Animal Spirits Podcast - Negative Arbitrage (EP.358)

Episode Date: May 1, 2024

On episode 358 of Animal Spirits, Michael Batnick and Ben Carlson discuss: Michael vs. StubHub, inflation at Disney is undefeated, 30 years of stock market returns, the bond market correction rolls on, ARKK is finally seeing an exodus, corporations are taking advantage of consumers, the biggest AI winners, the new normal of housing prices, and much more! This episode is brought to you by YCharts. Check out the Report Builder for yourself and click the link in the show notes to get 20% off your initial YCharts Professional subscription when you start your free YCharts trial through Animal Spirits (new customers only). https://go.ycharts.com/animal-spirits Sign up for The Compound newsletter and never miss out: https://www.thecompoundnews.com/subscribe Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com 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

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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. 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. I was going to start the show with some notes, some observations from my trip to California. And we'll get to

that. But Ben, I am piping mad right now, steaming hot. Let me set the stage. Let me rewind the audience for those who weren't listeners at the time, I'll fill in some of the blanks. I went to Miami Heat Boston Celtics playoff game in Miami. This was, I don't know if it was last year or two years ago.

I think it was two years ago. And I bought the tickets on StubHub, and as I'm getting ready to hop in an Uber to go down to the game, I looked to my wallet and there's no tickets. The seller never delivered the tickets. and Stubbubb never contacted me. This was like 90 minutes maybe before the game.

So now I'm, I'm steaming mad, trying to find new tickets. I had to buy another ticket, and the prices had gone up. I don't remember how much, but I had told the story on the show. I was mad at the time. Let's say it was $150 more than my original ticket, and it was worse quality seats. Stubhubbub said, I'm sorry, Mr. Batnik. There's nothing you could do. I said, what do you mean you're sorry?

You didn't even contact me. I had to find this out that I had no tickets. And now I'm on the hook because I had to pay more money because the seats went up. I had to pay more money for worse seats. So that pissed me off. The baseline is you're not a big fan of Stubhub. Not a big fan of Stubhub. A week ago, it was a Saturday and it was, now I'm giving you details, but these are important details.

They're all part of the pieces to the story. It was 1205. Kobe and Logan, we had tickets to see Kungpoof Panda at 1230. I get an email about playoff tickets being available, and I had thought that this was like free season ticket holders, that these were either tickets without fees or better prices or whatever. So I panic bought three sets of tickets. And when I say, I panic bought, Robin's yelling at me,

Michael, what are you doing? You have to go, the movie starts. You have to go. So I'm like, ah! And so I panic bought three sets of tickets. The first set of tickets that I bought, and when I just have, I panic, because A, I thought it was a deal, and B, I was running out the door. So I didn't have time to compare.

I wasn't shopping. I thought these were good deals. There's an investment lesson in here, but I'm going to let it go. There's a lot of lessons in here. It turns out, and there's part of this as a PSA, it turns out these weren't deals for season ticket holders. These were tickets that anybody could have bought. It was just an auto-blasted email.

So I didn't even compare and shop. So you paid off-the-rack rates. Off-the-rack rates. So for two tickets for the game that is yesterday, because the show is coming out on Wednesday, we're taping this on Monday, for the Tuesday night game, I paid $1,100 for a set of tickets. So I thought to myself, as I'm, like, digesting this news that I overpaid, I'm like, oh, shit. Like, all right, whatever. I'll be able to get my money back, right?

And I knew that going in, that I would be able to get my money back. That wasn't really a question. So it's But I overpaid So I overpaid All right So I'm going to lose 100 bucks

On this set No big deal Something like that Tuesday Sunday morning I had listed The tickets on Saturday And I'm not

So I split the tickets With a friend of mine And he is the person That's responsible For the reselling So I don't I don't know anything about this I'm new to this

I'm a nob I'm a newb whale Clearly I listed the tickets On ticket master And Stubub And I forgot to, like, raise the prices higher.

So I raised, I listed them where I would take a $200 loss. All right, not the end of the world. Annoyant, but whatever. Lesson learned, right? Shame on me a hand up. On Sunday morning, which was one of the top, let's call it 20 days of my life. I'm at a dive bar in Los Angeles. Barney's Beanery, I think it was called.

Great spot. The cool Los Angeles wind blowing through the windows. I've got a breakfast burrito. I've got a Bloody Mary. I've got the Knicks winning an incredible game I am on cloud nine

Put a pin in this one Bloody Mary is overrated Not overrated Never mind Keep going So I had a buzz And I was You know

flying high And I forgot to Move the ticket prices higher So anyway They sold on Ticketmaster And they sold on Stubub That's on me I have no one to blame

but myself. So I'm not pointing fingers on anybody. However, so the ticket master, those get delivered immediately to the, to the buyer. The Stubbub ones, I have to deliver the tickets. But I'm naked. I don't have the tickets. I can't deliver him. Right. So that's why you gave us a setup, because you've been through this

before someone didn't deliver. I've been through this on the buyer's side, and it's annoying. But as a buyer, Stubbup says, sorry, get fucked. You know what I mean? Like, you're on your own. We're not, there's just a platform. The seller didn't deliver the tickets. What do you want us to do? Now that I'm on the other side of this, listen to how they treat the seller's bet.

So I bought the tickets for $1,100. I saw them for $900. Guess what penalty I'm getting? The full $900. So the full $900. I'm like, wait a minute. Okay, so, all right, so I'm trying to maneuver. By the way, this is a reverse arbitrage.

I just locking in losses, just guaranteed. Although between your car lease and this, you're just locking in losses. is all over the place. I'm just swimming in L's. So, all right. So I find out, I go on Ticketmaster, and guess what? There are tickets directly next to the seats that I, so I was section whatever row, 15, seats five and six.

So those are the tickets that I should have delivered. So I could have delivered seats three and four because those were available. So my plan was, what if I just buy those for $11,100, deliver them to the buyer, and now I'll just lock in the $200 loss instead of the full $1,100 or $1,100 loss, actually. So I asked up and they said, all right, let me contact the buyer. The buyer says, no, we're good. I already bought replacement tickets. So why am I out $900?

If there's no harm, no foul, the buyer got tickets, this is unbelievable. How is this fair? I should, I deserve a penalty for inconveniencing the buyer, for costing the buyer, for costing Stubhub, an aggravation, I deserve a penalty. But the full penalty, a hundred bucks should be on you, not the whole thing. The full penalty, when the buyer has no recourse, I was on the buyer's side. They get nothing, nothing, not even a credit. You need to go on Judge Judy for this or something.

I think this is a Judge Judy case. The buyer, when I was the buyer and I had to pay $150 more for worse seats, I didn't even get a credit or an apology. Actually, they did apologize over the phone. Sir, I'm sorry we can't help you. That's what I got. I'm, I'm hot. Do you think I have a case to be hot? 40% your fault.

Yeah, fine, fair. 60% stubbub is a, is a racket. I'm taking, I'll take responsibility for what I did, but this is a racket. I just think it's funny that you bought replacement tickets on accident, you want to buy another set of replacement tickets. Like, if you do that, you're just going on another rabbit hole of, you're going to pay more fees. Oh my God.

