Animal Spirits Podcast - I've Never Used an Emoji (EP.112)

Episode Date: November 13, 2019

On this week's show we discuss the growth in auto loans, denominator blindness in debt statistics, experts on an earlier version of the world, the one-percenters, timing value stocks, infinite leverage, more surveys and much 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

Today's Animal Spirits is brought to you by our friends at Y Charts. To start the show off today, I'm going to be using some data from our friends at Y Charts that I pulled up very quickly because they showed it to me before to show why auto loans are not the next subprime and they're not worse than student loans and because there was a story in the Wall Street Journal that everyone's freaking out about because debt levels are extremely high and I'm going to prove them wrong and use some YCharts data for the research here. Go to Ycharts.com, tell them Animal Spirits sent you, call them up,

get 20% off your first subscription. 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. Michael Battenick and Ben Carlson work for Ritt Holt's 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 Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritthold's wealth management may maintain positions in the securities

discussed in this podcast. So this is pretty shitty. Thirty-three percent of people who traded in cars to buy new ones in the first nine months of two-old. Thank you. What I was trying to say was borrowers owed about $5,000 on average after they traded it in their cars before taking on new loans. So what's going on? So people are worried about... Tell me why this is not a big deal. You're trying to take the other side of this. So people are trying to say, car loans are getting out of control. So because of some anecdotes. And obviously this shows the share of people who have negative equity when trading in vehicles for new ones is now basically at one-third of all.

So I'm not saying it's going to crash the market, but you don't think this is a legitimate story? I think this is, I think student loans are something worth worrying about. So student loans and car loans are fairly similar. So I pull up the data from Y charts to look at the total level of debt over U.S. households and student loans and auto loans. and actually pretty close. So the total level of U.S. household debt is like nearly $14 trillion. It's about $1.5 trillion for student loans, and it's $1.3 trillion for U.S. auto loans.

So they're actually pretty similar in terms of size. Now, of course, more people will take out auto loans than will take out student loans because there's just a bigger group of people that get cars than go to college. but if you look at the growth over the past since 2002 student loans have grown over 500% in total auto loans have grown about 105% in total but u.s household debt is actually grown larger than auto debt so auto debt is actually basically growing at the same level of u.s household debt and if you look at the ratio of total of auto loans to total debt scroll down a little here on your on your google doc michael it's basically at the same level it was in two

2002 or 2003. So the ratio of auto loans to total debt has basically stayed the same. It dipped during the financial crisis and now it's come back up to where it was before. And actually, the surprising one to me is, so the bigger one, so auto loans make up roughly 10% of total US household debt. Mortgages make up almost 70%. But the ratio of mortgage debt to household debt has actually gone down. And part of that is because the interest rates are lower. So what am I trying to say here, Michael? Well, I'm not saying this. Hang on a second. You're actually in yourself because you have been on the... This is denominator blindness once again. Because you see big numbers. Hold on a second. You have been very vocal about you switch from a minivan to an SUV, right?

Yes. You have been on the record as saying that, holy cow, SUVs are so expensive. And now you're saying, well, don't worry about it. I'm saying this isn't like a big huge debt. that boogeyman thing, that all the debt's out of control. This is people are making poor personal finance decisions. Because, so in that book, Alchemy, you are a Midwestern elitist. Some people don't have that luxury of choosing. Yes, they do. They could just live in, they could keep their car longer. If it has negative equity, why don't you just drive your car longer? This is a personal finance choice, not. What if the car craps out, which it did in some of the anecdotes using the article. Okay. Which you probably skin. An anecdote, I'm sorry,

but an anecdote is worse than a survey. And we're an anti-survey podcast. I'm going to say we're also an anti-anactote most of the time. All right, but cars are getting more and more expensive. But cars are also better quality. The reason cars are getting more expensive and that the prices are going up is because, as you said, it's an SUV thing. People are buying these big trucks and SUVs that cost more and they want. But there's no inflation. So in the Rory Sutherland book, Alchemy, he says, you know, instead of buying a new car,

take it every couple months and get it detailed for a hundred bucks and you'll be amazed at how much better your car will be. So we have a place that does that for like 40 bucks, completely cleans the inside of your car. They power wash your floor mats and your car comes. This is not aesthetics. What does that have to do with anything? Some people get new cars because their cars stop working. Ooh, that's a tough. Cars can last forever now.

