiring developers and other staff to implement AI. They are hiring me to guide them. The goal is to be leaner, not have to hire.

and to replace jobs eventually. They are worried that their competition is going to be leaner because they are using more AI. They are worried AI might take their entire business. So they want to be the ones using AI to take the industry over. There is a rush to implement. In the boardrooms, the conversation with everyone is about how many people can we replace. We are going to see growth of jobs.

And then they will be dramatically gone. I think Ben might be right in that the next recession could be when it happens. I think my job has the same problem. I have a window. I have to maximize my income. this will go away. AI will take my job. Frankly, I use AI to do my entire job now.

I am just better at it the most. Eek. I don't believe this. Sorry. I don't believe these doomer takes. Good. I don't believe them. Maybe in some tech firms, yes.

I don't think this is the whole economy. I'm sorry. I don't believe it. Okay. That's not how the world works. I think I'm with you. The journal did a long post, the future of work in AI,

and they asked economists, will AI, they asked them to three questions, will AI lead to net job losses or job growth across the economy? And it looks like most answered no change, which is a cop out. I don't know how you can answer no change. Five answer net loss, two answer net growth. And they asked, based on what we are seeing now, is AI a technology more likely to replace workers or complement them? It was overwhelmingly compliment. It looks like it was about two to one. And then lastly, how much will AI change the way companies hire and develop talent over the next five years?

Major impact and some impact were about neck and neck and minimal impact to it. Justin Wolfers with a hot take. Minimal impact. Okay. I pulled two quotes that I thought were very interesting. David Deming. David is the dean at Harvard College and professor at Harvard University. He said that depends on their outside option.

I guess in terms of like job switching. Telephone switchboard operators were immediately displaced by mechanical switching technology. That job essentially disappeared overnight. But the young women who would have become telephone operators became stenographers, administrative assistants, and waitresses instead. This shows the importance of flexibility in education and training. This is the Kudegra. I could have just skipped to this quote.

People are the ultimate general purpose technology. I like it. That's a good quote. One more from Joshua Ganns. He's a professor at University of Toronto's Rotman School of Management. He said they will be reemployed in other things. It is only when technological change takes out an industry in a particular region, and people don't move that we see major technological unemployment and wage reductions.

Right, so that's like factories going overseas. Correct. This is the fun part about these type of innovative cycles, though, is that just no one knows. It's everyone is guessing and extrapolating and making expectations. And yes, no one knows. That's right. Ben, we got a decent report on the residential real estate market. It's been a while.

Existing home sales in the U.S. Accelerated to their fastest pace of the year in May, with contract closings rising to an annualized rate of $4.17 million. The median sales price of an existing home claim 1.3% from a year ago to $429,000. All right, here's one of the takeaways I have from this. So look at this median sale price from Redfin, shows lines by year. We're at all-time highs. I am starting to get bullish on residential real estate stocks.

It might be early. This might be, this might age horribly. Well, they've been bouncing considerably, right, the last month or so? So there's been, yeah, there's been a balance. So it could be a dead cat balance, and I might just be, you know, giving the stock market and the short term too much credit. But my thesis is this. I think that even though home affordability

quantitatively hasn't changed, it's still horrific, I think there is... Mortgage rates have gone up this year. I think there is a realization that... And it's been gradual. It's been like a multi-year process that, okay, this is just what houses cost now.

Yeah. Here's the thing, though. Look at the next chart. putting here that shows U.S. existing home sales. And you can see the minor, minor upturn. Yeah, it's, it's still way, way low. And it's good that it's beating expectations. But let's be honest, this is still far below average and far below where you'd think things should be given the amount of young people in the economy. Well, that's the thing. I mean, the demographic part of it, there is still, this is the largest cohort of the nation in terms of age. And they need to buy a house.

True. All right. Real quickly, you talked last week about the Rule of 55. The Wall Street Journal had an article this week, the retirement tax break that most people overlook. And they talk about the rule of 55, how you can, if you leave your employer, the year you turn 55 or older, you can pull money from a 401k with penalty-free. Did they quote you? And I said, no one knows about this. And they said, in a recent Wall Street Journal personal finance quiz, more than 80% of readers got a question wrong about the earliest age. You can make penalty-free 401-w withdrawals. So, yeah, no one knows about this. Which the retirement system is so jacked up in this country.

Because we have so many different accounts. We have IRAs, Roth-IRAs, 401Ks, Roth 401Ks, 529s, HSAs, SEP IRAs, solo 401Ks. It's too much. And some people get more. ability to put money in than others, so they should just be one big pot of money. Everyone has the same limit. And it accounts for everything.

