Animal Spirits Podcast - Never Go All in on Stocks (EP. 437)

Episode Date: November 5, 2025

On episode 437 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠��⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss bad breadth, a historical melt-up in tech stocks, the case against an AI bubble, sequence of return risk, the economy that's better for parents than their grown-up kids, demographic warfare, why tariffs are so confusing, the data center buildout, AI chart crimes, Michael Saylor and more. This episode is sponsored by YCharts and Vanguard. Download YCharts’ Great Wealth Transfer Deck free at: https://go.ycharts.com/winning-the-next-generation-of-wealth?utm_source=Animal_Spirits&utm_medium=Original_Research&utm_campaign=Great_Wealth_Transfer&utm_content=Podcast Learn more about Vanguard at: https://www.vanguard.com/audio Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

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That's vanguard.com slash audio, all investing is subject to risk, Vanguard Marketing Corporation distributor. 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 Riddholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Riddholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben.

One of the conversations in the market over the past couple of weeks, but really reaching a crescendo last week, I think, has been the dominance of technology stocks, particularly, like, in the last couple of sessions. You see, like, the RSP-SPY ratio, which just keeps hitting new all-time lows, really nosed diving off of a cliff. So I had chart can make this chart showing the past two days. and this was, I don't know if this was Tuesday, Wednesday, Wednesday, Thursday, whatever it was. This doesn't really matter so much. You had 227 stocks over a two-day period that were advancing. Said differently, the remaining 730 or 20, whatever it is, fell on the day. And in that type of environment, over a two-day period, when you've got that many

decliners versus advances, meaning stocks going up versus stocks going down over the two-day period, the average return of the S&P is negative 2% on those type of days. And yet, the S&P was barely positive on that, over that two-day period, which is bizarre. And it just goes to show that the concentration in the index is having all sorts of really gnarly impacts. Well, I guess having NVIDIA B, what's the percentage now? Is it up to 10% almost?

Yeah, it's getting there. So it cuts both ways. So duality research, who we've mentioned before, but their work is absolutely top-notch worth signing up for their substack if you haven't, if you're not familiar with them. So they hit on this too.

I read this this morning on the way in. They say this unprecedented concentration that we're seeing is going to keep producing these very weird mismatches between returns and internals. And as interesting as they may appear,

because they created the same chart that I had Matthew, as interesting as they may appear, these short-term divergences don't really signal much anymore. They mostly just reflect today's index composition. They're coincident indicators, not bare.

So if you were using the chart that I just have on screen, you'd be like, whoa, timeout, time out, not healthy, not healthy. But they also showed that if you look at the other side of the coin, like the days where you have a lot of stocks going up and yet the index isn't, that's just the nature of a market where the top 10 names are 40% of it. It's going to keep happening. Right. This isn't going to like go magically disappear all of a sudden.

Right. Right. You know what else though? I have a problem with this, the word breadth. Just, it's hard to say, it doesn't look right. Well, you saw that, I mean, did you see, I think that was sublimity planted in the, in the, in the inbox. You saw that email? No.

So somebody emailed us and said, stop saying breadth thrust. It is really unnatural off the tongue. And I would agree. It's an unnatural. It's a problem is. That's the term. He suggested calling it a bread crust, I think, which is easier to say, but you can't. It's Marty Swaggs' breadth thrusts.

It's not a bright crust. So I'm looking at the returns right now. And we're recording this Monday because you and I are going to Vegas tomorrow and we'll be there for the anal FBI conference. So if you're out there, say hi, even though this will be recorded by the time we're out there. The Russell 2000 is up 13% year-to-date or so, 12%. Equal weight is only up 9% and then mid-caps are only up 5% this year. So there is still this pretty wide divergence.

I think this is why international diversification is shining this year. This is the time that it matters the most because emerging markets are up 34% and IFA is up 28% or whatever it is. That's why the currency piece is such a big deal with that type of diversification as far as I'm concerned. But you're right. Even if like a million other stocks do well in the SEP, it's not going to matter. Right? Because these big stocks right or wrong and it's going to be like this for a while.

