Animal Spirits Podcast - Netflix vs. Paramount (EP. 442)

Episode Date: December 10, 2025

On episode 442 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠��⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss huge losses in the Nasdaq 100, 2026 outlooks, OpenAI, 401k millionaires, consumer spending vs. a slowing labor market, money without meaning, price cuts on housing are accelerating, baby boomer riches, Netflix and Paramount vie for Warner Brothers and more. This episode is sponsored by NEOS Investments, Exhibit A, and Fidelity Trader+. Explore NEOS Investments’ award-winning lineup at https://neosfunds.com. To book a 20 minute demo of Exhibit A with Chart Kid Matt, click this link: https://calendly.com/matt-exhibitaforadvice/20min. Or, start a risk free 7-day free trial: https://exhibitaforadvice.com/register. Learn more about Fidelity Trader+ at: https://www.Fidelity.com/TraderPlus 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. NEOS Disclosure: Investors should carefully consider the investment objectives, risks, charges and expenses of Exchange Traded Funds (ETFs) before investing. To obtain an ETF's prospectus containing this and other important information, please call [phone] or view/download a prospectus at https://neosfunds.com. Please read the prospectus carefully before you invest. An investment in NEOS ETFs involve risk, including possible loss of principal. NEOS ETFs are distributed by Foreside Fund Services, LLC. 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 sponsored by Nios investments. Markets remain unpredictable, rate expectations keep shifting, equity volatility persists, and questions around tariffs and the AI trade continue to drive uncertainty. As investors consider portfolio positioning for 2026, Neos ETFs may offer a way to stay invested across equities, fixed income, and alternative asset classes, while seeking outcomes like monthly income, enhanced tax efficiency, upside potential, or in some cases, a measure of downside production. award-winning firm behind the etf.com, Best New Active ETF, and ETF Express, Best Options Strategies, ETF issuer, $1 to $10 billion, offers a suite of options-based ETFs that

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and for advisors that are listening head to ExhibitA4advice.com to learn more. Hey, listen, every week I'm giving Matt ideas. Hey, Matt, how about this chart for chart of the week? How about this one? And we're building them together. So that's like up-to-date charts too. You're not going to get that anywhere else. Matt Chiby.

That's right. 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. Let's get out of the way quickly here. Every week, people ask Ben, what are you wearing?

It's like I feel like I'm on the red carpet. This is a Marine Layer sweatshirt again, okay? I'm just going to put it out there, so I don't have to answer questions. All right. We spoke about Chart Kid Matt a second ago. He had a great chart on its blog. I told him, so he has got, it's Chart Kidmat.com. I said, hey, man, you need to do a chart of the day.

I don't want to, like, give you too much homework here. Chart of the day. Chart of the day. We give him a ton of homework. I said, all the charts that we ask you to do, just put it on your blog. You can do a chart of the day. He said that maybe that's too much, but, so he's got this chart that shows a sector drivers in the 2020s. Okay, sector contributions for the S&P 500.

And no surprise, tech is a big, huge weight. And of course, Com Services put those together because Com Services is what? Meta. Google. What else? Google. Okay, so that's basically Tech. So if you put those two together, tech and comm services account for nearly 80% of the total return this decade in the 2020s.

Not hugely surprising, but still a gigantic number. Yeah, massive. Massive, massive. All right, this was... Sorry, my point here is this is the Bessimbinder study, though. The history of the stock market is a handful of winners

drive the majority of the gains, and that's what we're seeing in the 2020s. For Exhibitist chart of the week, Matt compared the tech bubble peaking. Now, I took a little bit of umbrage with this chart. I said, hey, I don't get it. Why are you using... Why are you using...

Gosh. Dang, my eyes are bad. It's from June of 2024. No, I said, why did you use June 2010 as the start date? And his point was, if the market were to peak today, comparing that with the previous run-up to the tech bubble peak, that's where he got June 10th from. But whatever, the starting point aside, the point remains, obviously, this looks nothing, nothing like the run-up to the peak from 98 to 2000.

When the NASDAQ, like at that point, the NASDAQ, we should probably have these numbers handy, but whatever. From 95 to 98, the NASDAQ 100 or the NASDAQ composite was up. How much was it up? 300%? Whatever it was. And then the final, like, a year and a half to the runup, it doubled again. Yeah, it was like 500% up that whole last five years. But here's the thing.

Those returns were more compressed. You could say these returns are way more spread out. But the magnitude, it's just not as compressed. The magnitude is still pretty great when you look at it over a longer period of time. Yes. So I had Matt create this chart with me I gave him the data he created the chart That's kind of how it works here

And I had never looked at this before I know the S&P 500 returns pretty good Like I can I can They're all up here The NASDAQ 100 I don't know as well So I looked at all the NASDAQ 100 annual They're not all up there I'm not gonna quiz you right now

But come on Give me a year In the last 20 years All right That's my party favorite trick So I looked at the NASAC 100 returns to show how random they are Going back to 1995

And we ran these numbers And Matt and I looked at this and go, huh, this is really weird. So first of all, the thing that stands out is, well, there's way more gains and losses. Out of the last 31 years, and this includes the dot-com bubble, obviously, popping. 26 out of the 31 are positive, including this year. But then we looked at the negative returns, and we go, holy cow, this is crazy. Literally, there's five down years since 1995. Every single down year is 30% or worse.

Is that not in, like, I had no idea that was the case? This is a face blower and a melter as well, both at the same time. Look how bad the dot-how bubble bust was. Down 36%, down 33%, down 37%. Imagine losing more than a third of the value every year for three years. Back to back to back. Yeah, that's insane. I guess I got to be honest.

I would have stayed away for stocks for a decade at least. It is kind of crazy that tech people kept so optimistic. Obviously, there was a 10-year period like a winter there. Who says they stayed optimistic? Well, I mean, they kept, they got back in somehow. But yes, so 2022 is the last one before that was 2008. So every single down year has been a loss of 30% or worse than the last 30 years, which is just absolutely insane when you think about it.

That is insane. So the S&P, in this same time, the S&P's had one down 30% year or more, and that was 2008. Good golly, Miss Molly. I'm going to go out on a limb and say that this won't hold forever. Not every time the NASDAQ 100 falls, will it fall by 30% or more? But this is a hell of a chart. Why, I did not know this. So since 1995, the NASDAQ 100 has compounded at 15% per year.

The S&P is 11%. And this is inclusive, obviously, of two, I guess if you call this a bubble, it's two bubbles, and then one huge bursting, which I think the NASDAQ fell 83% piqued the trough after the dot-com bubble. And so inclusive of an 80% crash, you've still got 15% per year annually, which is just insane, plus five different face rippers of county returns, and three back to back to back. Wow. Anyway, just I just, this is one of those, huh, I did not know that. All right, I don't know if 2025 was a particularly strange year, but for me personally.

Every year in the 2020s has been strange. That's true. There is, there to me is a pre-COVID, post-COVID. Everything in my life now, I almost look through that lens. Like, it's almost impossible not to. No, 100%. Watershed moment for civilization. 2020 today is a bit of a blur.

Yes, for sure. The world just feels totally different after COVID happened. Although, annexed it coming in, the train station in my town is back to normal. I know office occupancy isn't. Subway turnstiles aren't, but it feels like everybody's back to work. And what do you think it was? No, it's not five days a week, of course. But I go in on Thursday, it's packed.

The parking lots are full again. But a couple years ago, it was, what, 50% full, 75%? Yeah. All right, anyway, I say that because I was looking at, I was revisiting my 20, 25 predictions, which I haven't looked at since I made them. And I honestly, like, I remember writing this. But if you asked me to name one of my 10 predictions, I don't think I could have done it. Like, I totally forgot what I wrote.

Bitcoin's going to crash. There's going to be a correction. What did you say? Oh, here they are. No, they're right. Anyway, these are all news to me. So let's see how I did. You know what I did this year?

