Animal Spirits Podcast - Most Stocks Suck (EP.414)

Episode Date: May 28, 2025

On episode 414 of Animal Spirits, ⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠ and ⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠ discuss long-term bond yields rising, why government debt won't fall, where all the dry powder is coming from, how often you should expect bear markets, a weird time to be rich, $97 salads, why starter homes died, retail bagholders, why everyone takes Social Security early, Tom Cruise and much more! This episode is sponsored by Betterment Advisor Solutions and KraneShares  Grow your RIA Your way by visiting: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.betterment.com/advisors Learn more about KraneShares KWEB Covered Call Strategy ETF (KLIP): https://kraneshares.com/webinars/resilient-covered-call-strategies-during-severe-market-volatility/ Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's show is brought to you by our sponsors at Betterment Advisor Solutions. Imagining a better future is the first step. Investing in that future with Betterment Advisor Solutions is the next. Whether you're launching your own practice, looking to streamline client onboarding, or just searching for efficient way to scale your firm, Betterment Advisor Solutions is here to help. They automate to make tax optimization simpler. They provide support to make administrative tasks easier.

At Betterment Advisor Solutions, they are building innovative technology all for anyone who's ever said, I think I can do better. So grow your RIA, your way with Betterment Advisor Solutions. Learn more at betterment.com slash advisors. Investing involves risk, performance not guaranteed. Today's show is also brought to you by crane shares. Ben, we've spoken about the number one. So active ETFs are having a moment.

They are having a moment. And the number one active ETF is a covered call strategy. And this shocks me. There are only three international cover-called ETFs. And given that I just saw EFA as having the best start to a year in 25 years, if this keeps going, we will see more. launches prediction. Oh, interesting. So options on international indices or stocks are not as prevalent as the U.S. I didn't realize that. Okay. So we've talked to Brendan Neherne from

Crane shares before about how do you say it? You say I say Caleb. You say Caleb, but it's clip. KLIP. Well, I just, you know, they call it Kweb. Why would you call a clip? I get it. You're clipping. Right. So they have their K-Web strategy, which is the Chinese Internet companies, and then they also do clip, which is the income on those. And again, these technology stocks tend to be more highly volatile. That means potentially more option income because of the volatility. That's right, Ben. You can also find the link to the webinar they recently did. Resilient covered call strategies during severe market volatility. In the show notes, click that link. Welcome to Animal Spirits, a show about markets, life, and investment.

Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Did Memorial Day creep up on us this year? Are we back to middle-aged time-is-passing guy? Yeah.

Before we get into this, I've got to ask you a question. What percentage of your wardrobe is Nix these days? Because I feel like it's 95%. Is that close? After what game, what was it bad? What was game one? After Tuesday, it's been in the bare market. But yeah, probably 98%.

Okay, so you were in mourning a little bit. You weren't there for the gut punch game, were you? They don't know there for game two? I was there. Okay, I didn't, I haven't talked to you about it. So you, for the Heilberton bounce and... So I, thank God, I left. We were, it was 40 seconds left.

We were up, I think, eight. And OG got fouled. They reviewed it. So I figured, all right, I'm leaving. Like, I had a train to catch. I don't need to be part of the nonsense on 7th Avenue. And then they overturned that foul call, even though it was a foul. And thank God.

Thank God, I watched it on the train. I might have... Oh, so you weren't even in the building for that. Okay. I agree. That would be, because the silence was deafening kind of thing after that, after a regulation. I couldn't listen to any podcast. No recap.

Didn't hear it. Couldn't do it. Really tough. What were we saying? You can't believe it's memorial to already. Old man conversations at the beach club this weekend. Me and some of the dads were talking about the Merrick train station parking lot and the this and the that. I'm like, oh, my dick guys were so old.

This is, we're talking about, yeah, where to park. Okay, we're coming to Chicago next week, as mentioned a couple of weeks. Can you believe it's going to be June already next week? I can't believe it, unbelievable. Where does the time go? And I'm very excited. I looked at the forecast. The weather is immaculate.

The vibes shall be great. It's our biggest R2M getaway. I think we've got almost 50 people coming. We're doing an event at the salt shed. We are excited to say the least. So we will see you there or we will see you at another time. Yeah, we'll be doing the live compound. You and I will be recording animal spirits from somewhere.

in Chicago, probably our new office, one of those days. I can't mean, this will be our first of two trips to Chicago in the month. Yeah. So you and I are seeing each other a lot lately. Can't we see. Keeping things fresh. Yeah. So if you're in Chicago, come say hi.

All right. So last week, the new worry, and I feel like the market only has room for one worry at a time. This is a theory I've been thinking for a while. Oh, I like that take. You know, we just short attention spans. We've already kind of moved on from tariffs. And it does feel like the market just slapped the wrist of the tariff policies.

And even when Trump says, oh, I'm going to do 50% tariff in Europe and Apple can't make their iPhones in India anymore, you know what the market said? No one really believes it anymore. The market said, I don't believe you. It was the rod Burney. Because on Friday, we gap down what, like, I don't know, a percent or so. And given the incredible rally that we've had in stocks, I don't think it would have surprised to anybody if we said, oh, shit, here we go again, then market's down 3% heading to the

weekend. Who wants to be long on a three-day weekend? Stocks close at the high of the days. Bond yields were relatively unchanged. And so, sure enough, I guess the market got it right this time. Because on Sunday, he said, just kidding. We're going to punt that to July 9th. We've moved on from my children having to work in a sweatshop again and create our t-shirts or something. So the big worry last week now is bond yields, right? And it wasn't just the U.S. But I pulled up just, I typed in bond market or something like that into Google. And look at all the top stories, right? Is this the breaking point for the U.S. bond market? Oh, GOP bill locks a new deficit as bond market quakes.

And it's all these scary headlines of bond yields are rising. This is bad. And then people were tweeting about Japan. This is from bar chart. Their 40-year bond yield hit 3.6% all-time high, which is kind of nuts if you think about it, an all-time high for long-term bond yields. And so the question for people is, okay, rising bond yields must be bad because people are worried about the deficit.

They're worried about government spending. They're worried about inflation. It's a worry about something. And maybe these things are true But my whole point is just Let's just take a breath On the bond stuff And every time yields rise

We get worried And every time they fall we get worried Yeah, that's a good point It's been in a 4 to 5% range For I don't know two years now Yeah, ish Yeah, can I say that I'm not not worried Like I don't want to completely sweep it under the rug

But I will also say that What you just said is valid Let's take a breath So I think part of it is We were accustomed to such low yields In the 2010s that what if What if this is just a normalization? I looked at the average yields by decade for the 30-year treasury.

Don't come on me with average by decade. Who cares? So it was 11% in the 80s. In the 90s, it was 7%. Erroneous. In the 2000s, it was 6%. But now look at this, look at the chart of the last couple of years. It's average 4% and it's been in a 4% to 5% range forever.

And every time we go up, we go down. What's the opposite of erroneous? Is it erroneous? I don't know if that's a check. Because that's valid. It has been in a range. And I even pulled up the returns for, like, the 10-year treasuries this year. IEF is the 7-10-year treasury, okay?

People are freaking out about bonds. This is up 2% this year. Most of that is yield because, you know, rates have kind of gone nowhere. But are we really having a bond freak out because bonds are up 2%? Over the last year, they're up like 5%. I'm not freaking out. In fact, last week I bought zeros and TLT. See, I feel like the timing of the duration never works, though.

