Animal Spirits Podcast - Invest Like the Worst (EP.09)

Episode Date: December 20, 2017

We discuss some passages from Michael's old trading diary, the reason Millennials should be praying for poor market returns, why you should read more fiction and more.   Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, the podcast that takes a completely different look at markets and investing. I hate the people who talk about it all the time, so I didn't want to be one of those people. From two guys who study the markets as a passion. Can I count on you to talk me off the ledge partner? Yes, and that's what this podcast is for. And trade for all the right reasons. That's my due diligence. I'm in. Dude, if you're in, I'm in.

A line of thinking is the higher the volatility on an asset, the higher the volatility on the opinions. so I feel like you have crazies on both sides. Here's your host of Animal Spirits, Michael Batnik. I can say that I was never driven by money. So you were trading three times leveraged ETFs for the love of the game. Exactly, man. I'm a purist. But anyway, and Ben Carlson.

This is true. I do not drink coffee. I've never been on Facebook. I've never done fantasy football. Oh, one last thing. Michael Batnik and Ben Carlson work for Ritt Holtz wealth management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritthold's wealth management.

This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain positions in the securities discussed in this podcast. Now, today's show. Welcome to Animal Spirits with Michael and Ben. My name is Ben Carlson. And we're going to start the show off a little differently today because after our first

episode where we both went over how our thoughts and ideas have evolved on investing and went over some of the biggest mistakes we've made. actually got a lot of feedback that people love hearing about the mistakes. I think misery loves company, something like that. So when I was in New York, I must have been a few months ago, we were in Michael's office, and we stumbled upon his old trading diary from a number of years ago when he was trying to become a market wizard. And we read some of it, and it was hilarious in an unintentional sort of way. So we wanted to do a new segment called Invest Like the Worst, where Michael reads off some of his old trading diary, which I think is great that you actually

kept this. And what was the reason for doing this in the first place? Why did you decide to write down your trading thesis and ideas at the time? So I can't remember exactly where that came from, but it must have been from somebody that I used to, a trader that I followed on Twitter. Who recommended doing that? I mean, it is a good idea. And Mobison talks about this on a lot of his pieces, how investors writing a journal can use it to try to improve their mistakes and understand what they're thinking was at the time. So why don't we read? some of your trading journals from, and I believe you have a timestamp on some of these for the dates, right?

Damn right, I have a timestamp. Okay. So this one was from February 14th, 2012. So I wrote that I shorted 100 shares of Amazon at 18840. Here's what I wrote down. Quote, news broke that their prime service added fewer than half of analysts' estimates. Stock had been up 11% year to date, in my opinion, based on the meltup that we've seen. The Kindle fire has not been a success.

And when they announced very, very disappointed Q4 results, the stock traded down. down as low as 179.42, closing at 179.46. The price action recently has acted well due to the recent rally, which obviously could continue. Amazon has earned its ridiculous valuation, but its growth finally appears to be slowing, end quote. And there's early, but not wrong. So Amazon is at about $1,200 a share now. This was at $1.88. It could still round trip, though. Yeah, not wrong, just early. Yeah, I mean, anything can happen. I mean, it's not like Amazon's one of the biggest, most successful companies in the world. No, no, no.

And then, okay, so then a week later, I'm not going to read the entry, but I doubled down, or more than doubled down, I pressed my winner. So at that point, I was short 250 shares at an average of 182. And then a few weeks later, I wrote, cut my short exposure by two thirds. Fundamentally, everyone knows what I know, which was probably nothing. It is expensive and is not breaking down. long term I may be right, but I am not trying to think long term right now. I'm trying to be right and book gains. Spelled with an S but said with the Z. I love how you get yourself an out. Long term, I may be right. Listen, I'm not an idiot. Long term, I might be right. But hey, here's the good thing

you did in your shorting career. You cut your losses short, right? Because this was less than a month later that you actually took a loss here and moved on. Yeah, I definitely... Credit where credit is due on that. No, but it's funny. I think that one of the reasons why the light bulb went off so early with me, in terms of how hard it is to beat the market probably is because I was recording all this and I felt more and more ridiculous every day than I was writing the shit down and not that anybody was looking at it or reading

and I certainly wasn't sharing it with anybody but it just felt like some of these entries are so cringy, it just felt totally ridiculous and I was in a weird place in terms of finding myself as an investor or a trader I didn't know what the hell I was doing and traders have to react to the current market environment

and investors have to think about the future and I wasn't really doing either of those. I was sort of stuck in the middle of trying to analyze a company on a fundamental basis, which basically meant just look at their P.E. And also look at it technically, which meant just look at the chart and try and draw some conclusion. So I was doing both of those very unsuccessfully. Right, yeah, which is a tough place to be, trying to be like a value investor on a momentum time horizon. Right, right, exactly.