Yeah. They also have another chart showing, listen, you can't say, you can't use that data that we open the show with to say that breadth sucks because if you look at the equal weight version of the S&P, the NASDAQ, and the Ross of 2000. So within those indexes, you equate all the names, they're all within 3% of an all-time high. So yes, there are a lot of names that are in the AI crosshairs that are getting smoked. That is true. But a lot of stocks are, is doing just fine. So the way the stock market acts, and if my CNBC thing here is that it's not a stock market, it's a market of stocks. Right? If you look at the market of stocks, it's just going to seem the, it's going to seem weird for a while

because of the way the market's structured now. Yeah, the concentration is having weird impacts on both sides of the bright coin. So Nvidia eventually has its bad earnings report. It's going to happen at some point. It is funny how

I mean, there was a little bit of moving on some of the big tech companies for earnings last week, but, I mean, there still hasn't been this like, whoa, kind of moment, right? Like, one of them just getting, just, what? So, see, you're not a market of stocks guy. I am. I'm sorry, but Facebook down 10%. To me, that's not a whoa. I need, like, a down 20 or 30% to go, oh, my God.

Hang on. Facebook's not going to fall 30% in a day. What are you talking about? It's done that many times in the past. Yes, it is. That's going to happen. No, it's not. Facebook is not going to fall 30% in a day unless there's a massive accounting fraud.

No, one of these stocks is going to get hit 20 or 30% on some AI news. It's going to happen. That's going to be the end of this thing. All right, perhaps. But. Invidia. No, no, no. Well, let's move the goalpost back to where you originally moved them from.

Meta had a pretty bad week. Google went vertical. And Amazon was up 10% to an all-time high. It's been a while. I'm saying there hasn't been one that's gone, oh, my gosh, this is all. Like, to me, that's going to be the signal. No, I know. You said something.

You moved the goalpost. I tried to move it back. You tried to take it back. They were big moves last week. Let's leave it at that. I'm pretty sure Med has been down 20% in a day before. That's not out of the realm of possibility. Maybe it was a $300 billion market cap.

You think it can happen. I think it absolutely can. I said, okay, don't say 20 or 30 because those are very different numbers. I think 20 to 30 in that range. I think that's absolutely on the table. 30 is very different than 20. Can it fall 20? Yeah, sure, perhaps.

It would have to be really gnarly. But to fall 30 in a day would have to be either an accounting scandal or Mark Zuckerberg. I don't even want to say like, you know, something bad happening to him. What if he pivoted the company to the Metaverse and changed the name from Facebook to Meta? Would that do it? Okay. I think it's possible. You don't.

But I, because of the gains these companies have had, if there is a really bad, oh my gosh, we spent $300 billion too much, boom, up in flames. Yeah, over, maybe over a week. It could lose 20. But I'm saying, let's say that happens to NVIDIA, and Vidaia is down 15% in a day. Like, it's going to do weird things to the market. Oh, interesting, Daniel. See how he keeps moving it lower and lower?

Yeah, and can Nvidia fall 15% in a day? Sure. That was the thing I was trying to make is one of these companies, is probably NVIDIA is going to have a bad earnings report at some point, and it's going to cause weird things to happen to the overall market. All right. Let's move past this. We agree.

15%, I'll give you that. Okay. 20 is going to happen. Just mark it down. You said 30. I can't wait to revisit this in the future because I said 20 to 30. I'm putting what kinds on it. All right.

I wanted to see where this thing stacked up. So one of the great things about Chart Kid Matt is that I give him an idea and I say, hey, this is the chart I want to look at. And he makes it look better than I had it in my mind, right? That's why he's so good for us. So I said, I want to compare this to past meltups. I want to look at the down the roaring 20s.

I want to look at Japan in the 80s. I don't look at the NASDAQ in the 90s. Compare the last 10 years to this. Okay? He does this. I got to be honest. These were way closer than I ever imagined they would be. And so the past 10 years, the NASDAQ 100 is up more than 500% in the roaring 20s.

And I measured this from 1921 because there was like a depression in 1921. So from there and through the peak in 1929, the Dow was up almost 500%. In the 1980s, Japan was up 510%. The only one it really is not close to is NASDAQ in the 1990s, which was up 800%. Does it get there? I guess that's the thing. A lot of people, when I posted the chart, I knew it would kind of go crazy. And it did.

And a lot of people said, hey, we got two or three hundred percent left to go. Oh, yeah, that's how it works. I don't see how you could look at this chart and not say, okay, I'm a little concerned. And now my Grand Rapids Hedge here is, listen, all of these other periods resulted in a huge crash, like a mind-numbing crash. I would be way more comfortable. And again, I'm putting this on the table, Grand Rapids Hedge, so don't even call me on it. I'd be way more comfortable saying the returns are going to be far lower in the future than they are going to crash. I'd have way more confidence in that because the NASDAQ is up 20% per year over the past 10 years from the bottom in 2009, March of 2009.

