Animal Spirits Podcast - Inflation or Price Gouging? (EP.374)

Episode Date: August 21, 2024

On episode 374 of Animal Spirits, Michael Batnick and Ben Carlson discuss: what an average year in the stock market looks like, Seinfeld on consumers, why inflation is such a tricky concept, millennials are richer than you think, grocery stores are not the enemy, star fund managers, how demographics will help the housing market, sending your kids away to summer camp, and much more! This episode is sponsored by Eaton Vance. To learn more about the Eaton Vance Short Duration Income ETF (EVSD), visit: https://www.eatonvance.com/etfs.php 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 Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com 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/ Learn more about your ad choices. Visit megaphone.fm/adchoices

On today's animal spirits, Ben makes a reference to how consumers are like Seinfeld tipping over a Coke machine. Yes, you've probably never seen that episode. Millennials are way richer than you think and even richer than baby boomers at the same age. We talk about how inflation prices are fairly misunderstood. Here's a stat that'll blow your face off. Oh, Michael Bannock. 13,000 people are hitting age 35 every day for the rest of the decade.

And what that means? Ben asked me about sending my kids way to summer camp and much more. Hope you enjoy the show. Today's Animal Spirits is brought to you by Eden Vance. Check out the Eaton Vance short-d income ETF, EVSD. We're talking a diversified portfolio

of fixed income securities, government securities, corporate bonds, mortgage and asset-backed securities, average duration of three years or less. Still pretty good yields in that space. What's the yield? Yield to maturity, 6.2%. Remember and

2020, Microsoft, one of the monsters borrowed at like two and a half percent, I think. Pretty low. High yield was yielded like four. So now we're talking a mishmash of short-term fixed income of asset-backed securities and government-back securities and corporate bonds. Actually, got some juice. Love to see it. The Eden Vance Short-Duration Income Fund is an actively managed fund in an ETF wrapper.

To learn more about the Eden Vans' short-distance income fund. short duration income ETF. That's ticker EVSD. Hit the link in the show notes. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik 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 securities discussed

in this podcast. Welcome to Animal Spirits with Michael and Ben. We've got a collab with Tropical Brews, as we've mentioned multiple times here on the show. Not only did we have the Animal Spirits one, which was littered all over Future Proof, 2023. Hope to see it again. I'll be bringing mine. You know what else I'll be bringing in?

Future Proof 2024, which is turning out to be a monster event. I'm psyched. My excitement juices are flowing then. We've got a compound shirt as well, which I have to say, a little bit nicer material. Not that there's anything more with the animal spirit shirt, but this one is even better. Isn't it the same material? I don't think so. Okay.

Well, it's a good contrast because we've got the light and dark. It's good diversification. And Tropical Worlds just emailed us last week, said, hey, we've sold enough shirts. We're sending our first check to no. Kid Hungry. So not only do you get this fantastic shirt that's very breathable in the summer, especially on the beach in Huntington Beach, you're helping out a good cause and no kid. Oh yeah. No, no proceeds to us. No, we don't get anything. Right. Okay. Anything that would have gone to us goes to No Kid Hungry. I got my dad one of the animal spirits shirts when we first came

out and he's one of these baby boomers who he has like one nice shirt. Like he has like one nice winter shirt and one nice summer shirt and when it's time to wear a collar because he's retired and he whatever does in it. His animal spirits is his nice shirt. He has like one nice shirt. He has like one nice shirt. So it was my birthday last week, and we all kind of, you know, put the wine shirts on. And my dad, Ed Carlson, bust out the Animal Spirit shirt because that's his one nice shirt he has. Love it. So go to Tropical Bros. Hit the collabs.

You'll find us. There's also a link in the show notes, as always. All right, Ben, happy birthday. Saturday you turned, how old are you? 43. 43. How does it feel? I'm closer to 65 than Am to 20.

Yeah. Passage of time. What did you do to celebrate? I know you're a birthday hater, so. I'm not a birthday hater. I'm not a birthday hater. I just don't think adults need to get each other presents. But no, I've mentioned this before.

One of the great parts about having kids is that after a certain point, it's more about them than it is about you, which is great. So they were excited to get me stuff, but also, let's see, my parents came in, and my sister came and went on the lake. But my gift from my parents was an inner tube, a new intertube for the boat that I could pull my kids on. Was it really a tube? Like a tube for a boat. Is that a mechanical thing or is that like a raft? Yeah, like I send you, you asked me what I was doing and I sent you the video.

Okay. Yeah, but so it was a present for me, but let's be honest, it was really for the kids. So that's fine. I'm fine having it because, let's be honest. My birthdays don't matter until you turn 50 now once you're a middle age. All the other ones don't really matter. I turned 40 this year, the next year. Yeah.

So 40 you celebrate 50. 50 you celebrate. What should I do? Anything in between? I don't know. Hair plugs? Let's do it. You know, a weird thing is happening to me as I, as the year start to pile up.

I don't like it. My eyebrows are getting bushy? Okay, so you don't go to like a barber, so you don't have anyone that can trim up for you. Oh, is that what they do? So I'm not sure what to do. Matter of fact, Robin's been pointing it out more and more. And we were on the boat last week, and I swear to God, I saw my, I saw my,

My eyebrows and the wind did it feel great that I don't pluck that it hurts really bad insult to injury I'm bald and my eyebrows are started to length I just show up occasionally get a pair of nice little barber scissors and trim up this is what happens no his hair ears hair I can't go to a barber for an eyebrow cut that's absurd no no yeah I mean you could have them do the razor blade on your head once a week you know I do that a lot that's a that's a okay yeah but yeah no I'm not a but middle age, it's, I'm fine having it be more about the kids and it is about me. Credit to me, being so selfless. And I don't care about my own birthday.

Yep. All right, what a week. Remember the Lehman moment we had, like two weeks ago? I did. We had like a two-day recession. It was Lehman Brothers for like two hours. That was awful. Now we've had, what, eight days in a row of gains for the SB 500.

I looked this morning. We're taping this Tuesday morning as we usually, do, the S&P 500 is up almost 19% on the year again. Is it too early to start looking forward to 2025? I mean, we know the summer's over. Can we say that the year's over? No, no, no, because we have, first we have to talk about election volatility in November. We can't look past the election volatility that people are going to be talking about.

That's going to be a headline for a while. But this, I've decided I'm going to, when I retire from podcasting and blogging and I'm going to become a strategist. okay and my my whole ethos as a strategy is going to be every year I'm going to predict a number that's 20% higher than current year end and two out of every three years or so I'm probably going to be right so look I've had chart kid Matt put this for us the average up year and the average down year for the stock market when stocks are up on average they're up 21 percent going back to 1928 when they're down they're down 13 percent hang out a minute wow hard to believe isn't it so in a good year for the stock market on average it's up more than 20%. So look at this. Wait, so you're just looking at the up years. So when the market is up, the average is 21%. Yes.

