Animal Spirits Podcast - Long-Term Bullish (EP.277)

Episode Date: October 5, 2022

On this week's show we discuss why we're getting more excited about stock prices as they fall, why expected returns are rising, where investors will move their money with higher yields, Credit Suisse vs. Lehman Brothers, how the Fed is breaking things across the globe, why the Bank of England stepped in to buy bonds and much more.   Learn More  Follow Ted on Twitter at @tseides or LinkedIn  Subscribe to the mailing list  Access Transcript with Premium Membership  Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by Masterworks. Michael, you and I don't know a lot about the art world, besides the art that we've purchased. But Masterworks has done a ton of research on this. And they actually have, if you go to their website, you can click on the price database. You can search any artist. So if there's an artist that comes along and you want to invest in it, you can kind of look at their history. So let's just pull up Pablo Picasso, which... Overrated.

What percentage of the population do you think assumes Picasso was alive in like the 15th century and didn't die in like 1973? He was in the Godfather, too. Did you know that? He had a camera. Oh, really? I didn't know that. I made that up. When I was younger, you could have talked to me into... I thought it was like a Leonardo-type era.

It seems like it. A BC guy. Not quite BC, but you know. So if you want to just pull up Picasso on their price database, you can look at the different metrics and like the turnover by year, the average. So in 2021, Picasso had nearly $300 million worth of paintings turnover in terms of auction sales. Wait, whoa, whoa, whoa, how many millions? $293 million and change. In 2021 alone.

All-time record for a Picasso painting. What do you guess? 46 million. 179 million. Huh. Just a bit outside. Do you know, I own a Pablo Picasso, not to brag. You know which one I own?

That's right. I own the same one as you, right? The homiasis. Yeah. Your favorite one to say. So you can look at all the different paintings from Picasso that have sold, what the purchase price was, how much appreciation it had. Some of these have like 20 times appreciation over 20-year periods.

It's pretty crazy. Anyway, so if you want to learn more, actually understand the art old before you buy something, you actually look at MasterWorks database. My Picasso is not for sale. I'm diamond handing that thing. Okay. Way you go. Go to masterworks.com to learn more and then masterworks.com slash disclaimer for more.

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 Holtz Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritthold's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain positions in the securities discussed in

this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, I feel like the last few weeks, we've been a little bearish, glasses half empty. Things are horrible in the world. Let's do glasses half full. Last few weeks. Yeah, last few months for sure. Last few quarters.

Who are we kidding? Looking for a bright side here. This is a little research I did in my own this past weekend. And S&P 500 as of Friday was down 25%. So that's the ninth time since 1950. The S&P has been down 25% or worse in a bear market. When I was looking at this table this morning, that 25% number stuck up on me. I knew that we were down more than 20, but I didn't realize that we hit the 25% mark.

Yeah, from all-time highs. So I looked at, okay, what happens since 1950 when the S&P is down 25%. Now, in all of these instances, the stock market fell further. But I just said, what if you bought when the SPs down 25%. And I didn't do exactly because whatever, it's easier to just, I did the first month after this down 25%. Can I just do a little jump in right here, just a little jump? Well, as you were wanting to do, that's your thing, so.

Well, I just want to point out that in each one of these previous episodes, stocks didn't fall 25% for no reason. Each one of these had a very good reason for falling 25%. You had 2020, the GFC, the dot-com bubble, 1987, the recession of 82, 74, 70. So these were all really bad times. But no matter, had you bought stocks, you were, Ben, what happened? So I did the one, three, five-year, 10-year returns from here. And just so we know, these returns are not from the bottom.

So I put this out on Twitter, and a bunch of people came back to me with requests. Why didn't you do this? Why didn't you do this? That's what happens usually. This thing went a little viral because I think people are looking, grasping for good news. And what I did is I said, because I use total returns, that's where I have my data, I just did total returns from the month after the S&P falls 25%. So in most of these cases, the S&P fell way more than 25%.

So there was more downside. But even so, the average one-year returns were over 20%, average three returns are almost 40%, average five-year returns are over 80, and average 10-year returns are over 200%. There was only one down period over 12 months. Everything else is green. This is with further downside. Everyone kind of came back to me and said, yeah, but inflation and the Fed and valuations. And I understand all this.

Oh, why didn't we think about that? Yeah, of course. Yeah, no, because in 2009, things were very good. Things were very good. There's no reasons to sell in 09. To your point, every time we have a bad market, guess what? There's reasons for it. And those reasons are-gold.

Your stocks don't just fall 25% just because. They're glaringly. And I did the same thing. So the Russell 2000 and the NASDAQ are both down 30% as of Friday, both over 30. So I did the same thing. And you get one really bad period for the NASDAQ in 2000 because that coincided with the dot com and then the great financial crisis. So you had that that's a really bad outlier. Everything else for the Russell 2000 and NASDAQ looks pretty good.

Same thing. Again, it's easy to be bearish right now and look for the bad stuff. But I think if you let your brain get stuck in that doom loop, then guess what? historically buying stocks when they're down 25, 30, 40 percent leads to good outcomes in the future. How about this? Short-term, scared, maybe bearish, fine. You've got to be long-term greedy here. I'm getting to the place where it's like the further this goes down, the more long-term bullish I'm getting. Yeah. Definitely. I said that last week, not to brag. All right, here's another data point corroborating what we're talking about here. I had Nick Majuli look at all of the times where there was a complete washout in the S&P 500.

And I use a fairly arbitrary number, but here it is. When less than 15% of the S&P 500 is below its 200-day moving average, I asked Nick to take a look at what happened over the next one. So for people like me who aren't technical analysts, that just means there are very few stocks in an uptrend at all. Yeah, the majority of stocks are in a downtrend. So again, less than 15% of stocks are above their 200-day moving average. there were 219 times that this happened going back to I think 1980 something and a lot of these are overlapping okay so fine so we had 1987 when else did this happen 1988 2001 2002 2008 09 11 1819 it's rare in 2020 and 2020 and only the only time that it was

lower a year later was 2001. The SP500 was 12% down one year later. And October 2008, it fell another 6%. But the point remains, when stocks fall a lot, you have to buy. Can stocks fall another 15%? Yeah, why not? But do you really think that stocks won't be higher one or three years later? If you don't believe that, what are you even doing owning stocks in the first place? I'm sympathetic to the people who say, well, I'm a trend follower. Instead of buying early, I'm going to by late. And I think that's, if you have rules to guide you. Of course. That's fine too. But the thing is, yes, you can't be scared now. The time to be scared was if you were going to panic, you should have panic before. You have to assume that the worst is behind us. Is it possible that the Fed