I did it in gambling odds, right? I like, because I think a couple of years ago, I said a few things that were like outlandish. Obviously, like, it was a long shot. So I wanted to make sure that I staked my claim. Right. If you call them surprises, no one can call you out of them when they don't happen. I like the odds thing. Yeah, okay.

All right. So private investment surge was number one. That was my table pounder. I probably should have brought data to this conversation, so forgive me. But I'm pretty sure I got this one right. The little hiccup a couple of weeks notwithstanding a couple of weeks ago. Yeah, someone might take umbrage with that because of the Blue Owl thing, but that doesn't mean the money stop flowing. That has nothing to do with my prediction.

So I remember I listened to Blackstone last quarter, as I always do, and they did have record flows in the third quarter. So I feel like I need data to make sure that this is accurate, but I feel like green check here. I feel like with all things, the headlines versus the data will tell you two completely different things. Sure. All right. DGents aren't leaving. They're not anything leaving. Yeah, sure. The DGent Dow had a hell of a year. Actually, in fact, this. was a great year for degenerate stocks. I ran Aklo, Rigatoni, all those stocks. Absolutely. So, that was right. Money stays in money market funds, 75% chance. Nailed it. It's almost up to

$8 trillion. I would tell you that this is a, this is an easy pick, but you were on this way before anyone else. You were saying a few years ago. Yeah, I was earlier here. You were saying it before and it was cool. Yes, I agree. That seems like an easy one now, but you did nail that one early. All right. So, all right. So here's the next one is a 71% chance. So these four, I was very confident. And 70% chance are better. Mortgage rates remain high. The housing market stays frozen. Check.

For sure. Okay. This was a Grand Rapids hedge, if there ever was one. Equal weight outperforms cap weight, 52% chance. That's right down the middle. That's a coin toss. That did not happen, correct? Equal weight is lagging.

No, yeah. Definitely market cap is beating. Okay. Invidia, to disappoint on an earnings release, stock closes down 10% on the day. Half right. You should have said closes down 20%. percent then half right so it did fall 10 percent on a day but that was during back in deep seek

remember that oh yeah but it did not disappoint on earnings um vick so hang on so s&p is up 18 percent equal weights up 11 all right so big miss um okay in vid okay i said that already vick spiked to 50 41 percent chance nope we didn't get to 50 during liberation day what did we get to oh uh you know what you might have did i don't okay you know what maybe i'd Maybe we did. So I actually looked at this. A Vick spike to 50 does not happen that often. You think it happens every year?

It doesn't. Wait a minute. Like 40. No, no, no. No, we did get there. Okay, check. We did get there. Intra day.

All right. Yeah, I thought it was, that makes sense. All right, micro strategy levered ETF blows up. That was. So I got a couple weeks of that one to happen. No, no, no. That didn't happen. That was a 3% chance.

What I meant was like literally go cabooey. haywire and fall 90% in a day. Now, the micro strategy levered ETFs are down like 99% or whatever. I mean, they're down a lot. But in fairness and in the spirit of what I was writing, I meant that literally like the swaps that they were using were going to go haywire and the whole thing was going to unravel in the day. That did not happen. Right. The worst performance at 24 will be the best in 25. You know what? I apologize. I should have looked at this before I put these in here. I do remember writing about dollar general and dollar tree specifically. And that did happen. In fact, I know what I mentioned. I mentioned dollar.

Dollar Tree or general as some of the best and Modana as well. I did buy both of these stocks. I cut my loss on Moderna because I was a crap stock that did not. I'm going to say that one's wrong. I'm going to be wrong on that one. That's a red X. Fine. But specifically, I mentioned Dollar Tree.

And that stock is one of the best stocks of the year. Okay. All right. This was a high degree of difficulty here. I really called my shot with this one. This was getting very cute. Momentum keeps going in the first half, but we have a double-digit correction in the back half

and down on the year. I gave myself a 1% chance, so absolutely wrong. Correction was the first half story. It was. It really was. And then the obligatory, something comes out of nowhere that makes at least have these predictions look very dumb. 90% chance of getting that one right on and I did.

Liberation Day came out of nowhere. So those are my predictions. Not bad. Pretty good, actually. 4 to 10, 5 out of 10? We're on course to have an average up year. My average up year is 20 to 21% gain. We're right on track for that.

Very business as usual. Yeah, like always. Okay, so this chart was making the rounds. This is from Joe Wisenthal. So Jim Reed via Joe Wisenthal. Wait, can I show something? Joe and Tracy are coming on T-CAP this week. Oh, nice.

Yeah. We're crossing of worlds here, huh? Okay, showing how much open AIs expected to burn before turning a profit. And this shows Amazon and Spotify and Tesla and Uber as they're ramping up, right? And it shows, obviously, the open AIA is burning way, way more money before turning a profit. it. And obviously, it seems to me like if Open AI was a public company, it would be down 40% right now. At least. Right? Easily. This seems to be the poster child. And I'm not sure it matters because they have Microsoft behind them and all these other companies. But isn't that

the thing like, if this was a public company, you think, man, this thing would be getting smoked. But I don't know. I don't know if it really matters because all these other companies, they have to succeed for these other companies to succeed. Well, here's where it matters. if open AI is is if open AI fails and like literally is not able to meet its financial obligations that that's the eye of the storm that's the epicenter if we're in a bubble that's the bubble it's right there it's a trillion dollar market cap um if they fail we're in we're in deep duty because then these companies will have to divert some of their cash flows to help them as opposed to continue to invest right it's just all of the belief if the belief goes we're that's it

Caput. By the way, did you listen? Oh, you told me yet. You listened to Michael Burry with Michael Lewis. I listen to him as well. Yes. He sounds, his voice and his manner of speaking did sound a bit like Sam Altman to me. And I'm not making the criminal connection at all. I'm just saying, like, I do genuinely believe. I mean, he said it twice in the podcast that he's on the spectrum. It's so wild the disconnect between social media personality. On social media, you could be anyone. He's like, I think he's like sort of playing a supervillain.

I don't know if he views himself that way. I would imagine that he doesn't. You know, sometimes it's also the picture you use on social media. His picture looks kind of mean. Yeah. And it's, I look at it like this. When I, I, I'm a big okay guy on text. When I, my wife will text me this long thing and I'll say, okay.

And she'll mean, she'll be, she'll take offense to it. What do you mean okay? What, just okay, that's all. And she takes offense. So I think that's the disconnect. You have in your mind also, this thing on social media. Plus, the Christian Bale thing, you're right. When I view the Christian Bale character on the movie versus listening to him with Michael

Lewis, that's two completely different people. But they completely embellished him for the movie, which, duh, it's a movie. Um, he, he is the guy, though, whenever his 13F comes out, every major media outlet, like, because he's the big short guy, right? And we know how this works. But if he were to, if he were to tweet in voice instead of in text, like, people would be like, oh. Yeah. It's not as scary.

Yeah. I agree. His voice doesn't sound nearly as imposing as his, like, presence. you have built up in your mind from reading about it in a book and seeing him on a movie played by Christian Bale. And this is the thing with social media. You could be anyone who you want to be. Everything is taken out of context.

We always talk about this. We've met a lot of people on social media that are like the biggest, hugest, Dumers in the world. And you meet them in real life and you go, oh, he's like a little puppy dog.

He's not really like this. He's playing a character for social media. Yeah, which, by the way, that drives me nuts. Drives me nuts. I can't, to me, it's like... which is the real person. Right.

Is social media the act or is the in-person the act? And I don't know in some cases. It's social. But if you're a dick, just at least be that way. I remember we went to, when I went to college, there was a guy who, it was another, I became friends with a group of guys. And they said, hey, that guy over there, he went through high school. And they said, he wasn't like this in high school.

He's trying to change his personality for college, which, hey, more power to you. But they're like, that's not really what he's like. he's doing this as a show for college. And that's what social media is. You try to become a different person between high school and college. Credit to me, I'm pretty sure when I was active on Twitter that my online personality was more or less in line with my real-life personality. I try as well.