So Amazon's market cap was $87 billion when I wrote that. Now it's $573 billion. So, again, I reiterate, I was just early. Yes. Yeah, you forgot to use your Warren Buffett joke, by the way. What's that? Oh, yeah. It was bad.

I can't. Let's move on. Okay. Wait, you have one more entry to read. Oh, okay. So there's so money in here that are just make my, my, uh... This was my special request from me. All right.

So this was from April 26th, quote, been very light cash. Have not ridden in here since I got the puppy, but mainly because I got a little discouraged. Hogwash. I'm still up 30%. hogwash. I have been... I actually wrote that. I have been trading light, but still too much.

Do more homework and get cracking. I can do this. On a positive note, I cut small losses that could have been higher, and I'll just end it there because it just gets worse. But I guess that was a motivational Monday. But, yeah, hashtag motivational Monday. The fact that you said trading light, it seems to me like you really were putting yourself in the shoes of a trader.

Because that sounds exactly like what a trader would say. I dove into Paul Tudor Jones's brain. Yes. What does bin very light cash mean? That's that's a good, that's by far my favorite. I think hopefully you've got enough saved up where we can do these again in the future. But again, we think it makes sense to look at yourself in the mirror as a trader or investor and understand you're going to make mistakes and, you know, best to figure it out early

instead of waiting too long and when it's, you know, there's no turning back. Yeah, so anyway, let's move on. The GMO letter came out in the fourth quarterly letter and I'm usually much more interested and what Ben Anchor has to say, but I thought that Jeremy Granthus piece this time was really, really interesting. He said that stocks are getting more efficiently priced, but asset classes absolutely are not. You read this. What do you think? Yeah, I kind of like that I'm attached to this idea in recent years of the fact that markets are getting more microefficient and macro inefficient. And I think that is really making it hard on people in the asset management

industry these days because people were brought up to be bottom-up fundamental investors and pick the best stocks when really the big things you have to get right. And it's always been like this, but the focus is more recently because there's been so many meltups and meltdowns in the market over the past 20 years is the fact that you really have to get that asset allocation right. And if you don't have the asset allocation right, it doesn't matter how good of a stock picker you are. If you're not in the top 1% of the top 1% of investors, it doesn't matter. So I think that's what's making it such a challenging environment for so many professionals is because they want to be that bottom-up investor

when it's just getting so much harder to beat there these days. And so the way that you can do it, I think, is by making these asset allocation shifts, which is what Grantham brings up in his piece. Yeah, unrelated to this, but sort of. I don't know if Talib tweeted this and I said it. I'm blocked by him, so I can't see his tweets. Really?

Why did Teleb block you? Okay, so here's why Talab blocked me. I went through my tweets. I never tweeted to him, but I think when he was going after Barry or Barry was going after him or something that I think Barry favoreded one of my tweets. So when Tala blocks you, he blocks your whole fucking family.

Like he blocks everyone that you follow. He goes after everyone. He's like the cartel. Okay. See, I've never followed him, but I just was curious. That's funny. So what he said was that something along the lines of, it's easy to be a macro bullshitter, but not a micro-bullshitter.

And I thought that was like, that was a really interesting thing. But what Grantham said was that career risk used to be so embedded in these shitty stocks that people were just forced to sell them because of pressure from clients and that was the value premium that became the value premium is that the baby got thrown out with the bathwater and people just overreacted

but because of the army of quants and the academic supporting and discovering the premium that maybe it's altered these days so again he was getting at that stocks are getting more efficiently priced because of this but asset classes are not and what he said was

and I thought this is really interesting here's a quote from Grantham you go to cash too soon and your business or career melts away, you stay too long and you are seen as useless. In short, investing at the asset class level remains dangerous to career and profits and is hence inefficient, thereby allowing for occasional great opportunities with the old attendant caveats, end quote. And obviously, GMO hopes that we are nearing that part of the cycle where their clients are starting, or more than starting,

are starting to ask a lot of questions. It's been a low return environment that has delivered very high returns. And so Grantham and his colleagues predict over the next seven years, is negative 4.4% real returns for large U.S. stocks, which would be a 27% decline. What do you do when you read bearish outlooks from such brilliant investors? First of all, the stuff on the value premium, I think, is really interesting because that I think Qants almost love the fact that they don't know what is in their portfolios. So I think that actually does make sense in a lot of ways because back in the day, you were talking your book and talking about which stocks you own.