makes a big policy mistake? Is it possible that things spiral? Of course it is. Anything's possible. Oil went negative. Anything can happen. But you have to believe that one stock you down 25%. If you're not buying, I don't know what you're doing. And then if they go down 30 or 35, then you buy some more. That's the game. Right? If you're not going to buy now than one. I'm not talking about like individual stocks because all bets are off with those things. But a basket of stocks. The market as a whole. Whether it's index or a stock picking or whatever the heck, buy a basket of stocks. All right. So last week at the, I think it was a Seeking Alpha conference, Stanley Druck and Miller, he said, oh wait, we have to timestamp this. We forgot to do that

earlier. It is Tuesday morning, October 4th, 9.13 a.m. Eastern standard. Not to brag. The market hasn't even opened yet. So on this show, we're probably going to hear this stupid bell ring on your computer because it always does. I don't have it open. Don't have it open right now. You turn it up? Okay. Every time we're talking, I hear the bell go off in the back on. Michael has the bell for the market open and the market closed. It's think of a swim. It's a computer. Okay. So at seeking awful last week, Druck and Miller said the Dow won't be much higher 10 years from now. And I think he said something along the lines of, I'm just saying we've had a hurricane behind us for 30 or 40 years and it's reversing. And I wouldn't be surprised. In fact, it's my central forecast

that the Dow won't be much higher 10 years than it is today. So I looked at this and it's easy to say, well, 2020 and 2021 were probably some of the easiest markets in history. Like that 15-month period, might have been one of the easiest times to make money and financial assets ever. Then you had this 12-year bull market since 2009 that was just amazing. But Haley, actually, I'm going to move this up to the dock a little bit, just so you can see it. All right, while you're talking, can I talk or while you're pausing? Yes. Okay.

Here's the thing about Stanley Jock Miller that you need to know. He has said repeatedly that he has a bearish bias. He has made all his money in bare markets. Well, I don't know if that's necessarily true, but I believe he has said something of the sort. So it is in his disposition to be pessimistic. He was pessimistic from the entire last decade when stocks ran whatever hundreds of percent that they ran. And he's one of the best investment. of all time, traders of all time, whatever you want to call him. He can change his mind like

literally in three weeks. So, but if you invests strictly on his calls, he's been wrong more than almost anyone the last decade, but he's probably still made money. His public calls have been an abomination, but I bet you he's done just fine because he's not telling you when he changes his mind. He's one of the best risk managers of all time. So there's no way that he would give a 10-year forecast and then like go to sleep and see what happened. So, obviously, we always risk anything can happen in the markets. We can't predict them. You could see a lost decade.

Like, that has happened in the past. It probably will happen in the future. But I'm going to make the case. Look at the numbers I just put in here. Everyone says the last 40 years have been so easy. Look at the return since 2000. Stocks are up 6% per year. That's the S&P.

Bonds are up 4% per year. Cash is like 1.4. And inflation has been low. That's over 23 year period, call it, through 930. Look at the previous 20-year period when stocks did 16%. Bonds did 8. cashed in seven. I think a lot of that was just the 80s and 90s, and people think it's been easy because we had a 10-year bull market. We've had two 50% crashes in the stock market

at the beginning of this century. We've just had two bare markets in three years. That has not happened since the Great Depression. We've never had, since the Great Depression, there's not been two bear markets of 20% or more or 25% or more now that have occurred in less than three years. This has been a really challenging century for investors, even though we had that bull market because we had the lost decade already. So people maybe say, I'm cherry picking because I'm going from 2000, which was a bad entry point here. But the last two plus decades in the financial markets have not been easy for investors. We've had a really difficult time. It may have been really easy for people in the 20 plus years before then, but things have

already been pretty bad this century. We've had a lot to deal with as investors. It's hardly been a walk in the park. I have bad news. Bad news for me, not anybody else. My eyes are going bad. What does that mean? You know, on Google Chrome, when you have to zoom in, I have to zoom this dock 150% because I can't read these numbers. Do you need glasses? Reading glasses? I do, actually. I went to get my eyes checked, so I need to renew my license a couple of weeks ago, and I was doing this. You know what I mean? I was like squinting and making weird faces. I don't feel so bad. I made it 37 years without glasses. Most of the people in my, I think three out of five people in my family have glasses. You wear contacts now. No, no, I have better than 2020 vision, not to brag. I've never been

to an eye doctor in my life because my vision is like immaculate. I have like superhero vision. I know I shouldn't have been drinking coffee this all time. That's it. All right, but this is interesting. So, J.P. Morgan is out with their Q4 guide to the markets, and they show the return needed to reach the January 2020 peak. If we got there, this is kind of depressing, if we got to the January 2020 peak over the next four years, that would be a 9.4% compounded annual return from here, which is pretty good.

If we did it in three years, it would be 12%. If it took five years, it would be 8% compounded, which again, not so bad. Okay, if Fandul... But if it takes five years to get back to those highs, it would feel terrible. Yes, Fandul puts an over-under on one of these to get back to all-time highs. I'm definitely going under two. Over-under number of years it takes to get back to all-time highs. I would take two.

I would say under two. I got to see the odds. No? Well, the odds are the returns. What do you mean? the closer you say to it happening, the better your return is going to be. Do you take the inverse? Do you take the inverse? I'm doing the Gallifinacus gaffo. I think if you went over, then your odds would be much worse because

your return will be worse. All right. So you're going to timestamp this right here right now. I say under two years. Prior to October 24. We're back at all time highs. I'm pretty confident in that. Confident to that assertion? I don't know. All right. Someone who's not, Cliff Aznes. He put this piece in the FT recently. And it was perspective returns on a 6040 portfolio. And he shows that for the U.S. and global 6040, we're at near all-time lows. And he goes back to 1900. And these are real returns, expected real returns. So I just want to go through a little exercise to show why this expected return thing is so difficult to do. We've talked about GMO in the past. I went and saw Cliff Aznes in a conference in like 2010 for institutional investors and Dowlinson Foundation

was this closed door thing. And I think if you look at this chart, it's pretty close. I think he said the expected return on an annual return, real return on a 6040 portfolio was in like the worst 98 percentile in history. And he was saying, we're expecting 2.5 percent from here. When did you say that? 2010-ish, 2009, 2010. I don't want to be smirched the name of Clisness because he's one of my investing heroes, like the way that he does research and the way that he thinks through probabilities, the way he communicates. And I'm a huge Cliff Asnes fan. But from 2010 to 2019, a US 6040 portfolio did more than 8% real. It was like 8.3% real. He was saying it's like one of the worst 98th percentiles ever. He's basically saying we're right about back there now. And I think the

reason that expected returns are so hard is because predicting inflation is hard. A, predicting the stock market is almost impossible. B, the bond piece is easy. That's, you take the returns, but I think predicting inflation in the stock market is basically impossible. I don't really believe these. And if anything, I think prospective return for 6040 portfolio right now is better than it's been in years just because the bond piece is now at like 4%. I think one of the appeals of macro investing is if you get the macro right, then you have a much better chance of knowing where to allocate money, especially when there's like a turning point. If you knew from 2013 to 2019, central banks would be easing. There would be very little

economic volatility. You would probably say, okay, go along stocks and no need for bonds, obviously. The thing is, though, right now. But if you knew, if you knew that there was going to be a pandemic, and inflation. And so another thing that you can't predict, you can't predict the macro economy in the future. Like who would literally who knows. Yeah, or a pandemic, how that's going to completely change everything from 2019 on. So, but this feels like the first time, at least in the short term intermediate term, that I'm, again, I don't like to think of myself as bullish or bearish. I'm long term bullish on stocks, but I'd feel pretty good about bonds here at four percent rates. Feel very good about bonds here. We're not the only ones. Money's coming into bonds.