I'm very sarcastic on Twitter, and people on social media do not get sarcasm. Although, you are more, you're not like that in real life. So maybe you're part of the problem now that I think about it. I'm not sarcastic? In real life? You're not a jerk in real life? In real life? No.

Huh? Oh, I'm not a jerk on social media. What are you talking about? But sarcasm is like a jerky quality. Oh. What? No. Not if it's in jest.

On social media, sarcasm is jerky. Get out of here. That's just because people don't understand it. You think sarcasm is highbrow? You're talking over people's heads? I think sarcasm is funny. That's my favorite kind of humor. Could I be any more sarcastic?

Chandler, right? That's a great character. All right. Anyway, back to this chart. This is a projection. Yeah, to 2029. You're right. It's not like these are the losses to date, and it's like, oh, my God, like, recalibrate everything.

This is, this is not going to be right. You could say, listen, this is way bigger than Amazon in 94 to 2002. That means open ad is going to be way bigger than Amazon, too, because they're taking way more losses. They're just, they're just piling it up now so they can make more down the line. If this does come true, who's funding all these losses? all the big tech firms, right? Yeah, you're right. You're right.

This chart's never going to come true. No way. The ROI has to happen way before 2029. I just don't think that there's $140 billion worth of losses to be funded. At some point, people would be like, hey, you know what? Probably not a great use of capital. Right. Yes.

Microsoft CEO is going to say, no, this is not we're doing anymore. Sorry. Yeah. End of story. Okay. This next segment is brought to you by Fidelity. Ben, it is it's earning season.

It's Outlook season. Excuse me. Are you an Outlook guy? You probably... Yeah, I like to follow the Outlooks. You're talking about your own outlook, right? Predictions. It is funny because I think we all agree

that there's a folly of making predictions and forecasts. I think everyone has to do it. It's entertaining. Right? It's fun. I love it. All right. Anyway, go to Fidelity.com to learn more link and show notes

for what we're talking about here. All right. So they've got their outlook and they've got like six different like tiles. So I clicked on this one. International stocks reignite. We've shared this chart before many times. I don't know why I just did this.

Like I'm like a weather person. Global stock market PE ratios. US, of course, way above emerging and developed. But here's the thing, Ben. Did you know, I think you probably did, the degree to which international stocks are upperforming U.S. stocks, I feel like this is way underreported.

Granted, it's only one year, but it's, like, massive. Acqui XUS is up 30%. 30. And the U.S., Russell, 3,000, it's having a great year, up 17%. But that's a giant spread. And the giant leap, the fall in the dollar already happened. The dollar has more or less kind of stabilized, right? It fell 10%, and then it kind of stabilized the rest of the year.

So it's not like this is just a continuation of the dollar falling. International stocks have just continued to go up. And there's been something of a re-rating in not only the dollar, but valuations have come up a little bit, which is good. Investors are actually interested in these stocks again. So I think that we're not talking about this nearly enough that, hey, in the midst of this huge AI bubble, everyone's talking about, international stocks are crushing U.S. stocks right now. All right. Early peak at my predictions for 2026. This is going to be on the list. Not only our international stocks going to outperform again next year, but it is going to be

the year where finally the media pays attention. Not fine. I mean, it's only been one year, but it's going to be a headline stuff. Because you know what? Reality is you zoom out, who cares? It's a blip. Right? Like if you look at the ratio chart, this is, Doesn't really register. Give it another year. It'll start to register. Do you also think the dollar will continue to fall? Or does this just a re-rating of the stocks then?

Did a currency play or a stock play? Stay tuned. Okay. You have to do like a 7A and 7B for that prediction. All right. Fidelity's brokerage. They are, I don't know if they're the largest 401K provider, record keeper, whatever it is in the world. They probably are.

I think they are. And then DeNagarge point next. $654,000 401k millionaires. That's 3.2% of balances. Now, that sounds like a low... That's lower than I would have thought. But think about it, though. How many people have all of their money in a 401K?

Plus, people change jobs, and so a 401K stays over here and maybe you don't roll it over. So the fact that there are even that many hundreds of thousands of 401ers, I think that's impressive. Yeah, good point. I guess I just would have guessed it was higher. Okay, you're not impressed. All right, so this... No, no, no.

I'm not impressed. I'm surprised. I would have thought I was higher. But I think you'd make a valid point too. Right. So, $654,000 sounds like a lot. 3.2% doesn't sound like a lot. So in this Wall Street Journal article,

they also talk about how there's this... Someone gives the phrase moderate millionaires. And it says, if you're worth $1 to $5 million, you're a moderate millionaire, which sounds kind of degrading. But so you'd be... estimates that the number of such millioners around the world has quadrupled since two thousand to fifty two million this year um there were a thousand of these moderate

millioners added every single day in the u.s last year okay so that's the number hold on 52 million around the world yes and a thousand millionaires a thousand a day in the u.s okay wow so so then they talked to the chief economist eBS and he says popular culture still thinks of millionaires in terms of scroogement duck or the top-headed icon of monopoly the new dollar millionaires have a broken cycle cycle wealth threshold, but their income and spending is that of a middle-class household. He said spending like a stereotypical millionaire probably requires at least $5 million, he said. So this is another one of those things like, you think you're rich? Yeah, you're not rich.

But guess what? This is just the millionaire next door. This is nothing new. So it says that like they have this psychological wealth threshold, but their income and spending doesn't match it. That's a good thing. How do you think these people became wealthy? Because they have a middle-class household spending and income. This is how they did it. it's like they're trying to reverse if they spent like a typical millionaire they wouldn't be millionaires

duh that's the thing this is millionaire next door stuff come on people this morning I I showed Kobe a movie that you might

be shocked to learn that I saw this movie in the theater no way when you were six what's that when you were six I was nine about his age

All right, 1994. I'm sure you saw this movie. Blank Check. Ah, yes. So, blank, right, you saw that movie. Blank Check is, I'm positive I saw that at somebody's birthday party. Black Check is on Disney. James Reborn, the ultimate that guy.

Right, the dad. So he was the dad in Blank Check. He was 45 in that movie. I guess maybe that looks about right, but he was your age in that movie. Right. How? And he looked at that way. his whole life pretty much seems like, right?

So the story of that movie, this kid gets a blank check and he has like, he's like, oh, no, it's my boss's money. It's Mr. McIntosh. Remember that? Because a car hits him or something. The guy just gives him a check. Does he write it for a million dollars? Great recall, Ben.

Wow. Credit to you. I remember that. Does he write it for a million dollars? I don't remember. Yeah. Yeah. Okay.

So his dad, so he gets a blank check from his grandma. His dad asked, how much did you get last year? Ten bucks? And the kid goes, yeah, but what about inflation? So he gives him $11. He plugs into his computer. This kid was very savvy. He blocks into his computer.

I forgot what the interest here it was. How much would it, how many years would it take to go from $11 to $1 to $1 million? It said like $340,000 years. Kobe Lossett who thought it was the funnies together. Anyway, great movie for kids. Stunt Disney. Did you ever see the movie from the 80s, Bruceers Millions? No.

Okay, it's a John Candy Classic. So it's John Candy and Richard Pryor. And he has 30 days to spend $30 million, but he can't just give it away. And if he does give away $30 million, he inherits $300 million. That's a good one. And he has a hard time spending that much money. in the 80s. Today, I think that would be very easy. Okay, we didn't mention this last week, but Goldman Sachs bought interviewed ETFs. We had our first talk-your-book interview with Bruce Bond,

I think, in 2018. Yeah. And we did it. We were in Chicago visiting our office there, and we were in, like, the basement. Where were we? We were in the basement of a We-Work building. Oh, okay. Right? So we interviewed Bruce Bond there, and he told us the idea, and the light bulb immediately went on for both hosts, and we go, oh, my gosh, this is. This, This is going to be huge. And we've been saying this out. Like, we could just tell for advisors and clients and retirees, this idea is going to be massive. And every time we talk to Bruce, we talked to him, I don't know, half dozen times over the years, maybe more.