Cherry picking, fair. It's up 22% per year, the NASDAQ 100. We can't continue to see gains this big. It'll swallow everything. These companies will swallow everything. It's impossible. Remember the book Scale? Yes. Where it spoke about the law of nature and why elephants can only get to a certain size before their bones would just crumble. Yeah, I think we mentioned this like a couple months ago. Did we? But, yeah.

Well, that sort of dynamic does exist. Like, I don't, and I think you would agree, who wants us to go to 700%. The higher it goes within a shorter window. Now, if we could go up 700% over the next, like, six years where it's up, you know, 11% a year, not 22%, yeah, all day long. But you should not be rooting for this to look like the previous ones because at some point you're setting yourself up for just major disappointment. The numbers become too big

that all growth prospects in the future, you just discount them too much, too far, too fast. Yeah, we should, I would love to see just a, let's take a breather here. We don't need to see this thing get crazy. You'll notice on this chart, there's a huge gap. He did it by years between the 1930s and the 1980s. There's no meltups here.

There actually was one in that time. So a lot of people said, why didn't include the nifty 50? The returns weren't nearly as close. I thought about maybe putting gold in here in the 70s, but that would kind of defeat the narrative of the chart. There was one that was in the same, ballpark, and it didn't end in tears. In the 1950s, the whole decade of the 1950s, the S&P

was up 491 percent, on par with the roaring 20s, on par with Japan in the 80s, on par with the NASDAQ over the past 10 years. So why did you put that in here? I thought about it after the fact. I'm not going to lie. But I put the corrections in here. I have a whole table in one of my Excel charts. That's historical corrections. You can see in 1959, the S&P fell 14 percent. In the 1961 and 62, it fell 28%. 1962, it fell 22%. So it didn't, it, there was no bone earth-shattering crash here that caused the 1950s bull market. It kind of ended with the whimper. And now that one, to be fair, wasn't like this innovation-driven thing.

That was a middle class thing, World War II, sigh of relief, Great Depression's Over kind of thing. But that was one, if you want to point to an instance where you had a melt-up and it didn't end in a meltdown. So I would say that if it doesn't have to end badly this time, but if you get another 25% year in 26 and another 25% year in 27, then I see no way out. It will, yeah. I just, I'm a broken record here, but there, diversification hasn't helped you at all in the past 10, 12 years. If you're not diversified now because of this, I think now is the time. Well, maybe maybe that's the conclusion.

If you are all in on the NASSEC or the S&P right now, certainly if you're near retirement, I mean, what are you thinking? Exactly. And I'm sure there are people who are all in and keep pushing the foot down on the gas. But we have these conversations all the time. People who have made insane wealth off of these names going, I need to do. I know I need to diversify. Please help me.

It's not like people are saying, no, no, no, keep me on. I want to keep pressing. That's not happening. All right, take him who wrote the book on NVIDIA. He works for Barron's now. Where else has he been before? CNBC, great reporter. He wrote this thing about why AI is underhyped and it isn't a bubble yet.

And he did this whole really long thing, but he did a TLDR. So it's worth reading. If you want to click through, he did this on Twitter. Here's his bullet points. And I actually think it's easier right now to make the case and more believable to make the case. A.I is a bubble versus it isn't. Don't you think that it's more believable to say it is a bubble versus people who say, no, no, it's not a bubble.

Depends. If you're just talking about like quick, quick slam bites, then yes, easier to make the case that it's a bubble. I think it's very easy to make the case that it's not a bubble. So back to you. No, I think if you did the deep, deep dive analysis and charts, like it's way easier to make the case that it's a bubble than no. Oh, really? Okay, I disagree.

But go ahead. Okay. All right, we're disagreeing today. Here's his bullet points. Big tech valuations are reasonable and leverage is low. We're at the beginning of a multiple AI super product cycles in years ahead. We were in the early innings of a technology computing shift to AI, the largest in decades. Think 94 versus 99.

Every credible source reports overwhelming demand for AI computing capacity. Where is the overcomputer? capacity glut. Nowhere. This is the T. And again, he has way more that goes into each of these. So, I mean, that, that's a great, that's a great mic drop. I think there's obviously a lot of different shades of black and white here. Maybe you can even call it gray. For example, over the weekend, Sam Altman. My, my mother, who only, who only consumes our podcasts through the Instagram, uh, reels or whatever that we do, you know, the short sound day. Did she, did she watch my horror movies yet? I don't think, no, she, she's notorious for messing up saying. And she said, I just

want to thank Michael for being in the same boat as me for messing up sayings all the time. Because we replayed your thing about messing up your broken arrow or broken, you know. First of all, the great, actually the great, the terrible Jared Allen once said the lights are brighter than I expected when it came to the Madison Square Garden. Something happens to your brain, at least to my brain, when the light goes on. I don't know what it is. It scrambles the signals. Things get twisted.