So here's the thing, though, what's a better scenario for diversified investors? People have a balanced portfolio. Rates stay in the three to five percent range or rates immediately go back to one to two percent. That would not be good. If rates go back to one to two percent, yeah, you would get a boost on your bonds, but things would have to be very bad for that to happen, no? It kind of feels like that's what the Fed is setting us up for. If they push us into recession, that rates are just going to immediately go back to one to two percent and you're going to get some price appreciation on your bonds and then you're going to be screwed with no yield again. I'm saying like just holding rates here for a while would be way better for

investors than seeing them go back because we have a recession. I'm worried that's what's going to happen. So Goldman's making the call. A weaker economy will drive households to continue selling stocks, causing a shift an investor mindset from Tina, which is there is no alternative to Tara. There are reasonable alternatives. We expect households to sell $100 billion in equities in 2003. Would that move the needle? I mean, $100 billion sounds like a lot of money. I can't get with the Tara thing here because Tara Reid was kind of crazy. person and she's not a reasonable person. So I think we need to come up with a new acronym here. Is that fair? No? Okay. So they're saying they're going to sell equities to buy bonds.

My only problem with this is... By the way, have you rewatched American Pie? I just did like three weeks ago. How does it hold up? I was laughing a lot. That movie, that one has a nostalgia premium for me because that came out when I was in high school. And the guys who wrote it are from East Grand Rapids. And the school is based in East Grand Rapids. My mom actually went high school there. And so it had the Grand Rapids element, too, that it's based on a high school in Grand Rapids where these guys went. So yeah. Interesting. That does hold up. Was that the first like high school movie, teen high school movie? Obviously teen. Well, it was the first new post-80s one, probably.

Our generation. All right. So I don't know if I'm going to take the other side of this. I just would also mention that I don't think investor flows ever stop, meaning the automatic money coming in to 401Ks and people that have like the automatic brokerage deposits. So Balchun has tweeted, ETFs used by buy and hold investors have seen steady inflows as usual, even in September as Bing log advisors still unfazed. I just think that the money into VO, SPO, IVV, etc. But the thing is, so they're talking about selling stocks to buy bonds. I would think more investors would probably be selling bonds to put money into cash right now

because cash actually has a yield now. So I would actually be, as we've talked about in the past, people are. seeing losses and bonds for the first time, I have a hard time seeing people lean into that pain, even though they should because yields are higher. I think that makes sense. In previous years, maybe 7030 was the new 6040 with a 10 year below 2%. I think that made a lot of sense. But now maybe 6040 is a new 6040. You could actually, you actually have fixed income in your fixed income portion. I wrote a piece last week for advisors we talked about it on Portfolio Rescue or for retirees. Retirees said, great, if you're a young person, you keep buying, that's easy.

advice. It might not be simple, but it's easy. What do we do as a retiree if I'm sitting on a 60-40 portfolio that's down 20%? And I think with rates at 4%, you could, like you said, if you've leaned 70-30 in the past few years, you go back to 60-40 or 50-50. You could down shift. You could. This is a good example of be careful what you wish for. We spoke to a lot of investors over the last few years who were understandably not thrilled with what they were able to get in bonds. And now you're getting a lot, but there was some pain along the way. So Katie Greenfield tweeted LQD, which is investment grade corporate bonds, posted its biggest one-day inflow since March 2020. I think the average yield to maturity on that fund is approaching five to six percent

corporate bonds, which I think at the lows it was like two, maybe a little less than two. Remember Microsoft borrowed money at like, I don't know, 20 base points on the Treasury. It was like, Yeah, flows into short-term treasury funds or spiking, which, again, makes a lot of sense. This makes sense. What is the one you're yielding? Is it 4%? What's a 6-month? Like 3 and change?

It changes so much these days. They're all around 4% for a while there. Ben, are you worried about Credit Suisse? Quick story, I got to tell about Credit Suisse. When I was in college, and you know when you're in college and you don't really know what you're going to do their life and you send out a bunch of resumes and cover letters to places. Believe me, I know. I didn't even send that resumes while I was in college.

That's how lost I was. We all know your cover letter story about the Orlando Magic and Cleveland Cavaliers. Yeah, I said, wait, you have to get a job after college? I don't know. That's how this works. I had a friend who basically, it was a friend of a friend who said, here, apply to this job and investment banking at Credit Swiss. And so my friend says, I want to read you my cover letter to make sure that it sounds right.

I want to read it out loud to make sure. So he called it Credit Suzy. I said, all right, just throw it to the trash. You're not getting that job. You can't even pronounce the name. So every time I see it, I think it's Credit Suzy. but so it sounds like they basically the CEO sent out a memo

it was basically like we need to raise money but now it's not a good time I sent you this the other day was Credit Swiss versus AIG and Citig and Citig and these stocks are all since 2007 highs down like anywhere from 92 to 96%. There was a good one in the FT about it I don't know it sounds like this is the kind of thing

where a bunch of guys on Reddit who read like 57 pages of the big short assume this is our layman moment. And you kind of said, isn't this just a crappy bank? Because my thinking is the banking system is so much safer now because we had a layman moment. And the fact that we had that is- Yeah, so we're probably not going to have it again. That's my general stance right now. I looked at a chart of EU-FN, which are European financials compared with Credit Suisse. And I went back, I don't know, this is over the last 10 years. EU-FN, again, the European financials, financials are in a 32% drawdown, which is not too dissimilar from U.S. banks. Credit Suisse

over the same time is down 85%. So maybe credit suites is just a really shi bank. Maybe that's it. It's not a Lehman moment. People want to like throw all the derivative stuff and it would be poetic. So it looks like futures are way higher this morning. We had a very nice balance yesterday. I'm not calling a bottom. Nobody knows. But blah, blah, blah, blah. However, it would be poetic if it was like the Credit Suisse bottom. Credit Suisse balance. Yep, we'll take that. I notice you've got bros on bros today. Yes. So I got the...