Buy a Honda Accord. It'll last you 20 years. I think you're just, you're pulling stuff out of thin air here. You're doing strongman arguments. Guilty is charged. You are following the Wall Street Journal thing where they interview three people that shows like a, and you take that as a trend. You extrapolate that to mean, auto loans are going to be the next subprime because three people trade, three people trade in their

cars. You, sir, are a new will for believing this. No, you're putting words in my microphone. How dare you? I don't think there's a lot of words that could fit in there because that microphone is huge. Sorry. All right. Hold on. So back to the matter of hand. Again, this is, this is a personal finance issue where the majority of these people trading in an underwater car. But either way, isn't every car underwater? Like, shouldn't that be the thing where all cars are almost underwater when you drive off? because it depreciates by 20%. They're all in a drawdown. Yeah, when you drive it off the lot, it depreciates.

Yeah, but a lot of these cars, they're trading in, the trading value is worth less than the amount that they own the car. And I get why people are taking these longer loans because the rates are so low. So it kind of makes sense in a lot of ways where it doesn't probably hurt you that much in terms of your monthly outlay. I think this is more of a non-story than a story. That's what I'm saying. Oh, come on.

It is. No, no, no. No, it's not a non-story. on this and I'm going to dunk on you left and right and show you how wrong you are because you're using anecdotes and I'm using data. How is this anecdotal? Look at the chart right here. Share of people who have negative equity when trading in vehicles for new ones is at a all-time high. Okay. Guess what? By a used car. Everyone has to drive a new car. That's what I'm saying.

This is a personal finance choice. And you don't have to drive, not everyone has to drive an SUV. All right. Some people make personal finance, poor personal finance decisions. That doesn't mean that personal finance stories or not stories. That's what I'm saying. The student loan thing is an issue because that's going to affect stuff. This is, I'm sorry, I think people make poor decisions with their automobiles in a lot of cases. That's where I'm standing on this. All right. I'm Dave Ramseying this thing. I'm sorry. Okay. Well, if you get 12% annual returns in your minivan. Yeah, right. That's not going to happen. All right. Minivans are like the utilities of the S&P 500. Well, they're going away. They're going the way of the Dodo. Seven of the top 10 vehicles with third row seats are now SUVs. How about that? that. I don't doubt it. The only minivans still there are the Honda Odyssey, the Dodge Grand Caravan, and the Toyota Sienna. Millennials are not going to drive minivans. I'm sorry. It's not going to happen. I would get one. Robinson, no. We like, honestly, and the thing is, if you want to

make this a finance decision, minivans are way, way cheaper than SUVs. You can get a brand new minivan for probably 60 to 7% of the value of a nicer SUV. Do you know the state, the single state that has the highest percentage of vehicle sales with the third row seat. What's that? Michigan. Oh, okay. So we have more kids here? Or just we want bigger? That's probably just because everyone has a brother or a cousin or a sister that works at GM and they get a deal on those Yukons and big GM cars in Detroit. All right. Anyway, the world has gone mad and the system is broken. So Ray Dalio is now starting to sound a little bit like zero hedge. I guess he has for a while. He's been calling for 1937 since like

1938 pretty much. So it's easy to to joke, but do we think that there's any kernels or sure, I'll go with that word. Any kernels of truth here? I mean, this was actually one of the shorter ones of his for his LinkedIn blog. The easiest one, so he's reeling against there's huge debt in the system and monetary policy is not going to be able to do what it once did. And I think the one thing that in maybe people are becoming giving, you know, interest rates are too low, so people are taking on too much risk. Yada, yada, yada. We haven't heard this is nothing new. He was talking about pension and health care liability payments are continuing to increase. Well, I love for you're yada, yada, yada, yada and redalia. I mean, because a lot of this stuff is

not new. I think the pension stuff is probably the biggest worry. Here's the thing, though, all this stuff like large government deficits and lower interest rates and huge debt burdens and pension liabilities. He's saying the world is approaching a paradigm shift. Those things don't just turn on a dime. These things are going to be processes that take decades and decades to figure out, if ever in some cases. So I don't know how you can take these big, huge issues and say, all right, now here comes the shift. This is going to totally change everything. That's my problem with his thinking here. I feel like these macro hedge fund managers want to call for paradigm shift like every 18 months. And the world doesn't work that way. Well, you've said this in the past that

these people maybe are experts on an earlier version of the world. Yeah. Which is harsh. but may be fair. So there was a quote from Paul Graham. I think he wrote a piece in like 2015 that he's a technology investor. He did the Y combinator thing. He wrote this in 2014, actually. He said, if the world were static, we could have monotony, whoa, boy, I can't say that one. Monotonically increasing confidence in our beliefs. The more experience of belief survived, the less likely it would be false. And most people implicitly believe something like this about their opinions and they're justified in doing so with opinions about things that don't change much like human nature. But you can't trust your opinions in the same way about things that change,

