Animal Spirits Podcast - Is Apple the Next IBM? (EP.325)

Episode Date: September 13, 2023

On episode 325 of Animal Spirits, Michael Batnick and Ben Carlson are live at Future Proof! Duncan spills a Miami Vice and we discuss: what we actually do at RWM, if Apple is the next IBM, Canadian real estate, issues at ESPN, traveling to California, and much more! Today's episode is sponsored by our friends at YCharts! Start your free trial and get 20% off your first subscription at: https://go.ycharts.com/animal-spirits-referral. Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com   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. Wealthcast Media, 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

Duncan is redder than my strawberry dackey right now Oh my god Duncan, you're fired You want it or want me What? Why? Oh, no, the trick is we on? Let's do it.

Duncan, how are we sounding? Good? All right. You want some of mine? No, it's fine. You're going to spill out in two. All right, so last year, when we were here, it was super hot. I don't know if anybody remembers who was here.

There was, like, a little tiny booth. The air conditioner was broken. I might have had COVID. I didn't test positive. But I was under the weather, and I powered through it. This is going to be a much better performance, I promise. It'll be a much more fun show. Ben, what time did you get here?

When you go to a conference, the first thing you ask someone is, What time did you get in? That's the icebreaker. And trust me, you've all done it. I've seen it. All right. We ready to start? Ready to start. All right. Can't believe Duncan spilled the lambie vice already. I'm taking half. All right. Start, go ahead. So today's animals, welcome to Animal Spirits Live. Huntington Beach, California. That's great. I see a lot of awesome shirts in the audience. I appreciate that. Oh, no. Oh, my God.

I undecoried the, the, uh... Yeah, it's a concentrated portfolio now. That's all right. All right, today's animal spirits is brought to you by our friends at Whitecharts. They're just 100 yards over there in the tent. I see everyone in the crowd. Whitecharts people with their Animal Spirit shirts on. I went there this morning.

They gave me a little test run of their new proposals enhancement. It's nice. So if you basically do, here's your current portfolio for a client. If you're a financial advisor, here's where we are. Here's the differences. You can look through all these different performance numbers and attribution. And it's kind of like a here's where you are, here's where we want you to be. If you go over there and talk to the people at Y charts, I think they said for the whole month of September,

they're giving free access to this. And you'll notice they're wearing the Animal Spirits shirts if you can't find. Although there's a lot of great looking shirts in the audience. Thank you for everybody who bought them. Everyone listening will be having a link to that in the show notes as well. As usual, if you go to Y-Charts, tell them that these guys sent you. 20% off that initial subscription when you sign up. Welcome to Animal Spirits, a show about markets, life, and investing.

Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Riddholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Riddholt's wealth management may maintain positions in the securities discussed in this podcast. All right, welcome to Animal Spirits with Michael and Ben. I was told that we got a comment in the YouTube section. I don't check too too often because they're vicious out there.

And I'm often on the bad side of that viscerate. So we got a question that said, or maybe there's a comment. It would be pretty interesting to hear them discuss the details of what they actually do for Red Hills wealth management. This question didn't bother me. I just noticed the actual. That's pretty tame for a YouTube comment, but the gist of it was people were arguing the YouTube comments as they tend to do, and they said, you guys are always producing content,

you're doing podcasts and YouTube videos and blog posts. It's like, what do you guys actually do for a firm that is a wealth management firm, and how do you actually work with clients and how you have time to do all this stuff? We get that question a lot. All right, so it's pretty simple. I am one of the four co-family partners, not to brag, we don't do that on the show. But at Redald's Wealth Management, we have 30 financial advisors, full-time. That's all they do is talk to clients.

We have a couple of service advisors supporting them. We have four people on our tax team. We have three people that work on the 401K side. We have four traders, seven client service associates. We have a president. We have a chief operating officer, a chief of staff, a chief compliance officer, and a director of human resources, and I'm sure I'm missing a few. We also have a media team.

We have a media production team. Media production team. We have the best media team in the game. We just lost one person from the production team this morning when Duncan spilled my own vice. But the point is that we have time to produce a lot of content. Part of it is because we like it. We all did it before we even joined forces, really. Barry was blogging when I was like six.

Josh was doing it forever. I was doing before I met you guys. And so we enjoy doing it. We don't really have any other hobbies. I don't golf. I don't do fantasy football. Nothing like that. Part of this is just we enjoy doing it.

part of it is that we have a ton of people behind us behind the scenes that keep the ship running and keep everything operationally humming for us. So, yeah, how do we have time to do the content? That's why, because we have so many amazing people doing everything else on a day-to-day basis. But we do actually do stuff, actually. Yeah, we're both part of the investment committee at the firm. We talk with clients all the time. We have meetings.

We're busy. So we actually do do do stuff besides time. So, yeah, some of the do-do. So I do a lot on the business side that some of the stuff. stuff that is like behind the scenes. And so anyhow, thank you for the comment. We appreciate it. That's very nice here.