Oh, that's new too? This is new too. Here's how you graduate from Tropical Bros. So you start out with the Hawaiian shirt because that's for parties, vacations, dinner in the summer. That's for a good time. If you look at the smile. Then if you want to maybe shift it to a little more casual, then you go to polo. So this is a polo one from them.

And now these new ones, this is new to me and new to you, I think, the quarter zip, which is fantastic. The color's great. It's comfy. You can basically wear that to the wedding. If you wanted to. Yeah, so I got the polo on quarter zip here. So we were thrilled to learn that the animal spirits family took advantage of the animal spirit's promo.

Ben, what was it, Animal 20? Animal 20 is still live today if you want to get 20% off. We had a bunch of people send us pictures and receipts and people, they rush to the website we know. You know what I did not get. And this is my bad. I'll get it soon. You know what I did not get was I don't have shorts or trunks.

They have good swimsuits there, too. I have a two or three pair of their swimsuits as well. You can get the swimsuits to match the Hawaiian shirt so you can go full beach bod. Well, I don't know. Not me. Okay. Well, beach attire. So you can go matching. This made me laugh. When we did the Rocky video and I fell off of you and I was, somebody said I looked like a beach whale. That was nice. We said we're going to do the before and after for you because it's a new.

Listen, I bulk in the summer and I cut in the winter. I'm trying to cut. When we were in the pool, you said you're going to get a Phil Perlman health program, and they're going to do before and after. So we have the before. Yeah. Well, although I got to get that picture done because I'm already slimming down. I don't know if you can notice. Looks good.

Well, that tropical brother shirt. So remember, it's tropical bros.com. Use Animal 20 to get 20% off your entire order. It's a screaming deal. All right. So one of the things that we didn't mention as we spoke about the stock market, and I think this is making it especially difficult, is people are fairly confident, myself included, that the economy is slowing and possibly probably will even go into a recession.

Yes, this is the most telegraphed recession of all time. Everyone's been calling it for months. The thing that's scaring people is, all right, the S&P fell 25%, the NASDAQ fell 32-ish. Like, is that enough? And how deep will the recession go? So Jim Bianco tweeted the September Chicago PMI was 45.7, badly missing the consensus, even below the lowest, of 24 estimates on Bloomberg. Only one time has this measure been this low, and it was not a recession, which was December 2015. The other seven times it was this low, it was a recession. So the other thing that people are worried about is, okay, we're going to recession.

That means earnings have to roll over. I've done this in the past. I don't have it in front of me, but I'm going to update the numbers. There's been a ton of times historically where earnings have gone negative year over year and a stock market have done just fine. I'm going to pull this up. 15, 16, we had an earnings recession. Just because earnings fall doesn't necessarily mean the stock market has to fall too.

Maybe the stock market is falling because it knows earnings are going to fall. I'm going to have the data for you next week, but just a little teaser. Just to twist your head one more time. I think it's reasonable to think, all right, pessimism is too much. I don't care how bad things are going to get. Right here, right now, things got too pessimistic, and I expect a bounce that will roll over. Maybe that's thinking too far ahead. We'll see.

But anyway, the other thing that people are worried about, is the fact that the Fed just won't back off. So you saw the Bank of England step in to, I guess the worry was that pension funds were getting margin calls and that's obviously no bueno. But the Fed is not backing off just yet. So the Fed's master, I think she is Kansas City. I can't remember exactly. She said recession won't stop Fed from raising rates, which is a bold strategy cotton.

That is the Ron Burgundy. I don't believe you. I don't believe you either. If we go into recession, they're going to stop raising rates. They're tough talk. I'm sorry. Jerome Powell will be out of a job. If he throws this into recession and keeps raising rates, he's gone. The UN called for the Fed to stop raising rates, which is not something you see every day. This is kind of famous last words. Yeah, this was the day before, I think, the blowup and why do they call him guilt again for British bonds? So, U.S. Treasury Secretary Yellen,

I don't see any erratic financial market conditions. And that's the, what is it from the guy from Princess Bride where he kind of blinks his eyes and goes, which one's that? Princess Bride? That's the Princess Bride guy, isn't it? Wesley? No, that's how Carriela was. Not, I thought that was him. Okay.

Speaking of, my kids were all sick last week, and my daughter was looking- What a great movie. I was telling my daughter, Princess Bride might be the best sick movie of all time, just because they start the movie off with Fred Savage in his bed and his grandpa's reading to him, why he's sick. If you're a little kid and you're sick, is that not the best movie ever to watch when you're sick. Oh, that's so good.

It really is. That's way up there. But Yellen's saying that, I know it's not 2008, but that had flashbacks of Bernackie saying subprime woes won't seriously hurt the economy in like May 2007. So Colin Roche had a good one. He's one of my favorite watchers. Speaking of Princess Bride, not to get too far off tangent, but this run for Rob Reiner, stand by me when Harry met Sally, the Princess Bride, misery, and a few good men.

That's pretty good. That's a good run. He definitely didn't direct all of those, but he was maybe produced a few of them. Anyway, Janet Yellen. Colin Roche says he thinks of interest rates as a sledgehammer. You can tap a wall of the sledgehammer or you can smash it. Did you quote Yellen? Yeah, I did.

She said, I don't see any erratic financial park conditions. What is she looking at the economy with blindfolds on? I don't understand. Does she not see interest rates? I don't need. So he's saying you can tap a wall with a sledgehammer or you can like smash it. He's saying the Fed raising rates so fast is them smashing a wall instead of just tapping it with a sledgehammer. And it sounds like Paul Krugman and Greg Manquee, that's like the economist on the left and the economist on the right.