At this point, eat your losses. They're going to, said, they said the best they can do. is they'll give me, they'll only charge me 75%. So I'll only take a $425 loss. No, I'm sorry, I'm sorry. I'll only take a whatever. No, it's $6.75. Yeah.

Either way, shame on Stubhub. Lesson learned. Now, again, I shouldn't have listened on both sites. That was dumb. But, hey, you live and you learn, right? Stubhubhub is like the blockchain. If you make a mistake and send money somewhere, gone. Sorry.

So this is a PSA. If you are ever in the market, do not do what I just did. All right. You know, my hedge against this? I watch games on my 70-inch TV and I never go to the game. Actually, I did hedge. Credit to me. Although, maybe I shouldn't speak too soon.

I feel like I shouldn't speak too soon because this usually comes back to bite you. But once I realized that I probably was going to be able to get full face value or full, you know, when it decides to be able to take a little bit of a loss on these tickets, I bet, right? Because that never doesn't work. I bet on the Knicks. I did a parlay. Knicks and Nuggets to win the series.

So if that happens, then I'll be covered. But either way, not a great taste of my mouth. Not a great taste of my mouth. So you need to find a new app for buying tickets. I just need to not do that again. But yeah, stop up is dead to me. All right.

So I am in California and I have a bunch of notes. The first thing that I noted, was at JFK, which was just completely mob per usual, people are fed up with clear. People are absolutely fed up with clear. For people that don't know what clear is, clear is a service that basically lets you cut the line at the security. But now everybody has it.

It's useless. It's completely useless. And it's really to the point now where every time you're on the line, people are like, they should just, right? We had this conversation last night. used it. They should just, they should just do this. So people are, I think people are fed up with clear. That's over.

It's good idea. It's faster than clear now in New York. Yeah. All right, so the first thing that we did was we got our rental car and we drove to the San Monica Pier. Robin had never been to California. Obviously, the boys had never been here. So I wanted to show over the beach.

And we see there's like a robot on the sidewalk. And it's called, I think it's called a Coco robot. And it's a food delivery thing. Do you know what I'm talking about? Yeah, the box thing looks like a cooler or something. It is, just, I thought that we were like out of the ZERP excess nonsense business period. This is definitely a byproduct that hasn't died yet. It's just a horrible idea.

Looks completely ridiculous. You see rope, you see, it's a box on four wheels. So it's marketing, right? It's more for marketing than efficiency purposes, don't you think? Marketing for who? I don't know. Whoever the, isn't there like a big sign on it or something? I honestly have no idea.

It just struck me immediately as a horrendous idea. All right. What else? What else? Oh, Ben, you've been giving me a little bit of grief for buying expensive clothes for the first time of my entire life. Right? I've bought jeans that are. You have a barbell portfolio, though.

You have Instagram T-shirts and then really expensive clothes from Nordstrom or something, right? Bloomingdale's. But it's the first time in my life I've ever been to Bloomingdale. Loomydales and bought clothes. I needed clothes. I got rid of all my gap jeans that were like from 2015 literally. Like, come on, those are garbage at this point. Robin bought me a few, a few hoodies from Amazon. I thought it was called Amazon Basics. Now it's Amazon Essentials. Is there a difference? It's changed the name. Anyway, she bought me two hoodies on Amazon Essentials. Tremendous. Tremendous quality. Stuff is actually pretty nice. Like really, really good.

So I can't imagine that that was more than, I don't know. But if you're in the market for a cheap hoodie, Amazon Essentials. Oh, you know, we got a, this is a bit out of order, but we got a lot of emails on, you talk about grilled cheese. And I think for a lot of people that have made a grilled cheese with butter, like myself and Ben, there's always like the cheese isn't really, doesn't really melt properly because the bread burns faster than the cheese melts. It's true.

so we get a lot of emails saying that mayo is the move you put mayo on the bread and it's it doesn't not not for tasting purposes but mayo burns at a higher temperature or lower temperature well i don't know whatever not a chemist uh and so it doesn't burn as quickly so the cheese melts properly my solution to this my it is my solution to this is i put the cover on top of the pan so it traps the heat and melts cheese faster that's a good hack we were in so we did Disneyland and then Universal the boys had an incredible time they liked Universal better which was surprising to me better right because Harry Potter World

they've got like wands that there's like a laser on the wand where you could actually do like spells so you could like open a door and this and that and Kobe was super into it and then Nintendo Land was actually phenomenally cool and you sent me a bill

from a buffet at Disney And it was, I don't know, $300 or something for a buffet for a family of four. And I asked you, I assume the place was packed and you said yes. Beyond obscene. So, yeah, we went to a buffet because you get to meet the characters. Oh, yeah, I've done that before. Right? So Goofy is walking around.

And I got the bill and I opened it up and I laughed. It was $350. For Robin and I, it was $75 each. For the kids, it was $50 each. And Rob and I shared like a flight of, like, cocktails. Just a, and the rest of the park. $50 for a buffet for kids is ridiculous. I mean, right?

It's egregious. Yeah. Now, I said to Rob, but I need to buy more stock in Disney. I guess so. They have the greatest inflation rate on Earth. I guess there's no limit to what people will spend there, right? Like. I've got some inflation stuff in the dock here I want to talk about.

All right. Oh, I'm almost done. Actually, I'm not almost done. I'm almost done. I'll keep this quick. We want to, so at Universal Studios, there's a thing next to God called like a city walk. It's like an outdoor mall. We got Mexican food.

And I got a Casamigas repisata. Guess how much it cost? $50. $12. Oh. Okay. And I was simultaneously, eh, not bad. And also, equal parts, angry.

The Gauls. If this place can charge $12.50 and still trying to profit and other places are charging whatever, I mean, it's just totally nuts. Hey, I was thinking about this eating Mexican food. What are refried beans exactly? That's good. They just, I don't know. They fry them once and then they smush them in front. Good question. Here's a Mexican question for you. We're getting a little on tangent here, but when I was in Florida, I ordered a taco dinner, right? How many tacos coming in taco dinner? Three, right? Some of these places, this is shrinkflation? Two tacos. That is shrinkulation.

It's always got to be three, right? Okay. What else you get? You know people were complaining a lot about, you can't go out to dinner anymore for family four for less than X dollars. Guess what? Niche-nished. I had two dinners under $100.

No, it was over $100 with tip, but whatever. We had Mexico one night. It was $99. We had Italian in the next night, $99 for a family of four. Don't tell me. Don't tell me you can't go out to dinner for less than $400. $99? I don't know.

Some people still find that excessive. $99 for $9 for? a family of four? I don't know. I don't know. Okay. I had a great time. First of my life, I was able to, so we went to the car and the boys were cooked by like

the fourth day. So we took a drive around like Laurel Canyon, Mulholl Island Drive. You ever do that before? Like just breathtaking stuff. And then we went down to Red Dayo Drive and Beverly Hills. Los Angeles is the G-Wagon capital of the world. just nothing about G-Waggons. And it got me the thinking.