It worked last time I bought it. Who has the ability to time duration like this? Me, easy. So you're going to do the range thing? It gets to five, you're buying duration. It gets to four, you're lighting up. Is that your plan? First of all, for the market, I'm obviously kidding.

But this is not like a buying hold for me. I'll sell if it rips. Well, I hope not. Yeah, that'd be a crazy sort of buyinghold product. So Matthew Klein at the overshoot, which I feel like he is always kind of a calming voice. and he said, what if this is just what normalization looks like? And he looked at Japan, and he said, listen, if you look at what Japan was like in the years prior to the pandemic period and post-pandemic period, their inflation was a lot lower, their growth was a lot lower, their spending is. And now if you match up where the growth is, where the inflation is, where the spending is, these rates make more sense in this environment.

And he also, I've seen a lot of people poking holes in the whole deficit thing, people saying, like, well, the new tax. bill is going to add so much money to the deficit. It's crazy. So he said, the U.S. Congress is moving forward with a budget plan that would not lower most American taxes relative to current rates. Yeah, so if you look at it, a lot of it is just keeping things the same. It's lowering for some people, not very many. We talked to Bill Sweet about this the other day. We said, Bill, what's this going to do to our taxes? He said, nothing. There's no, it keeps them the same, but not, no material change. He also said it would meaningfully cut spending on health benefits for the poor for Medicaid, food aid for the poor for SNAP, and

subsidies for green energy. The budget is also set to sharply increase imposed taxes imposed on premier research universities. Remember Doge? That was cute. No, but he says, combined with tariffs, which are taxes imposed on Americans, the net effect should be contractionary relative to the current fiscal stance. Interesting. But you could say, well, what if the tariffs continue to come lower in that? So it's kind of a wash, essentially, is what he's saying not nearly as bad as what if this is just normalization

because look at the yield curve. I pulled this up from I feel bad. I had Sean make me a yield curve this morning and I said, oh, wait a minute. Why did I have Sean do that? We probably have one on Exhibit A. So I went to Exhibit A.

So I got a yield curve and it shows the yield curve from a year ago and the yield curve for today. So I remember, I'm old enough to remember that's something people say on a podcast.

I'm old enough to remember when the inverted yield curve was a problem. Remember how scary that, was. Inverted yield curve always leads to recession, except for this time. Now, the yield curve is becoming uninverted. Look at this. Is this not normalization to you? Looks like it to me. Now, the retort is, just wait, Ben, the bad stuff. And maybe this is, like, the American exceptionalism premium going away, and people are worried about deficits and government spending,

because I really do believe, I think I tweeted this the other day. I know people get really angry, but my baseline assumption is government debt will continue to increase, government spending, will continue to increase. Maybe voters will get mad enough eventually that they'll put someone in an office who will not. There's no reason to think anything else. Exactly. Like, you can get mad at it,

but that's the baseline assumption. That should be your baseline. And that's my baseline. So what if this is just a normalization and people are freaking out and the thing is the world we live in now is maybe just higher bond yields on the long end because I thought it was crazy.

It was nuts when we had 9% inflation and higher, longer term, bond yields didn't budge at all. right remember they didn't they didn't move up meaningfully it was just short-term rates i think this is just normalization fair enough fair enough all right what's my favorite thing about wall street journal articles the anecdotes the anecdotes all right this is the gut-wrenching play in investing right now is buy and hold so they interviewed some more people about their strategy for um you know what they should call this we should call these anic quotes okay that's not bad so i this anecdote here is one i think think that happens for stock market investors all across the country, almost all the time.

When a chunk of Bill Jensen's retirement savings got wiped out in early April, he started to second guess himself. And I'm coming to the point where, like, these could be AI made up stories, and I wouldn't doubt it, right? I'm just going to start not trusting anything just to be safe, but let's, you know, go with it. His wife urged him to consider switching their savings from stocks into safer investments, but Jensen insisted they wait for the market to rebound. he's a retired 68-year-old who tried to reassure both of them by sending emails to the gains

when their portfolio went ended in the green so he's like showing her, listen, it's worked out fine in the past. Seven weeks later, the couple's investments recovered most of the losses rather than to take risk down and actually recommitted to the stock market.

But I feel like almost every couple has this where one of the people is saying, oh gosh, this is too scary, get us out. And one of the people, don't you think that happens all the time with people? Sure.

Like that's a conversation people are having a lot. Yeah, we've said this a bunch over the past couple of weeks, but I'll say it again. The market gave you a get-out-d-d-dial free card. If you were, like, really worried and about to do something,

probably, probably do something right now. Right. But now it's hard because, like, well, what if it keeps going up? No, no, no, this is. This is a much better, this is a much better place to do that. Yeah, you're right. If you wanted to lighten up,

but so I'm curious, does Robin ever come to you and ask you about, like, your investments or does she completely... All the time. She won't stop asking me about it. Are you serious? No, she has... Okay, she never...

No, I've tried. She just... I think my wife asked when we first got married. And I told you this. I gave for like a PowerPoint presentation of why we're going to invest all of our retirement savings in the stock market. And that was all I needed to do.

You're like, Courtney, you're not listening. Eyes on me. Okay, so we got an email last week that I thought was really, really fair. In response to the conversation we had last week about the investor class being more educated and better behaved, was just listening to the latest podcast and the discussion of financial education and retail

investor behavior improving. I agree directionally, but can't help but wonder if that's giving them credit for what had been relatively easy tests. With the dominance of the big tech names, both as businesses and stocks and Walmart's inexplicable multiple, the SP 500 has had an incredible run and it just keeps working. The COVID crash and the recent tariff tantrum were extremely short in duration and basically rewarded investors immediately. 2020 was a longer downturn, but even the chat EBT reveal pretty much returned everything to normal. by NASDAQ, S&P, and you'll make money almost immediately. These downturns aren't stark contrast to one the early 2000s, the GFC.

To be clear, I fully support and recommend systematic buying of index funds no matter what's happening in the market. I'm not saying people should have to do all kinds of research and or pick stocks to build a global portfolio, nor do I hope for a sharp downturning in the market just to be proven correct or deliver some kind of comeuppance. Just saying, I'm not sure the last five to ten years of investors piling into the S&P 500 through mostly brief drawdowns is solid evidence of long-term discipline yet. I don't entirely disagree or agree.

I think it's a fair counterpoint. Okay. I kind of disagree because we've been three bear markets this century alone or this decade alone. And it's not just the bare markets, which have been relatively mild. True. If you invested in Bitcoin, you've lived through like four or five, 80% drawdowns, right? Yeah.

If you invested in some of the individual stock. Amazon was down 60% and video was down 70%. That's true. Right? Some of these are not just losses. They are catastrophic losses. Yeah. So even though the returns came back relatively quickly, I don't know.

I mean, I tend to think the great financial crisis could be a once-in-a-lifetime event. So so do I. Well, it could be or could not be. We're going to have another financial crisis at some point. But like that one, it's possible we don't. It's hard to prove anything. But what if we can say that investors are just, generally, better educated, better behaved, less prone to paddocks than they used to be,

and also it has been a relatively benign investing environment. What if it's a chicken and the egg kind of thing, though, the fact that people are better behaved and there's more automatic contributions, that makes the downturns not last as long? What if it's, it's circular? That's Josh's Relentless Bid theory. Yeah. No, it impacts the markets for sure. But it can't save the market from downturn.