You're 529, your HSA, your retirement. It's all one bucket. That's what it should be. Is that going to happen? No. No. All right, Ben, I want to play something for the audience. I love this.

We're in the studio. You were in the studio reading some... You were doing some promotion for the book. For your book, Risk and War. That's what you're doing. The Kompon Media Team, help me make some social media clips that were promoting the book. And we got some bloopers that I thought were just adorable, so I want to play him. I love this.

This would be a funny social of just Ben's out team. Take the financial media one out of that. I don't piss people off. Take two. The stock market. It's volatile. It's a roller coaster. Shut up.

Cut that. Ben. Breathe. Take three. I go into these details even more of my new book. And reward out now, wherever you find your books. No. Overconf.

Out now everywhere. All right. Just say available where books are solved. I detail all this and more in my new book, risk and reward. Out now, wherever you find your books. I was going to do the thing. Don't do you out now. Just say in my new book.

Okay. No. Yes. I say out now everywhere. No. Available. Oh, there we go. Yeah.

I detail this and more in my new book, risk and reward. It's available now. Anywhere you find books. I can't. All right. More on this and more and more and more and more on this. More on this in my new book, Risk and Reward, available now. You know what?

I don't like that one. Tons more charts. Nope. Way more charts in my book, Risk and reward, available now. All right. If you read this book, you can earn more, spend more, save more. And that's a wrap. That was like in September.

My brain was like just in knots. And that's what I have fun about. Yeah. All right. That was awesome. You know. Good job by the compound team. It's really hard.

I did some of that the other day for something that we're recording. It's really hard. It's hard than you think. It's so awkward. It's difficult. It's funny. When you hear a podcast, it's been so edited in many ways. And the ums and Oz are taken out.

And you don't realize that no one. talks as clean as people can be made to sound, right? Even this podcast. That's true. We're not that good. All right. Elon is the first trillionaire chartkin made a chart showing Larry Page. The combined net worth of Larry Page, Jeff Bezos, Mark Zuckerberg, Jensen Wang, Warren

Buffett, and Rob Walton is that of Elon Musk. And the Wall Street Journal, bless them. They did this great post where Ben Cohen and Andrew Malica said, picture aligned with $1 million on the left and a trillion dollars on the right. Where would you place $1 billion and credit to me? I was better than most, but still not even close. So it's basically all the way to the left. $1 million and a billion dollars compared to a trillion dollars are basically the same thing.

So here's some context. And I know you scoff at this, Ben, but we need it. If we stack dollar bills, it goes to the moon. Here we go. All right. A million seconds ago was about two weeks ago. A billion seconds ago was in 1994 when Pulp Fiction was about to open in theaters. A trillion seconds was back in the ice age. Here's one more.

A billion pennies. A billion pennies takes you from New York to Cape Canaphyl in Florida. Okay. A trillion pennies takes you to the moon. and back twice. So moon back, moon back. That's a trillion pennies. So Elon Musk, he can afford a house. So people, politicians in particular, are very upset. Are very upset. And the good news is the discourse around this is very reasonable on both sides. So I will try and offer a reasonable take. Poverty is horrendous. And I think most reasonable people, if there was a way to snap your fingers and make the world a more fair place with less horrific hunger and problems, of course, everybody would like to do that.

And so you vilify, the politicians vilify somebody with this amount of wealth. It's beyond the pale. Who needs this much wealth? Let's redistribute it. Let's tax him. let's whatever, whatever, whatever, whatever. Of course, I understand the sentiment behind that. I don't agree with it.

Economically, I don't think it's that simple, but I understand where it's coming from. It is mostly coming from a decent place. The part that has never discussed is that SpaceX, the IPO, it created so much wealth. Yes, the most of it went to the creator. That's the way the system works. A lot of it went to the investors for taking the risk.

That's the way the system works. It created 4,400 millionaires, according to the New York Times. And I don't know a better way to lift as many boats as possible other than the capitalist system that we have. And are there maybe things that we can do? I don't know. That's not for me to figure out. But a lot of people, a lot of people benefited in life-changing ways. and I think this should be celebrated, not torn down.

Well, we're never going to solve this one. I don't think wealth inequality is never getting solved, and it seems like we just can't tax rich people more. So I think this is just something people can argue about forever. I think that's probably right. Okay, let's talk about some recommendations. All right, I have one for you. Have you watched Widows Bay on Apple?