and now people don't even care because they're investing more on factors. But in terms of the GMO's outlook for, you know, the expected returns, I mean, they could be right, of course, something bad could happen. But I think the way that they look at the world is a little antiquated in a lot of ways. And I wrote a piece about this how there's a lot of experts on an earlier version of the world out there. And they use simple mean reversion, which makes sense, but they're taking profit margins and they're taking valuations and they're saying, here's what would happen if we went back

to average, which when you look at an average that has seen a data set change so much, you know, why do we have to go back to this mythical number? So what's the reasoning? Again, maybe they're right, but I think that they're probably a little too wetted in their views in a lot of ways. And actually Grantham in recent years has said, maybe I'm wrong on this, and maybe mean reversion doesn't happen over seven years like we think. It's like they pull these numbers out of a hat in some ways. But, you know, they're pretty sharp. They manage, I don't know, $100 billion or something. So maybe they're right and I'm wrong. But I think investing is never as easy as taking an average and saying it's going to get back to that point.

So let's just wait and see what happens. Yeah, so we're jumping head a little bit and we'll get back to this. But Bill Fleckenstein is in a video that we're going to talk about in a few minutes. And in January 1997, he makes the point that if stocks were just to return to their long-term average, that the market would fall 50% from these levels. And over the following three years after he said that, the NASDAQ rose 425% and the SEP 500. rose 86%. So I think, yeah, to your point, if markets just return to an average, well, if only it was that easy. But maybe it is different this time in terms of market composition

and profit margins might not mean revert. Who's going to come in and knock Google or Apple or Amazon off their perch and take a slice out of their pie? I think that the, you know, the old days of Caterpillar competing with Boeing, competing with General Electric and margins staying pretty steady. It's just a different universe right now. Yeah, it's hard to say what sort of what's the average you're linking to, the last 10 years, the last 20 years, the last 100 years. It's hard to say. And I think, and you made the point today in a piece where you said, okay, let's say returns are going to be lower in the future. You know, we don't know what that means. That could still be a wide range. And maybe, again, maybe we're wrong. We've been talking a lot about this lately. But you said what really

could matter to investor psyches is what's the path to get there. So why don't you explain the three path that you talked about and why that they could be challenging for investors. If we do get there, you know, why that could be tough. Right. So let's say that we have two percent returns over the next 20 years. And I drew out three hypothetical paths that we could take to get there. One of them is we go on a Japan-like bubble and we double from here over the next 10 years, taking the Cape up to, you know, 70 or 80 or whatever and then having a subsequent 30 percent bus to follow the next 10 years. The second trajectory is a continuation of 2017, not in terms of returns, but just in terms of the nature of slow, grinding, not many pullbacks, not letting you in,

just a slow and steady trudge of 2% higher for the next 20 years. And then the last one, which would be most ideal, if I could choose a path, would be a 35% correction from here, followed by a sustained recovery to the finish line. But I think that, paradoxically, the hardest of the three paths would be the one that is the most steady. Because imagine that we, every time stocks fall a little right now, you see the put-call ratio spike, you see top callers come out, and it's understandable. It's been a long time since we've seen a top, not even the top, but just a garden variety top. So if this were to persist for another 20 years, oh my God, I think it would be absolutely torture for people. Yeah, and I think one of the things that came

from the financial crisis is that we have people who are predicting the beginning or the end of something at all times. So they either want to see a melt-up or a melt-down. And I think that's sort of middle scenario where stocks just kind of don't do much and maybe they have some corrections and even a bare market but not a huge market crash would psychologically be the most challenging for investors because it's almost like people just want something to happen so they can see huge gains or losses and take advantage. It would put a lot of alpha hunters out of business, I think, if you just had a low 2% return environment where there wasn't much movement, not much opportunity, it would hurt wealth managers. It would obviously hurt end investors. Two percent is not really

do much for people. So that would certainly be not an ideal scenario. I think that we are anchor to maybe the March 2009 lows and think that this has been an eight or nine year run that's unprecedented. But if you go back further, we just had a period of low returns since, you know, over the last 17 years, and I'm cherry picking, obviously, nobody uses 17 year rolling returns. But we have just lived through a pretty much a long bear market, right? If you go by the book that we had a secular bear market from 2000 to 2013, we literally just had that. So it's not to say that we can't see lower returns in the future,