So the part about them still being behind capacity. Now, again, on the flip side, all right, well, Nvidia has a $5 trillion market cap. Like, so, so what? Who cares about capacity? We're talking about bubbles and valuations and expectations, to which I would say duality research, throw the baton back to them. They say, for us, it all comes down to profitability. So if you're comparing today's 22.8 times multiple to the 10-year average, you're also

comparing it to a period when margins averaged about 12.3%. Right now, they're closer to 14.5%. and that context matters. So he did this thing where you margin adjust the P.E. Because why wouldn't you margin? It's the biggest driver of valuations. Higher margins deserve a higher multiple. Counterpoint.

All right, well, how do you explain Open AI? $13 billion in revenue, a trillion dollar market cap. Now, could you tell me that Open AI could be a trillion dollar market cap in 20 years from now? And that could be it. And it could just be horrible returns for shareholders. Yeah, I buy that hook, hook, line, and sinker. Absolutely.

But to say that it's a bubble, again, getting back to my definition, of a bubble in which there's no inconceivable world in which this doesn't fall 70%, 60%, and stay down, I don't think we're there. I think you're hung up too much in the definition here. The falling 7%. No, I'm not. Words matter. Words matter. I think you're falling, you're too hung up on the, it has to fall in and never come back. But that's what a bubble is. That is what a bubble is.

It is an environment in which the future cash flows in, no, in no, in no, in, No outcome in no plausible outcome can match the hype of today. And that is not this. That's not this. So that's the Cliff Asan has said. The definition of a bubble is there's no future potential that can match what the fundamental is saying right now. There is a world where that can happen.

So of course there is. So that's why I don't feel comfortable saying, yes, this is a bubble. Now, if we're up 25% in the next two years and it's mostly multiple expansion, then I will probably say something different. So you're saying, listen, these stocks can crash and doesn't necessarily mean it's a bubble. No, that proves nothing. Amazon fell 50% along with Google in 2022. Was that a bubble?

All right. I'm sick with my, it's a KappaX level. I don't think the amount of spending that we're doing can match what the returns are going to be. That's kind of where I land. And I don't think that necessarily means that it's a system-wide crash and it's never coming back. But I think that the spending is, the expectations are too high for the level of spending. expectations on whose part, the investors or the companies? Everyone, the companies, the companies especially.

I think they're way too well in and they don't really care. I don't think that they care if this is a bubble or not. They're just trying to win. That's it. All right. Speaking of diversification before, Jason's why, should you just buy stocks until you die? This is a very good piece. Did you read this one?

Yes. Okay. So he talks about the luck of the draw when it comes to being in stocks. He said, consider two hypothetical investors. each with a million dollars invested in the S&P 500. They both withdrew all 4% a year in equal monthly installments for the next 20 years. One retires on December 31st, 1999,

the other on December 31st, 2002. Of course, between 2000 and 2002, there was a bare market, the market crashed. He said the first investor would have a little more than 890,000 left after 20 years. The second would have a little more than $4 million. Obviously, don't include fees, taxes, inflation, all that stuff.

And then a really good chart here. Just kind of, this is the sequence of return risk that if you happen to retire at the wrong moment, if you happen to invest at the wrong moment, there can be two diametrically opposed outcomes through no fault of your own. You could follow the same exact script. The process is perfect. The investment process is sound. And you could get much different results. And his whole point is, he says, that's why I still own some bonds, in my case tips. And I think you should too. The historical odds and current government policy are against them, but stocks are also far from a sure thing. Of course. Yeah, this is, I mean, to us, this is obvious, right? I think, obviously not to everybody. Nobody's going to be mad if you went from 70, 30, to 50, 50. Now, you know, depending on your situation. And the market does go up 25% over the next two years or three years.

You're not going to be like, oh, my God, I miss it. How could I be such an idiot? But secrets and return risk is real. And just because stocks have higher long-term expected returns. By the way, the fact that we're even having this conversation makes me like cringe or makes me a bit like, why are we even talking about this? Obviously, you shouldn't be all in the market. Yes, but it's at this time in the market when some people need that reminder, I think. Like, I've seen a lot of comments.