And every time we talk to them, the assets would get bigger and bigger and bigger. And last week, Goldman Sachs is going to buy them for $2 billion. Now, a lot of people looked at it said, geez, $2 billion and they managed $28 billion. Right? That seems like a lot in terms of like a multiple. It's going to be $100 billion. But also a lot of other people said also Goldman Sachs can do the option flow, right?

So these are option strategies. So they can make money there somehow too. But there's a lot of people in the industry who don't like these kind of strategies and don't get them. And they say they're suboptimal. And if you did, if you use this optimization strategy, you could do this and make the same return stream. And I think it just totally misses.

That's a total spreadsheet mindset. and this is the psychological component of these strategies. And I think that's the thing you and I latched onto immediately. It's a psychological thing, not a number spreadsheet thing. And that's why this thing was such a success and garnered so much money. And it's an interesting pairing, I think, for Goldman. But obviously, they wanted to increase their ETF business. Shout to Bruce on the whole team.

Very happy for them. What an exit. It's awesome. Great guy, too. And his second huge exit, because he was at Power Shares as well, and they bought up. I thought it was it power or pro? What did I say? Okay, one of the piece.

One of the things you and I have been talking about for years now is where does this money keep coming from? People, you know, putting more money into stocks and more money into money markets and Bitcoin and everything. Ryan Dietrich from Carson Group, also with a Facts and Fueling podcast, which is great. He says disposable income and employee compensation continue to grow faster than inflation. And he looks at it over the past three, six, and one year periods. And he's looking at disposable income and employee compensation, then PCE and inflation, which is the Fed's inflation rate that they look at. No, no, Ben, Ben. Ben. You have to say their preferred gauge.

Sorry, preferred gauge. True. And disposable income and compensation continues to grow at a pace that's faster than inflation. And this is the piece that we never talk about when people complain about inflation. It's also bringing up the, and I know because, we know why this is. When people get a raise, they think it's them. When inflation happens, they think it's the government. But this, people just have more, I don't think people realize with inflation rising 25% this decade, that also means pretty much a commensurate, 25% increase in wages and salaries. A nominal, right? A nominal basis. And I think it's actually been a little bit more. That's where a lot of this money is coming from. People have more money to spend now.

Yeah, you know what? I think if you poll 100 people with the benefit of hindsight, I think most people would say, you know what, I'd rather like, like one and a half percent wage gains and 1.8% inflation. I'd rather lose to inflation and have normal price increases than this. I agree. People would rather inflation be a invisible tax than this. It is funny, though. With this, it feels like I can't get ahead.

I got a 25% raise and I'm still in the same spot. It is funny. People prefer the 2010s, which was that situation. But it's funny back then, remember all the policy wonks we're going, we need to get inflation higher. This is too low. Well, because you...

Yes, exactly. Speaking of, like, where does I want to keep coming from, we had Vlad on TCAV. Did you listen to that? Yes. Yeah.

He's, I mean, they're going to, they think they're going to rule the world, I guess. I really enjoyed spending time with him,

frankly, more than I thought. I enjoyed his company. Did you really like his hair? Is that what it was? Did I really like his hair? You kidding me? He's got some nice hair.

It's incredible. In the third quarter, their net deposits was like, I can't remember for it was $20 billion or $28 billion. Where's all the money coming from? I mean, it's just wages, right? Where else could be coming from? Right.

And, yeah, and obviously the thing that they've done with the breaking down the barriers is you have the automatic deposits on, right? And that money just keeps coming and coming and coming. And every time you get new customers, their money keeps coming and coming. It's compounding on top of compounding. But not only is the market up, but more money's coming in on top of that. We spoke briefly about what it was like for him in the aftermath of the GameStop stuff. like, I can't imagine how many death threats he got, right?

People are, like, he was, he, he went from relatively unknown character to front page of every magazine, right? Like, overnight, um, global villain. Like, that must have been a wild personal experience. Yes. Sometimes people do separate the, that there's people involved in these things, too. Yes, it's, all right. Um, the labor market is not doing this very well.

Uh, I think the stock market has. probably overshadowed this. We'd be talking a lot more about the cooling economy if the stock market wasn't doing what it was doing. So Kevin Gord had tweeted last week, oof, businesses with 20 to 49 employees shed 74,000 payrolls in November. That was the sixth decline out of the past seven months and the largest drop since October 2020. That's really bad. These are pretty small businesses. Six declines in the last seven months. So you said that the stock market, doesn't seem to care yet. Consumers don't care yet either. So this is from our friends of the transcript. They always have good stuff. I feel like I'm pulling a Michael Badnick here, but they pulled

stuff from the MasterCard CEO, the Visa CEO, and then Travel and Leisure Company. I don't know that one, TNL. And they talk about the difference between sentiment and actual behavior again. So this is what we keep coming back to. So the labor market is not impacting consumer behavior yet, according to these CEOs. He says there's a divergence between the soft and hard data. We read all the headlines and some with the survey results around the consumer sentiment. It seems increasingly and gloomy. But what we see in the hard data continues to be very supportive

of consistent spend metrics. Through October and into the first two weeks of November, we've seen spending metrics across all our key drivers remain generally in line. And so we're encouraged by that. That's MasterCard. Same thing with Visa, right? If I had to use one word, it would be stable.

If I had two, it would be stable and strong. People continue to spend. And then this travel leisure person says, one thread for us has been super consistent, has been the performance of our consumer. Our consumer has held up very nicely and looking forward to stepping into 2026, people keep spending money. So even if the labor market on the edges, because I think that's what it is,

their market is slowing on the edges. It's not, the unemployment rate is still below 5%. Right? So I know when people lose jobs, that's tough. It's hardship. If the unemployment rate goes from 4.5% right now to 5.5%, right? That's millions of people losing their jobs. There's still hundreds of millions of people are still working and spending.

So doesn't it seem like it could be a while before there's, the labor market actually translates into a bad economy, it's going to have to get way worse, I think, before it really translates. That's my theory. Yeah, I think that's right. All right. I'm for a while at least, remember, I think there's, you've pulled a Brett Farb a few times on the Cape ratio and said, like, hey,

I'm retiring from talking about the Cape ratio ever again, and then it comes back. I think I want to talk about this wealth and happiness thing one more time than put it to bed for a little while, not forever, obviously. Can you not compare me to Brett Farb, maybe use somebody else? That's just the one that comes on. Yeah, that's true. So I thought that Chris Arna – how do you say his last name? Chris Arnade? Chris Arnadi? I've never – he has this – Chris Arnadi walks the world.

So he's the guy who used to be a Wall Street trader, and now he just – he goes around the world and he travels and walks and he talks to people. And he basically says, like, I want to kind of give my theory on this. Like why – even if we're the wealthiest we've ever been in this country and the history of the world, why are there so many people who are still unhappy? And why do we keep having these debates about what is wealth? And are you rich or are they rich? Or are they rich? Why aren't rich people happier?

here. And he says, Americans are materially wealthy and unfulfilled. The primary problem is cultural. We've sacrificed community and meaning to emphasize an archetype built on acquiring as much stuff as possible. But then we have made that unnecessarily hard to do. And his whole thing is like, there's, you can have all the money in the world, but without meaning, it doesn't matter. And there's no community. We're a material society. And it's all hollow. So yeah, that's the, that's the thing. That's why all the material, you can say, hey, we have iPhones now. and we have this, and we have this, and we have that, and everyone has two cars and three-car garages,

and that stuff doesn't bring happiness. And that's his whole point. If there's no meaning behind the money, it doesn't matter. And I thought that's a good, like, stamp on this thing. And also, we realize we're never changing anyone's mind on this stuff, right? You should feel wealthy or you shouldn't feel you're in this class, you're in that class. Literally no one's changing their mind than that. That's never going to happen.