It did it in 2020. money. It did it in 2022. But if you look at 2022, that was, I always break out between recessionary and non-recessionary bear markets. And if you look at a non-recessionary bear market, 2022 is textbook. The downturn, the length of time, the peak the trough, the return, all break even, all that stuff. That's a fair assessment. So we were asking, where is all the money coming from the last couple weeks? Jeffrey Patak for Morningstar, friend of the show, sent me some numbers. Because I said it's got to be just bonds or money markets. We're... And wages. Yeah. And so wages is a big one. So because wages are up, you know, more than inflation by a little bit, this. But he showed, this is from April, the flows. You saw money, big time money coming out of taxable bonds and municipal bonds to the tune of almost $50 billion. And over $21 billion of flows into U.S. equities. So not all of that money went into stocks, but a lot of it came out of bonds into stocks.

That is interesting. Right? So there is some of this. And I always say there's like, what, four reasons you buy bonds. Yield and income. You always say that? I've never heard you say that. Yeah, I've said it before.

Yield an income. Stability, like volatility reduction, spending purposes. And then dry powder. Right? So people are using bonds as part of powder. Dry powder is a catchall. Dry powder rolls up at the one through three. But I mean, dry powder for rebalancing.

All right. So here's another. thing. Twenty-six million customers at Robin Hood. So I had Steve Quirk on this show on Ascent Compound last week, and he talked about this. So it was 26 million customers at Robin Hood now. 13 million of them, it's their first brokerage account. And a few people said, hey, what if it's Gen Z and Millennials who cannot afford to buy a home? But they have that income still, that they would be using to buy a home. And now they're putting it into the market. Like, you look at this. I pulled this from a quarter, I pulled it from quarter. It's the

Robin Hood deck. Net deposits in Q1, $18 billion, $37% annualized growth. Yeah, that's something. $57 billion over the last 12 months. So look at their deposits are growing by leaps and bounds still. And it's a lot of factors, but I guess that's part of it. Here, read this other email because we had a lot of people who responded with this, too, about the money market stuff. Okay, so we have to do a bit of a Mia Colpa and Ben, no offense. I'm going to put this on you. Although I didn't flag it, so it's on me, too. Somebody said... I have a retort here, but just go ahead.

There's no retort. These are facts. No. Go ahead. I follow this stuff pretty closely. And the withdrawal in money markets in March and April, the last two years was not to buy stocks. It is to pay tax payments.

How do we prove this? Because we look for a spike in deposits into the Treasury General account of the Fed. You can look this up yourself. It did go to stocks and went to Uncle Sam. Warren Pies has done a lot of work on this. There is a very seasonal component of this. So the money that came out of money market funds that we mentioned last week did not go to buy stocks.

to pay taxes. Which is funny, which is why the stock market falls in. Here's the reason why I didn't flag this. My planning brain goes, who are the idiots who don't set aside enough for taxes that have to sell stocks to pay their taxes? Sell stocks. These are money market funds. Okay, never mind. Okay. I totally got that wrong. You're right. Yeah. That's okay. All right. My brain broke. No, we sometimes we got things wrong. That's okay. But it's kind of funny, though, that that causes also the stock market to fall in the last two April's. Yeah, Warren and Fernando, I've done some great work on this, like really, truly. That's what my brain is saying.

So people are obviously selling stocks to pay for taxes, too, a little bit. I don't know if they're selling stocks and or just not buying enough or not buying as much. Okay. But somehow this is, but that's what I'm saying. You don't think that there are people selling stocks to pay off their taxes because they did misplanned? Absolutely. Does that move the market? I have no idea.

All right. This has me excited, Ben. I'm excited. We've shared this chart before. Every advisor shares this chart, and the chart is that the odds of the S&P 500 being higher over time increases dramatically if you zoom out. So we grab this chart from Exhibit A. My all-time favorite long-term stock market chart. I want to say I'm going to give credit to Jeremy Siegel for this one, probably, for the first time I ever saw it in stocks for the long run.

But I could be wrong. Okay. So the quote is, if you hold stocks over a 20-year period nominally, you've never lost money. And it's powerful. And it does inspire, maybe not confidence, but it shows you stocks for the long run. But there is a huge and obvious counterpoint to this that occurred to me while I was listening to the Berkshire annual meeting. And Warren said something about the likelihood of the decline in stocks. Same thing. The longer you go out, you're almost guaranteed to have one. And I said, son of a bitch. He did it again. So I called Matt immediately. And I told him,

we got to flip this chart. And so for chart of the week, for Exhibit A, for advice.com, if you're a financial advisor, check us out. We're sending out charts of the week. And it's a new fresh chart every week with your logo on it. So what I had Matt do was show the odds of experiencing a bear market also increased by holding period. So it looks exactly the same. It's basically linear. So over any one year rolling period since 1950, you had a one and three chance of experiencing a 20% decline. If you go out to 15 years, it's 100% of the time. So yes, the message that advisors preach to their clients is stocks for the long run. Less is more. Keep your eye on the ball. The money's not for it today. But this chart is equally,

if not more important, because the facts are that those long-term returns are tough as shit and they always come with setbacks. Credit to you. This is a great chart. And I I told you the one that I honed in on to highlight is 77% of the time over five years. So you'd tell your clients, listen, 80% of the time over a five-year period, there's an 80% chance you're going to get a bare market. That is enough to, like, I think, help people understand the risk involved of either you have a steady hand and you hold or you need cash, fix income, something else in your portfolio. In a 20, by the way, look at four years. Nice. If a client says to you in 2024

After back to back 20% years Hey asshole Why am I 60% stocks? What is this nonsense? Like why are these bonds slowing me down? You show them this chart. Yes. Credit to Matt.

Credit to me. All right. So I feel like the I feel like rich people have always I've always had their own moment but they're just rich people are having a moment unlike any other time before. They're more scrutinized than ever before.

I think they're coming... Is this the Spider-Man meme? Are you pointing to yourself? Betta, you having a moment? No, this is like the rich, rich, rich people. So you saw this story in the Wall Street Journal about the draw-dropping cost of a Hampton's Girls Weekend? I saw the tweets.

Okay, I'm sure you saw the tweets. And it's talking about how it can easily cost $5,000 to go to Hamptons for a girls' weekend of drinks and Ubers and outfit changes and workout classes. And, you know, someone, Haley Sacks, so I think she's, she's been on the compound conference before? She's talked to Josh before. She says the Hamptons is like Disneyland

now. And so she says you have to like go to all these places and Instagram and obviously these are Instagram influencers. They're not, it's not real people. But I do feel like, so they talk about how there's like $97 lobster salads and I can't, I don't I don't know if I said, are you hampton, have you

gone to the Hamptons before? Is that your thing? What do you think? Probably not. I've been. I'm not regularly. No. Yeah. No, I didn't, come on. But I do feel like there's something to the fact of there's a lot of things that I think

we've all just, I know people complained about inflation and we hate it, but I think a lot of it is just like resignation, like, yeah, this is just what it costs now. Like these things that are so expensive and ridiculous and I can't believe I'm paying this much money, yeah, it's like, geez, that kind of stinks, but we just do it. Yeah. Like, I think there's just resignation of. What's the one thing in your life that you can't believe cost as much as it does? I'll start it then.

You can think of one. So there's a Greek salad that we get here in town, and it's iceberg lettuce and, you know, whatever, it's Greek salad. But they have great dressing. So I will give them that. It's $19. And I can't believe it. I won't order it, but Robin does. You know, the funny thing for me is that you go out somewhere to have dinner or go to a bar to drink and you get a beer and it's, I don't know, $8 or $10 for a beer, right?