When it's down, the average is like 13% down. So this is since 2017, we're up 22% down 4%, up 31%, up 18%, up 29% down 18%, up 26. And now this year almost up 20% again. And I'm thinking another 20% in 2025. It's early, but Gambler's fallacy would, I don't know, some problem there eventually gets you,

but so when I become a strategist and they ask me for a year on target, I'm just going to pick 20% every year and I'm going to be right. You'll be the highest. You'll be the highest every year. I'll stand out. I'm going to dethrone Tom Lee from Pirmable status. It's going to be me, not him. Okay,

so I know you didn't really get into Seinfeld all the way. You didn't watch the whole thing, right? You probably haven't seen all the repeats like I have, I've seen every episode like 12 times. I remember my mother-in-law used to claim that she was like the world's biggest Seinfeld fan. And I would watch it, you know, getting home from college, we didn't have streaming back then. We would put Seinfeld reruns on after lunch, after dinner. I've seen all the Seinfelds multiple times. And we got for Christmas one year, we got my mother-in-law some Seinfeld board game. And it was Seinfeld

trivia. And she's like, oh boy, I'm going to clean up. And I just smoked her. and my wife got so mad at me because she's like she was talking a big game she was writing checks her body couldn't cash yeah she thought she was a science field expert

and I just smoked her and my wife got so mad at me because she's like why can't you just let her win and I'm like listen she's put I'm a Seinfeld fan I can't help it

anyway there was one part where Jerry says to Georgian Lane breaking up is kind of like knocking over a coke machine it takes a few pushes back and forth to get it knocked over and he's saying that, you know, you break up and you get back together,

you break up, you get back together, then you break up. Did you write a blog post about this? That's possible. Pretty sure you did. Seinfeld explains most things. But this is my same analogy for the consumer. I think some people wanted to believe because of COVID and things dropping off so drastically that this time around,

the consumer spending is just going to drop off a cliff. And that's going to be the economy, right? Because we had some soft data. People are going, oh, here we go. this is it, everything's going to fall off a cliff. And I think that the economy this time around is more like the pop machine, soda machine if you're from the Northeast, because retail sales came in just fine again last week, looking good, right? Retail sales were above estimates. If you look at U.S. retail sales on a nominal basis, we're still far above and still rising slowly. So it's not

like this kind of thing is just going to all of a sudden end immediately outside of some crazy exogenous shock that hits? I think the Walmart CFO had a really good quote on the consumer. Let me just get to it because it's in the great quarter section. You look for that and I will talk about

Ryan Dietrich had a tweet the day Walmart reported and he said the good thing about Walmart is for promenverers is if Walmart reports good results that's bad for the economy because people are trading down and if they report bad results

then it's bad for the economy because even Walmart's hurting. Right. That's good. That's good. Okay, so an analyst asked about the weakening consumer. What does your guidance assume in terms of your outlook for the consumer? Blah, blah, blah.

Okay. So he said, we did not see a step down, and our outlook for the back half of the year is really for more of a continuation of what we've seen. Even in the first couple of weeks of August here, things have been remarkably consistent. So I know everyone is looking for some piece of information that maybe indicates further weakness.

With our members and our customers, we're not saying it. Hey, I'm one of those customers. What was that? I don't know. That was, actually, I know exactly what that was. That was a trailer that started to play. I don't know where I had it open. But Ramp sent me a trailer for this movie that's coming out in December 8th called Y2K.

It's an A24 movie. Got to be a horror movie. Oh, yeah. It is. Okay. I feel like they made this for me. So my wife took my son to finally see Twisters last week. Did you go with him?

I didn't go. They went during the day when I was working. And he loved it. And I always asked, he always tells him about the trailers. And he said, there was this alien movie trailer that looks awesome. But I probably can't see it because I can't see horror movies. I said, yeah, probably not. And I said, oh, it was aliens.

I said, Michael went to see it. And he was all weekend. He's like, do you think Michael liked it? What did he think about it? I think you liked the alien? Really into it. Okay. So we had a little argument on Slack.

yesterday about inflation adjusting. Because if you look at the retail sales nominally, the number is off the charts higher. But if you adjust it for inflation, it's not, it's, it's been rolling over a little bit. Wait, hang on. Hang on. I want to, well, peel back the card. You made me laugh yesterday. Okay. So the, the data in, in, the subject to the debate was Ben was showing percentage of times that a 60, 40 portfolio is up over any rolling gear periods. And I said that if you're talking 20 years, you got to inflation adjust, right? Like, it's a 20-year period. A nominal just doesn't quite cut it with investments. So, Ben wrote, in the words of the judge in my cousin Vinnie, that is a lucid, intelligent, well-thought-out objection. Overruled.

I owed you because you gave me a my cousin Vinny reference last week. I did? You said, we were doing an interview and you gave me the thing. I said, I'm done with this guy. Movie still works. That's why it's so rewatchable. So my whole contention is, it's funny to me, it's one of those we've done it this way because we've always done it this way. Some things we invest, we adjust for inflation and some things we don't.

And I think there's no rhyme or reason to it. To your point, why don't we, most long-term stock returns, most people don't adjust for inflation. A handful of people do. I think Meb Faber is a big one on this. He's always adjusting for inflation. Most people don't. We always adjust GDP for inflation because, well, inflation.

inflation was part of it. We never adjust profits for inflation. And here's another one. I asked Matt the chart kid to do this. Inflation adjusted credit card debt. One of the things we should, I think, adjust for inflation is I'm going to bring this to the tribunal of investment gods and ask them, why don't we do this? We should adjust debt for inflation. The government debt should be adjusted for inflation. So should credit card debt. Now look at this. Well, I feel like debt is often adjusted for GDP. There's not the same thing, but it's not, but if you're using nominal debt numbers, you're a client. Yes, but I feel like a lot of people do this. So I looked at, I said, I want to see inflation-adjusted credit card debt just because I've never

seen it. I'm not trying to prove anything. So our chart kid Matt did this for us. Inflation-adjusted credit card debt going back to 1968, peaked in 2007-2008, still well below that figure. And if you look from the start of 2020 to now, inflation-adjusted credit card debt is up 1.8%. From one to one? From the start of 2020 till now. Obviously, you had this drop in there. But credit card debt on an inflation on just a basis. Bob is poking red in. Hold on. This could be important.

You're looking for my wallet? Check my fanny pack. You still have the same wallet as me? I had to downsize. Actually, I upsize and then I need to downsize. So, Ben and I, remember the one time I stole your wallet by accident? Yep. I had it left in Uber.

I got a thicker one because I don't like the, The wallet that we have, that you have, where do you put the cash? Oh, yeah, that's right. You're not a Fiat guy. You don't use cash. But if you need cash, you put it in the rubber band. That's a pain in the ass. Okay.

It's not as easy. I agree. But I don't, I rarely have cash on me. All right. This is from Torson's Slock chart of the week. Household debt to income ratio around the world in developed countries. Canada is the highest at nearly 200%. UK, next, France.

United States is on the back end, 110% versus like, 190% in Canada, 150% in the UK. Do you think these countries are so much higher because their real estate prices to income are so much worse? Yes. Is that the only explanation? Mm-hmm.

I don't know. Listen, I'm not an economist. Although, I did graduate from Queens College with a degree in economics, not to break. Okay. I want to talk about economic textbooks in a minute. Mike So this is back to my point on pushing over the soda machine.

layoffs are extremely low right now. So he shows the layoff rate and a quit rate. And the layoff rate, it doesn't really spike that often anyway. The quits rate spikes more than the layoff rate, but it's near record lows this century. So I heard Claudia Somm talk about this on Adlots this week. She was saying one of the weird things about this labor market is that one of the things pushing up the unemployment rate

is people coming back to the labor force because so many people left the labor force in the pandemic. So if you look at this, is this a good thing or a bad thing? So the labor force, you can see, this is just the U.S. labor force. I didn't break it up by any age ranges or anything. It obviously crashed during the pandemic, and it slowly but surely come back up, and now it's at a record high again. This is bad because people need income to pay for their livelihood.

I don't know. How could this be bad? I guess that's the thing, though. So the people coming back are maybe having a harder time finding a job, but it's more people coming into the labor force, and that is essentially pushing up the unemployment rate. Interesting. I'm sure there are reasons to think this is a bad thing, but I'm all ears.

You know, usually when you get into this sort of trouble with numbers, it's denominator blindness, but this is the opposite. This is like a numerator. Right. This is unusual. Exactly. Especially when you have all the baby boomers that are retiring and dropping out, it's surprising.

I mean, I don't know if it's good or bad, but it's certainly useful context, no? Yeah, I think that's the point. Torson Sloc via Carl Kintanilla. Retail sales are strong. jobless claims are falling, restaurant bookings are strong, air travel is strong, hotel occupancy rates are high, bank credit growth is accelerating, bankruptcy filings are trending lower, credit card spending a solid, and Broadway show, attendance, and box office grosses are strong. There are no signs of a recession in the incoming data.