I think this Greg Manquy got, I don't know if I'm saying his name right, he wrote every economics book I read in college. and he's saying, I as a conservative economist and agreeing with Paul Krugman as a progressive economist, and the Fed has gone too far. And I think once Larry Summers pivots, it's all over. Then the Fed's going to have to back off. That's my call. When Larry Summers says, it's time for the Fed to back off. That's when it's going to happen. How's that? When does that happen? I need to know. I don't know. Pretty soon. So the Bank of England stuff, how much of this do you understand? Well, I read a few articles. I'm up to speed on what the articles are saying. Can I explain it cogently? Let me just quote this.

guy, Simon Bentley, who is head of UK client portfolio management at Columbia Threadneedle. He said this is the most extreme market event that I have been involved in. So I'm going to link to a New York Times piece. Alison Schrager wrote a piece. What it sounds like is pension funds did something called liability-driven investment where they were matching what they had to pay these pension collectors. Who are people that collect pensions? They had to match the payments with maturities. And so they were levering up. And so the good thing about rising interest rates is it makes the present value of future

cash flow smaller. So that's a good thing. It makes them more funded. That should be a good thing, but not if you're leveraged up like that. But if you're levered and rates rise too quickly, then everything blows up and you get margin calls. And maybe that's like a bad way of explaining, but that's sort of the TLBR. showed the 30-year UK government bond went to 5% one day and then back down to like 3-8 the next day because they stepped in, which is just a crazy move. And that's the thing. These government bonds

should not be moving this quickly. And especially if you're someone who is a pension fund investor or retiree, every liability of the government is someone else's asset. And these assets should not be trading this violently. And that's, I think, what the Fed misunderstands is we're doing this so fast that we're taking what should be a stable asset in making it unstable, and that's going to break stuff. I don't see how they don't get this. I think I read in the UK that maybe a third, I can't remember how big, but a lot of their mortgages are adjustable. And so rising rates makes it especially more painful. Yeah, we get that from a lot of people in Canada and the UK that write in about U.S. mortgages saying, why don't you guys just move them? Because they're adjustable. I think they

reset every five to seven years or something, which that would be just brutal. Just seeing that train coming down the tracks, knowing that's going to happen. Yeah, talking about anxiety. I don't know how you sleep with that. So I think the Bank of England said they're going to buy, I can't remember, $2 billion worth of mortgage bonds for the next 15 weeks or something like that. I don't know. Maybe the Fed will say our mandate is U.S. employment and U.S. price stability. But when they're causing instability everywhere else, that has to be a problem for us eventually. So the market did rally that day. The U.S. stock market rally pretty aggressively and then failed badly to close out the week. That was fun. Oh, I saw a gas blow through dollars. How about

that. In New York? In New York. It's back above $4 here. I think it went back above, but I did see it dip its toe below three bucks. Okay. Not bad. See, this is the thing about the political thing about inflation. I'm sure a lot of it is like the Fed politically knew that inflation is a bad thing, but if commodity prices are down and gas prices are down and wages are up, I mean, doesn't that take a little bit of the heat off of them from an inflation perspective? Even if the inflation rate continues to stay high. I feel like if nothing else in gas prices fall, it doesn't make it a hot button issue for people as much anymore because of the way our brains work. It really is. Because it affects everyone, even though mortgage rates are up and people rent and that resets like,

what is the number two-thirds of Americans own a home? Yeah, the homeownership rate is 65% in the U.S. Okay. And so all of those people are unimpacted by rising interest rates for the most part. Yeah. Unfortunately, I mean, and that's the thing that stinks about people who have been waiting for the housing market to crash or to slow. Housing prices are rolling over, but rates are so much higher that it doesn't matter. Housing prices would have to fall 50% for it to matter. I'm sorry, but that's not happening. For what to matter? For your mortgage payment to be cheaper because rates are so much higher that it's completely taking it off the table for making housing cheaper, more affordable. So Michael McDonough showed a chart how much home you can buy, assuming 20% down

payment for a 30-year mortgage rate, and you want to keep your monthly mortgage at $2,500 bucks a month. At the bottom of the interest rate cycle, that was $760,000 or so. Now it's down to $476,000. Again, that's the house you could afford with 20% down on $2,500 monthly mortgage payment. I know not everybody can stretch, but I think that you're right. The house that was $7.58 is not going to $4.76. Here's the other thing.

Sam Rowe tweeted this from Oxford Economics with 30-year mortgage rates approaching 7%. we estimate that 18 million fewer households now qualify for a mortgage to buy a median price existing home compared to the end of 2021. 18 million fewer. Fewer, 18 million fewer, meaning 18 million households cannot afford this. Like the bank won't give them a loan because the payment is going to be so much higher relative to their income. Housing prices have risen, mortgage rates have risen, incomes have not risen nearly enough.

Qualifying for a mortgage over the last few years was relatively easy. to at least get like the initial, yes, you could afford a home. Yes. Even if the paperwork is kind of a pain in the butt. When you go to house, you say, are you prequalified? Exactly. What's a pain in the butt? The paperwork side of it that we've talked about in the past.

But I mean, can you imagine trying to get what you're prequalified for and how much that changes based on rates over the last few months? You could have gone to the bank at the beginning of the year and got prequalified and looking for house all year and you probably have to start that whole process over again. 100%. Yeah. That's rough. Speaking of, so the vengeance movie I watched. last week. A few people said they watched it too. They have a great initial scene at

beginning with John Mayer and BJ Novak. And I think it's a millennial thing or a Gen Z thing, but instead of saying right or I agree or yes, they say 100% to everything. So you got me on that one. Everything they agree with each other on, they go, 100%. Yeah, 100%. It made me realize that that is a thing people say now. 100%. Why are you bringing that up? Because you just said 100%. Oh, okay. You didn't realize it. Didn't even realize. All right, let's do some quarter stuff. By the way, I saw the new transcript search for the quarter app, Q-A-R-T-R for those who are new listeners. Fantastic. What is that? Oh, that's a hat. Quarter hat. The new transcript search is Jeff's kiss. All right, so Ben, riddle me this, please, if you will. I listen to Nike,

I read the transcript. Nike today, this is from September 29th. Nike today reported fiscal 2,023 financial results for its first quarter ended August 31st, 2022. I'll read that one more time. Nike today reported fiscal 2023 financial results for its first quarter ended August 31st, 2022. Can we just get away with fiscal years? What is this nonsense? Yeah. I worked for a company before that had a November 30th fiscal year and it just, it screwed up everything. How is it, its first quarter ends in August for 2023? I feel like I'm taking crazy pills. It must have been like a tax thing back in the day where it made more sense tax-wise to do it at the beginning and they just always did it like that. Can we just do like a one-time adjustment? Everybody get on the same schedule. All right, be that as a May. The stock got killed. This was an inventory thing, I guess, in the backlog and then the over-ordering. This quarter, it became clear to us that conditions in North America are shifting once again. Earlier ordering by retailers, driven by strong consumer demand and less predictable delivery times has led to elevated inventory levels broadly across consumer goods. Then transit times began to rapidly improve with signals that further improvement may be coming. And at the same time, consumers are facing

greater economic uncertainty and promotional activity across the marketplace is accelerating, especially in a prowl. As a result, we face a new degree of complexity. So their inventory in North America grew 65%. The stock got killed. What's a Nike market gap these days? And it's still got to be a 130? I was going to say 100. Survey says. 137. You're pretty close. What did I say? You said 130. You were pretty close. It was 137. Here's a thing. I'm sticking with my call that Black Friday deals are going to be massive this year because of all this inventory build. That's a good call. I still think you keep holding on these deals. You're going to be able to get shoes and apparel and all this stuff for very cheap, Black Friday. What did you just buy? What