but I think that's one part of the equation that people aren't talking about. Yeah. And one of the things that we've talked a lot about expected returns and tempering our expectations for what they could be because of what's happening. And again, we don't know the time frame of that. But we did get a reader question or a listener question who said, hey, as a guy in my mid-30s, should I care? And I think this is a good point because for younger people and like millennials

who are just coming up and who are going to be hitting their peak earning years in the coming decades, and this is our biggest demographic in the U.S. now, you know, they should pray for middling returns so they can invest over time and put their savings to work at lower prices and hopefully, you know, lower valuations that the fundamentals catch up. And, you know, they should also pray for a crash, assuming they don't get completely scared out of the market and run to cryptocurrencies as their sole retirement vehicle. You know, I think millennials and young people and you and I should be included in that, you know, we should hope for a poor return environment in some ways.

Yeah, I mean, before we get to this video, I totally agree. I mean, I think I went over that pretty quickly because it's just so obvious for us. Maybe we take that for granted. But if you are buying stocks every two weeks and you plan in doing so for the next 30, 40 years, or maybe even for the duration of your life, why would you want to do that at a higher and higher and higher level? We should only pray that stocks go on sale and go on a big sale in the next few years. So there was a video that Noon 6 Capital tweeted in his weekly best, and I think he found

from Plan Maestro, and I know you think it's Maestro, but I'm sticking with Maestro. Okay. And it's a video from 1997, and it starts off with Jim Kramer and Peter Lynch is in it. There's some really fascinating stats in there, and it's an amazing, just time capsule of what was going on at the time. And on the one hand, it was showing people, just mom-and-pop investors that were totally euphoric and saying outlandish shit. And then there was the professional investors that were taking a more tepid tone, particularly

Jim Grant and Bill Fleckenstein. And this was in 1997. So everything that they were saying was 100% correct. Some of the stats were evident of an orgy of speculation. They said that 85% of all money in mutual funds came into the market over the past three years, and that the dollar amount in mutual funds was $3 trillion, which was bigger than the GDP of Germany and France. But the point is that Grant and Fleckenstein were 100% right in their analysis of what was going on. It obviously turned out to be an epic bubble. But from the time that video was going on until the top, three years later, the S&P 500 rose 86% to the NASDAQ rose 425% and ultimately round-tripped so that if you were in cash at the time of that video, because Grant and

Fleckinstein convinced you to go to cash, then you broke even. There was an opportunity to enter at that level five years later. But you had to endure a huge bull market. And that bull market sucked in even Stanley Druckeniller and caused him to get it on the top. So the idea that you could withstand the power of FOMO is probably not realistic. Yeah, you sent me this video and I watched the whole thing too. It's hilarious. Mostly because the 90s seems like it was 80 years ago now when you watch this. It just seems so old and antiquated, but you know, the technology. And it was funny seeing Jim Kramer at the beginning, like, this is pre-TV days for him. And he looked like he was just made for TV, just watching this, didn't it? It was like he was doing an

infomercial for what a movie set thinks that a Wall Street trader does. He's yelling about buy this, sell this, 500 or this, 1,000 of this. It's hilarious. Yeah, I was just like, he was like doing this. And I'm gesturing wildly. Go, go, go, go, bye, bye, bye, bye, bye, bye, yes. Okay. Yeah, sorry, I thought you were gesturing me to, that you had to make people. Hold on, hold on, Ben. I got, no, no. People can't actually see us. Anyway. But yeah, it was great. And the thing about the crash callers is, you're right, quote-unquote, they're right. And that's going to happen this time around, too. So people have, the next time we have a bear market, assuming they haven't been completely outlawed by the Fed,

who obviously is manipulating things beyond repair. If the next bear market happens, people who have been calling for a crash since 2011 and 2012 are going to feel vindicated when we need a huge crash just to get back to those levels. And that's when they started calling for a crash. So, yeah, I think there's going to be a lot of people coming out of the woodwork who say, see, I told you so when, in fact, the markets don't work like that. It's not just the direction you have to get right, but the timing, that's the tricky part. Yeah, that's the part that you just have to hope that everyone's, and I think there's an analogy that Bill Gross said when he was on Barry's podcast, everybody has an internal alarm clock, and obviously people like Grant and Grantham and Fleckenstein,

theirs goes off early, which is, you know, which works for them, but it's really hard for investors to be too early. And by definition, everybody wants to be early to get in and early to get out, and it just cannot work that way. Yeah. And so we'll post a link to this video. It's definitely worth watching. But I think my favorite part of it was the interview all these retail investors. And it's almost like they're setting these people up for failure. I felt really bad for them because it showed this couple. And the guy owned a small business and they said that they put their life savings into two tech stocks, which they asked the wife. They said, well, what are they? And they said, well, one of them used to be Microsoft.