That was like a, so you did Torseslock via Carl Continia. That was kind of like Michael Scott doing the Wayne Gretzky quote for us. That's just animal spirits fodder right there. So that would be, I guess, Matthew Klein made the point that maybe the, and I'm trying to play devil's advocate here because we've been pounding the table, generally knocking the table for a rate cut. I guess that would be the only case for not thinking a rate cut has to happen is the economy reigns strong. I still think it does make sense, but that would be. No, no, no, no, no, no, no, no, no. There's no reason for the Fed funds rate to be so far above the inflation rate.

Yes, I agree. I'm trying to play devil's advocate. Yeah, no, there's no devil's advocate. It's time. All right. This is interesting from the Wall Street Journal. This is the lead for their piece here. Millennials are now wealthier than previous generations were at that age.

They can't believe it either. And it does the thing where they interview millennials and asking them how they're doing their finances. And they show, the Wall Street Journal shows, millennials have had by far the biggest increase since 2020 in relative wealth. And you can see wealth by generation. The baby boomers still hold 50% of low. all the wealth in this country, but millennials have gone from, I looked at this up, because the Fed has this website where you can look all this stuff up. Millennials went from less than 1% of total wealth by households in the country in 2010. You get, you okay over there? You yawning?

That was a big yawn stretch. Well, we are talking about demographics here. Hopefully you didn't blow your back out with that yawn. So millennials went from less than 1% of total household wealth in 2010 to nearly 10% now. And remember, the whole thing in the 2010s, and I never believe this, but there was people writing think pieces. They're probably mostly people in New York saying millennials are never going to buy houses. They're never going to buy cars. They're never going to move out of big cities. And guess what the biggest reason for millennial household wealth increasing was? Real estate, it made up 50% of the increase in household wealth from 2020 till today for millennials. Now, the counterpoint

would be, well, that can't happen again. And millennials have more of their money in households. So in real estate. So millennials have 40% of their net worth in housing, which is far lower for Gen X and Baby Boomers. But guess how much Gen X had in housing in 2003 of their wealth? 40%. 50%. Yeah. It'll go down as you build liquid assets. Exactly. So it'll get better. This is another one that is shocking to me. In early 2024, millennials and older members of Gen Z had on average in adjusting for inflation, 25% more wealth than Gen Xers and baby boomers did at the same age, according to a St. Louis Fed analysis. How many people would believe that? 25% more at the same age, especially when you consider most of these millennials and Jen

Ziers went to school longer. All the baby boomers, for the most part, didn't go to college as long, they got married earlier, they started jobs earlier, and millennials are still wealthier than they were at that age. I had a few people tell me when I shared this that I don't believe it. I don't believe the data, which I guess is a take, a stance. If that's what you, I don't believe it. Well, you think like what? Because there's like the narrative that our parents had it better than us?

Yes. Someone also sent me. Oh yeah? Oh, yeah? Do they have, uh, they had commercials. How about that? That's true. So look at this one. So someone sent me this money magazine piece. It's from 1983. You see this?

The baby boomers. Can they ever live as well as their parents? Yeah, this is just perpetual. Yes, it really is. But look at these people. It says, not yet 30. Sherry and David Shield, blah, blah, blah. Look at how old these people look.

It says they're not even 30 yet. How did people look so old in the past? They're late 20s. She looks, I don't know. 40? And he looks like the biggest dork ever. If he was in his 20s, I guess our parents were dorks. Yeah.

My whole point is this is the circle of life. Some people thought this is never happening for millennials after the great financial crisis. They are screwed. The job market stinks. They're never going to have any money. Guess what? It happens. We're turning into our parents.

I already am. I'm eating cottage shoes with fruit in it. I mean, I've said this before in the show. I am my dad. Yes. We're going to be baby. We're going to be baby with us someday. I was with my dad is famous in my family for just bungling phrases.

Ah, that's my mom. Same thing. For example. Like the one that my brother and I always laugh about, he said that Jeter means detour in French, which I don't know if that's true or not. Probably not. But so he said, now batting from the Yankees. Number two, Dennis detour. And my brother goes, Dennis. What hell is Dennis? Dieter. So anyway, yesterday, I was with him over the weekend and he said something that made absolutely no sense to the point where we're like, okay, your mind is. on the decline. So we were laughing.

We said, hey, I made it 71 years. Happens. I don't think I'll make it that long before my brain starts to go. I'm already forgetting shit. That's true. My mom was giving me crap for being old on my birthday,

and I said, if I'm this old, how old are you? Because you had me. Come on, right? All right. Getting back to the Fed stuff, I did this tweet about

the last 12 inflation readings, and you can see it's all the volatility has been sucked out of inflation. It's the latest one was the lowest we've had, I think, since the whole inflation spike happened, it was like 2.9%. 2.89 if you want to go out, another decimal point. Jason Furman did inflation X shelter, and it's down over the one month and three months. It's negative. So this is the thing why,

obviously, the Fed needs to cut. Come on. Okay, so here's another one. Nick Timrose, Fed Woj. Someone tweeted, can someone please explain to me in Cran how inflation keeps going down, but we continue to live in the most expensive timeline of our lifetime, and he did this thing in Kran that says changes in prices in 1990, up into the right, inflation all over the place. Now, I know I've probably beat my head against the wall on this a few times, and it's funny because people still, there are still people who think it's legitimately intelligent argument to say the inflation rate is going down, but prices are still as high as ever. People think that's an intelligent argument, which is kind of funny. But if you think about it, how do people

know this. I think this is what we've learned in the past couple of years. Americans don't understand the economy or how it works. Most economists don't and can't explain it, but no one teaches people how inflation works. You mentioned you got an economics degree from Queens College. I did a liberal arts college and there was no finance degree, so I did a piecemeal and I was like two or three economics courses away from a minor. And my guidance counselor was like, hey, if you're coming back for an extra semester at the end, just get your economics minor. Can't hurt. So I did it. I would like a refund from whole college because I didn't learn anything in my economics courses to get my minor that is applicable to the real world.

You're a minor in economics. Yes. I was a major. I think so. I'm the authority here. Just for the record. That's fair. I also got a minor in accounting, though, in a major in business management.

So I was just, I was stacked, man. Look at me now. But I think back to the stuff that I learned in my econ classes in college. And I learned how to draw some supply and demand. charts, none of what I learned in college and economics courses is applicable to the real world and anything that's happened in the last 20 years. Yeah, I got to be honest. I don't think I remember a single thing from economics other than, yeah, the graphs, the lines. Nothing. I remember there was a lot of econometrics formulas that didn't make sense at the time,

and I... Yes, but it's also true that no one is... I think that's what I'm trying to say. I learn nothing. No one is incentivized to provide the right context on this stuff. And so, So the stuff with the election going on now, I know we're going to talk about price gouging and tariffs and incentivizing people to buy their first house and stuff. And the economists get all up in arms whenever these politicians talk about this stuff like price gouging. And here's the thing, though, the average person, more than the average person, does not understand how inflation works. And they like hearing this stuff. It makes them feel good. like they just want to have this like sounding board or this something to like someone to blame.

And so when politicians say price gouging, even if economists say this is ridiculous, it doesn't make any sense. That's what the average voter wants to hear. So people are giving them what they want to hear. So Robert Reich, who's one of these people, says food company, he tweeted food company profit increases since inflation peaked. And he lists cheesecake factory, Chipotle, blah, blah, blah. And how much do they collectively spend in stock buybacks? They use inflation. as a cover to get rich. So, Ben, I threw this chart in the dock of Kroger and Albertson, two publicly traded supermarkets, grocery stores.

What do you call them? Grocery stores or supermarkets? Interchangeable? I'm a grocery store guy. Okay. And for listeners, not viewers, for listeners, the revenue line is so far ahead of the income line. I guess I could have also shown margins, but look how funny this is. Yeah.

So Kroger did $150 billion. in revenue in the last 12 months, $150 billion. Their net income was $2 billion. Right. Albertson did $80 billion in revenue their net income was one, one over 80, two over $150. Does that sound like their price gouging?