So we're walking, we're driving, and we're on Zillow. And just the houses here are just absurdly expensive. Do you think people in Los Angeles, in a, I'm using air quotes, modest $2 million home think they're middle class? Yes. Every time we talk about incomes or housing prices, people will say, yeah, but if you live here, then, yeah, it's got to be just, oh, I can't imagine being someone to move.

into a younger person trying to live in a city like that? No, it's completely impossible. So in conclusion, and I know I hijacked a lot of the podcast, so forgive me. But California is wonderful. I get why people pay to live here. The weather, and we got a lot of emails about this. The grass is always greener, that type of thing.

And a few people emailed, like, the weather is the last thing you get used to, right? The person in Hawaii, like, got you. He's like, listen, I just my life now, but the weather is the last thing to go. So the weather here, it's, yeah, it's just, it's incredible. I get it. Every time we go there, yes, I say the same thing. Like, God, it's so expensive, but I get why people want to live there. Yeah.

Okay. Speaking of California, one of our advisors, Gary Pulford, who is based in the Orange County area, like a month ago, asked me, hey, can you give me the historical 30-year returns for stock, sponds, and cash? I'm doing something for a client. I want to look over three-decade period. Sure. So I did stocks, bonds, and cash, S&P, 10-year treasuries, and three-month T-bills as my proxies.

And he just wanted the numbers, but I, being the over-analyzer that I am, said, I've got to look through these numbers a little bit. So I was thinking, so this is 1994 to 2023. A lot of stuff happened there. Dot-com bubble, crash 50%, 9-11, great financial crisis, housing bubble, housing bust, pandemic, just a lot of stuff sprinkling some wars in there a lot of stuff happened in that 30-year period I'm sure I missed

dozens and dozens of other crises or whatever that happened. Stock market over that 30-year period. With a lost decade included there for good measure, 10.1% per year. Wow. It's just kind of impressive when you think about everything that happened

in that. And we had booms and busts and lost decade and bonds did 4% per year, which is pretty good considering the bear market at the tail end of it. I mean, bonds really did well in the latter 90s and early 2000s. Cash lost to inflation, barely, but it more or less kept up. But so out of the 30 years, how many of them were 20% gains or more? Out of the 30 years, how many were 20% gains or more? Yeah, for calendar year.

No, it was like 12. But 19 double digits. So like four out of every 10 years, we're talking at 20. 20% gain. There's only four double-digit down here. So 80% of the time the stock market was up, even with all that bad stuff that happened. I just think if you're, we keep talking on how crazy things are, like housing prices are crazy, inflation is crazy, valuation in the stock market are crazy. Think about 10 years from now. Do you think any of these things are going to be lower than they are today? Is inflation going to be lower? Or housing prices are going to be lower?

our stock, like, there's a off chance there is. Like, it's not 100% historically. It's maybe 95% to 98% for some of these variables. But that's just like the baseline long-term thinking. You can all this short-term stuff, throw that out the window. But in the long-term, over 10, 20 years, is any of this stuff going to be lower? Probably not. So there are people that have bought into that line of thinking, hook-line and sinker,

and just are long-term investors and don't. Yeah, and believe that they will be rewarded for taking the risk that they bear. And I'm in that camp, of course. And then there's everybody else who just cannot be convinced that they will be rewarded for the pain that they have to endure. And maybe they're right, right? Like, maybe we do get a lost decade starting today. I don't know. But I guess what I'm saying is that the numbers that you just threw out and the associated context doesn't change anybody's mind who doesn't believe it.

True. And you don't get the people who benefit from the long term don't get that benefit if there aren't people who freak out in the short term. Right. You have to have some people lose in order for other people to win in the markets, unfortunately. It's not necessarily zero-sum game, but some people have to lose. All right, I looked at bonds today. So I did the, I did all these different ETF. ZROZ is one of your favorites, the zero coupon. I did TLT and then IEF, which is a seven to ten-year Treasury. IEI is 3 to 7, and then I did the ag. Bonds are still in a pretty decent correction.

So zero coupon bonds, forget about it. They're down 60%. But TLT is still down 44%. 7 to 10 year treasury ETF. This is with coupons reinvested. This is, and a lot of these things topped out in like 2020. It's still on 20%. Ag is still on 13%. Guess what? Guess what? These are nominal numbers. True. On an inflation adjusted basis, it's even add another 20% to these. Yeah, it's way worse. So, TLT is probably in a 65% drawdown right now on a real basis from the highs in 2020. And do you think it's just easier to stomach a bond bare market? Because if this was the stock market, people would be losing their minds.

Like, we've been in a four-year bear market, and it still hasn't come close to coming back. Or do you think it's because the math on bonds is easier? It's like, it's going to be hard to ever make up those returns for, like, a TLT kind of position. But the other ones, you know the nominal yield is higher now. Yeah. This is the aftermath of the ZERP era and the inflation. Like it was really a powerful, explosive combination.

And I was thinking about the ZERP era, walking around Los Angeles, seeing all the scooters. Just a reminder of all the dumb shit that got funded. Obviously, the Cocoa robot. Do people still use them a lot, though? I haven't seen anybody on the scooter. I've seen a bunch of scooters. I don't know.

But the whole thing with ZERP is like it just was a mindset. And we had this conversation during this debate. Like, do we really think that institutional allocators are taking money away from bonds and moving it into venture capital? And I don't think that it was like that explicit. But it was the subconscious attitude of it all. that when money is free and it's cheap and it doesn't matter and you'll worry about the business later, all of this dumb shit and there's stuff like Uber got funded.

Uber's a great example of a money losing company that turned out to be a game changer. But it was just a pervasive mindset that we're on the other side of now. That's all. The risk taking, yes. I totally agree. But do you think that my question is, is it easier to stomach a correction in bonds like this? has been going on for almost four years now because you can say, well, those losses are the past, but the yields here are now, and I can handle the yields.

Yeah, you know, you don't know, but you have a decent idea of what your break-even rate is going to be. You can't predict future rates. But if a stock investor, first of all, people have a lot more money in stocks than they do in bonds, generally speaking. Right. And when you're into 50% drawdown in stocks, who's to say there's no floor, right? Like, and if you're in a 50%?

correction in stocks or crash, that's because things are blowing up. And it probably feels like you could lose another 50% of your money. So it's a whole, it's a, it's a totally different thing. I'm still, I've said this many times. I still can't believe there weren't more fun to blowups from people like over leveraging treasuries or bonds that when the rates rose from zero to five, that no one, there weren't any huge like long term capital management type situations that someone got just totally wrecked on. Yeah. We've talked for a while about ARC and how, even during their huge drawdown that they weren't seeing any

outflows from investors. People were like standing pat and the Wall Street Journal has a story out this week that says that's finally changing. Investors have pulled a net $2.2 billion from the sixth actively managed funds at ARC which dwarves all of the outflows from 2023. So people like

stood pat pretty good and then this year finally they are taking so total assets are 30% down or something from a high so they went from 60 billion in assets to like 11 billion now. A lot of that is the loss is too. Wait, is just the one ETF or all of our ETFs? This is all of their actually managed ETF. So I don't know about like the biggest fund. But you can see they finally have some outflows. And so they talk about they mentioned some people in like Reddit threads saying I'm down like 50 to 60 percent of all my

accounts. I'm not sure what to do. And I've heard a lot of people say this like do I just hold on to it. It's like a lottery ticket still. But listen to the these are the last five years of returns, including 2024 for their flagship fund, ARK, up 36%, up 150%, down 23%, down 67%, last year, up 68% this year, down close to 20% again. That like, when you look at the returns like that, no shade being thrown here at Kathy Wood, but those sound like the returns like my uncle has in his brokerage account, right? They're so all over the place. Yeah. And I think that's one of the reasons so many people held on because it's like, I could have

one of these 100% years or whatever in this fund, but I can't take another, after a huge down year, another down year again. So I guess I'm not surprised, but I am a little surprised that it took this long for funds to start coming out of that. I think the reason why it probably took so long is because I would guess that the majority of the assets in ARC are satellite positions, right? Of the 60 billion at the peak, how much of that represented more than 10% of somebody's portfolio. Were there people that were all in an arc? Of course they were.