But the weird thing that sticker shocks me is getting a six-pack and now it's like $19. out. It's my good O'Brien summer beer. Right? How much should that used to be? 12? Yeah. Just something like that, which is still probably a pretty good deal. But we had this conversation this week about, I'm sure you've had these conversations about houses that are in your neighborhood. Someone brings it up, like, can you believe the house down the street sold for that much? Yeah. And they go, you know, in 2017, we bought for this. And you're doing the math in your head to think what yours is worth, obviously. But someone finally just said, like, that's how much house has cost now. kind of like just slap to the face like get used to it this is this is where we are now and i think

that's the thing that's my whole thing is just i think it's just resignation of like oh yeah this is just how much stuff costs now yeah and people have moved on um there was another article in the cut titled it's a weird time to be rich now and this is kind of what what is the cut i don't know what that is that is the new york magazine like one of their okay you know it's like the grant land for New York Magazine, I guess. So they talk about all these rich people are going to therapists and complaining about how weird it is to be rich right now

and they don't want to be too flashy and show-offy because they don't want people showing up at their house with pitchforks and torches, I guess. But I pulled this out. A real estate agent who sells luxury properties in the tri-state area is seeing the same thing. It's a weird time to be rich right now. All the wealthy people I know are keeping their cards

closer to the chest. When people have that much money, stuff like inflation doesn't really affect them. them, what they do care about, though, is being judged for their conspicuous consumption. And the whole world is crying poor and you're living the life. What did I say? Conspicious. Okay.

Close enough. And you're living the life in this wealthy bubble. It's really frowned upon. They've all seen the White Lotus. No one wants to be like that. Some people want to be like that. Come on. Let's be honest.

Yes. But I feel like this rich people in the white, like we've shown such a light in this. And there's so many shows and, you know, succession in White Lotus and your friends and neighbors and the influencer stuff and I just think wealthy people in the past didn't ever think this deeply about their wealth.

No, no, no, no, no, no, no, not true. There was a lot of like Bill Gates in the 90s or whatever driving Toyota's. It's always been a thing for mega rich people to not be opulent. Did I use a word properly? Speaking of word messing up is? But I just feel like now is the,

it's harder than ever for an Uber rich person to be happy. That's my take. What? You're two in your head when you're rich. I don't know about that. You're making that up.

It's never been harder for a rich person to be happy? You don't think more rich people are miserable today than they were before? I think rich people are way more miserable. I have no idea. I have no idea. Because on a relative basis

you see other people's wealth. You don't think that? I don't know. I don't know. Well, but here's the part. I think there's a lot of miserable rich people out there. If you live in a rich town, then you're not hunting anything.

True. It's the opposite. Yeah, you want to flaunt it. Yeah. If you live in a upper middle class town, you're probably less likely to, you know, drive a Ferrari or whatever. That's true. There are a handful of like Ferraris or, because there's a handful of billionaires in much Michigan. And you see the Ferrari and you see it on the road and you go, whoa, whoa. But in New York, you probably wouldn't think twice. But if you're a billionaire, why not drive a Ferrari? Like, who cares? It's not like you could hide your

wealth anyway. Listen, to each their own. I don't know. Whatever. True. All right. So I pulled the retail sales graph just to kind of drive this point home about spending. And it's just, it's weird to me that you can see the charts here I circled. Like after the great financial crisis, there was a new trend for retail spending and it was down. Like we took a huge thing down and then the trend took a long time to get back on. And since the pandemic, it's just been way higher and it's still trending higher. And this is why I just, it's the whole risk thing about, and obviously some of the, this is inflation. I just think there's a new mindset these days. What is it? Spending, investing, speculation, risk, all that. The 2020s is, maybe that's our roaring 2020s. It's just a risk appetite change. I'm just trying to wrap my head around it still. Yeah. I think you're right. All right. I want to point out, so CB Insights has their quarterly state of venture report. AI now drives one in five venture deals. Pretty wild, right?

We were talking to Rich Bernstein on TCAF last week. Do you know what, I don't know if you listened to the show, but if you didn't, do you know what Open AI's most recent funding round was? I saw it in a headline, but no, I don't know. Okay. They raised $40 billion, and you can guess who led that round. They raised $40 billion on $300 billion dollar valuation. $300.

I thought Deep Seek was going to be the end of all these AI. companies. Here's another one. Eight early stage AI companies raised... Wait, wait. I'm surprised that it's not higher than one in five. I thought it would be 50% of them by now. Well, for context, in 2022, it was 1 in 10.

But you're right. I think it's... I mean, it's... It's up to the right. Eight early stage AI companies raised $100 million megarounds. That's a new record. Invidia, obviously they were a big backer of CoreWeave. they've done 49 equity deals.

And they also show Google's done 49. Microsoft has done 24. This is since 2020. And Amazon's done 20. So I guess these are the new megafuns. Kind of wild. I'm really fascinated by where the AI stuff goes. Did you see the videos this weekend?

I just think that there's so many different paths we could take from it, good and bad, that I don't even think you could possibly predict what is all going to come out of this at this point. Did you, we're going to talk about this later. Did you see Mission Impossible yet? I'm guessing, no? I didn't, but I will see it in the theater. Okay.

I'm a TC supporter. Sure. All right. So on Quarters app... Did you see it? I did. We'll talk about it in a sec. On Quarters app, I said, make me a chart of Uber free cash flow.

So they have, they have Claude and ChatGBT in there. So I said, make me a chart of Uber free cash flow by quarter for the last five years. And they said, there is no available... They, meaning the LLM. said there is no available data for Uber's free cash flow by quarter for the last five years. The request of information is not present in the latest financial disclosures. So in my head, I gave a shoulder truck. I'm like, what the heck? What do you mean? So I typed to them, can't you calculate it based on the financial statements? Boom,

chart on. See that? Isn't that wild? Too cold prompting, huh? Well, LSA was like, come on, man. Figure it out. And it did. That's pretty good. So there was a Bloomberg article traveling around this morning, and it said, Welcome to the Academy and the Age of Artificial Intelligence. And I keep harping on this one. As several recent reports have shown, outsourcing one's homework to AI has become routine.

Proversely, students who still put in the hard work often look worse by comparison with their peers who don't. So, like, you put in a lot of hard work on your own paper, and someone else does an AI paper, theirs is going to look way better than yours. They say professors find it nearly impossible to distinguish computer-generated copy from the real thing, I mean, even weirder, have started using AI themselves to evaluate where students work. So students are turning in AI papers. Professors are having them graded by AI. And the whole, the crux of the article was just college still have a purpose in the age of Chad, GPT.

But I keep coming back to the fact that this is why being a creative person is going to be such a thing that sets you apart. I was thinking about the early days of reading Josh's Reform Broker blog. And he, him writing in his own voice and sharing his own inside jokes and experiences and I think that's the blogger stuff that people really latched down to in the 2010s. I think why that whole scene of finance Twitter took off because people were, it was like a breath of fresh air to hear people

write in their own voice as opposed to some stuffy Wall Street research piece. And I feel like that kind of stuff, the ability to write in your own voice is going to be more important than ever in the years ahead. I don't think the chatypties of the world are going to change anything in terms of we're not going to be all the sudden reading stuff that is clearly generated by a computer.

I think it's going to be like you, people like you, who are just incorporating this into their own writing. Yes. Right? Because this stuff is, it's obvious and it's sterile. I think so too. Which is kind of funny. It says the professors find it nearly impossible to distinguish.