But the thing is, people get the most angry about grocery store prices. So what do the politicians do? They talk about grocery store price gouging. So this is the thing that, because people don't get, like, I think there's some people who legitimately think, well, if inflation's going down, prices have to go back to lower, right? Yeah.

People legitimately think this. And that's the problem is no one understands how this stuff works. Grocery stores are like a public utility. I mean, their margins are, how do they even stay in business? What a shitty business. It really, I always wonder how much excess food, like how they manage the inventory of those places. How much food has to go to waste every week at a grocery store. I don't know, six months ago we spoke about the prepared section.

Like, there's so much food there. How much of it gets thrown in the garbage? Yes. I don't understand how any food businesses survive. Restaurants, grocery stores, I don't get it. We got a bunch of burger emails last week. We did get a lot of burger. And it seems like the resounding theme is the fat,

when you have to cook on a griddle, like a flat surface, because it keeps the fat there and the fat doesn't drip down like on a grill. And then excess salt. That seems to be the biggest. way people explain why burgers are so much better at restaurants? So, like, butter, fat, salt. There was, yeah, a bunch of emails.

And there was, there was, there was, two main things. The point that you just made about the griddles, which, by the way, I bought a griddle. So thank you, listeners. You put it on top of your grill? Put it on top of the barbecue. Okay. I still think you're not going to make as good of a burger as, might be a little better, but not much.

I'm pretty confident in my burger abilities. But the other part. I also say a lot of it is the meat, like the kind of meat you, You buy the content of fat in the meat. Yes. So in grocery stores, when you buy a package of whatever, you know, beef for seven bucks or how much your cost, it's just the quality is not there. Now, if you go to a butcher, a proper butcher, and get some real ground beef, then you're cooking with gas. Right.

If you just go get the cheapest ground beef, you can find the groceries store, that probably is part of it, too. Right. All right. This is from Jeffrey Patak, Morningstar. From ARC's inception in October 2014 through January of 2024, the date of its most recent AMI report, the fund has collected $363 million in fees cumulative. Over this period, the fund has lost $7.5 billion cumulative. So he plots the fees versus the cumulative investment lost.

Now, this is the kind of thing that you can't really blame on the manager because all the money came in right as the performance peaked, and that's why there's so much money lost. But this really is a textbook star portfolio manager run that Kathy Wood had. Yeah. You have this huge spike in performance. I looked at the assets peaked at $28 billion or so. It's still a little less than $6 billion in that fund, which seems like a lot to me, considering how poor the performance has been.

Remember there was a lot of talk about Kathy Wood at the time because she was a star manager. And there was a lot of people that were predicting this, and they were labeled as haters. And in this case, what they were saying at the time was fair. Everything we read, you wrote about Jerry Psy in your book. Like, he was the 1960s guy, right? There was people in the Internet bubble. There was the, who was it, Ken Hebner and all these people.

It's the same thing. I pulled the John Hussman one. Remember, he was the one from the crisis in 2000. Going back to the inception of Husband's strategic growth fund, this inception, which is like 2000, this is like two plus decades, the fund has up a grand total of 6.9 percent. Nothing? What? I said, oh, not nice.

Well, the S&P is up 500 percent in that time frame as well. I mean, the crazy thing is look at the spread. So in the first, I don't know, decade plus of. the existence of this fund. He smoked the S&P. Right. And he did good not only in the mid-2000s, but I think it was down, the fund was down 9% in 2008, one of the few funds that did well, and the S&P was down 37. So tons of money comes in, and he hasn't gone out of the permanent mindset since then. He had $7 billion at the peak. There's still $300-something million in here. And I think the majority of the money is his that he's made from fee revenue in this fund.

I think he's probably walked away with a couple hundred million dollars in his fund that has literally not made anyone money in its history. Yeah, tough. This is just the way the business works sometimes, I guess. Yeah. All right. From the Daily Mail, getting back to my Midwest hedge. Daily Mail is a UK. Why they're writing about the Midwestern real estate?

That's a good question. They have a lot more ads in UK paper websites than we do. Just plaster of ads. All right. Florida condo owners are slashing prices up to 40% as they strive to dodge massive incoming repair costs. Remember that condo building that fell? Was that Miami or where was it? The condo building totally collapsed on itself. So they're saying a lot of these older units, because that happened, they're really cracking down on them, making sure they have enough repairs. And a lot of the HOA fees, they just haven't set aside enough money to cover these.

And so they're saying some units are just selling for way below asking because they know the HOA fees are going to have to be jacked up to fix these old condos. So they say an estimated 360,000 property owners in South Florida alone may not be able to afford the repairs reported by the new law to fix these condos up. Like this is, I don't know, I keep hearing stories about these costs where insurance costs rising, HOA costs rising. I don't see how this stuff gets any better short of government intervention somehow. And I don't know why the government would step in and help condo owners. Yeah. If you're hit with one of these, it's devastating. Yeah.

So the point is that people are trying to get out of them now to avoid having to pay extra fees, but that people are having to take that into account for the price. So having slashing it big time. All right. Remember our 10,000 baby boomers retiring every day stat? Yep. I think you had to, like, fact-check that. You're like, is that true?

Sounds, it sounds implausible. But it was true. It is true. So this is from John Burns. There are 13,000 Americans reaching prime home buying age every day for the next decade. Now, this is Americans turning 35. Say that one more time. 13,000 Americans reaching prime home buying age every day for the next decade.

So this is Americans that are turning 35. It's pretty crazy, right? Yeah. So I look at the chart here. So this is getting back to my bullish thesis on housing, if there is one. That's it. Right there. Yeah.

Right? Now, the question is, how do they afford them? So Jeremy Greenfield from Sherwood News, which is a really good new site. We've got some friends who write for them and edit them, and it's really nice looking. It kind of looks like the ringer. Have you seen this? Yeah, it's good stuff. So he wrote a piece that apparently was inspired by our takes on animal spirits, which I don't remember having this take.

but I'm going to take credit for it anyway. And he called and wanted to talk to us about, I think I said boomers should help their kids out. Boomers control $7,8 trillion in wealth. If they have the means, they should be helping their kids out now with a home. And so he put it in his article, according to the National Association of Realtors,

12% of buyers this year are getting help with a down payment up from 9% last year. That's actually low to me. I thought it would be higher than that. So it's not that many people getting help with a down payment. I thought it would be more like, I don't know, 30 or 40%. this is what we should be doing with the inheritance, right? It should come now for young people who need help,

which he asked me, what's the downside of this? And I said, well, obviously not every family can afford this. Some people aren't going to be able to get help from their parents because their parents aren't financially well enough to do it. So it furthers the gap between the haves and the have-nots, unfortunately. Yeah. But I don't know what the alternative is. Because you have the $25,000 incentive for first-time homebuyers,

which everyone, I saw immediately, everyone goes, well, that'll just jack up prices by $25,000, which is just not how things work. Well, yeah, that's making a lot of assumptions. Yes. That every buyer is a first-time home buyer? Yes, I didn't get that either. But I don't know what the other alternative is

to help first-time homebuyers out, short of mortgage rates falling a lot. I just think if you're on the tail end of being a millennial, if you're a younger, millennial, older Gen Z, and you missed the first wave, I think your whole life you're going to be spending higher costs on things that you would want. Is that fair? Yeah.

All right. So mortgage rates are coming down. Ref financing index jumped by 34.5% last week. That was the largest increase since March of 2020. Now, of course, it's off a low base. But nevertheless, activity is picking up. It's getting there. Someone in the comments last week said,

these guys act like it's free to tap your home equity. And then the crying emoji. Still never used it in my life. Probably never will. But I get the point of it. And I don't think, because we talk about the HELOC boom coming, I don't think it's free money, but I do think it's very flexible money. Because, so we're doing some renovations right now. We're redoing like a screen-ded porch.

What else are we doing? Getting a mudroom? No mudroom. We could use a way bigger mudroom. Our mudroom is very tiny. Hold on. Hold on. Hold on.