which could include practically everything else. When experts are wrong, it's often because they're experts on an earlier version of the world. And I wonder if a lot of the- I thought, I thought that was an original thought. Oh yeah, I wish that was mine. I stole that, sorry. And so I wonder if a lot of these hedge fund managers that came up in the 70s, 80s, and they had a certain way of doing things and they saw the way that the Fed reacted to certain ways. and it doesn't really happen that way anymore. If they just have the wrong playbook now, and that's one of the big problems

why they've been having such a hard time in these markets that they've been complaining about for the last 10 years. Well, that's a fact. What you just said as a fact, however, what if he's right? Okay. I mean, if he's right,

let's say all these scary things are, what does that mean? Is he predicting hyperinflation? Returns are going to be lower? Like, what's the, Okay, what's the outcome? Just that there's way, that there's way too much debt in the system. We're pulling forward future returns.

Economically, in the markets. I mean, people have been calling for too much debt in the system since the 1930s. What if this debt thing in the government debt thing, what if it just is never the problem people make it out to be? And when we're his age, people are still complaining about it. What then? I don't know. Not wrong just early? Well, talk about if we're going to, well, let's just read this quote that he said.

He wrote, there is now so much money wanting to buy these dreams that in some cases, venture capital investors are pushing money onto startups that don't want more money because they already have more than enough. But the investors are threatening to harm these companies by providing enormous support to their startup competitors if they don't take the money. End quote. It honestly sounds like somebody just told them what the Vision Fund is. You know, I mean, one of the big problems here is that I think the whole wealth inequality thing, they're like rich people have too much money. and this is the reason we have negative interest rates. Like it's okay to have negative interest rates because in that so much money is sloshing around in private equity and venture capital. Are you saying that risk parity drove interest rates negative? Yes, it was his fault.

I don't know. What are you saying? I'm saying that the whole wealth inequality thing with all the rich people owning financial assets and basically having no use for it right now, that's kind of driving what he's talking about here. So Bill Gates is under assault by Elizabeth Warren. So this story about income inequality, wealth inequality, it's not going away. It's just going to get noisier and more vitriolic. He said that he has 60% of his money in stocks, which means he has $60 billion in stocks or index funds. It's a lot of money.

What happens when Bill Gates goes to sell? What happens if he goes to buy more? That's cash on the sideline. Are ETFs going to crash? It's kind of funny because some people are saying we're like, some people are we're saying 60% is way too much inequities for Bill Gates. And it's like, guess what? If you have $100 billion, it doesn't matter what you do with your money. So this was a tweet from Robert Reich. There are basically five ways to accumulate a billion dollars in America. One, profiting from a monopoly.

Two, insider trading. Three, political payoffs. Four, fraud. Five inheritance. Then he says, none of these has anything to do with being successful in the supposed free market. And so he got dunked on left, right and center. Relentlessly. And deservedly so. So as it turns out, Twitter is trying to fix dunking on people. I think we'd actually reward dunking. Like, this kind of tweet should have like a gold star on it. Like this tweet got dunked on 10,000 times. That should be like a new category. Like likes, we retweets, retweets, ratios, and then this is an all-timeer getting dunked on. I mean, isn't that the whole point of Twitter is to make people look like fools? So what are they going to try?

to do. So here's some ideas. Twitter will add an emoji to a retweet. I'm not sure I quite understand. Giving people a chance to quote tweet without going into the compose field. Okay. Don't get it. That pretty much takes me out of the game because I don't use emojis. You know what? You don't use emojis. Can I make a confession here? I don't know I've ever use an emoji in my whole life. Just like not, I've never drink a cup of coffee. Emogies are What's with you? It's nothing personal. I just, what do you think you're better than us? I'm just not, I never got into the emoji thing. I've never done. No coffee. What else? Just, come on.

What else? No Facebook. No Facebook. No Facebook. No emojis. Have some fun. It wasn't like a, it wasn't a, uh, an idea that just, it just happened. You ever see Star Wars?

Yeah, remember I made the point here that Star Wars is overrated. I got, you know, wait, I feel like I emoji you all the time. Yeah. Yeah. Do I? Yeah, you like the thumbs up and the crying, laughing emoji and, you know, that's, the fist pound, yeah. Yeah, everyone uses the same ones. Okay, so there's an article in Bloomberg.

Wait a minute, wait a minute, wait a minute, hold on. Let's stick with this for a second. The second line of thinking for Twitter, and I don't get this either, Twitter will automatically suggest people use an emoji in their replies, again emoji. If you like something, you could use their heart eyes emoji. If you don't, you could use the red circle with a line going through it. But if you, oh my God. But if you pick a negative emoji, Twitter will ask, why do you disagree?

which at hopes will prompt a more thoughtful reply rather than a flame war. Yeah, freaking right. Flamore. I've never heard Flamore before. That's pretty good, actually. You can't clean this place up. It's a similar. No, it's never going to get.