All right. We're going to start the show today by talking about actually, actually, actually, let me actually myself. Before we get there, anybody ever hear the phrase you get what you pay for? My wife, Butchers, actually says you pay for what you get. I don't think that's how it works. That's literally true. What's that?

That is true. So I got a pair of sunglasses. A couple of weeks ago, I was talking about how I got two pair of Maui Chim sunglasses. They're quality. There's quality shades. And Ben's giving me shit. Why would you spend $200 on sunglasses? They're all the same.

They're all made in the same factory. It's all the same. If you're going to lose... All right, not true. So for those who didn't listen to that episode, I bought two pair of Maui Gym, a black one and a brown one. And I said, I'm going to keep one,

and I'm going to return one. Well, I lost the black one the next day. So, hold on. It turns out that I like the brown one. So I caved. I caved, and I got this pair of, not to name names, but I got these gooders. And I was...

I wore them today, and I got two people come up here, what is that? I've got, I know nobody could see it, but I've got these, what is this? I've got like this shit on my rims. It's like a crop circle. It rained, it rained, and now these glasses are broken. So you have anything to say about that? Gitter has a one-year warranty. They'll send you brand new.

My point was not the quality. My point was... You said they're all the same. This is not a car wash. But my point was, you're going to lose them. Someone actually wrote us in and said, actually these sunglasses make the world look like HD. I'm like, the world looks like HD through my eyes.

I don't need sunglasses to help with that. All right. All right. I just want to make one more personal point here. This morning, Michael said, I'm sick of stuff wiggling around in my pockets. I need a fanny pack. Now, when we talk about consumer sentiment,

I always say, watch what they do and not what they say. Because people say, I'm so bearish and the world's falling off a cliff and all this stuff, but I'm also 95% invested in stocks. That's Michael with middle age. because you say I'm not middle-aged, I'm fighting it, but your transition is just you want to drive a convertible, you wear dad hats, Hawaiian shirt,

and you have a fanny, a literal fanny pat-down. These are fair points. That's a middle-aged guy in that great-looking shirt. Am I middle-aged? No. No. See? Thank you.

Thank you, sir. I'm getting there, but take it easy. All right. Torson Sloc, who's at Apollo. says there are more downside risks and upside risks to the market. He gives 10 downside risks to the U.S. economic outlook. People are running out of savings. Student loan payments are coming back.

Defaults are rising. Oil prices rising. China, Japan, Europe, all this stuff that everyone talks about. You never see the contra to this. You never see, here's 10 upside risks to the U.S. economic outlook. That's like what no one was saying 18 months ago. Well, here's things that could actually go right. I guess this is just what we do in this industry.

I wrote a post, I don't know, six years ago called Gradual Improvements Go and Noticed. And the point was that, it's that chart that I do, the reasons to sell chart, there are always, to Ben's point and to Taurus and Slacks point, there's a million things that you can identify. Risks to the economy, risk to the market, it's easy. You could probably come up with 30 off the top of your head. It's impossible or very difficult to think about upside risks, like what can go, right? obviously AI, right? Like Open AI was on nobody's radar. Although last year at this conference, if you're here, raise your hand. There was somebody who came out to me last year. No, no, no, no, no. There's an individual I'm looking for. And this guy was like just,

no offense, if you're listening, chewing my ear off. And I wasn't like trying to get away. But he was talking about chat CBT. And I guess, is he here? He's not here. So anyway, the point being, that was like a huge upside risk to the economy, to the market. If that didn't happen, who knows where the SEP 500 would be today. I remember last year during this show, we talked, we were arguing about a soft landing. This is 12 months ago. We were, and we're still arguing about it today. Like, I don't think anyone thought that that period could last this long.

Like, oh, we're still going to be figuring out whether it's a hard landing or a soft landing or no landing. Shame on me. I should have re-listen to our podcast from last year, because I don't remember what we spoke about. I was, I was sick and- I just have a good memory. I just have a good memory. I just have a good memory. But even, so I tried to recreate the reasons to sell chart with, like, reasons to buy. Like, what drove the market higher over the last 10 years?

And I'm sure you could write a blog post about some of the things that transpired. Profit margins, probably the thing that come to my mind first. But even with the benefit of hindsight, it's hard to explain the upside. And so I agree, actually, with the list of downside risks. But that's how it always is. It's like it's always that way. It's easier to come up with those things, too. All right.

This is a trope that people keep going back to. Is this the next that? Is Apple the next IBM is something that Bernstein, Cron continue tweeted this? Bernstein wrote a piece, Apple, looking like the old IBM question mark. Now, I'm guilty of this. I wrote a post last week as Nvidia the next Cisco.