This whole time? Hmm. You had a mud room this whole time? Of course I did. I'm in the Midwest. It's very, pretty small, though. Your mudroom is like three times the size of my mudroom. It's, ours is way too tiny.

We said if we would have to give again. How have you been in the mudroom closet this whole time? Shame on you. I'll send a picture of the mudroom so Duncan can put it on YouTube. It's, uh, it's much smaller than yours. We would, we'd want a bigger mudroom. So, so we're doing some work, and I'm using the home equity line of credit to to write checks for this stuff because it's easy and it's flexible enough to move other money around.

And I'll pay it off in like a year. Even if rates are high, I don't care because I'm not paying that much an interest cost. I don't think we ever said. home equity was free? What are you talking about? And the other thing is the great thing about it is for people, I mean, if you think about it, a mortgage isn't free either, but how many people could afford to pay cash for their house? Very few people. So a mortgage gives you the ability to buy something now that you couldn't in the future in a home equity line of credit. If you do a huge home renovation, that's six figures or something, you have 10 years to use that

HELOC, and then 15 years, that's interest only for 10 years, and 15 years from the end of that to pay it off. So it's essentially another mortgage that you can have. It gives you flexibility That's the whole point. Leverage, baby. So across the street from my office complex, I live in kind of a more retail area, like where I live, or where my, sorry, my offices, it's office complexes. It's office complexes. There's a bowling alley across the street, which for someone I've never gone bowling in the middle of the day. I feel like I should just to up my game. I don't think we've ever gone bowling together, have we? Didn't we bowl? Oh, wait, you weren't... Good team building exercise.

No, you weren't there. We bowled that future-proof retreat in Colorado Springs. We had a great time. So, but on the street that leads to my office complex, there's a lot of duplexes and apartments. And there was this one little piece of woods that was sitting there. And in the last year, they completely knocked all the woods down. They built up an apartment.

It's not that big. It's probably 15 to 20 units. Who built a blackstone? Probably. And so there's a website. on it. And it's almost done. They've been working on it. It looks pretty nice. And I looked at it, and I wanted to see, like, okay, how much of these? Because it's one in one bed, one bath, and two bed, two bath. I pulled it up on the website. Two bed, two bath starting at 1585. One bed, one bath

starting at 1395. And I thought, for a brand new apartment, not the greatest place you want to live as a young person, but it's not bad. So in 2007, when my wife and I were renting our first place after we got married, we rented for like six months downtown, then we got a house. and it was $1,000 for our place in 2007. So I did inflation adjusted $2,000 to $1,000 till today. Now you're inflation adjusting. Yes. So that's $1,50.

So that's essentially the same price. And we had a two-bed, two-bath. And that's the same price as they're charging at this place. That's not bad. My first apartment was in a Storia. Not out of control. $2,000 for my first apartment in Astoria, one bed, one bath. Nice place?

Pretty nice. What would it go for now? Let me check. I'm going to guess... I'm just happy to see they're building more apartments, though. I'm going to guess $4,000. Okay. Let's say.

No units available. I don't know. $4,000. Everything's so expensive these days. Not apartments Grand Rapids. Yeah. It's true. Move to the Midwest.

All right. Some great quarter stuff. Hilton, CEO. We sit around this very table with all of our senior team, including head of sales and his team. And they feel very good. They're not, there's no sense of sort of slowing on demand and pricing and the group demand. All right.

Hilton, stock looks, uh, whoa, looks healthy. Not bad. Almost on an all-time high. What's that? Their stock looks good. Uh, however, they did say something that we continue. to hear. The lower sort of half of consumers, maybe even the lower three quarters, I mean, you can read the data. It's all out there. The bank accounts, the checking accounts, pull the money

coming out of COVID. They spent all that money. Now they're barring. Blah, blah, blah. So, yeah, lower income consumer continues to get pinch. We're hearing that for most companies. My only bone to pick with Hilton. I got a Hilton Amex, like a year ago, two years ago, maybe. And I did it for the sign-up bonus because you get 100,000 points or whatever. Those points just don't go anywhere now anymore. Nah. It used to be like, I think if you have a credit card, sitting on those points is a worthless exercise.

I think you use them as fast as you can. Get the cash back, going to trip right away. Don't sit on those points because they just keep, that's the highest inflation rate there is right now. Writter cost. Worse inflation hedge ever, credit card points. Yes. They're constantly going down in value.

It used to be like you could get a good two or three nights at one of these places, and now it's like you barely go one night with like a 200,000. points. It's crazy. And like at like the courtyard in, not even like at like the nice ones. Yes. I got a story for you

before I get into this thing. When I lived, I did a summer abroad in Vienna when I was in college. Now it sounds way more glamorous than it was. It essentially cost the same amount as getting two classes. So I got eight credits for going there in the summer. And the way that they kept expenses down and like 40

or 50 people, and they did this every year for 40 or 50 years. They've done this program. You live in Vienna, but you live with a host family. And so I lived with this family in Vienna. And it was way in the outskirts of town. So I would have to take a, I'd have to walk through a park to a bus stop. I'd take the bus stop to the subway stop. Then I'd take the subway into the city to get to our classes, which is right across in the opera house. Beautiful. But every day I'd like, Leonard Cohen once said there's a concert hall in Vienna. Did you go to that one? I did. Beautiful.

Knocked down in World War II and they rebuilt it. Went to a few operas there. I took an opera class for my music credit. So every day I'd walk through the park in Vienna, and I'd see these old people walking around, walking their dogs, feeding the ducks, whatever, beautiful park. And I thought, you know, you'd walk past someone, and I'm a head nod kind of guy. Like, yeah, kind of like a good morning, hello. And every day walking by these people in the park, I'd get nothing. No head nod, no smile, no nothing. And my professor of opera at the school, he's this old guy. He spent, he did half his time in Vienna and half his time in, in New Jersey, because he taught at Prince, and he had this high hair like this, you know, bald but high hair,

like the Larry David. And I asked him, I said, what's going on? How come no one will give me a head nod? This is, I don't get it. I'm just trying to be nice. And he said the people in Vienna don't like the minor intricacies. Like, they don't like the little, hey, how's it going? They would rather sit down and get to know you. That's a cultural thing. Those are my type of people. Yeah, which I probably should be fine with as a not big small talk guy. But, oh, okay, so it's a cultural thing. For some reason, that story has always stuck with me.

And I think you have to understand the cultural things to understand people. And I say this to, as a lead-in, to sleepaway camps in New York. Okay, because I feel like a lot of people outside of New York probably don't get them. So Doug Bonaparte tweeted that his daughter was away at sleepaway camp for seven weeks. And apparently he got a bunch of crap for people on Twitter. be like, how could you send your daughter away for that long? And then Heather Bonaparte did this whole thing where she wrote about it and like, listen, this is our family, this is our thing, this is a tradition.

If you don't like it, cool. And I think it's a... I love the internet. Yes, it is, right, judging your decision for kids. But, like, you grew up in this world. You did it. I'm sure maybe your parents, I don't know how far it goes back, but so you remember you were talking a couple weeks ago, looking for one for Kobe. And I tell people in Michigan about it sometimes.

and I told my brother about it and he's like, well, has anyone ever thought about just renting a house in the Hamptons instead of paying for this for the summer? And my whole thing is, like, I get from the outside, it might not make sense, but from the inside, if everyone is doing it, can you imagine telling your kid? Yeah, sorry, all your friends are going away,

but you can't go away. Like, it's, so it's a cultural thing, and if you're not part of it, you don't understand it. Is that fair? Yeah. Actually, I met Doug and Heather's daughter in camp. the summer. We were visiting sleepway camps. I told Doug that I was going to be there. He said, say hi. So I did. Um, yes, it is a, it is a cultural thing. And I went to sleepway camp from

like eight to 17, 16. I was wondering how, how long you do it. So you do it till almost the end of high school. We were waiters. We got, uh, we got fired all of us on the last day at camp, believe it or not. They make you work at camp? They don't make you do anything. But if you want to, you could be a waiter there. So you could go to camp and still make some money somehow. Correct. Okay. So unless you get fired, in which case, you make no money.