People are just, and if they implement these things, people are going to figure out ways around them to utilize them against each other. Instagram is removing the like button. What are they doing? I don't know. You think that's a big deal? Yes, huge. I don't think they're removing the like button. They're removing the, you don't see how many likes there are.

That's the point. How are influencers are supposed to make? a living. Yes. I don't know how they're supposed to realize they're worth in the world. I'm sure they can still view them, just not everyone else can view them. While we're on the Instagram thing, don't you think, though, it's too late at this point, the cat's out of the bag, trying to fix these social media platforms, any of them? Oh, yeah. Oh, yeah. You can't fix them. I'm sorry. There's nothing you can do that will take away what's already been done. It's over. It's over. I agree. I listen to a business war's Snapchat versus Facebook. Endorse. It's a good show.

Okay. What's the takeaway here? Listen to that business. worse. It's a good podcast. Okay. You're doing it. Just a friendly plug. Okay. So there was, there was some stuff about the one percent of stuff in Bloomberg. The bottom 50 percent of households in America own 36 percent of liabilities and six percent of assets. Awful. Awful. Awful. Yes. So how much, how much of those 36 percent of liabilities are car loans?

Maybe you're, maybe you're right. You are. You are. You're harsh. I'm guessing a lot of that is just, it's got to be mortgage debt, whereas most of the one percent probably has their houses paid off. and everyone else owns a home and they have a mortgage on it, that'd be my guess. So this is totally politically impossible, but instead of going after Bill Gates, we really should figure out a way to get the bottom 50% of the people, how do they earn a living wage? I feel like that is such a more productive conversation to have. Yes.

Honestly, though, if I could go, like, if I could pick a subject of outrage, like I could pick a stock, I would pick the class warfare stuff and going after billionaires. That is just into the election, that is, that is like a small cap stock right now that is going to be a mega cap. Like, that stuff is just going to continue to take, like that guy billionaire tweet. Yeah. That's what I'm saying. It's good. It's going to get ugly. Yes. It's, it's, that stuff is not going away. Like the class warfare stuff, that's going to continue to, regardless of it, whether it's true or not. And supposedly some of the stuff that Gates said at a conference last week, it was put on Twitter completely out of context when he was joking.

in a lot of ways. And when you show a joke, they should have used the, they should have used a smiley face emoji. Ah, that, there's where emoji should work. Yes. So here's a, it's the top, I think it's the top 10% have as many assets as the 50th to 90th percentile. I mean, I don't think that the solution is banning buybacks, but to say that this is not an issue, come on, it's an issue. Yes. And unfortunately, it's always been an issue because we talked a few weeks ago, how the ownership of stocks in this country is the highest point it's ever been. Like, it's 50% ownership, which is that's totally a glass half full, glass half empty sort of argument. Well, 50% owned stocks now. And back in the 80s, it was 30 or 20. But that still means half of the

country is not participating in financial assets where that's where so many of these rich people make their money. And as you said, I think the top 10% own 85% of all stocks. So did you look at the Vision Fund presentation? Yes. Oh, yeah. Of course, because I thought it was fake. So I tweeted last night that Silicon Valley used to be a parody.

And there was a chart, the CEO of Huli, I forget, Gavit, I forget his last name. It doesn't matter. And he was giving a presentation. And the chart was a baseline for five-year forecast. And he wrote Sunshine and Profits. And it's just a parabolic line. And of course, it's a joke. The thing is, though, that this is actually.

basically the same slide in the Vision Fund. And you know what? I'm going to out you right now. Say what you got to say about Silicon Valley. What do you mean? You just told me before we started recording. Tell me what you got to tell me. I loved the show when it came out.

The first two seasons I thought were hilarious. I believe by season three or four, whenever Bachman left that season, the show kind of jumped the shark and I thought they ran out of storylines. And it was kind of the same thing. I'm here to say that you're wrong. When's the last time you've heard anyone talk about Silicon Valley, President company excluded as a funny show. Yeah, pretty much.

And it was great when it first came out. I just thought it wasn't like they kept using the same storylines and the same jokes and it just, I don't know. I thought it kind of rang everything out that they had. Maybe it's gotten better. But I thought the last season I watched it, it felt like a chore to do so. And I had a stop loss. I had a tight stop loss on it. No offense.

I liked it the first two seasons. This chart didn't make it out into the public. I think the turnaround one of the hypothetical illustration of EBITDA was really the one that, that grabbed the Twitterati. But look at the next one that I put in here. So this was SoftBanks presentation for a few years ago, though, right? This isn't a new one. No, this was a new one. Oh, this is a new one. Okay. Yes. Okay. I thought this was an older one. Look at the next one. Hypothetical illustration of occupancy rate. We'll put this on the show notes because I know you can't see it while listening, but.