but we sold it all. And now I honestly don't even know the name, but some guy on the phone told me it's going to double by August. And this is in 97. So it's possible these people made a bunch of money, and then I'm sure lost their shirts in the ensuing crash. But you can always find these people in any market, I suppose, we're just looking to get rich. But the phrases they were using was, you know, the regular stock market is too slow. I want to invest in tech stocks. I want to get rich fast. I want to be aggressive. I want to get rich quick. It was like the warning signals were just like ding, ding, ding, ding, ding, all along the way, which is another reason why, If you would have shown me this video, 97, I would have said, oh, my gosh, this is getting out of control.

There's no way it can last. And then guess what? Like you said, it lasted three more years. And so that's why I think it's so hard to gauge market sentiment these days, because these types of stories are shown all the time now. We have magazine indicators that people try to, or a movie that came out or something someone said, or there's a celebrity getting involved. It's impossible to gauge that type of sentiment these days. So any of these things that are going to, quote, unquote, call the top will just be lucky in hindsight. and they won't really matter that much.

If we saw that video, there was, yeah, there was a guy saying that the bank is only paying you 3% in a savings account and it's too slow. If we had seen that video today, we would say this is literally the bottom of the ninth inning, get out. And that video was January 97. So all of these anecdotes are total bullshit, throw them out, they do not work. If that was the bottom of the ninth, then March 2000 was the top of the 475th. Yes, big one. So you mentioned Drucken Miller earlier. He had a good quote.

He was actually interviewed on CNBC this week. And for those of you who don't know, Stanley Drucken Miller is one of the most legendary traders of all time. He worked under George Soros and built his own career. I think he's supposedly got one of the greatest like 30-year track records of any trader in history. And so anyway, they brought him on. Hold on. Hold on.

What do you mean supposedly? Yes. Definitely. Okay. Yes. If you quote him on Twitter, that means you guys are friends. And so he had a good quote that I liked because,

my way of looking at things is always that less is more. And so Drunken Miller said, you know, I don't really like hedging. And this is guy from the hedge fund world. If something needs to be hedged, you should have a position in it anyways. And I thought this was an interesting way of looking at the world because especially since 2008, people really looking to hedge out every single risk they can find in their portfolio. We saw a huge influx of like Black Swan funds after 2008. And my way of thinking of it, and you and I have talked to prospects and clients about this. They're worried about the world coming to an end and how to hedge that out. And our prescription is usually just, well, take a little less risk. You don't need to

look for the perfect hedge. And so I don't think it's always quite need to make it so complex. And I love the fact that a really big, well-known trader went this route and said, you know, if you really need to be hedged something, you probably should have a position in any ways. Yeah, I think that this is, this is an interesting comment for him, but I think this is so case-specific. Obviously, individual people should not be comparing themselves to drug and merely what he's doing. But I think that, I just think that it depends because here's a, for instance, let's say that you're a concentrated value investor and you don't practice traditional risk management. In other words, you're not using a stop loss or a moving average or a max decline or anything like that. If you are

committed to a name and it's 15% of your portfolio and you buy it at 100, and you know that you're going to be buying more at 70 if it gets there. In that situation, it makes sense to buy it deep out of the money puts in case you're just spectacularly wrong to protect yourself. But for the average person, I think less hedging is probably a better idea than more, certainly. And hold more cash is probably a good default for people. Yeah. So, again, I think I was just default to keeping it simple.

So I was in a due diligence meeting with a fund company, fund manager a few years ago. and this is a value manager, and they said all the things that all value managers say, you know, we look for companies with moats, and we look to hold them for the long term, but we have a new strategy that we're employing to hedge out any company-specific risks. So they would look at energy companies, and they would hedge out the oil exposure, or they would look at food companies and hedge out some of the grain or the commodities that were part of the food. And so it just didn't seem to make sense to me because at a certain point,

take out all those risks, you take out the return as well. And so I just don't see the point sometimes in getting too cute with it and trying to, you know, overanalyze and hedge it and make it too complex. So, I mean, what were you trying to hedge out with your Amazon short? Right. Yeah, like if you're going to be long dinner and short breakfast as a way to stay on a diet, maybe just eat a little bit less. Yes. That, oh, that's a great analogy. Good one. All right. So this weekend I saw two very good movies. The first was Wind the River, which was a new movie. It came out in, well, relatively new. It came out in 2017. That's with Jeremy Renner and Mary Kate and Ashley's sister. I forget her name. And it was about a murder that could place in Wyoming with Native Americans