But, yeah, best summers in my life, some of my best friends there, it's just a whole thing. And what it does, for people that sound like, wait, you say it sounds psychotic, these kids learn how to become people. They learn how to socialize. They learn how to fend it for themselves. They learn how to be independent. it's great for networking and later in life when kids go to college

it's always like a friend of a camp friend or a camp friend that you're rooming with it's a big networking advantage I'm sure they have a time of their lives and the thing is we essentially piecemeal camps

I think so our daughter did a week sleep away this summer that was the longest she did as a week but we also did all these little basketball and football and soccer camps and I don't know add it all together and it's still probably not as much

as you pay for this camp because that's going away and that's a long time and food and all these things but you have to do something with your kids, right? I mean, I guess for some people just let their kids sit around all day and do nothing and play outside. But yeah, anyway, I'm sticking up for the New York camp, summer camp scene. I guess the only people that you'd say, like, come on, is the people, I'm sure there are some people who can't wait to get rid of their kids and want to, like, party all summer and be, because they're not buying their own.

I'm sure those are the ones that you can kind of thumb your nose out a little bit, but most of the people, like, you're doing this for the right reason. Yeah, no, it's great. I'm very excited for Kobe to be going. But have you ever done the compound interest table of, if it took this money and saved it, Kobe would have like $9 million. And the car on the way home, I said to Robin,

between Kobe and Logan, we're going to pay these people quite a bit of money over the next 10 years. Yes, okay. Did you see Deadpool? I did not. I'll see it when it comes out.

You hate comic book movies, but you love Ryan Reynolds. Deadpool is the only comic book movie I really like. I mean, I don't know. After Iron Man 1, they all kind of fell downhill for me. I don't know why I don't, like I really love the comic book movies, but just the Deadpool winking at the camera, I don't know why. I just don't really care for it. See, that's why I like it because all the other comic, he's making fun of the other comic book

movies. We'll see if this one goes. I like the first two. So I'll watch this when it comes out. So Charter had this thing about R-rated movies. From 1995 to 1997, R-rated movies averaged 40% of the movie. box office domestically. Since the pandemic, it dropped down to almost 15%

and now it's back up to 30 with Deadpool. So we had a real bare market there in R-rated movies from box office-wise, which I don't really know how to explain, but I guess this gets back to the point of the 90s were the peak of movies, always in forever. Yeah. I don't know why people shied away from it.

Is that because Pixar came along and people tried to do more family movies? I don't know why that is. Well, it's an interesting point because this crash happened before the Marvel movies. Yeah, it did kind of. I don't know what the reason is. Hmm.

I wonder if maybe more violence became acceptable that, like, what is PG-13 now used to be rated R? Is that possible? Yeah. That could be. There are other ones that show, like, sex scenes have dropped off in movies big time. Maybe that was part of it, too. If you had a sex scene in a movie, it had to be R-rated.

I don't know. Maybe they thought, what's the point? we can get more people if we do it this way well when you say sexy are we talking we talk we talk a nipple i got they are they are they showing it or is it you just see the silhouettes like top gun i don't know what the rules are yeah it's funny that when you said top gun is the first one that came to mind it's the most meticulously ever yeah what a movie yeah very blue everything's very blue yeah take my breath away yeah just totally totally totally ridiculous. I remember, because I saw it for the first time, like, three years ago, and I remember

laughing out loud. Like, what the hell is happening now? Yeah. Did you see TC at the Olympics? No. He's finally starting to show his age a little bit. Finally, like, okay, this... He's in a 60s. Yeah, he's in his 60s. John Ehrlichman tweeted, saved by the bell premiered this day in 1989. It was the first time many people had seen a cell phone. Roughly one percent of Americans had one at the time. It cost thousands of dollars. It took 10 hours to charge of the battery lasted for 30 minutes. Probably at the time people were like, what the hell is this bullshit? Who would use a phone that costs us so much money? It only lasts for 30 minutes. How about using this nonsense? What did Zach Morris's dad do? Do it afford the cell phone? I guess they were in California.

Did you ever, did we ever see Zach Morris's dad in the show? That's a good question. I'm sure I've seen every one of these episodes as many times I've seen Seinfeld as well, but just a classic, classic show. Absolutely. Just elite, elite. I wasn't a big fan of the Miss Bliss years, like the early ones. No. No. With Mikey. And then the guy was annoying. Then the one where Kelly Koppowski leaves and the girl, Tori comes into the leather jacket. Yeah.

But they brought it back the college years. It wasn't bad. I like the college years. I like the beach club one. Ah, the beach club, Stacey Carossi. Stacey Carossi. Yeah. Mr. Carossi was the voice of Pumba.

Oh, yeah. That's right. I didn't realize that. All right. The Twitter deal was not great for the financiers. What banks do these deals, they make money mostly on the fees, and then they get these loans off the balance sheet. They sell them to investors, and they're stuck with Twitter.

I'm surprised. I wouldn't be surprised if they did an Elon Musk-type billionaire run on industry. Like, where they're doing the deal for a billionaire who's going to take a social media network private? Does that make sense for industry? Yeah. So anyway, so it's been the longest, they call this a hung, deal, which is when these deals are stuck in banks' ballot sheets. The longest since pre-GFC, GFC?

Hung deal. A banker definitely came up with that at like three in the morning. By the way, speaking of industry, did you watch it yet, episode two? No, I watched the first episode. You know my only problem with industry is? I like the show. I feel like none of the people are good at their jobs. I wouldn't hire any of these people. That's my only problem with that as a finance guy. I need to take my finance glasses off when watching it, but yeah, it's still a good show. Very entertaining. The second one was pretty epic. Okay.

The American Gaming Association showed that combined revenue increased 8.9% year-over-year reaching $17.6 billion for the second quarter, the 14th consecutive quarter of year-over-year growth and its highest-grossing second-quarter revenue performance on record. Online gaming increased 32% year-over-year compared to 21.8% in Q1, driven largely by online sports betting. I wonder, they say, whatever, I wonder how much of this is like existing bettors

versus just like more states opening up. Oh, right. You know what I mean? Yeah, the growth. That makes sense. Yeah. Because I would imagine that individual gamblers are not increased in their bets

by 30% you over year. that doesn't make sense. That's too high. But alongside this, there was a paper that was way too long for me to read talking about they tried to analyze gambling and its impacts. I did the TLDR, Bloomberg version. So they say the legalization of sports betting has far-reaching implications for household, financial behavior, and health.

Our results show that not only does sports betting lead to increased betting activity, but it also leads to higher credit card balances, less available credit, reduction in net investments, and an increase in lottery play. These effects are particularly pronounced among financially constrained households. These findings suggest that while sports betting offers new avenues for state revenue, it also introduces significant financial risk to local residents, especially for already constrained households. I don't know.

Again, I didn't read the article, a lot of formulas, but in the Bloomberg article, or I should say that I should not call it an article, it's a paper. In the Bloomberg article, they say, quote, notably, the researchers found that sports betting proliferated spending on lotteries and other online gambling activity such as poker increase too. So do things they characterize as betting related, things like cable TV and dining out. So it's hard to do with, so it's hard to do with betting related. So basically people spent more on everything. I just. The correlation causation is kind of hard to admit here, but a lot, a lot of the comments that I saw were like this study is bunk, like the, the way

that they're, so they, I think they said that like it leads to a significant, decrease in actual investing. Like people aren't investing in stocks because they're gambling. I don't know. I feel like the people who end up getting a problem with this, who are degenerate gamblers, they're going to gamble in the stock market anyway, probably. That'd be my feeling. I mean, there's going to be stories in the years ahead of sports gambling and ruin my life. But, but and people are going to be probably, I'm sure there's going to be some people advocating that politicians step in and do something, but they're getting the revenue from this. Politicians are never going to do anything about gambling.