But as a percentage of total assets, I'm guessing the reason why most people were able to stomach the volatility is because it was a relatively small-ish position. Right. Wall Street Journal again today, I don't know if you saw this one, young Americans are getting left behind

by rising home prices and higher stocks. We've talked a lot about this, how young people, out of any group that has gotten screwed these past few years, they're the one that got screwed the most. If you didn't buy a house pre-2020 and locked in a 3% mortgage, you got screwed and you have a right to complain. I'm giving the green light on that complaint. I'm not a big complainer guy, but I like, I'm giving the green light there.

So the Wall Street Journal goes through this and they interview the people who, a newly married couple who can't buy a house, all these things. But then they give some stats. Americans 55 and older grew their assets by $114 trillion at the end of last year, up from $84 trillion just four years ago. this is using Fed data. That accounts really 70% of all households, which is 170 trillion or something, their share said it's 51% three decades earlier. Working age adults, meanwhile, with households under 40, have 15 trillion or 9%. Americans 40 to 54 own less than a quarter of all assets, and they had nearly 40% in 2001. And I think these numbers are actually a little deceiving because the baby boomers didn't have a generation of baby boomers to compete with, if that makes sense.

Like millennials and Gen X is competing with the largest demographic of all time before millennials, and they've had 40 plus years to grow their assets. What do you mean? Because baby boomers' parents, like, didn't have retirement accounts and didn't live long, and didn't have all the assets? Yes, and they were a much smaller cohort than their kids. So you can see this chart in here that shows it by age. It keeps going up, and the older generations keep...

having more of the wealth, that's because the rabbit going through the python or wherever the baby boomers, of course they're going to pull that up. Because millennials are going to be the richest generation at some point. They're going to get all the money handed down to them at some point. So it's not as bad as it speaks about me. The cycle will begin all over again with the next generation complaining. Yes. By the way, by the way, hold on.

Hold on, hold on. Are the millennials going to be more dominant than baby boomers? Probably. We're going to be so much more wealthy than our parents. Definitely. Yes. Like in 20 years. Which a lot of people, definitely. Millennials are going to be the richest generation in history.

It's, there's, it's just, it's numbers. Eventually, that's going to happen. There's going to be trillions of dollars handed down. People being born right now are going to hate us. Oh yeah, millennials will be the boomers someday. Yeah. Definitely. Think about it.

In 40 years, they're going to, like, people now say, oh, baby boomers, they bought their house for $8,000. People are going to say it to us, like, oh, you bought your house for $200,000. with a 3% more, something like that. That's going to be the case in 30 years. You shared a chart a couple weeks ago about equity allocation percentages going higher and people getting smarter. Vanguard released their How America Saves Report, like at least a precursor to it. It was kind of like a trailer.

They did a movie trailer for it. We're not releasing the rumor report yet. And then now for movies, they have trailers, four trailers, right? It's like, here's a 15-second trailer for the trailer that's going to come on tomorrow. It's a little bit of a teaser for the trailer. So they said the percentage of participant assets invested in equities as of year-end stood at 74%. I think Vanguard manages like $5 trillion in retirement assets. 79% of planned contributions were invested in all equities in 2023, up from 77% in 2022.

So those equities just keep going higher. In an all-time high of 64% of all contributions were invested in Target Day funds, which two-thirds of all money in Vanguard's $5 trillion retirement plans are going in all into Target Day funds. that's so that's these automatic investments right that if you don't sign up for a group of funds on your own we're putting you a target date fund so this the equity allocation is just going to keep getting higher and higher so it's young people who have these automatic investments now it's going to be people around the globe so equity allocation is not i mean a bear market crash would make it fall but the trend is going to keep being higher than it is not is there going to be, is there going to be a, nah, I'm thinking for an angle here. I got nothing. I was thinking about like the bridge between this and 24-7 trading. There was an article last week that we didn't get to, but there's a proposal or ideas being floated. And this has come up in the past, but like, is this where we're heading, 24-7 trading for everything? I really hope not. But it seems like it's inevitable. Yeah, it does. I don't, I don't know how the, the operations behind the scenes

stuff works there. I guess if it's all computer base, it's not that difficult, but I think during, especially like bare markets, the having the off switch is helpful. I think it's a good thing. It's a great thing. I don't want to be at the screen on Saturday. Right. You have 17 slacks to answer. You already have enough on your plate. We got some good memes on that of you working hard and being the person's stint. Anyway, uh, last week you brought up a proxious. and gamble doing the, their volume is flat, but their prices are increasing, so their revenue is increasing. Tracy Alway wrote about this for Bloomberg. She talked about Pepsi. Pepsi's organic sales volume contracted 2% in the most recent quarter, but pricing increased 5%. And then they

said, in the first quarter of 2023, prices were up 16%, my volume fell 2%. She's showing the shares of Pepsi are at her needle all-time highs. And I think, so obviously corporations and consumers were not the cause of inflation, that the government spending and the pandemic were the causes of inflation, right? I mean, you could add a bunch of other things, but it was the supply-driven stuff, and then the demand from, you know, all the pent-up demand and the money from the government. That was the two main causes of inflation. I think if you want to figure out, like, why inflation is being so sticky, corporations and consumers probably don't get enough blame for it for the fact that inflation, you mentioned everyone at, why would consumers be

to blame. There's no boycotting of, you know what, screw this, Pepsi increased their price is 15%. I'm going to drink Fago now. There's none of that. People are just going so there's no consumer substitution going on. An overall basis. Consumers aren't, so

this is, or the people with money are just keep spending, so a bunch of people sent us this Chipotle one. What did I say? Chipotle, Mexican Grill's increased prices six times since 2021. It is a, it was a among the first restaurant companies to say it would boost its menu prices on delivery apps, and its prices are setterized further in California where roughly 400 locations are paying higher hourly wages in response to new state law.

Traffic last year was one percent high. I'm sorry. You know which consumer is not to blame for Chipotle's price increases? This guy. I told you two years ago that I was buying, that I was boycott in Chipotle, and my Chipotle consumption is down 70% from its size. I thought you said you were still eating it. I've had it, though.