They're going to seek to improve over time. I mean, do you see this? Who did this? I had a college intern. So you tweeted something about smart money. What did you say? I tweeted out that 2019 is the year that smart or that smart money term has officially completely died. It's over. It's,

I think there's probably just too many people in the private markets now to, that it's kind of like you've, you've invited almost a retail mindset there where there's a lot of, so maybe there is some alpha to be made in the private market still because there's so many people that have jumped in there. Like the competition thing maybe outweighed by the fact that there's going to be people doing dumb stuff there. What if the dumb money, like the people that the dentists are no longer in the public markets or in the private markets? It's certainly a possibility.

So Cliff Aznes from AQR said it's timed for a venial market timing sin and value. Do you know what venial means? Well, there's two types of sins, venial and mortal. Whoa, whoa, whoa. What? Educate me. I don't know what that means. so mortal sin is obviously like killing someone whereas a venial sin is like not quite as it it's not going to damn you to hell basically is this a religious thing yes this is from okay yeah it's a religious

spoiler i'm i'm i'm jewish he's saying it's it's it's a small sin so okay he's saying value has gotten cheap enough relative to growth where it's time to maybe put the tone the water and over rebalance to value i guess so they look looked at a bunch of different forms of value and they compared it to like the tech bubble. And they were saying the tech bubble is basically the 99th percentile. That's as wide of a spread as we've ever seen in terms of the value versus growth. And they're saying now or anywhere from the 95th to the 97th percentile in terms of value being cheap. So not as cheap as it was in the tech bubble, but pretty darn close. Well, X tech bubble, it's the most, the biggest spread that they've seen across many metrics. I really like that. I really like that. this one. This is wild. So he has a ton of footnotes. And this one caught my eye. In 1999, 2000,

the expensive stocks were worse companies than the cheap stocks on many of our objective measures. That's rare. Again, the expensive stocks were worse companies than the cheap stocks, which is usually the opposite of what should happen. Like, stocks that are expensive are expensive because they have explosive earnings growth. And stocks that are cheap have a lot of hair on them. They're cheap for a reason. And this was, 2000 was the opposite. So it's possible, probable, in fact, that we will never see something like 2000 again in terms of the spreads. And they're also saying, in the past few years, it was for a while that the fundamentals were just better in growth stocks for a while. And that's one of the reasons they outperformed. The last few years, I guess the fundamentals have been

improving in value stocks, but the prices have just stayed where they are. And maybe that's like a sign of capitulation of people saying, all right, I'm done with these. I'm over it. But don't you think when these calls are made and you get like a signal that says, all right, it's time to do it. Don't I think that's usually a sign that we're still like two years away? Like, does it ever match up so perfectly where you get that signal and then you're like, all right, I'm going to go. I'm going to add some and then it's just going to turn around and I'm off to the races. Usually no.

However, in this case, I'm not saying he will be right. But like, to Cliff's credit, he wrote a piece last year or a year before saying like, I know a lot of people want me to tell you that it's time to over rebalance and go all in because the spreads have never been this attractive, but that's not the case. So he's not one of those people that says these things willy-nilly. But to your point, is this going to be, is this going to be like the perfect timing signal? I don't know. We'll say. Yeah. And that's the reason why I think you can actually trust this call to take it for whatever you will in terms of intellectual honesty because they haven't said in the past. And a lot of people have been saying value is the cheapest it's ever been.

And a few years ago, he said it's not as cheap as people are saying it is. And now he's saying, and now it is pretty good. I think Cliffassness is like the anti-Charlottons, anti-Charlottonid. Yes, I agree. Very intellectually honest is a good way to put it. Okay. This infinite leverage thing, I still don't quite get it. But some Robin Hood users figured out that they've been trading with unlimited borrowed funds

because you can actually pay for this Robin Hood, I think it's called Robin Hood gold, where you pay $10 a month and you can margin up your account. And somehow someone figured out a cheat code that allowed this person. And of course, it was someone from Reddit, which I still don't understand that place, but people keep telling us we need to check it out. So they took a million dollar position using a $4,000 deposit. And obviously Robin Hood says this is kind of an isolated incident. We're taking care of it.