Okay. Let's move on. Okay. I've got a question for you on inflation. So I tweeted this out. at Target last week. We actually went to Target and made our kids because, like, I'm trying the hardest we can to not raise spoiled kids because they're talking about all the stuff they want for Christmas. And so finally my wife and they said, all right, we're going to Target and we're

picking out toys for tot stuff for other kids, right? You guys have to learn and you're not getting anything. Good for you. I love that. So we got a big Toys for Tots box at my planet fitness that I go to and I dropped them all. So I said, I tweeted this. I saw a 65 inch TV at Target for $250. And I said, it feels like someday Netflix is just going to give us all TVs and say, hey, here's TV for you, it comes preloaded with Netflix. That's part of your subscription. So phones are more expensive. Computers are more expensive. Automobiles are more expensive. Why do TVs keep getting so much cheaper? Every single year, TVs get better in quality and they go down in price. I do not get it. Why is it everything else is more expensive besides TVs? Please explain it to me.

Okay. I would say the business model and the economics, that's like my needric reaction. Apple knows that you're going to replace the phone. Like, they just know, you're going to. The phone's going to slow down, technology is going to get better, and they can raise the price. I think the TV market is hyper competitive. People don't replace their TVs every day except for me. And they need to compete on, and so that's why prices are cheaper. I don't get, and so I have, my new theory for TVs is we have a really decently nice TV in like the main family room, right?

We have one of those frames, Samsung ones. And then all the other teas we have, because I love TVs all over the place, is a really, like, I get the, cheaper versions now because I know in three or four years I'm going to just replace it because there's going to be a nicer, faster, better picture. And I just, I don't understand someone's got to give me an explainer why they keep getting cheaper. Like there has to be a technological opponent to it. Like, what's the inflation piece that this technology is getting cheaper? Well, do you think the cost to manufacture the iPhone keeps going up? I doubt it. I mean, maybe it does. I don't know. I mean, there's more stuff. I just, someone who knows this stuff.

Oh, how about this? You know what? The, the, the, the, the, the, the, the, the, the, the, the, the, the, Technology of the iPhone is incredible. I know that they're spending gazillions of dollars in Capbooks, so I take that back. I'm sure it is going up. But is it going up commensurate with the price increases?

That part, I doubt. I think, obviously, phones are an amazing leap forward, but I think just TVs from what we grew up with, the tube TV, the box, remember the Zenith brown stuff all around it?

It was huge in the back. We had antennas. You'd put the tinfoil on them and hope the antenna would work. for a channel. I just think the leap forward we've had in TVs in my lifetime has just been one of the great...

Remember I were parents saying, get away from the TV? Because you were... Because you had to sit two feet in front of it. Otherwise, you couldn't see. Yes, exactly. It was so blurry.

It was like, wait, is that, is that John Stark? I can't... You couldn't see anything. You'd have to hit the side of the TV. I just think the... I think this is just one of the great leaps forward we've had in our lifetime

in HD quality and size and it's... Can I give another... I think I plugged this a couple of weeks ago. The Amazon, what is it called? Is it like the Echo Show? I'm not even sure what it's called. Did I say this on the podcast? I can't remember.

Oh, yeah, where it's got the screen. Okay, so it's like 15 inches. So in my, we don't have a TV in my kitchen area. But we've got like this 15 inch thing. You pick it up, you can move it. It's a wire, but like the screen swivels. It has all of the apps. It has Netflix, Disney, Prime, whatever.

There's Amazon TV now. There's like channels on there, which I only saw. briefly. I haven't really looked into it. But my favorite part of this device is I synced it to my photo app, to my photos on my phone. And so it gives us, runs through your phone. So it gives us memories. And every day I walk past it and I see a picture from 2019 or when Kobe was born in 2017 or whatever. Like, I love it. It's a, it's so highly recommend that, I don't think it was that expensive, but great purchase, phenomenal purchase. It's nice to have a little TV in your kitchen too. A material purchase that made me happier. All right. I told you, I'm on board. I've

completely changed my tune on this. I think material purchases can make you happier. When I wear a nice new sweater, it brings joy to my life. That is a very nice sweater. One other material purchase that I've been plugging that I feel bad about is the Tommy John's stuff, which, by the way, life changer. And I've had a lot of emails. Michael, these are really expensive. Yeah, they are really expensive. Guess what? They're like, what, $35, $40 for an undershirt? I will wear these undershirts? How many times will I wear this before I throw them out? Let's be honest. 15, 20, at least. So it'll be $2 a wear.

My life is so much better with these undershirts, not sweating. However, here's where I apologize. There's two versions. One of them is like a very skinny one that's like, it like hugs your body. I got that. It felt really uncomfortable. You got, did you even turn it or did you just wear it? I asked my wife if she wanted it because it was like, it was so tight.

Yeah, it's right tight. Yeah. Not that one. Okay. Make sure you don't get that one. Okay. Here's a quote, Ben. Back to the transcript. Here's a quote from the CEO of IBM. So let's ground this in today's cost. This is on a podcast. I know which podcast. So let's ground this in today's cost because anything in the future is speculative. It takes about $80 billion

to fill up a one gigawatt data center. That's today's number. If one company is going to commit 20 to 30 gigawatts. That's $1.5 trillion of CAPEX. To the point we just made, you've got to use it all in five years because at that point, you've got to throw it away and refill it. Then, if I look at the total commits in the world, in this space in chasing AGI, it seems to be like 100 gigawatts with these announcements. That's $8 trillion of CAPX. It's my view that there's no way you're going to get a return on that because $8 trillion of CAPEX means you need roughly $800 billion of profits just to pay for the interest. These numbers are so bananas, it's hard to wrap your head around.

Okay. That doesn't make sense. The first ever computer that we had in our house was an IBM PC. BB gun to your head. What does IBM do? Because if you look at their chart, their stock chart, they're going crazy. They're up like 100% of the last two years. What does IBM even do anymore?

I have no idea. Like, I used to use IBM for a word processor. What do you mean? What do they do? They're the mainframes. It's just impressively that this company is still around. They were like... Enterprise software up in the cloud.

Yeah, no. The Nifty 50 back in the 70s. I don't know. I couldn't explain to what IBM does. Going bonkers. But yes, okay, yes, these numbers are insane. And I guess the whole point is that, like, I think, just like the open AI stuff, all of these estimates are no way anywhere going to be true.

Right? There's something, something has to give. It can't be, there can't be that much spend on this stuff. It can't. It won't happen. If you knew that there would be $8 trillion of Kappex, what would you do? Nothing? I don't know.

What, what am I supposed to do? What would you do? Get gig along. I guess so. And then get out, when it, before the top. Hello? Come on, Ben. All right, here's a chart.

Last week, I don't think we, I think we, I think we, we skipped this last week by accident. Vanguard announced that they're allowing their customers to buy crypto. Did that really put the bottom into Bitcoin prices? I think it did. It seemed to coincide with... No, it definitely did. Because the day before, crypto had a really disgusting candle, like really ugly.

And then that morning, when this was announced, it was the bottom. So yes, I do think it put a bottom. Do you think Vanguard customers will buy Bitcoin ETFs? No. I bet if you looked at the percentage of clients who buy it at different, you know, Shraub and Fidelity and all these different places, Robin Hood, of course, it's going to be a tiny, tiny percentage of Vanguard. I totally agree with you.

So I don't think that it matters. I think for sentiment it mattered. But will Vanguard investors buy a meaningful amount of Bitcoin at Vanguard's brokerage? No. If they really wanted to, they would have just done it already. They would have gone somewhere else. Yeah, it's not like it's hard to do it. Anyway, it wasn't just them.