Like, you couldn't tell that the freshman kid in your English class is all the sudden creating way better paper. So don't even- But wait, but wait. I'm sure you could say to the whoever, whatever program you're using, and make it sound like it was written by a 19-year-old. That's true. I mean, but couldn't you take the first day of class?

Like, like, put in a few, uh, some grammar that doesn't really flow too well. But the first day of class, I want everyone to write a one-page paper about this subject. And that's my baseline for your writing skills. And I'm going to be matching your papers you turn into this baseline. If you're a professor, I feel like there's got to be easy ways to around this. I'm sure there are. Maybe they're just too lazy to figure it out. I don't know.

Speaking of AI, so Michael Mobeson had a new piece out for Morgan Stanley, drawdowns and recoveries. It's 24 pages or something. Now, anytime I, in the past, would get a very long research. Shame on you. No, this is not a shame of me. This is just time saver. Anytime in the past I get a really long research note, I would scroll through the charts. I'd read the first paragraph.

Then I'd do Control F conclusion, and then I read the conclusion. I feel like Mobuson deserve some respect. You don't chat. You don't chat CBT Mobison. Come on. Okay, so I chat GPTed Mobusin. Then I went back and I read the key points. Anyway, you read this too because you put some stuff in here.

Why don't you go first? I actually have not read it yet. I read the first, what page am I on? I'm on page two. I haven't had to read it yet. It was a busy weekend. I'm going to read it, though. I'm going to read it.

Okay, so he looked at the drawdowns of individual stocks, not just the stock market. Why don't we read this and we'll circle back to it? I did read it. That's what I'm talking about. I'm going to share with you some of my... Findings. Your findings. This is clearly a chat trip with your findings, sir.

I see the, I see it. I know it is. And then I went back and I read it, the points that made sense. So I didn't read it all. But he's looking at the draw, they looked at 6,500 companies from 1985 to 2024. The median drawdown on it, this is individual stocks, was 85%. I buy it. Which lasts about two and a half years.

And then he looked at the time, like the peak recovery was 90% to get back. So meaning a lot of them didn't come back. And so they said only 46% of the stocks that had these drawdowns managed to recover their prior peak. Yep. So most of the stocks that fall. But it was also skewed. Most stocks are not worth buying and holding at all. So he looked at the median and the average.

And the average peak recovery is like 340%. But that's because it's skewed by a handful of stocks. So they even put a chart in here, which I did pull the chart. And you can see the recovery, there's a handful of stocks that if you bought when they were down that much, you did them. I'm sure it is. You did amazing, but most of the stocks did really poorly, which is, again, just so you see these, this is the Nvidia thing. Like, Nvidia fell 70%, Netflix fell 70%.

You idiot, why wouldn't you buy that? This paper from Besson, Ben, there, and also Howard Marks, ruined me as a stock picker. Because I read Howard Mark's stuff about second level thinking, I never bought Apple. Because it was like, this is first level nonsense. Who is buying Apple? This is like 2014. But all jokes aside, knowing this data like you and I do, and I still pick stocks, but as a, you know, as a game, not because I think I'm, you know, going to retire off of it. It's a bad idea.

The data set, isn't not me saying it. Most stocks are garbage. Most stocks don't be treasury bills. You know what I've been doing for the past couple months? I've been slowly but surely trimming all the individual stocks in my brokerage account and just pouring it in index funds. Ain't nothing wrong with that. I look at them less. I'm not constantly checking my Robin Hood account.

It's just less, as West Gray would say, it's less brain damage. Very valid. Counterpoint, content for the pod. True. Don't want, I'll carry the load for now. You know what I was going to say? You were talking about IMAX before we get on here.

And look at the chart of IMAX. Maybe this is a New Yorker thing, but you and Josh love to share good news about the stocks you won't. is that fair Josh Josh loves Uber Josh is a big crash like Uber however if you

Control F How many times I mentioned IMAX in our group chat That's true So I've even Hold on whoa whoa How many times

I did it this weekend When there was an article In the New York Times About them I'd say a dozen mentions of IMAX No fucking way No way

Control F right now Go to Slack I'm calling you out This is recent you by So I did it today I mean, no, I did it. I did it over the weekend. You're right. No, this is, this is in-person chats as well. Come on in-per. I don't talk about I-Ax in-person. Get out of here.

Yeah, I've heard it on the podcast. Listen. All right. No. Look, right now. You'll find at least a mention, because I did it this weekend. I'd say, you said 12. I'm going to say, I'm going to say five or less. 13 messages IMAX is mentioned here. All right. I stand corrected.

Okay. So, a couple of them are from Josh. Okay, but how many from me and how many of them cluster? How many is, like, in the same conversation? All right. So I see five from you. All right. We're both right.

Listen, fine. I, I, no, I'm not embarrassed. I'm proud of IMAX. I feel like it's not too often that, like, the fundamentals and technicals line up. They are dominating and the stock is breaking out. Sorry, not sorry. And you're, this is, see, you, you did. Did learn. This is first level thinking from you. You go to IMAX. This is your Peter Lynch stock. You go to IMAX theater's lot. You buy IMAX. Dude, the sound is wild. You better see it in IMAX.

My daughter went to IMAX for a field trip last week. And they didn't see a real movie. They saw some like National Geographic something on IMAX. They saw like 2.45 minute, whatever. And she was blown away. We've never taken her to IMAX before. She loved it. Do her favor and buy her the stock in a up my account or whatever. Okay. All right. Let's talk about the real estate market. Carl Kintania on Blue Sky. Existing home. Slowest pace.

Slowest sales pace for any April since 2009. It is crazy that like the number of existing home sales are basically down to the housing crash lows, more or less. We're right there. Well, yeah, rates are ridiculous. I still can't believe. I say this all time that rates are still 7% for mortgages. that it's gone on this long. We opened up the conversation talking about, you know,

should we be worried about the long end of the curve? Yeah. But this is another thing where it hasn't totally derailed the market besides. Like, it hasn't caused a huge something besides making it more annoying for first-time homebuyers. Annoying. It totally derailed the housing market. It's a nice age. I'm saying from a price perspective,

I think most people would have assumed from a price perspective, that would have been where the derail. came from. Yeah, it's worse. You haven't even got in the prices coming down. That's what I mean. If prices came down, at least it would have spurred activity. So it didn't do anything from that perspective. All right, from Sherwood. This is a good one. They say America's homes and the people who buy them are getting older. We've been talking about this a lot lately, like the median age for the first time home buyer. But they show, so they say the existing home buyer repeat went from like 35 in 1980 to 61 now.

We talked about this last week. The first time homebuyer is 38. But this is an interesting one. The typical home that people are buying keep getting older. So the median age of homes sold in the U.S. In 2012, it was 27 years. Right now it's 36 years because they say only 9% of all existing homes in the U.S. were built in the 2010s, which is the lowest decade going back to the 1940s. So we just, we basically stopped building homes in 2010s because of the housing bust. Wow. Which is really, it's sad that like a boom and bust caused this to happen. And home buy, home, Builders just pulled back. They also show the median age of homes purchased in 2024,

and you could click on your town. So I clicked on Grand Rapids. The median age in Grand Rapids, Michigan is 42 years. And then they show the median share or the median price of a home that is less than five years old or that is 30 plus years. And it's like a, I don't know, almost a $200,000 difference. So they're showing the price of the homes, the older homes versus the newer homes. This is, I guess, just why, I don't know, you buy Home Depot and lows. If they're not building enough homes, there's going to have to be massive renovations. Right? The younger people coming in are going to want their HGTV house.