Who are these people that would ever try to do that in the first place? Well, is there any downside? like obviously if you I mean like how does Robin to recoup their cost I know it's a dumb question but I mean that's the thing honestly if you could do this and you took a position and then you lost you're not going to be the one paying that back that's on Robin Hood basically that's what I'm saying like let's say somebody loses the million dollars it's like all right sue me yes you know what I mean like I have I have 11 dollars to my name right I day traded my basement this yeah I just think it's funny that these people ever figured this out in the first place and if I don't know who

came up with it, but infinite leverage. Doesn't that sound like that could be some 1998 movie starring Matthew McConaughey? Sounds like an Avengers movie. Yes. Survey. What do we got? Disney Plus comes out this week. I'm pretty excited. I think it comes out tomorrow, actually, on Tuesday. So by the time this podcast drops, it'll be out. And people are wondering, is that mean that people are going to quit Netflix or how are they going to reshuffle all their services? So this is from the Wall Street Journal on the Harris Poll. Americans are willing to spend an average of $44 a month on streaming video and subscription services. And on average, people subscribe to 3.6 services. I'm way over the average on that one. I'm bringing the average up.

What do you subscribe to? Well, first of all, I'm never getting up my cable bundle. So all the movie channels on that one, Prime Netflix, Hulu, HBO, Go, I guess. I mean, we have stars and Go because of the cable channel. What I mean, what else is? I have to say, you're a savvy negotiator when it comes to your cable bundle. Oh, every 12 months I'm calling saying, I'd like to talk to your cancellation department, please. And that's how you skip it and get them. What if they call your bluff?

I don't think they can at this point because they have so many people that they have to offer you something. And usually it's a little bit of give and take, and they throw on a movie channel. What if they offer you? Oh, they can't offer you free trades anymore. Trades are free. That's true. This is the one that doesn't make sense for the survey. this is why we're anti-survey. Nearly one in three Netflix subscribers said that they would likely

cancel the service in the next three months to make room for a new entrant. Some 43% of parents with kids under 18 said they were likely to cancel, as did 44% of men aged 18 to 34. There are currently 158 million Netflix subscribers globally. There is no way one third of them are going to cancel because Disney Plus is coming out. Are you kidding me? That's not going to happen. Right? These are the problems with surveys. I'm guessing when this comes out, there will be negligible hit to Netflix, don't you think? I don't think it's going to matter at all to Netflix. I'm with you.

So there is a story. But I will be coming with my Disney Plus review next week. I'll give the full review. I'll bring mine as well. Are you going to watch the, what's the Star Wars show, the Mandorlorian? What's the name of it? No, I doubt I'll be watching any of the adult shows. This is all for my kids, I believe.

I'll let you stick to the Star Wars content. Okay, Boomer. What are you talking about? The boomers probably love Star Wars. It came out in like 1964. Patriots rookie Joanne Williams is all about protecting the money. So this guy, Joanne Williams, his teacher said something about compound interest and growing money. And it really took to him.

And people have, myself included, scoffed at the idea that, like, oh, teaching kids about money doesn't work because you were also talking about earth science and how much do you know about earth science 20 years later? How do we really know? I mean, I know that I wasn't a good student, but like I guess like anything else that's taught in school, some things take, some things don't. Some people learn this class, other people learn that class, whatever, whatever. Shouldn't it be an option? Shouldn't we at least try to teach basic financial literacy in middle school and high school? Yes, I agree. Like even if you can help 10% of the population, Don't you think that's a win?

He said, he raised his hand to his teacher, and I was like, So you're saying we can sit on money and watch it grow? And his teacher was like, basically yes. And he said, okay, sign me up. And so, yeah, if it helped one person in class, better their finances. And it says he invests 90% of the money that comes in via game checks, saves and invests. So he's well on his way to fire. He's going to start a fire blog by age.

The funny thing is, what is the average age of retirement for NFL player, 27 or something probably? 19. Yes. Yeah, totally out of player. Okay. And good for him. And also, a little plug here, we talked to the strength and conditioning coach of the Yankees last week when I was in New York. And that was on our comic book this week.

Former Strength and Conditioning Coach of the Yankees. We talked a little bit about athletes and their finances and that. So check that on our talk about. He said that Alex Rodriguez is something of a financial advisor to the players. Yeah, he would hold classes to teach them about how to manage their finances, which is great. So it's been a few weeks since we spoke about the multi-trillion dollar cash hoard. But it's coming up again. There was a big article in the Wall Street Journal. I'm going to put this in the file of why would you say this? So here's a quote. So this is another cash in the sidelines things? Yes. This is a big one. Did you read this? No, because I feel like I read it two weeks ago already. Okay. Which one do we talk about more? Investor cash hordes or all-time selling high in mutual funds. You mean equity outflows? Yes. Hey, good topics. All right. Here's a quote. Cash always makes me feel good, both having it and seeing it on the sidelines, said Michael Farr, president of the money management firm Farr Miller and Washington, which is holding twice as much cash as usual.