But in my defense, it's very lazy to say, like, is this the next that, right? It's like we have blueprints of, oh, we saw how this movie, no, you don't. No, you do not. I got a question for you. So when I, what's that? So your life is on the line.

Could you explain what IBM still does? Because I had an IBM computer in like 1996? Of course I can. Mainframes. Okay. I just have no idea. But anyway, when I write about that, like, is this the next ad? It's usually to point out, like, there's so many more differences than there are similarities. Yeah, tech stocks were in a bubble, and now tech stocks are carrying the market.

Like, I don't know. I think it's lazy. But anyway, I didn't want to talk about IBM for a second. Ben, try it on. Oh, we're on? Okay. So over the last 10 years, IBM's stock is up 28%. I think the NASDAQ is up, I don't know, 10x that?

it's a lot. Their revenue is down 34% in the last 10 years, and their net income, holy moly, is down 88%. So is, oh, there we go. Is Apple the next IBM, strictly speaking on this? I mean, no, I hope not. I hope not for all of our sake who are investing in the market. You know what IBM's market cap is, right? 180? It's $135 billion. But here's the thing, Apple becomes the next IBM and it goes to underperform, it comes the next GE. Something else will take its place. For Apple to become the next IBM, Open AI will become the next Apple or something like that. There was a story last week about like the Chinese government getting rid of the phones and maybe cracking down and doing like a whole consumer thing. Who knows? So China accounts for roughly

40 to 50 million iPhone units, which is not nothing. I feel like you've been secretly bearishing your paper account with Apple for like the last month or two. Is that fair? No. I feel you've been talking about Apple sales and iPhone sales a lot lately. Apple's revenue is down. three consecutive quarters year over year. I think that's right, which is, now listen, there's a new iPhone, there's an upgrade cycle. Matter of fact, they had their meeting today. I didn't see it because we're here, but what they're trying to do is raise their prices by $100 on the most expensive iPhones. So the journal had an article, Apple test limits for most expensive iPhones, and this is an important piece of information, at least I think it is, in terms of where Apple is

in their life cycle. For the first time since 2017, the average selling price of iPhones in the U.S. declined to $948. That's meaningful. For the first time since 2017, the average price decline. iPhone sales fell 2.4% in the last quarter. Again, that's probably because they haven't in an upgrade cycle. But their CFO said the smartphone market has been in a decline for the last couple of quarters in the United States. So we'll say, obviously, a very important company to the market. One of the things that they were talking about releasing at their event today, which I think is finally good news. Every time Apple was open with something new, it's either, you know, you you need to like get new cords or new this or new that,

it's all Apple all the time. One major change is in store for both the iPhone 15 base and pro models will be the transition to a new connector point with the USBC standard. Thank God. Apple is moving away from their proprietary lightning connector. Good? You really care about that?

Yeah, of course we care about that. It's annoying. It's gonna be something else in five years. I work out at a planet fitness, not to brag. Wait, what? Oh, you work out. The treadmills they have have those old connectors are this big, that we're useful for, what, 18 months?

It's always going to be something else. 10 years, what's Apple's annual average return? 21. 28% with dividends. Wow. So if we're going out 10 years, you'd have to say, at the very least, Apple's should, should, underperform like the NASDAQ 100. Is that fair?

Could? 28%, almost 30% per year for a decade. Yeah. Yeah, it's a lot. I would rather take that stance than I'm bearish on one of the best companies we've ever seen ever. All right, sticking with the big companies. So this is from man.com. How do you think they got that website?

Is it two ends? No, it's one end. It's an investment company, and they literally have man. I guess maybe they have a lot of money. They talked about the biggest companies in the stock market. And typically the way things work with a recession, as far as my research goes, the leaders going into a recession are rarely the leaders coming out of it. And it kind of worked like that this time.

We went from low rates, low inflation, pandemic hit. rates go up, inflation goes up, last year value stocks did much better, growth stocks out crushed. Like, okay, this is following the historical script. Now it's already reversed. And their whole point is that, like, this is kind of what's been happening for over a decade. So they have this chart here that shows the top 100 companies in the S&P 500 at the end of each decade in the 1960s. And they show the sum of the weights and then how it performed, where those weights go the next decade. You can see every other decade since the 60s, it's dropped. Wow, that's a great chart. But in 2010, it stayed exactly the same.

Right. So is big tech the next, big tech? Like, is big tech the next thing? Well, look at the other one. So this also shows a survival rate of the leaders of the 100%, 100 stocks the next decade. 99% of the companies that started in the top 100 were still there by the end of the decade. Wow. So usually it is like the competitive destruction, all this stuff.

That's not happening anymore. I think this is one of the biggest debates inside the market is, are these tech giants, irreplaceable, have their moats grown too large, et cetera, et cetera. They've basically broken the stock market in terms of historical patterns. The tech stocks so far have broken the mole. So people love to show the top ten companies from each year. And there used to be like a decent amount of turnover. We remember what happened with IBM, General Electric, Exxon, et cetera.