Spaces to entertain, big garages, right? Outdoor spaces, all that stuff. All right. From the Wall Street Journal, the lack of starter homes. This is a good one, too. This is one of the reason houses are becoming unaffordable. In 1950, 92% of all homes built were 1,500 square feet or less. this, remember the Pope's house we looked at a few weeks ago, that tiny thing, which apparently

the town took into like receivership and they said, no one's going to buy the Pope's house. It's going to be like a shrine or something. I don't know what they're going to do with it. Now that number is 22%. So we're just not building smaller houses anymore. And this is, you can blame a lot of people. Part of it is the consumer. They don't want small houses anymore.

Yeah. You can blame home builders, but I think people want bigger houses. Yeah, totally. One of the reasons there's no starter homes anymore and they're not affordable. So obviously builders, I think, get higher margins and higher price points on bigger houses, but consumers want more amenities. Like, if you look at what they were building in the 1950s, it was no frills, no nothing. It was a thousand square foot, a couple of rooms, no walking closets, no three car garages,

smaller houses. Yeah. All right. Moving on. Ben, you've been on this case talking about private equity coming in, coming for, retail coming for 401Ks. So the FT wrote an article this weekend talking about that dynamic. The billionaire co-founder of buyout firm Tom A Bravo has said wealthy individuals should be concerned about companies that private equity firms cannot sell ending up at funds aimed at retail investors.

Now, in the article, they didn't mention anything that it's actually happening. It was just sort of, you know, beware. So he's worried that retail is going to be the bag holder. Yeah. Now, maybe the park. Wait, where do you think that phrase came from? It's a great phrase. Bag holder.

There has to be a story behind that. Maybe someone can email them if they know it. I'm thinking like a sack, like a satchel of coins that were like maybe empty, an empty bag. I don't know. Anyway, they're not in this business yet of going to direct retail. They're still all institutions. So maybe this is them talking their buck a little bit. Isn't that illegal or is it not illegal if you disclose it?

Like if private equity giant. A, is buying one of their companies in the retail channel from their institutional-backed funds. Is that legal? I mean, obviously, it's shitty, but if they can't find a buy, and they're like, all right, these schmucks will hold the bag for us. I mean, listen, they have really great lawyers. They have 200-page prospectuses.

They, if they, yeah, unfortunately. And I don't know, maybe we'll, be as bad as I'm thinking. Oh, wait, this is Chad GPT, actually. It was a phrase from the 18th century, in the literal sense, someone stuck holding a worthless item, like being left holding a bag of stolen goods while everyone else runs away. Okay. So... Again, the problem is, if this happens, we're not going to know about it for a very long time, like how the ramifications. It takes so long for these funds to play out that we're not going to know that these results are bad for like five, seven, ten years possibly. Because the marks are

kind of old. Until you get an actual, you know, event, a company gets sold or goes public. We've spoken about this before, just a remarkable chart. This is from Morgan Stanley. Today, 87% of U.S. companies with over $100 million in revenue are private. Just wild. And then they share, the private market share of global AUM is up from, it was hovering around seven percent from 2013 to 2017. Then it broke out. And now it's over 10 percent. I think it's probably going to go higher. So this is the sales pitch, though, right? If there's that many companies that are private with that much, making that much money, that's like, hey, you're not getting access to these companies. You need access. Yeah, I think it's legit. I also think that

I think that most people are skeptical or downright cynical of private investments. And I think that is understandable, but I think a little bit misplaced. There are areas of the market that you just cannot access inside of an ETF. For example, and I'm not saying that these are good or better otherwise, but natural resources, infrastructure, litigation finance, GP stakes, secondaries, all of those sort of things, again, no commentary on good, bad, or otherwise, there is potential diversification, there's potential upside. So I think it's prudent for most people to look at these things a little bit sideways, but

to just, it's all bullshit. not all bullshit. Right. Of course. Yeah, there's a ton of money in here. And many institutional investors have done well here. The problem is the range of outcomes is way wider. Yeah. And also, how do you evaluate it by the time it's getting to you? Like, all that sort of stuff, obviously. That's why it's, my only solution is it has to be in a target date fund, right? 20% of this target date fund is going to be privates or 10% or 5 or whatever it is. I think that's the most prudent way to do it if it's going to be done. Yeah. I agree.

All right. So we got a bunch of feedback from people living in San Diego. Everyone kind of agreed with our assessment. Housing costs are too high, but it's worth it. But we were there. We were at the golf course, and the golf course looked fantastic. And someone asked us, hey, do you guys golf? And we both said, nah, we don't. I think the first time we ever golfed was seventh grade or something.

So I started way late. My dad loves golf. He golfs all the time. Oh, really? Oh, yeah. My dad golfs four times a week. So why did you never get into it? I was always doing something else. I had other sports going on.

I wasn't a dork. I don't know. It just, one of those things. I'm kidding. I just, it never, and I think because I didn't have the patience to put in the work in the time, I got, it was infuriating me because I was bad at it. Same. Yeah.

And so I never put it in the work. But, so I thought about this and I know it takes up a lot of time. And we just choose to do other things, right? Because golf could take up a lot of time. It's expensive, but I know people do love it. So I wrote this blog post, and I wrote some things that I'll just never spend money on it. Golf was one of them. And I wrote all these other things. Some of them I was just being tongue-in-cheek and funny and whatever. This is kind of a throwaway blog post, I thought. And

it kind of went crazy on LinkedIn because people commenting on it. Oh, I totally agree with you on three of those, but this one, you're an idiot. You're wrong. And it's just a really good reminder that people love to judge others, but hate to be judged on what they spend on. Yeah, that's a point. Yep, you're right. Right? But it's a fun game to play. Like, why would they spend on that? But it's all, my point is, Ryan Holiday had this thing where it's either work, family, or scene. Pick two. Work, family. Scene is like going out.

Okay. So, like, if you, you can try to do all three, but if you do, I do all three. One of them is going to suffer, though. If you put too much into one, another one is going to suffer. I feel like I balance it pretty well, not to brag. All right. Sure. You just have it all figured out.

If you need advice, you come to me. I got you covered. I wonder how he does it. Life guru. All right. The point is, though, if you know what, actually. If you go out too much, you're not at home with your family. You're missing games and stuff, right?

That's the point. I really, I'm even going to caveat this with saying, oh, I teach them. I really hate the life, judge, the life philosophers. Can't stand it. Cannot stand it. I'm sorry. I know it helps some people. My God, it drives me nuts, irrationally nuts.

I watched the liver king doc over the weekend. I don't know why. I think it was just, you know, he was on and falling asleep. That a Netflix thing? Yeah. And need this to say, by the way, that was three years ago, 2022, that it came out that he was doing steroids. I feel like that was like yesterday.

Whatever. Point is, he's a life guru guy who was obviously not exactly practicing what he preached, the nine and central tenants and you could look like me and then he was just doing steroids. But he was like, yeah, I was full of shit. But it's just, to me, it's just so transparently obvious. Like, why are you telling people how to live their life? You don't have enough problems of your own? You have it all figured out.

that you're going to, like, give strangers advice, like mental advice. It's just so fucking tires when I hate it. I do agree, but obviously there's always going to be a market for it because there's... How big is a self-help market? Is it a $100 billion market? And there's new self-help books all the time to reframe your mind and obviously people need it. Yeah. Well, I've mixed feelings because on the one hand, there are people that genuinely benefit, you know?