So there's still 8% below pre-pandemic level. levels of traffic in stores and people going in there. But their same store sales are up. So because their prices are higher, sure, fewer people are coming, but the people who go are still spending money. And so there's a certain amount of people that just won't change their habits. And they'll keep paying higher prices. Well, me, a man of the people, I've changed my habits. All right. I don't know if your $75 buffet is actually helping anything at Disney.

But I, and the thing is, I just don't think consumers will, it would take like 10 years of this for consumers to ever change their habits. That's my point. Good luck betting against a steamroller that is American consumerism. I guess that's my point. Right. Well, yeah, speaking of spending. So Disney, Disneyland was packed. Universal was...

Even more packed. I mean, it just, it feels like we're in an absolute boom. They never went away. I remember someone emailed us and said, some of this stuff used to be seasonal. Now it's year-round, right? For a lot of the travel places. Yeah.

And I think a part of that is because of work-from-home stuff allows people to take vacations on off-seasonal times. Here's some good news on a fashion, Ben. from Carl Kintanated tweeted this. This is from the CEO of Walmart. Quote, we are now seeing prices that are in line with where they were 12 months ago. I haven't been able to say that for a few years. The last few weeks, we've taken even more prices down in areas like produce and meat and fresh food.

Pretty good. Walmart is one of the cheapest stores on Earth, isn't it? Do you ever shop there? I got Walmart Plus with one of my 19 credit cards I have. It was like, if you sign up for Walmart Plus, you get it for free, whatever it's called, whatever they're free delivery services. And I've been using them for a lot of stuff lately instead of Amazon. Household items and food, and they are way, way cheaper than Amazon.

Oh, they deliver. Interesting. Yeah. So free delivery, if you use, and it's, if you use the Walmart Plus, which is like their prime. Hmm. So we're at Target household. So the Walmart is, I don't know, 10 to 15 miles from me, and the target's like two.

So I just, I feel like I'm at Target twice a week, just doing a target pickup. The pickup, my wife does that a lot. Yeah. It is convenient. This is a true story. It happened right here in my town. One night, 17 kids woke up, got out of bed, walked into the dark, and they never came back.

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No. What does that mean? I'll tell you. So here's from the emailer. If a driver hits another person or a piece of property causing bodily injury or property damage, the legal demands and settlements for these type of claims have skyrocketed. What may have been a $100,000 demand for damages 10 to 15 years ago, often is now a million plus with commercial large vehicle, some are $25 million plus, with higher settlement and trial-cost driving significant costs into the system, often referred to in the industry as social inflation. As the other listener mentioned, many insurance companies are struggling with profitability for this product line,

even the best managed ones. The industry can't keep up with the rising ultimate cost of the policies, which are only determined after they're purchased by the consumer. So the best way to hedge deflation is to jump in front of a car. That will do it. That will do it. You'll be good for a few years. All right, more green shoots.

This is from a Ford dealership in Little Rock. The new 2023 Ford F-150, $10,000 off MSRP. That's different. That's a change from what we've seen of the last few years. Interesting. Actually, speaking of... Wait, this also says 1.9 APR for 72 months. So they're buying down rates there, too?

Looks like it. Zerpa's already back, I guess. I drove... The rental card that we got, I got a Tahoe or Yukon. I don't know, one of those. Just gigantic. I curse at them every time I go to one of my daughter's soccer games because they take up, you can't get through the parking lot to find a parking spot.

Yeah, it's just tremendously... It's driving a pontoon on the road. Just tremendously large vehicles. And I will say parking it was not a lot of fun. Got to be hard to find a spot, right? Yeah, not a lot of fun. There should be SUV-only lots. All right, a lot of people, I feel like people are ready to,

predict the downfall of this economy at every turn? Like, anytime there's like a just a little bit of breathing room. And my whole thing about it is, yes, there's going to be a downturn at some point, but I feel like you have to give the U.S. economy the benefit of the doubt until proven otherwise. Is that fair? Yes. Innocent until proven guilty. So a lot of people were saying last week because the GDP numbers came in a little bit soft. Okay, stagflation is here because inflation is still a little higher and growth is slower. And Dario Perkins put a chart together that shows all of the big developed economies and their GDP growth for the last four quarters plotted against inflation. And it looks to me like there's, there actually is some stagflation

in places like Germany, UK, Sweden, definitely not the U.S., who has by far the best growth of anyone over the last four quarters. And yes, things were soft last quarter, but Atlanta Fed is still saying, I don't know, 3.9% or something, over 3% for the quarter. And that could change, obviously. Still pretty strong. The transcript this morning had a... We got data last week on PCE, or people's incomes rose 0.5% of March

from the B.EA. Spending grew 0.8%. Both figures aren't current dollars. So people are making more. They're spending more. And something, there has to be like an asteroid. to knock us off this trajectory. And hopefully not literally.

But like this story about people running out of excess savings and like, is that behind us? Like, are we done with that? That was like wishful. That was wishful thinking, I think. So this is the transcript posted a bunch of good macro thoughts. This is from cap of one financial CEO. I think the U.S.

consumer remains a source of strength in the economy, the tight labor. The labor market remains strikingly resilient. Rising incomes have kept consumer debt service burdens relative to low by historical standards. When we look at our customers, we see that they have higher bank balances than before the pandemic. This is true, cost income levels. On the whole, I'd say consumers are in pretty darn strong shape relative to historical benchmark. Visa CEO said something similar. TransUnion CEO said something similar. I don't know. The Wall Street Journal had an article about the share of the gross domestic product for the world and the U.S. has gone up since 2010. You can see China

has started to come in. Japan has gone down. India has risen quite a bit. India, Japan are on the same level. So the U.S. went from 20% in 2009, 2010 to 27% now or something. I do think the consumerism we have is unique across the globe. We're spenders. We're, we just, so I'm thinking, I can't stop thinking about this stub-up situation. The, the tickets that I bought for Tuesday's game were 550 each. Net of Ticketmaster's ludicrous fees which is a whole separate topic.

Dude, I did it by these are not great seats. I'm in, I'm not even in the lower bowl. These are in the 200s. Your return is even worse if you add on the frictions involved in the cost, right? It's terrible. It's horrendous. This is the opposite of an asymmetric

bet for you. Yeah, it's horrendous. Now, a lot of this is like, obviously it's been It's been forever since the Knicks had a contender. But people are spending $550 like that on a, on like not great seats. I don't know what the get in price is going to end up being, but it's going to be close to $500 just to get into the building. That's a ton of money.

Like, I've never spent that much in my life on tickets. It's, yeah. For two people, adding the concessions, getting to the arena, we're probably talking a $1,500 night-ish. Yeah, not she? A lot of money. Matt Klein had a piece about China saying, like, what's going, what's wrong with China? And he is showing their retail sales, and if they would have followed trends in 2020, but they stagnant.