did you just buy for your wall? Oh yeah. I got to send out that we had friends who bought one of those Samsung frame TVs. It looks like a picture frame. It's a TV, but it looks like a picture frame. We should do a Masterworks pairing there where they can show our Masterworks paintings on our TV. So it actually looks at a picture frame. You should have your home asses right on the screen for you. Exactly. So I can't remember who sent this. to me, but a few years ago, we were talking about Samsung dryers for some reason. And someone said, hey, I work for Samsung. Here's a discount code. No, me. It was the line of my TV. Oh, that's right for the line on TV. You still have it. You showed me, right? When I was at her

house. I moved it upstairs because I have like a lot, like a big bedroom. So I thought that because my bed is so far away from my TV that I wouldn't be able to see the line. Oh, no, I still see the line. It wasn't as bad as I thought. But someone from Samsung actually replied to us and said, hey, here's a friends and family discount. And so I go to look, and I got like 700 bucks off of this TV for their friends and family discount. I can remember who sent that to us, but thank you for that. And my wife appreciates it because she wanted one of these framed TVs.

Very nice. You don't ever hang those TVs yourself, do you? Because you got like these 80-inch TVs. What are you nuts? No, I can't do that. Okay. Who do you pay, Best Buy? Or what's your place?

You have like, New York has all their own store. It's like Randis or something or you guys have all your own stores that are like called something else. Well, Geek Squad will do it for you if you buy a TV from them. Okay. I know a few people that could do it. All right. Revenues for Converse were $643 million of 2%, but whatever, $643 million.

That's a lot of Chuck Taylor's, no? I kind of forgot Nike even owns Converse. Wait, for the quarter? It's a lot of money. I still own a pair of Chuck's. Those shoes will never go out of style. I own too. I don't wear them very often, but they're great sneakers, but $643 million, and they're not expensive.

Well, that's not all they sell, obviously, but that's probably the majority of it. That's a shoe that never goes out of style. What else do they sell? I don't think they sell. Closer sneakers. I don't know. Clothes? Wait, Converse doesn't have clothes, do they?

Don't think so. I don't know. That's a good question. All right, either way, the stock is now flat since 2018. Stock picking is such a bitch. This is one of the best companies in the world. Best brands. Who doesn't love Nike?

Huge Nike guy. Stock is flat. The problem is, though, you have this price change chart in here. It was up well over 100% from 2018, as recently as 12 months ago, and now it's flat. So this goes back to my point that macro is everything, especially at turning points. Why did you put a picture of a guy who in a hoodie in here? I'll tell you exactly why.

Because when I was listening to the call, they spoke about innovation and something called Nike Forward. I looked at this and it's like sustainable, like crazy material that, I don't know, it looks very scientific. So I'm like, oh, this is cool. I'm going to buy one of these. They got you, totally. It looks very scientific.

Oh, no, no, no, no. They totally talk you into this. Well, I looked at the video, and it's like, it's got all sorts of waves and shapes and a men's hoodie, 160 bucks. No way. Yeah, no way. Come on. Okay.

I draw the line somewhere, and that's way over the line. Nike are the only running shoes that I'll wear, though. Their running shoes are the best. They're very lightweight. They feel like you're wearing socks on your feet. It's great. I don't run. Never have, never will.

But on clouds are phenomenal. So Robin bought me a pair, and I saw Josh wearing them. And I don't like to, like, be like, Johnny Come lately to these type of things. I never wore Allbirds, for the record. I missed that one, so I never wore Allbirds. So Robin got me a pair, and I said, thank you, but you know I only wear Nikes. And I put them on and I said, ooh, these are comfortable. So I got another pair.

On Clouds are phenomenal. Okay, Albirds had the crown for while, but on clouds, those are the new balance for dads. If you're a dad, you wear those instead of new balance. I don't have any, no, sorry. And they have a pair of, like, nice on clouds, like casual. Okay. Big proponent. Those are for dads who don't wear the white new balance shoes with shorts.

Let's talk about Oh, Ben, you know that I've now played basketball twice? No injuries? You know, blow your Achilles yet? I played last night. Not even that sore. Okay, that's pretty good. Like, what are we talking?

Like, games are 11, ones, and twos? Seven. Shirts and skins? No, shirts and skins. Okay. All right, let's talk about CarMax. By the way, I know we can't talk about this every episode, but the pandemic really changed everything.

There was it before the pandemic and after. I think you do have to keep coming back to that, how it changed almost everything. Maybe we spoke about it so much. that now we don't speak about it enough, it really did change the world dramatically. All right. So as an example of how the pandemic changed the world, look at the revenue of CarMax, which this was a nice, steady, eddy sort of growing company, but the growth that it had post-pandemic was ridiculous. And now, like many other businesses, they are now on the other side of all that pull forward. So they said in our retail business, total unit sales in the second quarter declined

6.4% and used unit comps. We're down 8.3%, which is great. Finally, we're getting some relief on cars. It sounds like prices are coming down. They said we began the second quarter with a low single-digit decline in comp sales during June that reflected a continuation of softer, although improving sales, which we discussed on our last earnings call, COPS sent fell sharply at the beginning of July. There we go. Personal finance tip from Ben, if you have a used card, do not sell it to CarMax. I think the way that they... Oh, did you ever do it? No, I tried. The way that they sell their cars at low prices is they probably buy them for very low prices. So, like, I checked the Kelly Blue Book

just to make sure. And they offer me like $2,500 less than it was worth. And the dealership gave me Kelly Blue Book, basically. Okay. So Carl Kintana tweeted, General Motors ends Q3 with 359,000 vehicles in dealer inventory, nearly three times the inventory available at the end of Q3. The dramatic jump reflects supply chain production normalization as supply chains normalized, so too will inflation. And Sam Rowe showed a chart of prices of new vehicles and used vehicles prior to the pandemic and obviously prices went parabolic and so it sounds like bang on back your Black Friday deals maybe we're not quite there with cars so I was talking about the guy last night on the way back from basketball every reasonable car is up 40% like from where people's leases

are just ridiculous so eventually when all the semiconductors are finally back in these cars and there's new cars that come out there's a flood of them the used car prices are going to crash but they have to you'd assume lastly Tesla had a pretty ugly day yesterday. I'm not quite sure. Every stock was green but Tesla basically, all the big stocks. Why was that? I'm not quite sure what the story was there.

I mean, they did miss estimates, even though there was a record quarter, but they missed estimates. So I screen grabbed the heat chart from yesterday and green across the screen and Tesla sticks out like a sore thumb. So you only see the heat maps when it's a really, really good day or a really, really bad day. You don't see it if it's just kind of an okay day. It's when you know the extremes in the market when you see the heat map. They said, as our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and that a reasonable cost during these peak logistics weeks. Is that enough to knock the stock 10%? I don't know. I don't know what it was.