Yes. Okay. So if you watch the first step, So this is Matthew Ries, who you said, hey, not a great actor in the Claire Daines one on Netflix. I love this guy. I loved the Americans. I think it's one of the most unheralded shows of this century.

I loved it. I loved that guy. And I watched the first episode, and I'm like, what is this show? It's kind of mysterious, but it's also kind of lighthearted. And then it takes a turn. And it gets dark, and it's kind of, I guess it's Stephen King, would you say, ish? Yeah, oh, yeah, yeah, that's right, that's right, yep.

It's kind of a Stephen King's show. And usually, we talked with it. I'm not a horror person. Not usually my thing. I really like this show. My wife, she's like you, she can't look. Like if there's a, she knows there's a jump scare coming, she looks away and says, tell me what's happening.

She's like you, for me, like I said, it does nothing for me. So I just watch. I'm like, oh, it's a scary clown or whatever. It's a crazy old lady with long fingernails. But I really am enjoying this show. And I'm surprised that I am. Thoughts for you. Because you watch horror all the time.

So is it too much for you? Too much. No, to me, this is, I understand it's a horror genre, but this is not a scary show, I don't think. It's not like... It's like a suspenseful show, right? Something like that. There's some scares, but I wouldn't say...

You know, it's like lighthearted. It's like it's comedy horror for lack of better. Yes, you're right. It does have some lighthearted parts. Again, I think the first episode of the show, you'd never expect where it's going to go the next four or five. We're halfway through or so. I know I say this about a lot of the shows that I enjoy.

I really don't need a season two of this. I think they already agree to one. Okay, I agree. You're right. It seems like a one... Get it all out there. But yeah, no. I'm enjoying it.

And an Apple, man, Apple is, Apple has found their groove. I'm watching Cape Fear with... I didn't know if I wanted to watch it. Just because I've seen the movie, I'm like, do I really need it? I don't know. It's good. Okay. It's ridiculous.

It's Amy Adams, Patrick Wilson and Javier Berdem, produced, executive produced by Spielberg and Scorsese, who famously swapped movies. It was the Cape Fear for Schindler's list. swap, which, man, the alternate scenario of that is bizarre to think about. I guess my whole thinking is I have a hard time watching movies where bad things just keep happening. Oh, this is ominous. Yeah, this is pretty dark, so maybe not for you.

But, you know, I revel in the darkness. I watched on the flight. Is this thing on? So I watched the first 15 minutes, fell asleep. probably missed 40 minutes of it, which is, I don't know, I don't think I've ever done this before, and I just watched the rest of it.

And I don't know if I could comment on a movie in which I missed a 40-minute chunk, but it was okay. It took itself way too seriously, that's the problem. For a movie about a comedian, took itself way too seriously. It definitely wasn't a comedy at all.

But how can you have a show about a stand-up comedian that's not funny? Well, you know, I'm a sucker for movies about divorce. So I thought it was okay. Okay. It's an airplane movie at best. Yeah, I think that's where I watch it. All right.

I rewatched a classic that I haven't seen in a long time. And this is a movie that could never be made today in a million years because no one would believe it. It's called Dave with Kevin Klein, where he is a look-like with the president. And then the president gets sick and he becomes the president. And I haven't seen it in forever. It's one of my favorite. I think the 90s has the 90s is just the best in terms of White House stuff, right? Was that Sigourney Weaver?

So it's Kevin, the cast, I couldn't believe how good the cast was, I forgot about it. Kevin Klein, Sigourney Weaver, Frank Langela, Vingraims, Ben Kingsley, Charles Groden, Laura Linnie, Bonnie Hunt. Whoa. It was just like a murderer's row of, oh my gosh, that person, and that person, and that person. And it's such a sweet look at, like, the White House and politics that could never be made today. Because you'd go, no, that, but you could make that movie in the 90s because politics were different. and I just, I don't know what it is.

That in the American president is like neck and neck for the best presidential movies ever made. They're both made in the 90s. Air Force One. Get off my plane. Anyway, I can't remember what's on Amazon or something, but I love that movie. Aged perfectly and horribly. All right. Grats to you.

Thanks for coming on the show today, looking like a guy from Bronx. Is that fair to say? Yeah, I feel completely. I mean, yes, I'm wearing this outfit ironically. I understand that I look like a complete buffoon. No, you have to. You have to buy all the championship stuff. You're keeping everyone in business right now.

Your next gear purchases. Your disposable income. All right. Animal Spirits at the Compoundews.com. Personal emails, personal responses. We'll see you next time. Hey, y'all. It's Kelly Clarkson with Wayfair.

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