And if Apple, Amazon, Google, Microsoft are still here for the, you know, in the next 10 years, are we going to be having the same discussion? It would be shocking. It would be more shocking if we were, but it wouldn't surprise me either. Yeah, this is like the tricky thing about history. I think sometimes if you study history, you like you over index for what used to happen. There's no precedent for the big stocks having these margins and just keeping to perform year after year after year.

And if you've been in that camp of any day now, it's been, you've been in a world of pain. So the Templeton thing is the foremost dangerous. words are, this time, is different. Templeton himself said in an interview one time, 20% of the time it actually is different. Let me quote myself quoting John Templeton. The 12 most dangerous words in investing are it's different this time. Or the 12 most dangerous words, I'm sorry. You really messed up on my own quote. All right. All right. So you and Josh had Nick Colis on the Component Friends last week, who just a whipsmart guy. He's an old automotive industry analyst and I don't have nearly the experience as an automotive industry analyst. It's

him, but I do live in Michigan, so I think that kind of counts. And he basically said Tesla and Toyota are the ones that are going to survive. Wait, time out, time out. He said the market is saying. Yes, because it's important. He said the market is saying that only Tesla and Toyota will be around the 20 years. So these are the PE ratios for Ford GM and Tesla and Tesla and obviously there's a little bit of General Motors is trading for a sub five PE ratio. And he's basically saying, listen, the evolution to self-driving and EVs, it's going to be Tesla and Toyota are they're going to be the ones. I don't know why the Toyota thing was. I guess I could see that, but my whole thinking on this from purely living in Michigan my whole life

is Ford and GM are two of the most important companies in the Midwest by far as far as, you know, politically. And I just don't see how any government official would ever let them be swallowed up or go under. And so I would take the under on that. I don't, I think these companies, whatever, call them zombie companies going forward if they are, I don't see how in a political battleground state like Michigan, anyone would ever let these companies go under. So Morgan Stanley just gave Tesla a huge upgrade today. I think they're the highest price target at $400 a share. Stock was up 10% today. Here's a contraindigator, though,

because we talked to a card dealership guy last week. Then you talked to Nick Colis, and they both said glowing things about Tesla being the winner going forward. They're like, actually them lowering the prices is a good thing. Duncan said he was going to go buy Tesla. Right after he heard those two things. Duncan, did you buy it? Today? Today. At the close? So if you want, like, the contraindicator to Tesla, Duncan bought it. So I think there's like a lot of, there's a lot of nuance in what Nicola said, because he said, like, the market is saying this. And then Josh said, do you think the market's right? He said, I think the market is more right than wrong.

Yeah. I tend to agree with, too. All right, Ben, where are we going next? Okay. Anybody, has anybody heard of the zero days to expiration for the options thing? show of the hands, just got one to it. Yeah, there we go. There we go. All right, so there's a chart from Bank of America

showing the breakdown of options to expiration. And in 2016, zero days was 5% of all the total volume. It's effectively zero. And it's gotten up to 43%. Now, I'm sure there are things that I don't understand about this. Like, who's doing it? Is it hedging? Is it short-term traders?

Is it market makers? I have no idea who the buyers and sellers are for this. But I saw somebody, the Daily Chartbook, had this in their notes, that it says CBOE concludes, so there's like talk, this has to be impacting market structure, right? There just has to be. Actually, no, there doesn't have to be. CBOE concludes that there is basically no market impacts noted from zero days to expiration, option trading, S.P 500, index, intraday, volatility, and price patterns.

So does that just mean that people are using these and just rolling them over and do them again the next day, like to keep their same exposure? I honestly don't know, but it seems to not be impacted the market. But I was thinking about this. Remember Gamma Squeezes? That was like a huge topic in the meme stock mania, which I guess is more or less behind us. How they work out for AMC? Not great. I was looking at that.

It's down 99% from the highs. We got a weird GameStop email. I don't remember. Over the weekend, it was the worst email that we've ever gotten. He actually said he wanted us to talk more about options. No, and he wanted more GameStop. Like, why don't you guys cover GameStop? Okay, so, but the takeaway here from the option thing is simply that we don't understand this market enough, or I don't...

It's just to say that, like, oh, this has... People are saying that this is going to impact the market. It's going to do whatever impact volatility. It just, it hasn't. Okay. It hasn't. Oh. Is this yours?

That's you. All right. Skip it. See how we do that? Skip it. All right. This is interesting. From Lisa Bromowitz. I think this is from Apollo.