Do you think that if you drive a Tesla electric vehicle, you should be getting a good parking spot? Because I've been seeing a lot of places who have the EV charging stations in a really good location. And that's taking up a good parking spot, I'm just saying. If we're talking parking lots here. I've got a few nits to pick here. So I dropped my daughter off at soccer two or three times a week or whatever. These parking lots for soccer field were not made for like 40 foot long suburbans and trucks. The people who drive the big suburbans, that's fine if you want to drive a big car. That's your thing. You've got to park like three miles away. You can't park in a regular parking spot because you don't fit. What do you think about that? No suburbans

or trucks in the parking lots at the soccer games. Because you can't get around them and then they take up like two spots and you can't fit. They need their own parking lot. for trucks and suburban because they're too big now. Thoughts. I can't wait to you get a suburban. It's not going to happen. I went to Roosevelt Field Mall this weekend. Why did I go there?

I was with Kobe and we had like, I needed to get something. I needed some time to kill because it was a rainy day. But the Tesla, the plugins are literally at the end, all the way at the end, at least where I was parked at the very end of the lot. Oh, the worst spot. So you know what? You and your electric vehicles? Back of the line.

All right. Did you see this thing about Elon Musk's rich friends? I didn't read any of this. Fill me in. Okay. A lot of people were dunking on the rich people, basically saying, ha, rich people are just like us. So they showed all these rich people text messages with Elon Musk when he was trying to buy Twitter. And their due diligence was basically Elon Musk saying, do you want in? And they'd say yes. So Larry Ellison said yes right away. Mark Andreessen said yes right away. And they were saying, like, no additional work required. Whatever you want,

Elon, we're in. And everyone was kind of dunking on these people saying, see these big, huge billionaires. They're just like us. They don't do any due diligence on their investments. Blah, blah, blah. I understand that. I also seem to think there probably have to be people in your life. Everyone had a friend in their life who they would just do whatever they said. Hey, this friend says we're going to this party. We're going. This friend wants to do this tonight.

There's always one friend who everyone kind of follows. And I think it's just kind of nice to know that really rich people like billionaires are still like that. They're just regular people. They have peer pressure and social angst just like the rest of us. But I want to know, sight unseen. If there's a person in your life who says, I'm investing in this, I want you to invest with me. who are you saying yes to 100% of the time besides me? Because it sounds like this is what it is to these people.

It's like Elon Musk is in. I don't care what it is. I'm in. Who's that person for you? Duncan. It doesn't have to be a person you know. If it's like just a really well-known investor, this person is investing,

I'm following them in, sight unseen. I don't care what it is. Meaning I'm not doing any due diligence. They're just going to tell me I'm investing in this. Are you in or you out? I don't know that that person exists. I couldn't think of anyone either. When you say sight unseen,

and you won't even know what you're investing in? No, like, I'm investing in, I'm going to take over this company. How much can I count on you for? And you've got to answer now. Okay. It's a tough one, right? I don't know a lot of successful people, I guess is where I'm going. I don't know.

That was a back at a compliment of the date. No. Anyway. That's a good question, though. So Josh just sent this to us from Morgan Stanley. So they just put out a note, autos and shared mobility. To our clients who refuse to pay above sticker for a new car, your patience is about to pay off.

A stalling U.S. seasonally, what's SAR? I don't know, but I appreciate the fact that you tried to say it. Is that seasonally, it's something adjusted rate. Auto? I don't know. I'm going to go to Google. What does SAAR stand for?

Sarn Indian Bistra. That's definitely not right. Oh, a seasonally adjusted annual rate. Okay. He had it. Close. A stalling SAR and a 17 month high in new day supply may finally bring deflation to new prices.

Make room in your garage for a cheaper new car, but will you make room in your portfolio for car stocks? So if you want to buy your significant other Alexis with a huge bow on it for Christmas, maybe prices will come down in time. Are you going to make it in December to remember, Ben? Pretty good. All right. Let's go to DocuSign's cutting by 9%.

I don't know. I don't know if I put them there. How bad is Docu sign down? It's down bad. That seems to me like one that people still have to be using. So it must have just been people just bidding. it up too high. It's down 80. I understand the Peloton thing. You had the chart last week that said, what,

Peloton's down 96%, stitch fix, all these. You had all this handful of stocks down 80 to 90%. I guess DocuSign must have just got completely overvalued, but that seems like one to me that I still docian stuff all the time. Like business-wise, it should be still working, correctly? Yeah, I guess it was just like a lot of other things. It was just a valuation thing. How big was evaluation? It was way too much. It was $55 billion. True. For clicking size. yeah. Okay. We had another day last week where everything was green and there was a big one that was right. It was Apple. And if this was any other day, this would have been, I actually think this

was the Bank of England day. So there was so much news that this sort of went under the radar. But Apple was down like six or seven percent at one point. Finished off the lows. But Bank of America downgraded to Apple, which doesn't happen too often. They said that they viewed the key risks of a weaker iPhone 14 cycle as consumer spending is elevated globally, weaker near-term services, and whatever.

But Apple caught a body. So they were saying that the demand for the iPhone is not, I got the new 14 one like two or three weeks ago. How is it? They're all great, right? It's fine.

It's like it's a little faster. I mean, it's like 10% better than the 11 that I traded in. By the way, I love, it's fine. When in reality, this is like the best piece of magic that the world has ever seen.

Yeah, I use it 12 hours a day. It's okay. Yeah, it's okay. All right, Ben, last week I spoke about the app game changer or how parents communicate and I was wondering how people did it back in the day. I got an answer asking you shall receive somebody. Some guy, Jack, tweeted to me, either you called a local number where the organizers would update a recorded message for cancellations, quote, due to rain all practices at Miller Field

are canceled. Okay. Or there's a call sheet. A calls B and C, B calls D and F, C calls GHI, et cetera. And then somebody wrote, yes, phone trees. Coach calls three people, each of those call three more, blah, blah, blah, blah. Everyone knows within 10 to 50.

I mean, sounds pretty bad. Yeah, that doesn't sound great. All right, so some variety, Amazon's Primes video, Lord of the Rings, took number one position on Nielsen's streaming rankings with 1.3 billion minutes viewed, meaning this thing is like a juggernaut. And this surprises me because I have not heard one person say, like, this show is awesome.

You have to watch it. I guess Lord of the Rings just has a lot of cachet still. I didn't even realize there were string rankings. Did you know this? Of course. That is a huge number. Also with Amazon, so Dolphins Bengals, 11.7 million people watched. And it said before the season, so now Thursday Night Football is only on Amazon Prime.