Quote, it keeps things a little bit safer, end quote. Wait, this is from a money manager? Yes. Now, in his defense, I'm sure that he spoke for three hours to this person. right so like you know i i understand that some of these things are taken out of context but it keeps things a little bit safer he's probably waiting for the fat pitch in building his margin of safety i'm going to give him the benefit of the doubt here oh here we go we don't have to swing at every pitch it's in the same article

it's a second half story cash in the sidelines is the second half story well of course there was a cumulative net flows year to date, and money market are just, they're taken off. Yes. And you can earn your 2%. Looks like the rates at 1.6% now. Well, wait a minute. Actually, in the article, there was a UBS Global Wealth Management survey of 4,600 wealthy entrepreneurs and investors. Cash holdings rose at percentage point to 27% of survey response in its portfolios. Here's another thing. Do you believe that? Do you really believe that cash is 27% of their portfolios on average? No way. I would guess no more than 27% of the people surveyed for that know what their asset allocation is. That too.

Right? Especially for wealthy people. I'm guessing they don't really know. So we got some good feedback in the email this week. One of them was somebody actually being then about New Zealand and World War II. They've been a strong ally of ours. Last week, Ben said it would be like New Zealand during World War II. And apparently they weren't World War II. So that Thank you for that. That made me laugh. Did you laugh? Yeah. I wasn't saying New Zealand, thanks for, thanks for out of me on Veterans Day here. Ooh. Sorry. I was, what I was saying is they're a very small country. And Crackle is obviously a small streaming service.

That was the analogy I was trying to make. I was not trying to make light of, yeah, there. Oh, Crackle. That's right. Did you, did you, uh... Thank you for your service, New Zealand. Did you know that Snapchat was originally named Peekaboo? Oh, really? Oof. And did you, do you remember? So they would have shortened it eventually to like, boo. Hit me up on boo.

Do you remember the app, the yo app? That was like a joke? Yes. You could yo someone. All right. Another email I came in. This is interesting. I did not know this, obviously.

Okay. So last week we spoke about gyro and how can it possibly be pronounced Euro, which doesn't compute? Well, here's why. Greeks say the G differently than we do in English. and the word gyro has to do with the revolving spit that the meat comes off, same root as gyroscopic in English, hence gyro, hence Euro. Does that mean they call it a Euroscope? Instead of a gyroscope? I guess so, yeah.

Okay. Well, if they were to say gyroscope, yeah. Good to know. Okay. Yep. I'm going to the Euro then, so I don't sound like a new whale. All right, listener questions. With the amount of money inflowing into equities from 401Ks, is this a trend big enough to keep the market?

it's propped up. No. Stocks fell 20% in the fourth quarter. And let me just say this. So we were in Boston over the weekend and I was, the baby needed to sleep. So Robin was getting ready in the room with Kobe. So I was walking around my floor. It was like a, it was a circle or a square. So you had the ability to walk around. And I had nothing to listen to it. So I don't know why I thought of this. There had to be a reason. But I went back and I listened to our bare market episode in the fourth quarter. I think right near the bottom. It was December 24th, I think we recorded. Do you remember that? Did it age well? I will say. It aged kind of nicely. I was a little bit more hysterical as, as as usual. The point that I was making, I think it was valid.

You always say, I will be fearful when everyone else is fearful. Intrudey rallies were not holding, which, uh, anyway, that was a good, that was good. We did good. Okay. What were we saying? But don't you, why did I just bring that up? The 401K thing, is it enough to hold? Oh, right. So the answer is no. The trend over the long term, though, has had something to do with things like valuation slowly increasing and stocks going up and maybe being a little less volatile. Do you think that there has to be something to the fact that they're not less volatile?

Yeah. Okay. I mean, no, I don't know. Don't you, okay, the valuation thing. Don't you think the fact that we've had a good, I don't know, 30 or 40 years of people slowly putting money in over time in a more diverse fashion? But I thought they're taking money out. I can't keep up There's too much cash on the sidelines

And 401 is what I'm saying Let me ask you a question Go ahead Do you remember this feeling Where you would go to a blockbuster And there was like a new movie Or a movie you wanted to see And you would take the cover off the shelf

And there was no movie boxes behind it Yeah And there would be like four choices, yes That was awful But right You were like oh cool National Treasure And you'd go

You'd take the box So there's no boxes behind it What a terrible feeling that was Yeah, then you'd walk up to the counter and go, hey, did anyone return that movie yet? Can you sift through there and try to find it for me? All right, what do we got for recommendations? Wait, hold on. I'm going to stick with movies for a second.

So, Edward Norton, we've heard, how many podcasts have you heard Edward Norton on? It must have been seven or eight. I probably listened to at least half of them. I thought it was great. His movie, his, what, you thought what was great? Just him getting out there, but he never does interviews, really. True. So his new movie made like $3.6 million on opening night or opening weekend.