31%. of all U.S. government debt outstanding or $7.6 trillion were mature over the next year. I don't know if you've noticed, but interest rates are significantly higher than they were 18 months ago. How does this not impact certain things? This was my whole take for the reason I didn't think rates could go as high as they have. I would have assumed it would have been a political issue. Obviously, inflation trumps the worry about the deficit or spending. It surprises me that this hasn't become a political issue.

close to you yet. Well, I think it will in the election. I wish I knew enough about macroeconomics to have some sort of take, but I don't know, 31%? But doesn't matter. Doesn't matter? I don't know. I'm not. I don't know. Maybe it doesn't matter. Okay. All right, here's a chart I don't understand. We're looking at, this is from a data stream. I think there's from Albert Edwards at SACGen. U.S. corporate net interest payments fell yet again. So there's one chart that overlays the Fed funds rate, which is obviously gone vertical, versus the net interest payments for U.S. corporations. Is part of this just the fact that they're not taking on any new debt, so it's just going

to fall for a while until we have to roll the debt over? Is that fair? That's one explanation. I don't know. But it shows that they're down 30% year over year. So this has been one of the conundrums, like higher interest rates impacting the economy, impacting borrowing, impacting all of these companies. You know what? No one ever, they always say, like, if the government operated like a household, we'd be in debt.

And no one ever says if corporations were like a household, that's actually a good thing. True. Right? Not bad. This is interesting. I asked Nicola's about this chart, that the tech sector is deflationary. Everything that you buy that has wires and chips and gadgets cost less every single year. And so there's a chart from Goldman showing U.S. CPI. and inflation for information and information processing. And this runs negative.

Deflation almost every single year. So this is like the unstoppable force and the immovable object. I still am in the camp that it's hard to have structurally high inflation when you have tech and who knows what AI is going to do to productivity. So it's basically demographics and, technology would be your argument for rates staying higher for longer? No. For rates staying higher for longer?

So that's your argument against it? Against it, yeah. Yeah. It makes, it sounds good to say. I just, I don't know, again, I think it all comes back to government spending, though. If the government continues to spend, it doesn't matter what technology does. I think it's a fiscal policy thing. I think that's the biggest, that's going to be the tell.

Any Canadians in here? There we go. We had a lot of emails from you guys last week. so, thank you. We spoke about mortgages in Canada. What was the gist? Is that there's, when rates go up, their principal, or their principal gets extended? The amortization period gets extended. They have these, the payment is set. Right, the payment is set. So they're, they're, I'm making this up, but it could go from like, all right, you have 11 years left in your mortgage. Like, nope, just kidding, you have 23 years left? Oh, there's a cap at 20?

I don't know. I don't know these specifics. Anyway, let's get to the email. Hey, guys. guys, love your podcast, and I've been listening for years. I'm a native New Yorker but moved to Canada 10 years ago. Let me know what, okay, some major differences between U.S. and Canadian mortgages. U.S. interest is tax deductible. It's not on your primary residence in Canada. So mortgage is either fixed or variable. Fixed you can lock in terms for up to five years. For example, my fixed rate is 1.6%, but in 2016, I have to renew at current rates at the time. They basically just have more variable loans, and usually it's a period of like five years that has to reset. in our system? Way more confusing. We're lucky to have the mortgage industry that we have, I think. They definitely, so this is another, I did a piece on the Canadian housing market versus

the U.S. housing market. This is real price, this is from the Dallas Fed through 2022. Real housing price growth versus the growth of disposable income in Canada since 1975, just a bit of a difference there. Now look at the U.S. one. It's basically tracked it. Canada, U.S. Wow. It's a crazy difference. Now, a lot of people said, well, listen, that's Toronto and Vancouver. So I have never seen, like, an ex-Torona, ex-Vancover. Oh, okay.

But we heard from some people, and I got an email from a guy basically saying, I bought my house in, like, 1986, in Canada for like $200 grand. It's worth $4.8 million now. I guess the silver lining of buying real estate now in the United States is at least you're not in Canada. I think that's about it. All right. They're kind of screwed, eh? There we go.

All right. Sorry. funky, funky, funky real estate markets. So KB. Home, the CEO of KB. Homes last week, this is from Lance Lambert at Fortune, said housing market inventory is so scarce that builders will be in the driver's seat for years to come. A chunk of that resell inventory isn't even livable. You know, we've been speaking a lot in the podcast about how much nicer houses are today than when we were growing up. Like, when I grew up, there were nice houses were not a thing in my neighborhood. Like, there were some big houses. They weren't.

nice, they were just, they were big. I was thinking about this watching, so I started watching Kirby enthusiasm, which started in 2000, 2000, yeah, 2000. And remember dressers, like in bedrooms, dressers? Yeah. Now, if you live in an apartment, you probably have a dresser. But I feel like houses now, they just have closets. They have bigger closets and no dressers. I don't have a dresser. You live in New York. What does that mean? People still have dressers. I have a dresser. You don't have a dresser. People, this is a New York thing. There's no way that people don't have dressers anymore.

Who has it? Show of hands. Who's got a dresser? That's a lot of... All right, everybody. Remember dressers? What? I don't have a dresser.