Now that it's legal, it's going to be like, hey, it's your responsibility. You're an adult. Have at it. Yeah. I mean, listen, I understand that people's lives are going to be ruined. But not to make light of it, but like, how many lives is alcohol ruined? Yeah. Unfortunately, I think if you have an addictive personality that getting into something like this is just, that's what's going to happen.

All right. So not to cabash this myself here. But I do, there is a bet that I do like. I'm just going to throw it out there. You could take it. You could, you could send it back if you don't like it. Did you watch some of the Caleb Williams highlights? I probably saw a couple on Twitter.

Okay. Did you see the throw to the realm, the rookie? No, but I'm a Lions fan. I got a root against the Bears. Okay. So I'm a Bears fan this year. So Caleb Williams, for people that are not sports fans, is the number one pick for the Chicago Bears,

looks to be the best rookie quarterback since before C.J. Stroud, I don't know, Andrew Luck. Like, it could be that good. His over under for passing yards is 3,500. Now, assuming he doesn't get injured, which is a big assumption, quarterbacks get hurt all the time, that's 205 yards a game,

which seems, it seems mispriced. Plays outdoors in Chicago as well. Take that into account. That's true. But they have three good receivers. I'm hitting the over. I'm hitting the over. Okay. Good luck with that. He's a rookie.

Got to play that Detroit Lions defense two times. One in the dome. True. Last week we were talking about Airbnb. Long time listener from California, just listened to your last pod when you mentioned booking holdings and Airbnb are down year of year. I'm in the boutique hospitality space and I've seen all time of highs in 2024 in revenue across my portfolio. I've got an explanation for why this is. When I list my units on online travel agencies such as Airbnb booking.com, et cetera, I mark up the rate by the amount the OTA charges me per booking.

Therefore, the guest pays more, but I don't lose that on my revenue. And no matter which platform of a booking comes through, I make the same amount. However, this also enables me to offer direct bookings at the discounted rate to the OTA. Travelers are getting more savvy in some of our hotels. We've seen 35% growth in direct bookings year over year. So although my total revenue is up, my booking.com and Airbnb revenue is down. That makes sense. Most of the time, I will double check across like Expedia or I'll also go directly to

the hotel or resort website, and oftentimes you do get a discount if you go direct to the website. So it's kind of the same deal. I just booked a hotel for New York. I don't know it's because of the time of the year. My hotel was super cheap. They must have the most volatile prices of anywhere for hotels in New York, depending on the time, but it was probably the cheapest I paid for hotel there in 10 years. Right next to our office, the Bryan Park Hotel. Hmm. I wonder if it's time of the year. It could be. A bunch of people said one in done presidents. You said has it been happened before? A lot of people said, James Polk.

Of course. Yeah, we should have got that. He actually ran on that saying, I'm coming in for, and they said he was a very successful president. What did he do? I don't know. Google it.

James Polk, he, uh, you know. All right. I was, I like these policies. Hey, hand up. I'm a man. I'll admit when I'm wrong. Many dive watches, which are rated for waterproofness

down to a certain depth, actually do show the depraating in both feet and meters. Rolex Submariner does this. Tudor Black Bay and Omega Seamaster, both popular dive watches. show 100 feet in, or 1,000 feet, 300 meters. I did know this. Maybe I'm buying cheap watches.

Speaking of which, someone asked, has been a watch guy because he talked about watches. I do like a good watch. I love wearing watches in summer, but I own like seven watches probably, but they're all, I bet not one of them is over $100. I'm talking like a fossil kind of guy. I don't get like the nice $10,000 Rolexes

just because I would never want to wear it because I'd feel like I'd lose it. Not surprising. I don't think you ever wear a watch do you. I mean, I have an Apple watch too, but. watches. Okay. You're a watch guy? All right. Josh and Barry bought me Rolex. That's right. You ever wear it? I wear it. Okay. I wouldn't buy it, but I wear it. Um, I lost a pair of sunglasses again. But thank you to you, Ben. Speaking of things under $100, gooders. There you go. That's why I buy

cheap in the summer. I have like 10 pair of sunglasses, but again, they all don't cost anything. My kids drop sunglasses in the lake all the time. It was my patron. It was my patron. at my July 4th, red, white, and blue sunglasses. I did like those. Your wife probably crushed them and threw them away. She hated them. But for 25 bucks, I'll get another pair. All right, Ben, do you remember this dumbest invention of all time?

Remember, like, during this, the work from home time, everybody was sitting at their desk and sitting at some new smoking. So they came up with a bicycle for under the desk? I have very strong feelings about this kind of thing because I've seen the walking treadmills too the desk treadmills I have a very strong

separation of church and state for working out because I think if you're working out you work out you don't do other stuff like I go to the gym and I see people reading a book on like the treadmill

or the elliptical and I think no no no you when you're working out you work out you don't multitask with working out that's ridiculous right

I bought this and I returned it immediately it didn't work I don't know why I thought about it, but... Honestly, what is that going to... You do it all day and you kill five calories or something? Well, Majuli has a desk treadmill. Oh, wow. Okay.

I don't know. I don't want to... Standing desk is good enough for me. You ever see him when we're on camera? Oh. It's so distracting. He's doing this. I didn't know that. All right.

Do you guys have lanternflies? Yeah, we don't call them, Matt. What do you call them? Fireflies? Nope. Lightning bugs? No, no, no. I'm not talking about fireflies.

Okay. Google lanternfly. Spotted lanternfly. These things are taking over. No, I don't think we have those. And they're just spreading like, they're just spreading. So they're not physically dangerous to humans.

And so. Do you take your bug zapper to them? I still have the bug zapper that you recommended me and I use that thing all the time. I use it all the time. I love it. And I use it on my kids

when they get out of hand. So these lanternflies Kobe loves killing them. Loves it. And I feel like it's like from Starship Troopers. Remember that movie? Oh yeah.

With the kids killing the bugs. I'm doing my part. It feels like that. They're everywhere. I showed that movie to my son a couple months ago. You did? Yeah.

That movie had a, there was breasts in that movie I don't know if we got to I think we got to that part were there really oh I guess I should have been rated R you let your 7 year old watch that I didn't know you should have told me

that it was a nipple shown we didn't get to that part wait that was that is a very rated R movie is it maybe it's possible my wife came and shut that one down I'm a little more lenient in these things than my wife

we kind of balanced together out okay uh good well you're talking working out I got to tell a story I almost died yesterday I think So I talked about there's all these apartments stuff And they were doing yard work on these apartments

And they're weed whacking the edges And they're mowing the lawns and I'm out on my jog I go for a jog And I take a wide berth around these people Because you know stuff flies out And the guy's weed whacking and I'm on the road And he's in the sidewalk And as he's weed whacking

Something flies out like a rock Or an I don't know piece of something Stick just boom right in the temple Really? I got one of these Yeah, and it kind of just nailed me. I kind of look at the guy like, you know, he didn't, he had no idea. I think we should have some better safety measures for weed whackers.

I don't know what it was, but it, boom, right in the temple. Can you imagine? Yeah. Did it hurt? It kind of just shocked me a little bit. It was, yeah, not bad, but enough to like, what the guy? One of those, you know? So.

Glad you're okay. Better safety measures on weed wackers. All right. I'm loving the fact that these movies are coming to streaming faster. Like Furiosa is already in HBO. Didn't watch it yet. But the bike riders. I can't remember.

Did you see that one in the theater? Did not. That's the Tom Hardy. What's the guy who played Elvis? What's his name? He was in... Austin Butler. I feel like that's a...

That is the Postal Child for Wait to See It at Home. Yes. And it needed a better name. I guess it's based on it... It's a true story based on an actual book by this guy who infiltrated this gang, this biker gang in Chicago in the 60s and 70s. Wait, where did you watch it? Did you pay for it?

It's on Peacock. So I didn't pay for it. Technically, I paid for it. And got an awesome cast. Michael Shannon is in it. A ton of people that you know. And it had, it could have, Tom Hardy was made to play a biker gang guy. He was ahead of the biker gang.