I'm not sure which one. Oh, man. He was really pushing it, too. I think he was on, like, Good Morning America. Like, he was really going for it. He was basically never done, like, the media tour stuff before. So. That's too bad. I got a story.

So I was in Boston this weekend, and we couldn't get a babysitter because we don't know anybody there. So when the kids went to sleep, I went to the north end. And I will say, I'm a gentleman. I went to the north end first. I got Robin some pasta, and then I brought back for her. And then when the kids were sleeping, I went back out by myself. And I was listening So somebody called me out on the last podcast

Because I said that I was going to give Robin my AirPods And that's fair Like I'm just giving her my My hand-me-downs Context is that I've been pushing for me to get her AirPods for a long time She kept telling me she doesn't need a pair But I'm like, no, they're great, you would love them Anyhow, now I am taking the opportunity to upgrade mine

And I'm forcing her to take mine And if she wants a new pair, I'll get her a new pair So that's a full story but I will say that I was in a restaurant listening to Zach Gaffanakus and Conan, which was terrific. That was very good. And I had trouble hearing. And I was like, wow, I really do need my AirPods pros for this very reason. And one of the things that Galefanax said on the show was, or maybe Conan said it, I don't remember who.

Galifanacus is like, he's lightning quick, isn't he? Yeah, he's impressive. He was very good. And so is John Oliver, by the way. I also listened to that. He's also very quick. So one of them said, I like being an adult more than I like being a kid. And by the way, I think I say adult is a singular and adults is plural.

I think I figured that out. Okay. Diversification. What do you think? Do you like being, I like being an adult more than a kid, not even close. Yeah, they were saying, like, going through high school, wasn't that great? I don't know. I hated middle school.

Yeah, I don't think I really like middle school. I don't really remember, but. I mean, high school and college were great. I loved high school in college. I had a different experience I had so much fun But yeah There's definitely things about being an adult now

That you say I would never want to go back And live in a dorm room again Or not have any money And live off of ramen noodles And that sort of stuff So yeah I can see that How like was eight years old a fun age You couldn't do anything

Yeah but you didn't know any better either So You never thought about anything It was great I think I always wanted to be I always wanted to be 40 years old Okay Okay. And you've looked like you're 40 since you were 30, so.

That's true. All right. What do you got for Rex? Besides, wind around Boston on your own. What do I got? Robin got me, oh, I recommend Silicon Valley, still like a show. Robin got me a docking station where you could charge your headphones, your watch, and your phone, all in one thing. And I said, how much was this? And it was only like 30 bucks. Oh, really? And it works? Yes. And I'm going to say one more thing about my wife.

Last week, I said, man, I'm getting dunked on. And she's like, why? I said for being bald. And so I showed her the picture of the video. She's like, you're not getting dunked on because you're bald. You're getting dunked on because you look like a psychopath. And I was like, oh, great, thanks. Apparently, I watch a video, and it's true.

I did look pretty psychotic. I'm not sure why, but I don't know what can I do to improve, to look less crazy. Was it the shirt? No, you had a little bit of a resting psycho face. in the in the in the you need to smile smile like when judge is interview introducing the video i need to smile yes that's that's my okay i'll try that's what i'm all right thank you what do you got all right uh started jack ryan season two it's completely different than season one so i think you wouldn't have to watch season one to get season two and it's really good still three three episodes in

i'm all in again on jack ryan i i really like it bloody genius by john sanford is another one of My detective novels, I knocked out over the weekend. Just stop it. Just stop it. A Minnesota detective one. Really good. Actually, I'm shocked. He's great.

I'm shocked that we got a lot of emails appreciating your detective recommendations. There's a much bigger audience than I thought. You didn't want me to talk about that. You said no one's going to care. Here's a goal. So that book is a detective series based in Minnesota. You should read a detective series based in every state. Ah, now we're talking.

I probably got at least 10 of them. Did you read the detective from New Mexico? I was amazing. All right. I'm on it. And I picked up the 50s by David Halberstam again. That's one of those really long books that's going to take me forever to read. I kind of comment it out. I want to read that. They had a whole chapter on Marlon Brando. And I thought this was good. This kind of reminded me of Twitter in a lot of ways. So they talked about how one of Brando's first big important films was called the Wild One. And he was a member of a motorcycle gang. And someone asked him, what are you rebelling against? This girl in a small town asked him. And he said, what do you got? And that kind of reminds me of Twitter in a lot of ways. Like what do we met out today? I don't know. What do you got? So that's a perfect. That's all I got. All right, Animal Spiritspot at gmail.com. Thank you very much for listening, and we'll see you next week.