Remember bedside tables? Yeah, my room is not 12 square feet. All right, listen, credit to me, I'm going to take the L on that one. I was just... I'm in the arena trying things and, you know... We don't even need Duncan to do the point on YouTube for this. All right, so hitting on your theme, I have this theory I've been talking about for a while. I don't think people really understood housing and...

housing in the past, and I think the increase in information has actually made it like the light bulb went off sometime like the 90s. So if you look at Robert Schiller's data, which goes back to like 1870, from 1870 whatever to 1989, real housing prices were up 30% in total on a real basis. Now, I don't really believe these figures because it's hard to tell the actual returns of housing when you include leverage and cost. It's hard to know. But basically, the line was flattish on a real basis. Since 1990, it took off like this, and it's up, like, double or triple that on a real basis. So, like, what happened in 1990? Right?

Like, we got more information in the 90s. So driving into Huntington Beach, it's a great, great stretch of driving on the beach, and then all of a sudden you see this big metal, whatever, water plant or electrical power or whatever, and they tried to put these things up to cover it. It's like, people back in the day didn't go, you know what, let's not put this big, clunky piece of metal in front of the greatest view we've ever seen, like, where I'm from. in Traverse City, Michigan, the best spot in the whole city. It's one of those beautiful places on earth for three months out of the year. They put a power plant right downtown,

my whole life growing up in the best spot in town right on the water there was a power plant. And they finally, in like the 2000s go, we should move that, like away from the water so we can use this. I don't think people in the past had the same thoughts about real estate. If you look at old houses, their windows are like this big if they're on the water. Like, I think people just know more about housing now. And like the light bulb went off when we could see pictures of houses and I think people just realize now, like, oh, wait a minute, let's put more housing where it's nicer. Yeah. Let's actually use this water or use this view.

People in the past did not think of this stuff. You know what? Like, let's just put walls everywhere and cabinets everywhere, so we can't see anything. People didn't think about real estate the same way they do now, and I think that's one of the reasons that it's getting a premium now. We were talking about this the other week. The house that I grew up in, it makes no sense. You would never build a house this way. All right, so you get to the house, I don't know, 2,200 square feet or whatever size it was.

You walk up the steps to get to the door. You've got a door. You open the door and there's like a four by six foot area. Steps up, steps down. All right, great. Steps up. Living room, dining room, walls, kitchen. One bathroom, bedroom, bedroom, bedroom.

That's it, three bedrooms. And then downstairs just like a, I don't know, a random room. So the hope is that in the 2030s, the baby boomers will have to start selling their houses because they're going to move to assisted living homes or going to die off or whatever. Sorry, it's kind of more of it. That's true.

That's like the hope for housing supply because I feel like we're just never going to incentive of building more homes. And so the hope is there's going to be this flood of supply in the 2030s. There will not be a flood of supply. There's no hope. Well, I think there could be, but there's going to be a massive renovation boom, too, because a lot of these houses are older.

They've been living in the houses for... Modern farmhouse guy. I don't have a big mudroom like you do, so... All right. I was thinking about... What was I reading? I was reading or thinking about ESPN and the debauchery the debacle with Charter, which I think they got, they came to some sort of agreement.

Yeah, there was an deal made today. Yeah. Remember those guys have all the fun inside the world of ESPN? Was this, who wrote this? James Andrew Miller. James Andrew Miller. That was the absolute peak of ESPN. It's an awesome book, too. Have you read that book? No. 2011. It's really good. I don't know when the actual peak was, but it peaked over a decade ago, right? Yeah, middle of 2010's probably here. So they, it sounds like the deal that they made was they're going to put Disney Plus and ESPN Plus as part of the cable package. That makes sense.

But this is what I want. I don't want to give up my cable package. I just want them to include a channel for Netflix and Disney Plus and Hulu and Apple Plus and Peacock and Paramount Plus and what else is there? I just want to be a channel because I try to, I'm a Michigan fan watching Michigan football. They had a peacock game

a couple weeks ago, right? So I'm watching on Peacock, but on the commercials because there's so many commercials, I want to change to another game. And I have to go out of the app and go into my cable and then change the channel and then go back into the app. How much do you spend on streaming and cable? $300 a month? I try not to calculate it.

Same. It's worth every penny, though. But I would pay it if they just put it all together, like a bundle. Here's a prediction. You will never, ever lower your cable bill ever again. So Ben, Ben likes to brag that it's so easy to lower your cable bill. You just call and ask for a discount.

And I guess people in the Midwest are nice. So they don't, nobody's a jerk like in New York and they call up. So Ben claims that he gets his cable bill lowered every year. You claim? I do. Every single year. You will never lower your cable bill ever again. Put a pin of this. Come right back.