You remember, our retail sales took a huge jump up and is at a new permanent plateau. China's went down. And he's saying the problem in China right now is people aren't spending enough money. They're the exact opposite of us in terms of their retail presence. we love spending money their culture for whatever reason it stagnated all right uh i told you last week i think i mentioned to you and josh i have a friend who is starting a business and it's based in ai right and i can't tell based it based at ai well whatever a i is in the name and i have a hard time telling like oh man this is a wonderful idea first

move or advantage, this is going to clean up, or this thing's going to get wiped off the map by Google, Microsoft, Amazon, Apple, Pick Your Poison. And the FT had this thing about AI talking about they compare conventional VC to Microsoft, Amazon, and their investments in this space. And last year, Microsoft and Amazon both had bigger investments in AI than the whole VC industry combined? I mean, you'd want to think the creative disruption thing would be, you know in the movie I robot with Will Smith, how the biggest corporation in the world is the one that made these robots,

right? You would assume with AI, it's like, well, of course there's going to be a new company that comes along that's going to end up being part of or bigger than the Magnificent 7. Like, it has to be. But what if it isn't? What if it's just these firms just get bigger and stronger? I mean, I want to be so Cavalier about the statement But of course Microsoft's going to be the winner

And Google I mean they already They already have everything And Amazon Who's competing? It's kind of like They're funding these things But it's like IBM was there

IBM was the company for decades And then they just got left in the dust And so you'd think historically That would be what would happen But I just don't It probably won't this time To your point Like the baseline assumption

Is these companies are going to get bigger And stronger because of this probably well there's there's people in that camp that are like who's competing with these companies they're funding all the innovation who's gonna nobody's gonna sneak up on them right or if there's a competitor they're gonna buy them right exactly exactly so there's people that are in that camp and there's other people that are like well look at history look at the turn around the top 10 and it's like come on this is you have to be open minded to the fact that yeah it's different this time it absolutely is the funny thing is that there's a lot of people who who anytime you talk about government intervention or government spending are like, I want free markets. Like, they used to be free, like, which has never really been the thing. Like, the government has always intervened in everything. But if you want to see free markets, this is the magnificent seven is free markets, because there's been no regulation on breaking them up. Right. Right. So this is,

we have free markets. And what you get is these huge companies that have no competitors, but each other. Ben, you know what? Like, there's this, uh, there's a cohort of people who were upset about buybacks and think that companies should just spend more money on R&D and developing projects, right? So Apple. It's a waste of money.

What are they doing? Apple, one of the biggest money makers, best companies of all time, best allocator of capital, et cetera, et cetera, all the accolades. Bloomberg wrote a piece this week saying that the company

spent a decade and 10, billion developing a car that will never see the light of day. It spent eight years and many billions more

creating the $3,500 Vision Pro a device that won't become a major money maker for years. So I just say, this is like, be careful what you wish for.

Not, did Mopison do a piece on this? Somebody, if I think I read a piece years ago, maybe just a little more, I can't remember

that like R&D is often like a net negative. Like, finding a good use of capital is really, really, really hard. Right. It's almost like a lottery ticket, right?

And oftentimes when these companies are like swimming in free cash flow and whatever, like giving it back to the shareholders is not a bad idea. Let them reallocate it somewhere else. I was worried about the Vision Pro taking over and people just having headsets to their faces. It sounds like Apple has already cut back on this a little bit and the demand is lower than they thought. And they said like their planned update and 2025 could be canceled potentially.

I mean, you said, like, the experience is amazing, but there might not be enough apps yet. So I, you can't exactly call it a failure, but are you surprised that it seems like it was in, it had its moment there for a couple weeks, and then, I don't know, you don't really hear about it much anymore. And you don't see it out and about much, unless people are using it on their couches,

but do you think it was, it kind of flopped a little bit? Yeah, I'm not surprised. I mean, I think this is like more or less consensus, no? I don't think anybody thought that the Vision Pro was going to be a monster hit. I don't know. Maybe there's a revision of accessory. I don't know.

You got a lot of publicity when it first came out. No, of course. And rightfully so. It's a magical product. But I think most people were pretty pessimistic on the prospects for this being like a giant category today. I don't think Amazon, I don't think Apple probably expected it either. True. All right.

Let's talk housing prices. I was having a conversation with a friend at a birthday party a couple weeks ago. And we were just kind of doing the thing you do as middle-aged people. talking about like, geez, did you see that new housing development going up and how much they're selling the houses for? Like, can you believe they're selling houses for that much money? It's like this new housing development, it's in a pretty good location, but like, you know, like one and a half million to two million dollar homes in Michigan, Grand Rapids just seems egregious for not, you know, you're not like on a lake or it's not like a hard, a really nice place they'd want to be.

And we were talking like, I think the new normal of housing prices is just something people are going to have to get used to, right? So. Yes, it's not going the other way. Someone sent me this article from 0.2, and they said, how fast did the 100 biggest housing markets in the country? How long did it take their housing prices to double? And 68 cities saw it happen in less than 10 years. So prices have doubled in some as recently as 2019,

which Detroit was one of those places. Homes in Miami and Tampa have doubled since 2018. Baltimore and Spokane, Washington. same thing. Buyers in Irvine, California in the last seven years have seen the prices go from $750 to $1.5 million.

There's no going back, unfortunately. No. Even if prices fall 5%, 10% would be a huge correction historically, we're not going back. Michael J. Fox,

you know, or Doc, we have to go back. That's not happened. I don't know. Was that lost? Oh, yeah, that was Jack. Did you ever get lost? Yeah, we have to go, yeah.

I loved loss. A big loss guy. Okay. Connor Sen had a good piece on how higher rates now are going to make housing worse in the future. Anyone thinking the Fed's going to fix the housing market, it's just not going to happen, unfortunately. Like, whatever the – if the Fed raises rates, it's bad. If they lower rates, it's bad. He shows that they had this big boom in production, especially in apartment complexes,

and you're seeing places like Austin where rents are falling because they built so many apartments. But now that rates have risen, basically the building is going down again, right? We had this boom in new homes being made. We got a boom in apartment complexes. Higher rates make that hurdle rate way bigger to buy those, and the cap rates are way lower. So he says, with the labor market in good shape and large numbers of millennials still under house,

shelter inflation could stay warmer than the Fed would prefer for years with central bank policy itself being part of the problem. Meaning if we're building fewer units now, and you still have this demographic wave of millennials coming, in Gen Z right behind them, that that portion of inflation, that's not going to help matters

if we're not building enough. And having rates be higher now is going to set us up for more pain, whatever, three to five years down the line. Which I completely agree with. There's no incentive for these builders to build with mortgage rates 7%. This is going to be a problem

for years and years to come with no easy solution. Yes, definitely one of the biggest stories in the economy. Ben, let me ask you. You see this, are you as surprised as I am that these gigantic companies can still be so volatile? Stock, this person's Stock Talk Weekly tweeted. Meadow was trading at 510 yesterday.

It's trading at 410 today after earnings down 17%. This move constitutes a one day loss of nearly $250 billion in market cap, which would be the worst single-session value loss of any stock ever. And then you also have Tesla, another. behemoth mega cap stock up 31% in 40s. What does this tell you about market efficiency or lack thereof or, I don't know, like, I'm shocked. I mean, I don't know if I should be or shouldn't be, but maybe not shocked, but just like, yeah, shocked, that these gigantic stocks could just swing like that.