Tom Hardy is just perfect in this kind of movie. It was a good but not great movie. Like it felt like it could have been great. Never quite got there. But I enjoyed it. And the fact that it was a true story, ish, made it even more interesting for me, I think. Needed a better name. The bike riders, I guess that was the name of the book.

I think it should have been called something else, but I liked it. I think it was good. Not great, good. I watched, oh, I went on a little Vince Bonnathon lately because he was on smart list and he's been talking. They did a Dodgeball rewatchables, and so I watched Dodgeball in old school and wedding crashes in the last couple weeks. That was like 2003, 2004, 2005, Vince Vaughn. Can I remember if we talked about it on this show or another one where I said, Dodge Ball didn't do it for me.

Yeah, you don't like thatchball. I never watched it since I thought in the theater. So I watched it again. Here's the reason I didn't like it. They didn't let Vince Vaughn cook. This is the, this is prime Vince Vaughn. This is peak of his powers, Vince Vaughn. Because this is in between wedding crashers in old school.

No, there's some good Vince Vaughn cooking. I know you said, I know you said that. He's more so much. I mean, Ben Stiller is great in that, but it just, they didn't let, it's a cheesy movie and they didn't let Vince Vaughn cook. So I'm sticking with my theory that Dashball, eh, take it to leave it. Also, James Carville was in both old school and wedding crashers. What a duo of movies for that guy. Oh, and wedding crashers, was he at, was he at the wedding?

He was at the clear-his wedding. All right. By the way, hold on. But you're a big Justin Long guy. I am, but he was just okay, and he was kind of a, in Doddball, like, little two. I guess we'll have to agree to disagree on that one. I was a little too over the top for me. I like slapstick humor.

It was a little too over the top. So I watched Bad Monkey with Vince Vaughn. We're two episodes in, his new movie or his new show on Apple. And I'm a big private detective guy as far as books go. it's based on one of these series of a private detective, kind of a wise guy, does his own thing, kind of a loner, and I'm into it. I like it.

Okay. I'm a big, first of all, I also, coincidentally, we watched old school this week. Just 12 out of 10, perfect movie. Yeah. Right? Yes. So Bad Monkey, I'm a big,

not a big private detective guy like I knew you are, but I'm a big tropical guy. Yes, the setting of the show gives it a premium, doesn't it? Being in the Keys in Miami? What was the show? I have a block in my brain for the show for whatever reason. I can never remember the title where they're in the Florida Keys, the three siblings. Oh, yes.

The Netflix show. Blood. Was there blood in there? Bloodline. Yeah. I love that show because it's outdoors. And I feel like I love the movie cocktail, which is not even a good movie, but you're outside. You're right.

You get a premium. So I love the fact that this is in the Keys. However, I don't like the narrate. I could do without that. I agree. They could have picked a better in area. I'm in agreement there. I think Vince Vaughn is great in it, though.

He's a little more subdued, but he still has the funny one-liners here in there. Is the second episode good? Because the first one, I don't know. I thought it gets better than the second one. Okay. All right. Maybe I'll stick with it.

And he's looking pretty good in his mid-50s. He still got it. I can't believe I actually influenced people to go see Trap who were not M-night stands. And- You guess I could have been more explicit, but I feel like two weeks ago, we read a review about Trap,

It was laugh out loud, horrible, silly, ridiculous, and I loved it. Remember that review? Yeah, so it's kind of like... Isn't that what I conveyed? Yeah, you kind of liked that out. You said it was, the ending was hilarious, and that's not a funny movie. Yeah, no, it was absurd. Like, it was, it was, it was, it's M. Knight.

He makes absurd movies. So I apologize to the people that were expecting something else, but I feel like that's on them, not me. That's fair. Like, when I say it was a great movie, I don't mean it was gone with the wind. It was terrible great. It was awful great, great, great awful. You looked it ironically.

Yeah. But sincerely. Okay. Ben, somebody emailed us, specifically citing you. They said, I feel like this, I feel like there's like a Ben movie. You ever see this movie? A recommendation from the early 90s called The Cutting Edge. Oh, yeah.

I used to watch this movie a lot back in the day. Definitely. What? Nailed it. Really? I never heard of it. Yep. Oh, yeah.

I've seen that movie multiple times. Wow. Figure skating. So let me read. So stuck up figure skating with Kate Mosley is denied a gold medal at the 19, 888 Olympics after fall as Kate Dives drives off partner after part of her and then I got cut off but wow they nailed it really nailed it really nailed it um in a long time since i've seen it so it didn't age well there's a new movie on netflix with uh mark walberg and

hallie berry called the union and it's got the worst trailer i've ever seen he's reached the point of his career where he's doing like straight to streaming movies so i wanted to do this ben i want to see what it's like on netflix i'm going to get this is like a 30% on the tomatoes. Ooh, nailed it. 39% from the critics, 26 from the audience. That's how you know it's real dog shit. By the way, I swear, I put it in the dock,

let's check Rotten Tomatoes live on the show. I did not check it before. Okay. I think Robert Zia, it ends with us. Yeah, how was it? Highly recommend. Really? As a, listen, the movie was more for her than for me.

I thought it was entertaining. But if you are looking for a date night, if you're like, you know what? me and my significant other we haven't been to the movies in a while looking for one of those date night experiences it's a good day night movie

okay good to know good day night movie I watched Furiosa What do you think I was a big fan of the first one with Tom Hardy Well who wasn't great movie It's just like the first one

Except half is good And an hour too long Legitimately an hour too long Well it was an hour It was two hours 20 I think There was no reason for that Okay. I fell asleep multiple times.

So was it, was it entertaining? Sure. Yeah. Entertaining, but. All right. Okay. That's your alien recap. All right.

So I saw Vimulus at IMAX. And IMAX is the only company that I'm an investor in that emails sends out these great emails. They said, we looked to build on that momentum through the second half this past weekend on alien Rymulus. We had our second highest ever August opening and realized 16, million of box office with a high of 15.5% of market share and 17.6% in China. I'm sorry, 17.6% domestic and 20% in China. Okay. So Alien Romulus was... I think it's funny that they email you, like their investor relations email you. Yeah. I love aliens. One of my favorite franchises of all time. Alien Romulus was a fun movie, a good movie, violent, felt very much like a

throwback. Like, it felt like aliens. Which I enjoy. The story was a bit flimsy. I'm not sure I followed it. I'm not sure that the story really matters. But Fetti Alvarez, the director, did a great job. Sort of like forgetful, but I had fun. It was a good movie. A bit hollow, but good.

No, a bit hollow, but good. Okay. Lastly, Ben, you made a comment last week about movies being top heavy. Right? Yep. So I had Sean and Matt put something together for us. I didn't drop it in the notes because I wanted this to be a surprise.

So bear with me. I'm going to drop it in momentarily. All right, Ben. Feast your eyes on this. Eye candy. Top 10 box office has a percentage of overall ticket sales. So not only is this pretty

and I'll explain the numbers in a second, but there's actually some information signal in here. So the median is 42%. For the last 10 years, the median is 42%, but interestingly, prior to the pandemic, it was below 40. It was 30, so starting in 2015, 37, 39, 33, 34, 40. And we're talking about the top 10 as a percentage of overall box office. But just like the S&P, things are becoming more concentrated.

And then in 2020, obviously due to the pandemic, it's spiked to 83%, and then 52, and then 64, then 43, then 53. So there was a clear line in the sand before the pandemic and after the pandemic. And the reason is because people are only going to the movie for the most part to see the blockbusters. I was right. Yep. Top 10% is 53% this year of the box office. So that's actually probably higher than I would even have thought. So you're right.

It is very hit or miss. So aliens has done $110 million worldwide so far. Not bad. It ends with us also, hell of a show, $180 million. Wow. I'm telling you, man, movies are doing okay. And, uh, and that's that. All right.

Good chart. You've done some good, add this one to your Kevin Bacon collection. This is a good one. We went long. We had 42 pages in the dock today. And we skipped some stuff. That's true. All right.

What's your email? Animal spirits at the compound news.com. See you next time.