I've tried to do that twice. Total rejected. And you know why? Because Ben Thompson was talking about this with Bill Simmons. The cable companies are like, fine, leave. Leave. They're not making any money for you anyway. You will not have a lower cable bill ever again.

Hi, I'd like to talk to client retention, please. Oh, sure. What other deals can give you? Every time. They're going to tell you to leave. I'm telling you. Also, I did this thing for the phone. My six-year-old, she was doing the phone thing.

She does it like this for an iPhone. Speaking of New York versus Midwestern differences, I have a question for the audience. All right, here's the background. You're the coastal leotis. You're going to lose again. I don't, I probably will. I probably will.

All right. So I got, I was on a phone call with a company who invests in fintech companies. And they said, would you mind taking the introduction? I want to know your take. Absolutely. So they set up the email and, Eight days later, my bad, I said, oh my God, I'm so sorry I dropped the ball on this, happy to chat, Tuesday, this time, Friday, that time, whatever.

Nine days later, hi, Michael, now it's my turn to drop the ball. Dot, dot, dot, dot. I'm a bit, that's a pet peeve, the dot, dot, dot, dot, dot's. Now it's my turn to drop the ball, dot, dot, dot, dot, apologies, dot, dot, dot, dot, so I'm reading this. I'm like, my blood pressure is going up, like, what is you trying to say? How passive-aggressive is this? So I'm thinking, you know what? Nope, I'm not doing it.

I'm not taking the meeting. I respond, thank you, but no, thank you. I don't want to meet. And I said, you're like my wife that reads into my one-word text messages as, like, where's the exclamation point? Why didn't you include an exclamation? Aren't you excited?

All right. You read way into this. I'm still upset. I am taking the meeting, so I'll report back. Show of hands. Is that passive aggressive? Nicole, hands all the way up.

She's from Long Island, too. That doesn't count. All right, so it's like 20% of the audience is in agreement with me. That that is, that's not an accident. That is extreme passive aggressiveness. Because they had to adapt. People, some people just don't know how to type correctly. Now it's my turn to drop the ball.

She was trying to play off of your joke. No, you're too nice. All right. A couple weeks ago on this show, we talked about 0% credit cards. And I kept, I keep getting these offers in the mail. And how does this work? Because credit cards are like 20% interest rates, 25%. And I keep getting these applications for 0%

credit cards. And I said, well, why wouldn't I just take a 0% credit card? And every month, when my bill comes due and I put everything on a credit card, I take that money and I sweep it into a T-bill. That's way better than it. Because the rewards for the credit cards, they keep getting lower and lower. They're not worth as much. You don't get as much cash back. And then we said something- There's the deflation. Yeah. But we said, there's got to be, also, I just wanted it's hot in here, right? I'm sorry. I'm glad we have these tropical brochures on because they're very breathable. It's a little toasty. So I said, well, the rub here must be if you're applying for a zero percent credit card in an interest rate world like we're living in. They're probably

not giving out very much. So I said, you know what? Just for the show, I'm going to apply to one. So I applied to one. I applied to two. What do you think they, I, not to brag, I have a pretty good credit score. How much do you think they gave me for a credit limit? A thousand dollars? I'm not 18. No, I'm saying, what's the catch? What's the catch? No, they gave me like 15 grand. It was pretty good. Wow. I'm going to use it and it's 21 months. Zero percent. I'm going to just What I'm saying is your credit score is going to tank to $490. Do you know how Ficoke's credit scores? Nope.

The more credit you have, the better your credit score is. That's what you say. They do ding you for applications. They're going to get you. They're going to get you. They're going to get you. I have a pristine credit score. Trust me.

Okay. So last week on the podcast I was talking about that I bought hexclad pans. And they got sent to this guy, Brian, in Torrance, California. some place in California. I'm like, what the, how did this happen? Where are my pants? So, Shopify, I sent, so Brian's a fan of the show. On Shopify, like, two and a half years ago,

I sent Brian a t-shirt. And so he had, like, the default address in my Shopify card. So, actually, I think I am middle-aged. I bought chia seeds for my yogurt. I bought chia seeds for my yogurt. Wait, wait, what's a chia seed? Don't worry about it.

I only know Chia from the Chia pet. I don't know what it is, but my dad told me to buy it. It's good for your stomach. And the checkout was on Shopify. And I said, oh my God, oh, God, oh, God, and Brian, it was Brian in Los Angeles, or whatever he is. So, watch out. If you ship something on Shopify to somebody else, it will store that as your address. Fun fact.

The more you know. All right, Instagram is my personal shopper, as many of you know. But there's some weird shit happen on Instagram. The ideas are getting dumber. Do anybody do the cold plunge? Anybody do the cold plunge? Anybody do it in your backyard? Anybody do it in the backyard?

Backyard? All right. So I saw something like that. I'm scrolling through reels. The best, this is quotes. The best thing for sleep is a sauna. I'm like, what? It's a little personal sauna.