It's just kind of wild to me. It is weird that you can have a 1987-like crash in stocks that are this big, right? I think what this says is that you can never arbitrage out herd mentality. Like the herd mentality of piling in and piling out, you're never going to be able to change that. You're never going to make it more orderly when someone hits the buy or the sell button when there's a piece of news like this. I guess that companies can, particularly after earnings, like that companies can, I don't know, that in not what companies can do. That investors can be shocked to this degree and have a 17% sell-off in the average. after hours, immediately following an earnings release is just, it's just a mind-blowing shit.

With as many analysts that follow these companies and track them, and now we have satellites that track, you know, the supply chains and knowing as much as they know about companies now, way more than they did in the past. And yeah, you're right. And they still could be surprised. Well, this also gets to the fact that, like, I think a lot of newer investors would maybe look at an earnings report or just see the headlines and, like, not understand how a company can beat under the top and bottom line.

beat estimates and still go down or the opposite situation. But there's two things. Number one is that if a company was up 90% over the last one month's running into an earnings report, then obviously it's a buy the boomer, sell the news type of thing. But you could also have a thing where not only will a company like beat, but they'll have record revenue and record earnings. But that doesn't matter because that already is in the price. The market already discounted that.

it's always it's always about guidance and looking forward and I guess even with all the analysts in the world like you don't know what a company is going to guide towards how could you right the numbers like you said record numbers but the CEO says one line and the stop drops 10% in two seconds yeah it's not about what you just did you don't get credit for what you already did yeah I guess I guess that's why it's so hard to trade in the short term because it's all expectations based because the in the right and that's yeah because when these companies are when meta and Netflix were down 70% their numbers weren't great, but they were better than people expected, and then they shot up, and now it's the opposite. All right, we've talked for a while now about how, like, there's record amounts of net worth, and especially with people on the upper end. But not everyone. This is from the AARP. Someone sent this to me about one quarter of U.S. adults, age 50 and older, who are not yet retired, say they expect to never retire. 70% are concerned about prices rising faster their

income. One in four have no retirement savings. according to research released by the ARP. So even if the top 50, 60% is seeing massive gains in net worth, there are still people who are unfortunately never saved or being left behind for whatever reason, circumstances, bad luck, whatever. This is why Social Security is such an important benefit, though, because that's going to be the whole kit and caboodle for, and it has been for, you know, 25% to 50% of the people, pretty much.

It's going to be the majority Is this the first time You've ever used Kit and Kubutal on the show? It's possible Yeah Trying to keep in your toes here It's a good phrase Anyway

Just looking at the other side here Okay What else we got? Any of the random stories from California Before I go into my coaching diatribe? No I do have one thing we were uh it is funny like how people think about spending and what what is an acceptable thing to spend money on and what isn't i'll give you an example last night at dinner we were talking

about robin and i going through the neighborhoods are just hopping on zillow and somebody might have been duncan was like zillah should charge a monthly subscription fee to use the platform and i was like that's a terrible idea like they want as many users they don't want to create any friction They don't want as many users on the platform as possible. Like, that's their business. And Doug, it's like, you're telling me that you wouldn't pay a nominal fee for using Zillow. And I said, yeah, I am telling you that. I wouldn't pay $2.99 a month for Zillow, which sounds ridiculous, but I just wouldn't pay for it, would you?

Yeah, I would. I would. I love Zillow. So do I. But if you're not in the market for a house, you would pay for Zillow for what? The thrill. For what? There's something about it. I don't know.

There's something about it. I'm like, you get hooked on it. But you're right. Another, I would, I probably would pay, though. But I'm just saying it's weird where people draw the line, right? Like, I'm drawing the line at $3 for Zillow. I'm just not doing it. Last night, another thing happened last night at dinner.

This was as close as you could possibly get to saying something to the waiter. There's a topic of the show, right? When do you say something with you not? Kevin ordered a martini. And one of the great things about the martini is the glass, right? Ben, you know this. Yes, that's a sales point, yes. For not frequent listeners, Ben, Ben doesn't believe that the stem or whatever the glass it's called

enhances the quality of the drink, and he's wrong, he's just wrong. It's part of the whole package, and it makes a drink taste better. I say that the only reason people like martinis is because of the glass. I mean, that's absurd. That's just an absurd statement. If it was in a regular cup, you would not drink, you'd not think a martini is nearly as good. If it was in a red solo cup.

Well, yeah, agreed, because it wouldn't taste as good. It would not taste nearly as good. Anyhow, Kevin ordered a martini, and it came in, like, it came in like a glass. It just came in like a highball glass. It was very weird. And we were, like, laugh. Like, do you say, like, hey, I was kind of hoping for a martini glass?

And that's as close as the line to you could get, to be like, I'm not going to say anything. I'm not going to say anything. Yes. I'm sure they have their reasons, but that's a weird choice. I agree. Yeah, it doesn't go there. All right, so coaching, what's on your mind?

You do a lot of sports with your kids. We do, I don't know, soccer, football, basketball, baseball. We have a lot of different sports in our family. And we're transitioning a little bit from, like, parent-only coaches to, like, actual coaches in some of these leagues. But still, I've seen a lot of parent coaches. And I just think that- Whoa, whoa, whoa, whoa, whoa. I'm sorry, I'm sorry.

Actual coaches? What do you mean? Well, like someone who's not a parent. Like, my daughter's on, like, some club soccer team. It'll be, like, an actual, like a coach who coaches and not necessarily just a parent. Okay. And she's, what, she's almost 10? She's 10.

Okay. Which seems excessive, but this is what happens these days. I can complain about club sports later. So I've seen a lot of, you know, we started our kids pretty early, like, I don't know, four years old or something playing soccer. And so there's different types of coaches, and I've seen a lot of them. The first one is, I have no idea what I'm doing, just trying to survive here, right? The coach who obviously has never done this before, they're doing it because no one else volunteered, and their significant other, like, made them do it.

And you can tell, because the other parents get annoyed, and it's like, well, why didn't you do it? I don't know what I'm doing here, right? That was me with baseball last year. I got roped into it. I have no idea. I'm not a baseball person. We have one of those coaches. It's Kobe's team.

Yeah, it's one of those coaches where the dad, like, he should, I mean, you know, he should not be coaching. And I get it. It's, I'm not, other than I don't want to do it, but, but he definitely should have to be doing it. Yes. So that, everyone has that cut. The other one is, my kid is definitely going pro, and I'm giving them the damn ball every time, right? Like, if it's, you kind of know, like, you're close to scoring, it's like, oh, coach's getting the ball here for sure, right? Yeah.

So there's that one. And there's also the one that, uh, the really hard-o coach on his own kid, but very nice to the other, the other kids, right? So they also secretly think their kids going pro, so they're super duper hard on them. but they're very nice to the other kids because they have to go hard on their own kid. Right? So those are kind of the coaches that I've... I think that kind of runs the gamut, right?

I'm not built for the, like, the youth sports world. It's too intense for me. It's a lot, isn't it? And it gets intensive. It's very cringe. It's very cringe. And you learn a lot about people. It's like, didn't know that this guy was a psycho, right?