and very entertaining movie. And the other one I saw that I also liked equally was Sicario, which is a few years older. I'm not sure what took me so long to get around to that, but really good movie about the FBI and drugs and the Mexican border. Yeah, that was pretty dark one for what I remember. Yeah, this was a pre-wall talk, but they built a tunnel, so the wall wouldn't have worked anyway. Ah, that's fair, yeah. But, yeah, it was Benicio del Toro and Josh Grobin and Emily Blount. Very good movie.

Wait, did you say Josh Grobin? Did I not? What's his name? Brolin? Josh Brogan. Who's Josh Groban? Josh Grobin is like the opera singer that my wife likes. I love Josh Grobin.

All right. That was a good. You've been listening to his Christmas album or what? Hold on this thought a little bit. Aren't you a big opera fan? Yeah, I do like opera, yes. Yes. Although I guess I've never, yeah, Josh Grobin, I'm kind of taking him relief, I suppose.

He's an opera singer, right? Yes. I have no idea. All right. You're the one who said his name. All right. Okay, so I didn't have much time to watch any movies or anything this weekend, but I am reading the new Lee Child book, which is called The Midnight Train. He has this series he's written, and I think it's probably well over 20 books at this point, and it's a Jack Reacher series. And so on all the podcasts, people always get asked, like, what's the most influential book that you've ever read or what's one book you could gift to someone that would totally change their outlook on life? Are you about to tear this down?

Yeah, well, I don't think that, yes. I don't think that actually exists, especially from, I don't think that I've ever had a book where I've gone, oh, my, gosh, that just changed my whole outlook on life. I think the biggest thing for people is just to become a regular reader and figure out what works for you and just read more. And I think one of the ways to do that for me, which I think is kind of underrated for all these bookworms out there is just, I think that fiction is highly underrated. So I think it's, and I think for us, it's great since we do a lot of writing about similar topics because it delves into character development and storytelling and creativity. And so this guy writes a book about the same guy who's this transient ex-military police guy. He goes around traveling on a bus with nothing

but the clothes on his back. And he always manages to find his way to trouble. And every book is kind of the same, but not really. There's similar elements and he develops the characters. But it's really kind of the same thing. But every one of them sucks me in and has me. And so I think fiction is highly interrated if it can get you to reading. And that's kind of the big thing that got me into. Like in college, I hated reading. I never read anything. I didn't read any of my textbooks. None of the books I was assigned. It wasn't until after school, really, that I started in fiction was the thing that really got me on to reading. And once I was hooked and got into the habit of reading a few hours every night, then I went

from fiction to nonfiction and some stuff that really interested me, you know, in the markets and psychology and these other things. So I know you're not a huge fiction reader. Is that correct? Yeah, but I totally agree with you because I don't have any singular books that was a holy shit moment. Like, this changes everything. I would say probably the closest that came to that was cliche, but it's true is the

intelligent investor was the first investing book I read. So that really got me very interested in the market. But to your point about fiction, I totally agree. The book that got me into reading actually was the Pelican brief. I was in Mexico and I think I was stuck in an airport or something and I picked that up. But I do love fiction. I just like nonfiction more. And for me, I'm not reading nonfiction because I want to be on Jeopardy. I just love the material. Even if I forget like 99% of it. I read a bio on Herbert Hoover a few, probably maybe two months ago. And if I took a test on him, I would fail miserably. But it doesn't change the fact that I was thoroughly entertained. So yeah, so reading for me is not a way to do anything other than really just enjoy myself.

Yeah. And my personal rule is typically I read all my nonfiction during the week. And then on the weekends I give my brain a break and read fiction and just kind of get lost in it a little bit. And it's just like you said, it's kind of mindless reading where you don't remember everything. every story and every character, but it's just a way to sort of, you know, get out of your own head in some ways. So speaking about the content, so next week we're going to do our 2017 favorites podcast, and we're going to be going over our favorite books, movies, blog post podcast. So if you have anything interesting, send us your favorite blog post you read this year to

Animal SpiritsPod at gmail.com. And we're going to go over some of our favorites and hopefully some ones that you haven't heard of yet in terms of books and stuff. So anyway, thanks again for listening. We'll talk to you guys next week. Thank you.