So I don't want to like discount that entirely. But the people that that give it on the internet. Oh, I agree. And you do wonder how many people actually It just goes in one ear or not the other And then they're on to the next self-help Because it's like, bro, you're 26 years old What are you talking about?

Yeah, how much life experience do you actually have? Like there's this book I read a long time ago called Mindless Eating And it was a psychology of food And the point, his, the one stat that stuck out to me all the time was 95% of people who go in a diet and lose weight end up getting the weight back. And I think that's probably how it is with most self-help people And I'm guessing the market for self-help

Obviously you can graduate out of it is just, I'm sure there's some people who are just constantly consuming this stuff and never actually applying it to their life. Right? You could take the building blocks from a lot of big self-help stuff and apply some of it, but it's like, well, what if there's a better way to do it

in another way? Yeah. Yeah. Once you see through it, though, it's a, I don't know. So we, last week we talked about, there was a New York Times story about people taking Social Security early and because they were freaked out.

And we got a ton of emails from people saying, and it was all the same exact tone. I'm taking, like, hand up, I'm taking it early because I've done the break-even calculations and, you know, it wouldn't break even until I'm 77 or 80 or something. And I just don't care. I want the money now. Like, I don't care what the data says.

I thought we were pretty fair on that last week. I thought that we, maybe I'm wrong. Maybe I'm misremembering it. But, like, I totally get that. I'm not going to besmirch anybody for doing that. But I think, though, if you don't have enough saved, the best way to ensure that you beat the longevity risk is you work a little longer, and then that allows you to push Social Security back.

So you work until, instead of retiring at 65, you work till 67 or 70. Then judge not, lest ye be judged. But obviously no one wants to work longer, but this is interesting. So this is from IMF's World Economic Outlook, based on samples in 41 countries suggested that the average 70-year-old in 2022 had the same cognitive ability as a 53-year-old in 2000. That sounds made up. It does, doesn't it?

So they're also saying this means, so people who are employed at 70s see a 30% uplift and earnings. But think about how many people are still working into old age now. I mean, the fact that it's a 22-year period or whatever seems almost, if you would have said in 1950, I don't know, though. But this is my point of some people who aren't, there's a lot of people out there who are not prepared for retirement. Their solution is going to be working longer.

because you're living longer. Yeah. And your brain is staying sharper, longer. Duncan is saying that, according to various market research reports, the market for U.S. self-improvement is $16.5 billion. It's a lot of coin. Yeah. All right.

I'm going to do it. I'm going to start just podcasting shirtless and going for runs all the time. And let's do it. All right, a bunch of people confirm for us. you can book Grand Hyatt Bahamara using Hyatt points. Michael, it's still there for you. They also said... Hang on, hang on, hang on.

There are blackout dates. Yes, there are blackout dates. They said there was a certain amount of rooms. Christmas, for example, you can't use points. Unless I was told, I was... I called them and I... That makes sense. I complained and...

They also said that if you use the Hyatt points, it's a really good credit card because there's no tax as a resort fees with points, which is pretty good, because those resort fees are ridiculous. It's so expensive. All right. What?

You're trying to talk me out of it? Because I'd feel free. No, it's phenomenal. No, it's... Twist my arm. No, no, no. It's a great time. All right, Lucas Shaw tweeted.

Netflix's share of TV viewing is flat from a year ago. YouTube group by more than three percent, excuse me, more than every other streamer combined. My kids are on YouTube a lot these days. don't love it. They're just like, they're just watching garbage. Yes. I was, I've been thinking about this a lot. My kids do the same. And I just think about I've been saying no YouTube a lot. I have too. I'm, we're putting like limits on it now. But I look at some of the stuff that I grew up watching cartoons and stuff and I just, is it really

that much worse than the stuff we grew up on? I don't know. I think so. I was watching Spider-Man. That was, that taught you how to be a man. And, uh, I don't know. Great. Spider-Man was a life coach, or aunt, what's the uncle's name? With great powers, it was great responsibility. That was uncle done. That sounds like something a life coach would say. Yeah. All right, so this is the article that I shared over the weekend on Friday, Ben, that I think

you called me out for. But the article was in the New York Times, a reputable publication in the eyes of some people. Why is IMAX suddenly everywhere? And this is the lead. Tom Cruise had a major request. He wanted IMAX to show his latest Mission Impossible movie and only his movie on its giant screen for three weeks. It is the kind of exclusive run that few films get. So, Mr. Cruz went straight to the top. He reached out to IMAX's chief executive, Rich Gelfand, who had some

request of his own. He wanted all the mission impossible premieres, along with press screenings and influencer screenings, to be held at an IMAX theater, and he wanted Mr. Cruz to endorse the company's screens during his global press store for the film, which opens this weekend. Did he also want to teach him how to eat popcorn? Holy shit. The viral video of Tom Cruise eating popcorn. So he ate popcorn, like how some people eat peanuts. And I think even that's weird eating peanuts, but whatever.

I'm not here to judge how people eat their food. I guess I am actually. That's a lie. I am judging. When you have your handful of nuts or popcorn or whatever it is and you just, I guess there's a hole over here, you just throw it in. It's just fucking weird. Who does that? I've never seen anyone with popcorn.

It was very bizarre. Okay. So IMAX relented and gave him all his demands? Or they each gave each other to the demands? I forget what it said. But last night I went to the theater, saw 7-10 showing. I got there, ready to get some popcorn, and I oscillate between a Sprite and a Diet Coke, depending on my mood. That's the only place that I drink soda, actually, for the most part, is at a theater.

And the line was ridiculous. I almost took a picture for the show. I didn't. But there was, I think, four registers that were open. and I, I, uh, I, I, I, I, I, I, I, I, I, uh, I, I, I, I, I, I, I, uh, I, I, I, I, I, I, I, uh, I was at 7.10. I went in there, I got there at 7.05. I went in there, like, 7.25. I'm looking, I'm, uh, I'm like, for 20 minutes. I tried to come out again, the line was still so long. Uh, so they captured, third, I got an email from IMAX over the week, uh, even on a Monday night, huh? Well, it was, you know, it was a holiday. Um, all right, so the numbers were, uh, uh, IMAX kept up, um, IMAx kept up, off the summer in record fashion. $31 million in box office for Mission Impossible, including a stunning, 20% of the domestic.

20%. And it's probably 1% of theaters. It's wild. That is crazy. So, yeah. If people are going to get out and go to the theaters, they want a premium experience. That's your selling point, right?

That's exactly right. It was a, this is from the journal. It was a Blockbuster Memorial Day weekend for Hollywood, led by a little blue alien. Disney's remake of Lilo and Stitch topped the box office with an estimated 183 million dollars. Mission Impossible did $77.5 million. All told domestic ticket sales totaled $326.7 million for the record for the holiday weekend. The prior record, not accounted for

inflation, was $314 million in 2013. So this is great news for the theater for the movie industry because the first quarter was garbage. My kids are excited about Lilo and Stitch. I'm sure you're taking your kids of that one? I am going to take them. Yeah. So this is crazy. We talked about the drawdowns with individual stocks earlier. After the dot-com bubble, I'm ex-pike for what, 95%? And came all the way. It's one of those stocks that did come back. Now, it's still in the 35% right on from the high in 2015. You got room to run here. I think so. All right, I've got a question for you. I want to know if I'm a curmudgeon or if I have a point here. You're not a curmudgeon. Dude, instead of honking out the car next to you, you climbed out your window. You're the

opposite of a commercial. Okay. I didn't say anything, but this is in my head. So, breweries have figured it out, right? If you want to get like millennials and their kids there, you have to have the beer and the food, but you also have to have, like, games or an outdoor spot for the kids. So the kids can play why the parents sit there and have a beer, right? Mm-hmm.