Bank of America also announced. that they're going to be letting their advisors at Maryland to buy it. But flows have been pretty ugly. Going back to January 24, this is the second worst taught us a chart showing this is the second worst 20-day flow for crypto. So it's like a chicken and the egg thing. Did the flows cause the price to fall or did the flows fall because the price is falling? Both. There you go. Yeah, good chart here, though. I was talking about real estate. I'd said earlier that sometimes you have to separate the headlines from the data. So the Wall Street Journal had this article, when home sellers set price is too high, they're paying for it. It says more

than half of homes sold in 2025 through October had at least one price cut. You look at that and you go, geez, the housing market must be getting killed. And they looked at this and it, yeah, it's, I think it's almost 60% of houses that, but the average difference between the list price and the sale price is 3.7%. That's pretty tiny. Okay? That's not that much. No, it's not. No, it's not. Percentage-wise, it's tiny, but like on a million dollars, it's not nothing. But it also says that So 57% of homes sold this year Have had a price cut

But between 2020 and 2024 It was 47% of home So don't you think almost all of these negotiations There is a price cut involved When someone comes in I think that's just how this selling process works I just think the Yeah, you're right, 3.7% on a big

But if you look at this chart here Share of active listing homes with a price reduction by month It looks like we're just back to 2010 levels It just was way, way lower in 2021 and 20% when you had all these bidding wars and it was 5% of them because people weren't going to lower prices because the supply wasn't there. But now it's back up to 20, which looks to me like about what it was at the peaks in 2017, 2018. So it's not that much different. Let me ask you this. What's your outlook on 2026 housing? Because we're going to get another rate cut tomorrow,

I think. I think that's the expectation. I think we muddle through again. It's like housing prices are up 2%. And even if mortgage rates get to... What about activity? Are we going to... to see a significant uptick and activity? I'd say it's more of a normalization. How about that? Is that a cop out? I mean, it didn't answer my question. I think this year was a normalization type of year.

I asked if we're going to get a significant uptick and activity. You're saying... I don't think... I don't think activity is going to go bonkers, especially if the labor market continues to soften. I don't think that the housing market is going to go crazy. How about you? I agree.

I own a rocket. I think I might sell it. Okay. Here's one more from Logan Motishami, just to put this one to bed again on the first-time homebuyers. Remember NAR said, hey, the median age of first-time homebuyer is now 40 years old and people lost their minds. And if you compare this chart, it looks at all these other surveys and databases. And those numbers have not increased barely at all. They're still around 31, 32 years old.

And the NAR is the only one that's going higher. So this was a survey problem, not a housing market problem. So the median first-time homebuyer is still around the same age as they've been for the last 10, 11, 12 years. Survey of the week, we haven't done on these in a while. Almost half, 46% of Americans say the cost of living in the U.S. is the worst. That noise that you just made was like, Werewolves of London.

What was that? Daniel should do a music over. Good song. Say the cost of living in the U.S. is the worst they can ever remember it being. And they say they talk about whose responsibility is, and they say it's Trump's responsibility or whatever.

I think that this is, obviously, like, Trump and Biden have done themselves no favor on inflation. Like, Biden spent more money. Trump has put tariffs on. Like, they didn't do anything. But I don't really think there's anything they could have done to lower inflation that much beyond putting the economy into recession. Like, I think whoever is in office is going to get blamed for inflation. And I think people who say, I'm going to come in and save us all from inflation, there's no way they can ever deliver on their promises. Trump had a great quote.

I think it's way beyond their control. I saw a great quote. about inflation from Trump. I don't know, it was perfect. It was like, I don't know if he said it's beautiful. It's perfect. There's basically no inflation. It was so good.

But politicians, I know they have to say, hey, we're going to come in and fix prices, but they can't. They literally can't. They're nothing they can do. They can make it worse. They can't make it better. How's that? Yeah.

Unless they send us into a recession, I don't think there's anything they can do to really make it better. So people are always just going to be bad about it. Yeah, if they send us into a recession, If the liberation, if the tariff stayed on like the Liberation Day tariff announcements, that would have put us into a recession and prices would have come down. Yes, yes, exactly. All right.

So the Washington Post had this story about how baby boomers got so rich and why their kids are unlucky to catch up. And they say, baby boomers have $85 trillion in assets. They're the richest generation by far. It keeps seeing all these charts showing people over 70 have steadily increased their grip on wealth. And it's like people who are 60 or 70 are over have more wealth than they've ever had in history. By contrast, people in their 40s are losing ground comparatively on a relative basis, relative to history. But this is just, here's a thing, millennials are going to be the richest generation someday

because we know baby boomers are not going to spend all of their wealth. We've seen this. We've had these conversations. Wealthy people are not going to spend all their money. They're going to pass it down. And guess what? Then millennials will be the richest generation. Dude, this is like Brewster's Millions.

Is it Bruce's, what's the name of the movie? Yeah, Bruce Just Millions. Yeah, and real life. Yeah. So that's what's going to happen. And the fact that there's so many more people over 70 that are richer because the baby boers didn't have an offsetting generation. Millennials have the baby boomers.

Baby boomers had no one as big as them then. So, like, there wasn't a huge generation that could live so long and be so wealthy. So this is just a compounding thing. This is not like a crisis. Yeah. That money is going to be passed down. It's not, I absolutely think young people are going to be just as rich or richer than their parents. Yeah.

All right. Big news last week this week. Netflix. Has an offer accepted from Warner Brothers to buy the stock for $72 billion in equity. It's another $10 billion in debt. I can't believe it. I mean, I guess I can't believe it. But my initial reaction was, oh, my God.

I really thought that Paramount was going to take it. I think everybody did. Polymarket reflected that. So I don't want to take for granted that everybody knows what Warner Brothers does. I mean, everybody knows it's a big studio. But these are the directors that they've worked with, like exclusively for the most part. So Clint Eastwood his entire career, only did movies with Warner Brothers. Stanley Kubrick, Todd Phillips, the Wachowski's, Nolan, minus Oppenheimer.

These are some good. Can I say, like, Todd Phillips has some good stuff. I think it's funny you put Todd Phillips in this group. Well, that's kind of like Bigberg sitting at the. Chat, Chabee gave me Todd Phillips. Okay. Well, no, he does, because Joker was another huge one. Like, he deserves to be there.

No? Hangover? The hangover? Dude, those were. All right. Anyway. Harry Potter, Barb. dark night lord of the rings matrix casablanca the exorcist superman all the president's men

batman the shining twist of the fugitive dune it uh which by the way there's a new show welcome to something something i watched the first episode i've ever heard anything about it i saw this morning on twitter like it's the finale i've literally not seen anybody talk about it all right there's obviously the studio um i'm sorry the streamer HBO max you and i walked by the studio when we were in california that was so sick so sick walking by the uh the water tower they are So the deal does not include the networks. So no CNN, TNT, that's going to be spun off. Discovery, all that stuff.

So the big freak out from people was, oh, my gosh, this is going to be the end of movies, right? And so Lucas Shaw said, Netflix reiterates, it will release Warner Bros. movies and theaters. It'll produce their shows. It sounds like they still don't know what HBO, and I get the Ron Burger, I don't believe you. I think, let's say this net, huh? What don't you believe? That they're going to keep releasing these movies and they're, they're, they're,

They're going to play out their contracts that they have now if they acquire them, but then all those movies are going straight to Netflix from there on. No. See, I think you have a, like, you're as a movie theater person. I think this is the beginning of the end for movie theater. Like this, I think that, like, there's still going to be there. But the writing's on the wall, man. These things are going to be going straight to streamers for the most part.

There's going to be, it's going to be really huge blockbusters at the theater. And not as, like, these are going straight to Netflix, man. This is going to happen. This is the future we're living in. I don't think this is the beginning of the end. I definitely do. No, I think it's maybe the end of the beginning. Like, this was already emotion.