Yes. I could do a whole other list of parents. that you see at these games. Though that's the weird part is the parents. Here's the two rules for kids. First of all, you never brag about your own kid besides to your spouse or maybe the grandparents, that's it. About anything.

School, sports, no one ever wants to hear. I don't care if your child is a prodigy. People only want to hear about someone else's kids messing up. They never want to hear about them succeeding. Right? Like that's just, and I'm sure I've done this before, but you try not to. Number two is you literally can never say anything bad about

someone else's kid in sports. Like, why didn't they do this? What are you thinking? It's only encouragement and cheer. You cannot like ever comment on another kid making a mistake. Oh, you definitely keep all the kids' names. You kicked it in the wrong goal, but you cannot say anything. No, no, no, no, no. Ever. I, uh, yeah, recently somebody, somebody to know where it was always saying how brilliant this person in their family was. Just brilliant for years. Brilliant. And when it comes time for the person to go to college, the truth comes out. Let's just say that.

Let's just say that. Right. Yeah, I just, I just, like, have you, I mean, you've heard this before. Other kid parents who can't help but say my kid is so gifted in this, they're the greatest player in this. At school, they, and I literally could care about nothing less than hearing about your kids' accomplishments. No one wants to hear it.

No one ever, I would never want to tell someone, and I'll catch myself if I think I'm doing it, that like, oh, my kid did this, you know, no one. cares. Maybe the grandparents and your spouse. That's it. In the no one cares universe, which is a big universe and probably deserves more attention that it gets, is like this is

even lower than fantasy football. Like nobody cares about your fantasy football team. Don't even, don't even. This is even lower than your dream you had last night. Dream, fantasy football, your kids' accomplishments. Right? All right, Ben. So we have two recommendations.

Oh, wait, before we get there, I just want to point out, hold on, hold on. Did you see Tom Brady's resume floating on the internet? No. Look, he's just like me. Summer 1998, Polo Fields Golf and Country Club. He's a sales rep. Developed interpersonal skills and exemplified flexibility in order to better serve club members. Gained invaluable experience working under club profession.

I mean, this is, you know, all... Wait, Tommy was at Merrill Lynch? He worked at... Yeah, he was at a assistant senior... What did he learn? Let's see. Research stock... Oh, Tommy.

Research stock and mutual fund reports while updated client portfolios gained knowledge of broker activity and day-to-day administrative duties. Now, he also happens to have elected team captain of the 1999 University of Michigan football team. Credit to him.

So, he did have some things that I didn't. That's for sure. All right. Any good movies on the airplane? I watched two movies Anyone but you Standard romcom Fun

It's a good I recommended it to someone this weekend And they said like It felt like a throwback romcom That's how I described to do I was cute I watched ISS International Space Station movie

And it was This is one of the great trailers Where they're in Space The Russians and the US Oh that's right By the way, a Russian... Explosions on Earth.

Yeah. A Russian astronauts called cosmonauts, or did I make that up? Or what is it cosmonaut? Yeah, that's right. Is that a Russian astronaut? You got it.

Is Cosmonaut a Russian word? Or is what we called them? Oh, wait. I don't know. Anyhow, the movie should have been great. They're on the spaceship and they see, like, a bunch of things blowing up on Earth. No, that is a good point.

Why aren't they just called astronauts instead of cosmonauts? No idea. Okay. Anyway, the movie was not good, unfortunately. It was watchable, but it was a great concept, bad movie. Okay, two things. Man, Delta, and I'm a shareholder, some buys, but they've got their shit together, Ben. You know, you can't find Angels in the Outfield, right?

It's one of those movies that, like, just vanished from the ether. It's not on Prime on Hulu. It's not on any of the services. You can't find it. Yeah, I have a streaming app where I check. It's called Just Watch. And some movies, you'll type it in and it'll say it's not able to, anywhere. It's like, what am I supposed to do?

Nowhere? Guess what? If you want to watch Angels in the Outfield, get on a Delta flight because it's streaming right now in Delta. One more thing. You know the movie Kazam with Shaq? Mm-hmm. Like, I remember years ago, Josh had told me it wasn't a real movie. They only, they only, like, made a trailer and did, like, promo.

It was fake. There was never an actually Kazam movie. I'm like, what? Is that real? And I was like, Josh convinced me. I don't know, I don't think he was. Josh convinced me that there wasn't a movie. Well, guess what? I watched it back in the day. Kazam was on Delta.

Not great, right? Did your kids watch it? No, no, no, no. No, Shaq's movie, not that great. I finished two shows last week, and I think they're not for everyone, but I enjoyed both of them. I finished Ripley and I finished Shogun.

Ripley's probably too slow for a lot of people. Black and white thing I already complained. Got that out of my system. So here's my take, the movie. The first two-thirds of the movie were amazing, and I thought it kind of petered out the end. This show wasn't as good at the beginning, but the end was way better than the movie. I like it. The further it went along, the more I liked it. Uh, showgun...

Wait, somebody, wait, hold on. Hold on. Somebody emailed us about a great black and white recommendation. You've, you've must have seen 12 Angry Men, like in high school or something. No. What year did it come out? Really? I don't know. I've heard of this movie. It's pre-1970. I'm not watching it. 50s? I'm sorry. And then I also finished Shogun, which I thought didn't quite live up to the hype of like the first episode or two. And it's the kind of show you definitely have to pay attention to because there's a lot of subtitles. And it's also a little hard to follow, like, because they kind of have some twists. But I thought it was really well done. And I'm, the Japanese people are very principled.

It's like, listen, I was disloyal to you for two minutes. I'm going to cut out all my guts and I want you to chop my head off because that's what we do. Like, they follow their principles and they're like to a T. They have honor. They have honor. You know us, you know, you know, you know what? who has no honor, stubbub. That's true. They would not kamikaze themselves. I remember my parents watched The Godfather Part 3 for the first time

in the 1990s when it came out and just hated it because the first two were so great. For some reason, I've never watched the third part. And so I find that it was on Paramount Plus, and I watched it. And I know it's been panned for years and years, and I thought, I've got to give it a try. It can't be that bad. It's that bad.

It's just everything anyone's ever said about it. it is true. It's just not a, it makes no sense compared to the other two movies. It's awful. Waste of time. Don't watch The Godfather part three.

I never will. Okay. What do you say the best airplane movie ever is here? Oh, oh, oh. So this was on Delta. I did not watch it, but I've only seen this movie once and it was on an airplane 10 years ago.

Focus. You ever see that Will Smith movie? I've seen him multiple times. Is Morgan Robbie in that? Yep. I've only seen it on the airplane, but I feel like that, if I had to describe like the perfect airplane movie, that's near the top of the list. I love a good con artist slash heist movie. That was a good one.

Very good. Okay. How much longer are you in L.A. for? We fly out Wednesday morning. All right. Good luck fighting with Stubhubh of the rest of the week. I hope you cool off a little bit. Have yourself a Bloody Mary to feel better?

Tomato juice doesn't do it first of the side. Bloody Mary's overrated. That tomato juice is gross, but Bloody Mary's are great. Okay. Animal spirits pod. No, what is it? Shoot. Animal spirits.

Animal spirits at the compound news.com. See you next time. You know,