Like, have we jumped the shark? Sondas, individual saunas before sleep? We need a recession. it's time it's time all right we kept this one a little bit short thank you everybody for coming what are you doing? No I know I know

I'm just saying before we finish up just saying thank you everybody for listening for all the animal spirators what are we calling you guys everybody that has the shirt on we appreciate you coming out all the advisors here thank you for making the trip my entire Wittholz team is here for the most part so if you do want to talk to us

if you do want to talk Oh, my angel. Hey, we have a new Miami license. Duncan. Duncan just saved his job. And we have to thank our media team who deals with our bullshit every week. Yes.

Duncan, Nicole, John, Rob, Graham. You guys are the best. Hey, I just want to say credit to us for not making an analogy to it raining this morning to financial planning or investing, right? It's pretty good. I wasn't thinking about it.

All right, recommendations. On my flight here. Oh, this is damn good. Oh, actually, we both have a movie wreck. We have the same movie wreck for this week. I have not seen a good comedy in years. That's not true. You saw the J-law one.

That's what I'm talking about. Prior to the movie I'm talking about, I had not seen a good comedy in years. And you actually told me, you said, Jennifer Lawrence, her new comedy, No Hard Feelings. Was that cute? Give it a try.

So it was a throwback. I mean, it's the kind of story that could have been told in the 80s, 90s, it was, can't buy me love, cross with 10 things I hate about you. It's, the plot is kind of dumb, obviously, but how they pull it off is... What's a plot?

It's a 19-year-old going to Princeton, and... He's socially awkward, he's never been laid. His parents... Oh, Ferris Bueller. Matthew Broder is the dad. But so I go into these things with pretty low expectations because they just don't make comedies anymore.

Why, because I recommended it? Well, that, that, too. And show hands, how many people think Michael has trash movie takes? 30%. All right, 70% don't. Grant, do you just raise your hand? You're fired. All right, so Jennifer Lawrence gets hired.

You have to tell me, where's Montauk? All the way out east. Okay, all the way. On Long Island. It's the very tip of the spear of Long Island. Okay, she's a townie there. They tire her. I got to say she's very funny in the movie

And I want to have gotten low expectations It was really funny It was great If you're on the plane at home No Hard Feelings It's a good plain movie It was just way funnier than I And the kid who plays the awkward

19 year old He was perfect Very good right Their first date when he just says Yeah you drink a lot Right Wait are already the comedy's back The answer is no unfortunately

But I watched another good one Wait was No Hard Films Rated art probably Yeah She did a movie A naked fighting scene, it has yet. She did, she did. Joyride.

Anybody see Joyride? I can freeze it. All right, if you're flying home, which I'm guessing most, unless you're in California, everyone's flying home, watch Joyride. It's a rated art comedy, and it's good, clean fun. Not clean, but fun. You told me, I asked for a recommendation from you.

I was searching through and we were texting each other. You know, for somebody who gives shitty recommendations, you're sure taking a lot of my recommendations. Unsolicited. Ben said, what should I watch on the airplane? You told me you watched The Covenant, I said, should I try it? It's not an airplane movie. I turned it off.

I'll watch it eventually. I can't watch a war movie on the airplane. I'm sorry, I need... So I watched The Wedding Singer again. Oh, so good. Here's my take. That's the highest quality... It's not the best.

It's the highest quality Adam Sandler movie he's ever made for a comedy. It is the best. Well, no, happy Gilmore's the best. Fine. You're right, you're right, you're right. I think Billy Madison has an aged very well. Billy Madison sucks. No, no, no, no, no, no.

I'm sorry. No, no, no, no, no, yeah. It pains me to say this. Boo this man. When my son Logan was born four years ago in the hospital, I'm watching Billy Madison. I was like, what the fuck? There's a lot of dumb part, the penguin stuff.

There's a lot of dumb parts, but there's so many classic lines. It has parts of it haven't aged well. How about this? If you watch it today for the first time, you'd say this is the dumbest movie. Happy Gilmore is his best, but wedding singer is the highest quality one. It still aged really well, so I watched that on the... 50 first day.

That's cute. No, it doesn't. I love you, Barry. I love that movie. It's a cute movie. Worst recommendations, Michael or Barry? Definitely Barry. Definitely Barry. All right.

Sci-fi nonsense. All right. So, anybody remember the Porn O'Gill episode of Curb? Barry's shaking his head. Bob Odenkirk. Timeless. Go back to the early curb. It's timeless.

Or don't. Okay. This was fun. Anybody have fun here? All right. After we're done, we'll meet over there. We'll say hi to everyone. But if you've got one of these shirts out,

we want to get a picture of everyone in the shirts. How? Oh, really? We'll figure it out. All right. All right. Email us, AnimalFourn's Pod. Email.com.

Thank you, guys. Thank you.