It's not like, it's not like, I don't think that you're going to see in the data. And I'm going to save this data because Josh and I are having a Hollywood guy on TKF next week. So I had Matt crank out some incredible charts that I'm very excited to talk through. The movie theater has been in secular decline, obviously. So I don't think that there's going to be in 10 years now, a, I don't think you're be able to look at the before and after, I don't think it's going to change the data. I think it's already, it already happened. So what Sarandos and Peter said, because they did a call on Friday after the announcement,

what they're going to do, at least what they say they're going to do, now they've said a lot of things that they then changed their mind on, is that they want to shorten the exclusivity. So if a movie was going to be in the theater, if they're 45 days, they want to shorter that window, which in effect is going to continue to maybe be the final nail on the confidence for movie theaters, to your point. Because if a movie only has a two-week release, like Dune 3, for example, obviously I'm going to see that in IMAX. But for most people, if it's only going to be in the theater for two weeks, they're

just going to wait. So I think that this is bad for movie theaters, but this is better for Hollywood than Paramount buying it. At least this is what, like, Bellini and the smart people are saying, because Paramount already has a movie studio. So there would be a lot of cost-cutting because there would be a lot of overlap between the two studios.

Netflix obviously does not have a movie studio. So it's not like they're going to buy Warner and just gut the place because they need these people to produce a movie. So my biggest worry about your biggest worry should be movie theaters. My biggest worry is HBO. Like I'm worried about how HBO is going to be handled here because I feel like that's like the best,

to me, that's the top echelon of shows. It is. That's the crown jewel. So that's my worry here. If I'm having to choose between Netflix and Paramount, like Paramount Plus is kind of garbage as a streamer, like the, just the, like, I would much rather have Netflix take this over and make it better, because honestly, HBO Max, too, is so glitchy.

Like, if they put it on Netflix, I just, I hope they keep the HBO people. The thing is, you mentioned, like, all the directors and movies that have been made. The thing is, people aren't tied to these studios forever now. Like, they'll just, if they're not treated well because we, this, this company about Warner Brothers and they're not doing it as well, they're going to go somewhere else. Like, the people are the thing that matter. Yeah. Obviously.

at Netflix wants the IP and the library and all that stuff. So you would rather have Netflix take it over, it sounds like. I don't know. I think for labor, Netflix is way better. For theaters, it's way worse. I think for consumers, it's a better deal if Netflix gets it. Now, Paramount came over the top with a hostile bid. They offered more.

Who knows where this is going to shake out? Kushner is involved with the Ellison's now. So it's not like the deal is far from done. I just, I don't know much about David. David Ellison, but I think that he should probably step back because Larry Ellison needs to save his money because Michigan needs a new wide receivers and new DBs. He's got to save his money for Michigan's NIL program. Stop getting into this bidding war.

Let Netflix have it. That's my theory. They're not going to let Netflix have it. So what does this do for? So the way, does Netflix come back and try to go over top and try to just keep running the price up then? I don't think so. So the question is like, why did Netflix do this?

Because they already won. And what people are saying is they're just competing with YouTube. They just need, it's a land grab. It's Netflix versus YouTube, that's it. That's what Ben Thompson at Stretti said. Stratory said, he said, like, Netflix is worried about YouTube. That's like their biggest competitor now. There's this chart on the Wall Street Journal that shows share of U.S. TV viewing time by distributor.

YouTube's going up into the right. Netflix has sort of flattened out. Warner Brothers and Discovery have fallen. This makes a lot of sense to me that Netflix is, it's almost, because it seems like a little bit of a desperate move on their party. Why would they need to do this? It doesn't make sense to me. If I'm like, listen, they're great executives and they obviously know more about their

business in the industry than I do. It does wreak of desperation a little bit. If they could pull this off, they, but here's the thing. They have 300 million subscribers. Max is 130. There's obviously a lot. They set this on the call. I don't know what the overlap is.

I'm going to guess 75%. Right. They're not huge. They're not adding a lot of new subscribers. subscribers and their streamer, it's not like, it's not that profitable. Most of, most of one of those discoveries profits from, or from the, the legacy cable channels. Now, they're obviously in secular decline, but I don't, I don't see the, the, the, the, the cost energies, the profits. Like, they said there's going to be two to three billion dollars of cost savings. That's

going to flow through. I don't think that this is economically a good deal for them. Here's the thing. In our lifetimes, there's never been an entertainment merger like this that has worked. Every single time, none of these big. acquisitions, mergers, and entertainment like this, have ever worked. Yeah, but this is so different. Yes, that's true. And also, there has never been this sort of content plus distribution strategy. Those are two separate businesses.

There was never a Netflix type of thing. The thing is I would have way more confidence that Netflix could pull this off. And still, I would be a little hesitant that, like, again, we've never seen this work out very good for these companies to do this. HBO has been passed around to so many different companies at this point. That's my biggest concern. don't ruin White Lotus for us. Okay?

Keep that stuff going. But I think the bidding war is going to be entertaining, though. Yeah. And Polly Market has it pretty much dead even. They have Paramount at 4 to 3% Netflix at 38%. I think Paramount steals it, if I had to guess, on the outcome. And in fact, I wonder if Netflix is counting on that. Could be that they, do you think they'd really go through this whole thing just to drive up the price?

Well, no, because the breakup fee is $5.8 billion. So if Netflix, no, that's stupid. If Netflix doesn't get the deal because it either falls through for regulatory purposes So if Paramount steals it, then I believe Warner has to pay Netflix a two point something billion dollar breakup fee. But if the deal doesn't go through, well, maybe that is a strategy. I have no idea.

So the question is, what matters more of the decision making? Is it the CEO who seems like he wants to get in bed with Netflix or is it the shareholders who have now been offered a much better deal? Yeah. Now, Paramount needs Warner. Like if Paramount, if Netflix gets Warner Brothers for real and Paramount is just Paramount, they're dead. Well, then Paramount will just buy Peacock, right? There needs to be consolidation. That's what we know.

I don't know if Peacock is for sale. Well, it's going to be. Like, if it's Netflix and Warner Brothers and then Disney Hulu and then it's got to be Paramount Peacock, like there needs to be consolidation. Just for me, because we don't have any passwords. That's all I'm asking. Anyway, this is obviously the most fascinating story. It really is. It's great stuff.

I mean, a company. like Netflix, who's never done a big acquisition like this, just freaking all in. Were you shocked? Like, I couldn't believe it. Yeah. I guess. I did not expect it. It does wreak of desperation, but it's also like, well, maybe they're going on the offensive.

So I can see it both ways. I just think. So they're like, this is just, this is game over. It's like the disruptor bought Hollywood. I mean, Warner Brothers is Hollywood. I just think it'll be a blessing in disguise if Netflix doesn't get this because these deals barely ever work out. That would be my, that would be my baseline. If I knew, how about this? If I knew that Paramount was not going to, if I knew that Paramount

was going to steal Netflix, I would buy the stock hand over fist today. You would buy what? Netflix. Yeah. And it's been falling a lot too, right? If I knew the deal wasn't going to go through, I would buy Netflix. I'd back up the truck. All right. I'm looking for a positive spin on Gen Z being so unhappy. And I hope that it'll mean we get better creativity from them. So there's two things I saw this week that people just love nostalgia, but they don't really know what was going on at the time. So I think people, I've been saying this for a while,

people are going to be nostalgic for the 2020s in like 10 years. So there's a story of the New York Times saying, I won't let that happen. I'm going to be the nostalgic wrench. Listen, so is Gen X actually the greatest generation? And they say how one era changed everything about the culture and why we're so nostalgic for its creators. And they talk about everything that came out of the 90s and how great it was.

And there was Kurt Cobain and there was reality plates and all this stuff. and they went through all this list of stuff that Gen X created. And it's a great list, right? And then I saw this tweet going around and saying, apparently there is a Gen Z TikTok trend where they were romanticizing being a millennial in 2012. And it's saying, like, I want to be in Brooklyn in 2012

because millennials were so happy and optimistic. I'm here to tell you, millennials were not optimistic about anything in 2012. We couldn't get jobs. No, this is a totally rewriting of history. But the thing is, like, they talk about how one of the reasons that Gen X produced so much great content is because they're all unhappy.