Before the season, some sports media observers thought Amazon would struggle to capture 7 to 8 million viewers. The e-commerce giant has drawn more than 11 million viewers for each game through three weeks. I wonder if this is driving synops. I bet you it is. They said initially, like, they drove a huge amount of stuff. I can't remember the number for the first week of that. So doesn't it seem painfully obvious in the future

that it's going to be Netflix, Amazon, and Apple that are going to just own TV? Yeah. Oh, well. Oh, TV. They're going to buy the sports rights eventually. If everything's going to streaming, it's going to be Apple, Amazon, and Netflix. That's my call.

A few weeks that we spoke with Michael Lombardi about which coach gets fired first, which streamer gets thrown in the trash can first. It's either Peacock or Power Men Plus. Peacock, I'd say Peacock. That's fair. All right. Recommendations. I'm still going through all my Jack Nicholson.

ones. I think I've caught up to most of the 70s ones. So I watched, I started with one Flew Over the Cuckoo's Nest. I watched China, which is great because all these movies are on HBO Max. They have a great catalog. The Shining was great. I think the Shining and Chinatown are both really great films. Like, they were really well done. The Shining was well done. I'm just

like the horror thriller kind of movie is just not my style, I guess. I don't love those kind of movies. No, it's not my genre. But I mean, obviously, he was amazing and it was very good. But I think my favorite was one floor of the cuckus nest at all of those. I would watch that again for sure. The other two I probably wouldn't rewatch.

Can I make a recommendation? Sure. You should see Doctor Sleep. Which one's that? It's the sequel that was made three years ago with Ewan McGregor as Danny. Oh, when he's older or something? Yeah, it was good. The kiddos are very creepy.

It was good. Apple has a new movie called The Greatest Beer Run Ever. You hear about this one? No. It came out last Friday. It's Zach Afron and cameos by Bill Murray and Russell Crow. And it's a true story about a guy who all of his buddies from the neighborhood went to Vietnam when he was young. And I think he just was in like the merchant Marines or

something so he didn't go over there. But he said he all these, his friends were down in their luck because they're over there or they were people were dying from his neighborhood. This guy actually decided to go to Vietnam as a civilian and go across the country and give beers to his friends to cheer them up. And it's a true story. It's definitely a better story than it is a movie. like Zach Ephron's Boston accent leaves a lot to be desired, but it's a really cool true story, the fact that this guy actually did it. So, not bad.

Decent movie, a really cool story. I got a lot of feedback. A lot of feedback on The Raid. Good feedback? Great feedback. Said, if you like The Raid, see The Raid too. So I haven't done it just yet, but... I can't believe how many Michael movie stands there are

that love these really crappy horror movies that you like. No, no, no, no, no. The Raid is not horror and it's not crappy. It's legit. I don't know if it won at Toronto Film Festival, but it's got an 87 from both the critics and the audience of Ronna Tomatoes. This is definitely not a crappy movie.

Oh, so I potentially might like this. It's straight up violent kung fu. That's all it is. Okay. It's kung fu with a lot of blood. Okay. I like to kill Bill. Oh, what a movie.

It was on again this weekend. So my friend texted me on Thursday. You want to see Avatar tonight. And I'm like, ooh, it's out. So we're on our way to the theater. And I'm like, dude, I am so excited. I haven't read a single review. I just, I don't want this to be tainted for me.

I thought the same thing when I saw the commercial. He goes, you haven't read a review for the 2009 movie? I'm like, what are you talking about? He goes, wait, do you think we're seeing the sequel? He goes, it's just a re-release for the movie that's coming out in December. And I felt like such an idiot. Because, like, obviously, when Avatar comes out, they're going to spend $100 million on advertising.

and it's going to be impossible to ignore. I saw a commercial for it, and I was like, wait, it's out already. I thought I was coming out on Christmas. Yeah, so it just didn't click. We're on our way. He goes, well, do you still want to say it? I'm like, I'm not really. I want to see Smile.

So, Smile was not playing. So we saw, don't worry, darling, which was not a terrible time. It wasn't a bad movie. It wasn't a good movie. Here's my take. What movie is that? Oh, is that the Chris Pine one? Yeah.

So Chris Pine is a poor man's Leonardo DeCate. Caprio. I could see that. If Leo played that role, it would have been much better. Florence Pugh was absolutely incredible. She carried the movie. She was so, so good. What was this movie? What was it about even? I don't even know what it's about. So, Harry Stiles, who should have been played by Joseph Gordon Levitt, he was terrible. Harry Stiles and Florence Pugh are in the 1950s, and they're like the perfect couple, just perfectly in love, no kids, just all about themselves. And every morning in the town, the husbands go to work, and the wise have no idea what they do, but they're doing something

that's going to change the world. And Chris Pine is like the creepy sort of leader, cult leader, I guess, and things start to go a little bit south, and things start to get a little bit weird. But the ending was very predictable, which is fine. I don't mind like, I don't need to have like a massive twist, but this was building and building and the end just sort of felt really flat for me. There was like a 6.1. It was like fine.

We're not recommend, but not the worst movie ever soon. So then I ran it back because I really did want to see Smile. As you know, I'm a fan of horror movies. And I saw it on Friday night at 7.30. And there was a ton, a ton of teenagers in the theater. The average age was probably 16 and a half and me. And because that's a scary movie, they were very noisy and they had to have chaperones like come in and like shush them for the entire movie.

Shush. One more time you're out. Shush. Anyway, that movie was incredible. It was the scariest movie I've seen in the theater since. it. It was so... I feel like you say that for every horror movie you see, though. You said it about Barbarian. Barbarian was a great movie. I didn't say Barbarian was a scary movie. I said it was a great movie. Smile legitimately was terrifying. It was terrifying. And not like gory, just

frightening. Excellent. Excellent, excellent. Cannot recommend it highly enough. This has been a year of horror. A lot of good stuff. I guess so. I've never heard of any of these movies and you see them every weekend. You've never seen the preview for Smile? No. I don't watch commercials. Fair. Have you seen the lady at the baseball game that was smiling, like really creepily. Oh, okay. That was it. Okay. I did see that. Yeah. It was so good. All right. Good. Okay. Remember, you want one of these quarter zips or a polo, Hawaiian shirt? I got to say, you know what I like about this among many things? It's like the in between. You're not going to wear this in the winter, but right now when it's like 54 and you're transitioning.

Yeah. And now, unfortunately, it's going to be cold real soon. That window is too short for my liking. Yeah. Animal 20, if you want to get 20% off, I don't know how long it's going to last, but probably not too long, send us an email Animal SpiritsPod at Gimid.com, and we'll see you next time.