So I frequented two breweries this weekend and waiting in line to get a beer. At both places, the same thing happened. So it stood out to me. The people in line in front of me and there's a big line of people behind them waiting to get a beer, right? They ask for a taste of a beer before,

like one of the little cups. No, sorry. And they taste it and they sip it, and they go, and think, and think. Yeah, that's pretty. You should not be allowed to taste a beer before you order it. I'm sorry. You can't order food at a restaurant and try it and then send it back.

You're 100% right. Right? Like, you shouldn't be able to do that. If you buy a beer and you don't like it, you're out seven bucks. Well, guess what? Drink it, throw it out, get back, get a new one. Think, yes. This should not be a thing.

If this was my bar, I'd say, no. Buy the beer, don't buy the beer. One of my strong points, I'm very courteous to others around me. I'm a very considerate driver. I'm a considerate worker. I'm considerate line attendee, line cure. I care about the person behind you. It's very rude. It's very rude. It's very rude.

Thank you. I was at the beachless weekend talking to my Cabanboy, and I was asking him, because he told me that he went to the beach club next door growing up, and I worked there. It just sounds weird to say that you have your own Cabanaboy. That doesn't sound... By the way, growing up, I knew one person that went to a beach club in my town. And I'm sure there were others, but I knew one. I went to one. I visited once or twice growing up.

So now everyone has one. And a beach club is just, you have your own cabana and there's a pool there and a restaurant and stuff. It's great. Okay. So I spent maybe five years as a cabana boy. I think from like 16 to like 20, something like that. So I was talking to him and I'm like, oh, you were in the sand court. And I'm saying to Robin, I said, because Robert and I met at the beach club, I said, who was the cabana boy in the sand court in 2002?

When he goes, I was born in 2006. Yeah. High school job. So do they work on tips essentially? Yeah. Is he going to get a tax break? Ooh, that is a good question. Hey, you ever been hit by a car? No. Why? I got hit by a car last week. Okay. Like a bump or a hit?

I would say it was probably in between. Well, no, I didn't get hit. New York? I'm surprised more people don't get hit by cars in New York City. Yeah, so I was crossing the street. AirPods in? No, I was walking with a friend. And she backed up into me because I guess she was too far into the crosswalk. So she backed up it into me. Like, why are you, where are you going?

You're on 7th Avenue. And it hurt. She hit me in the arm. Did you hit the car? Like, hey, boom. No, but it hurt. Did they know they hit you? Yeah, she was like very apologetic.

But she was only going, you know, four miles an hour tops. But it actually hurt. So can imagine getting hit by a car going more than four miles an hour. Was it an SUV or a car? I don't remember. Okay. That's kind of funny, actually. So, all right.

Mission Impossible. Dead Reckoning. Is that name? You saw the one before this, right? Wasn't it one before it called? Ghost? No. I thought that was dead reckoning. Is this dead reckoning? What was this called? I can't remember. God, I'm old.

Oh, the final reckoning. Oh, the final reckoning. The other one was a dead reckoning. All right, so the movie was... The last one didn't get great, great reviews. views, but I still liked it. I enjoyed the shit out of the last one. This one, however,

I, all right, I had a great time. But, now I've said this before. Actually, I feel like I've said it the last three weeks. I have trouble following plots, especially in action films, which is like sort of there besides a point, but this was so convoluted.

Like, this story made no sense. Not that it matters to the, to the movie-going experience, but it was so disjointed. I'm excited to hear your take on it. But some of the, some of the things that T.C. did were just unbelievable.

He's a maniac. Unbelievable. Like, the peaks of the action scenes were as good as it gets. But it was, I mean, there was a lot of fat on the movie. It was two hours and 49 minutes. Yeah, that's long. Because the last one was two and a half hours or so. Yeah.

But, so yeah, not the best mission impossible, but I don't want to complain. I had fun. And that's when I go to, when I go to movie. movie, right? I'm looking for fun. Oh, that's a theater movie. That's an IMAX movie.

Not trying to talk my book there, but it really is an IMAX movie. Did you finish the studio? No, I finally watched your Ted Sarandos episode last night. I thought that was funny how everyone just kept thinking Ted Sarandos. That was a good inside joke. So I might have two left, I guess. Okay. All right.

Well. I'm finishing up some other old shows that are sunk costing. So just go ahead and I'll tell you it. Okay. So Seth, Rogan and Evan Goldberg were on the town, a two-parter, talking about the making of and the goals. And I think that the show went a different direction that I thought it would. I thought there'd be like a storyline like through the season. There wasn't.

Each episode is its own thing. Man, I enjoyed the shit out of it. Like, no apologies, had a great time. I thought the finale was hilarious. I really, really enjoyed it. Big fan of the show. Yeah, again, it's hit or miss for me. Like, I think the good episodes are really good.

The bad ones are like, eh. Yeah, but is it an hour? It's a half hour for a 40 minutes, maybe. Yeah, so it's, you know, it's quick. If you don't like it, whatever. And the fact that there's so many guest stars in each episode is. Right. Anyway, so in the finale, Brian Cranston, you're going to die.

He, uh, he steals the show. Okay. He's good. Um, we're finishing two shows now that it's kind of, I equate it to a, I equate it to a good novel. Like, there's a lot of good novels that start out really good, and the setup is amazing, and it's just hard to find an ending, right? Always. And so we're finishing you, which is a serial killer show on Netflix with Penn Badgley, and I think it's the fifth or sixth season, and it just went too long. And we finished it, and the ending was okay. But I feel like

there's no good way to end a serial killer show. It's, like, the Dexter went too long and didn't have a good ending. There's just no good way to do this. And then we're finishing the Handmaid's Tale, I think we're up to the finale now. And it's one of these things where the start was just way better. And we're hanging on because I think my wife liked both these shows more than me. And it's kind of, we're finishing because we started them. Are they still making new seasons or is it over? This is the last one.

Handmaid's Tale is, this is it. So there's one more episode. And it's kind of like, yeah, these shows were really good at beginning. And I don't know if I needed to see how they concluded. I had to because I wanted, I needed to know what happened. but the quality went down for a while. That's all I got. Markets up almost 2%.

Kind of wild. Not kind of wild. Wild. It's a bull market. The stock market wanted to move higher. I do wonder, if we never had the tariff thing in the first place, if Trump just said deregulation, tax bill, would we have had another 20% up here this year? Yeah.

God knows. Maybe we still. But that seems to be, maybe that's the baseline. Not saying the market is even a year. Stocks will go up 20% every year unless something bad happens, says Ben Carlson. No, in a rip-roaring bull market with a lot of animal spirits, I don't know. Maybe the baseline for this year was a 15% or 20% up year, and the tariff had pulled us back from that, the tariff stuff. It really is kind of incredible how much of an about-face there's been.

It seems like, of course, it shouldn't have been a surprise, but it still is kind of surprising for the rhetoric. we heard in April. I think. All right. What else we got? What do you mean? In general, in life? Yeah.

Summer? Can you believe how fast summer went? That's a preview for 12 weeks from now. On a year-to-day basis, the SEP is now up 1%. We're back in the black. All right.

Animal Spirits at thecompannews.com. Thank everybody for listening, for emailing. We'll see you next time. Thank you.