Even in the 90s, people, think about the stuff that came out in 1999, at the height of the dot-com bubble, Fight Club, in American Beauty, and all these movies, it was in that movie book that we read. The Matrix. Yes, all this stuff, people were so unhappy, and they were saying that's what led to them being so creative and making good stuff. So, Gen Z, I get it. You guys are all sad and depressed, and you hate your lives, and everything is bad.

Make some good art for us, then. That's going to be the positive. They can't, this AI. Make good stuff, Jen. Okay, one thing from last week I said my heater broke and we couldn't come with the word And a million people said, hey, it's a furnace idiot

We couldn't come up for the word furnace Okay Fair enough That's a middle-aged thing for me though I can't come up with any words Having a word of my tongue And not me to come up with it All right, let's do a recommendation

You got anything? I do. You're not a Wayne's World guy I enjoyed Wayne's World I rewatched it again last year actually Okay I don't know if I have mono There's a line where Wayne goes

I thought I had mine up for a month. Turns out I was just really bored. I'm so tired all the time, especially when I get into bed. I can't, I cannot watch anything in bed. Now, maybe,

maybe it's because Jay Kelly is just really boring. But I'm actually an old bandback guy that might surprise you about me about you. Surprise you. Squid and the whale you liked? Well, you're a child of divorce. You had to like the squid in the whale.

Love squid and the whale. And I liked a marriage game, marriage story, marriage story. Oh, I didn't. I didn't care for that one. Okay. Jay Kelly,

what did you think? Did you like it? I was going to get on here. I was going to get on here and tell you don't watch it. Here's the funny thing. It was not a good movie. Like, it was surprising that it was a Noah Baumbeck movie

because it was like, it's kind of cheesy, it's very sentimental, but I enjoyed hanging out with Clooney and Sandler. It was the first time Sandler played a normal guy. And Lord, darn, she was a crazy.

I thought, I actually thought, I didn't like how he called everyone puppy. That was a little weird. But I thought Sandler was really good. I liked seeing Sandler and Clooney together. Yeah. And because I thought Sandler actually played just a normal guy for once,

even though the movie itself was not good. I give like a 6.1. Have they ever, yeah, that's right. Have they ever worked together? Not that I could figure, but I had this thing for you because Clooney is best when he just plays himself in a movie. He's obviously playing himself in this movie essentially. I thought he was great.

Like, I thought he did a really good job. It was just boring. Their performance was good. The movie itself, I thought it got worse than. I'm trying to think of who's the, I think Clooney might be the best actor who just plays himself. Like his best role is playing himself. So I thought, like, Ben Stiller plays himself a lot in movies.

Seth Rogen plays himself. They're actors who are just, they're better when they just play a version of themselves. Owen Wilson? Owen Wilson? Yes. Wait, so the reason why I brought this up, I was just very bored. I think I watched it three times, four times. I just kept falling asleep.

This was one of those movies. And this happens to me sometimes where I watch a movie and I'm like, and I could go either way. Like, if the first person told me that that was a good movie, like, yeah, it was pretty good. Or if you were like, dude, that's stunk. I would be like, yeah, right, it did stink. Like, I was... Yeah, I actually, I enjoyed it.

I enjoyed watching it. I was entertained, but I didn't think it was a good movie. How's that? You weren't entertained? It was not entertaining. It was pretty boring. I liked spending time with Clooney and Samma. And it was in Tuscany.

So like that was, I was entertained. Yeah. Anyway, that's not going to the theater. Ever. No, that's a movie that will never be in a theater. I know, I think it played for two weeks maybe, but you're right, that's the kind of movie that'll never be in a theater ever again. And nor did it need to be.

No. But in the 90s, there was a lot of star power on that. And even, like, the people who played the side characters, Patrick Wilson was in it, and Laura Dern was in it. Billy Cruttup. Yeah, I love him. He should have been a way bigger star. I had to Google that.

I said, wait, is that, is that him? I actually thought that was the best part of the movie. That whole conversation with him. I thought the first half of movies, but anyway, yeah, I didn't feel like a Noah Baumbach movie. I got one for you, because you're always looking for great airplane flicks. Caught Stealing is on Netflix. It's a movie with Austin Butler and Zoe Kravitz and Regina King,

Was that good? And honestly, so I give it a 6.5. It's, I feel it's a trashy action movie. Like, hey, there's a crime going on, and this guy gets pulled. It would have been like a Paul Walker movie in the 2010s or a Nicholas Cage movie in the 90s. Amen. And then I watched it, and it was entertaining and a little over the top. And then at the end of the movie, it said directed by Darren Arnovsky.

And I thought, I went. Whoa. What? Yes. I couldn't believe it. He's like an artsy, right? Black Swan, isn't that him? Yeah.

And I thought, I, I underestimated, I did the Shaq meme of I did not know your game. Austin Butler, I thought he was like, a guy who takes himself way too seriously. This is the, I love when actors will do movies that they don't take themselves too seriously in. That was the best part of Nicholas Cage. And I feel like I give Austin Butler credit for doing just a trashy action movie. Okay. I will definitely watch that. Finally, I, you talk me into listening to Unscripted.

And I think that's how I'm going to want, I'm going to consume all of my nonfiction reading now. I'm going to read fiction. I'm going to listen to nonfiction. Did you finish it? I'm three quarters of the way done, and I thought about it through the lens of succession, and I told you this is, it's even crazier than the story's in succession. It's, I think people with that much money and that much power, never say never. I don't think I'd ever want to be a billionaire with that much power.

It does not sound like a good life to me. Everyone around them is just an enabler. The two women who were with him in his house were probably in the top 10 gold diggers of all time. Did you Google each of these characters to see what they looked like? I'm waiting until I finish reading and then I'm going to. Interesting strategy, okay.

But I really like the story of the guy who came in and he was kind of a low life, the Palmer guy or whatever. Pilgrim. It probably should be a movie, but they won't because it's succession. And we obviously just missed that the first when it came around.

I just didn't follow the story of Summer Redstone. But I think just money and power and how it can consume you and make you and just a evil person is I would never want that he was he was he was an evil person the way that he treated his daughter and his family just a despicable human being um so i'm glad that you enjoyed the book i listened to i finished

um disney war also by james b stewart i think is his name phenomenal eisner and ovitz and katsenberg and great stuff doesn't it just make you never want to have that much ambition in your life i mean we're ambitious people but the amount of ambition those people have is it's like well it's power it's too much power because when you get when you get the mantle, everybody is gunning for you and trying to stab you in the back and it's no way to live.

Like, I don't want that. Right. So yes, good, good wreck there. Anything else? Oh, did he doc? No, thanks. Not permission. Okay. I did watch the Jeff Buckley doc

on HBO because I was a child of the 90s and liked his music. And one thing about the 90s that I think is probably going to make a comeback is the video quality was just better back then. Like when you see a video recording of the 1990s, like a handheld camera or whatever, and it has that grainy quality, it just looks better on a documentary than like the HD stuff we have today. Doesn't that kind of make you nostalgic for that time here, seeing the grainy quality like the stuff you'd see in America's Funny Some videos or something, the date is in the

Bottom left corner. I don't know that I loved being 14 years old, but I like memories of that time, even if I didn't enjoy it at the time. See, all, this is what being a human being is. We're looking for moments that we can have, be nostalgic about. All right.

Thanks to the production crew, as always, Duncan and team. Remember, if you are listening to this, check it out on YouTube occasionally, because all the charts and stuff are there, and they do a great job, making us look like idiots sometimes, making us look funny. Check out exhibiting.

for advice.com for all your charting needs. If you're an advisor, email us, animal spirits at the compound news.com. Also, check out Talking Wealth. I think Josh is on this week. Oh, we got a banger. I'm glad you plugged it. I almost forgot. The headline stat is something like 90% of RAs are shrinking net of the market. Compound Insights has a new research report out and Josh spoke with the author, Mark Bruno, and it is a banger. So check out Talking Wealth on YouTube or Spotify. See you next time. Okay.