Like, why would everyone bonds? What's the point of cash? I think there are, there is some of that. It's not everyone, but there's some of that going on. I actually, one of my readers I heard from a lot early in my blog days, he sent me this whole thing. He retired in 2000. I think he said March of 2000, which was actually the top. And he gave me this whole thing about how him and his wife survived it.

He's like, I retired early. It was in March of 2000. Literally the worst, that's the worst entry point in stock market history. You could say the Great Depression, but no one really invested in stocks back then. Which that's my one problem with the 1929 book from Andrew Ross-Soriken. Great book. He makes it sound like everyone is invested in stocks. 60% of households are invested in stocks now.

2% were back then. It wasn't, no one invested in stock back then. Anyway. So this guy says, how did we do it? We kept four years in cash. And we rebalanced. And if stocks were down, we took from cash. If stocks were up, we took from stocks. And he's like, it was really, really difficult. And this guy, like, he managed his money to a T. He actually, I get emails about it all time. He created this thing called the four-year rule. And I did a write-up about it like, I don't know, 10 years ago. And I still get emails about it this day because people ask for his, like, longer version of it. Anyway. But if you don't have some sort of plan like that, like a backup plan, just in case? Because guess what? You don't get to do the Monte Carlo thing when you retire. You don't get to try it 10,000 ways and see which one's the best. You have one shot at this. Yeah, maybe I take this for granted that because our advisors are doing this all day with our clients. But my God, this is so obvious. Hello, risk management. You can't, your life can't depend on the stock market, for God's sakes, especially after this run that we've been on. It's treated you very well. May continue to do so. Who cares? Plan for not, plan for this not to continue.

continue. Yes. And again, I think most baby boomers investors recognize this, that they're retiring. Like, they know, and they've lived through enough crashes to understand, like, this is not going to last forever. And I'm probably far richer than I ever would have been otherwise right now. But I think, I think this is the kind of thing that it's worth a reminder. Yeah. No, you're right. Um, there was a really good story in the Wall Street Journal about kids versus adults and basically saying things are way better so it's the economy that's great for parents lousy for their grown-up kids and they go through all of these different stories about the parents who are doing well they have home equity that's up a ton their stock portfolios are

up a ton they have kids who are graduating with PhDs and these different jobs and it's hard for them to find a job and they look at the survey or a result and they looked at people like themselves the baby boomer parents versus their children and like can keep up with the expenses, have enough money to buy a car, pay an unexpected medical expense, buy a home, find a good job. And obviously, all the older people, the parents, have way higher responses than the kids, right? It's way lower for the kids. Do you think it's ever not like this? I wanted to say, have two things here. One, it's a tough job market for some people, especially college graduates. Two, suck it up, right? I had a terrible job experience when I first

came out of college. I think the difference between now and like any time in history before this, today people want others to feel sorry for them. It's not just like recognize the fact that there's a tough whatever. It's tough to buy a house. It's tough to find a job. I need everyone collectively to agree that they should feel sorry for me. I don't think we had that when we came out of a tough job market in 2008. There was- What was unemployment in the GFC? Did it hit almost 10%? It was 10%. That was the high. Yeah. The unemployment rate is 4% right now. So yeah, there's there's pockets of like where things are starting to get bad. Imagine millennials complain.

Not imagine. We did. Millennials, I mean, I had no way to complain because I was an idiot. But millennials that did the right thing in college complaining about not having a job when grown adults were getting laid off in their 40s. It's like, shut up, kid. I have kids. That's the thing.

We didn't get in. No one gave any sympathy to young people back then. That's all I'm saying. So I think that, of course, listen, of course, like, I am a sympathetic person. I don't like to see this. It is weird, though, because on the one hand, like younger people tend to be more optimistic than older people.

I made this comment to you and Josh last week. I feel like it's always been younger people have this optimism. And today, I feel like it's getting broken. All the young people, they are, they're way more pessimistic and cynical. And I think it's just because they grew up with the internet and social media.

I don't think they had a chance. So young people have way less optimism than they did in the past, than they're way more cynical. Are young people, this is a dumb question. Like, are young people on Twitter? I don't know. They're on TikTok and I don't know.

I feel like it is more of a middle-aged Gen X, late-millennial thing for most people. But I do think you hate talking about demographics. But I do think the demographic stuff in the years ahead is going to be the divide between the demographics is going to be worse than ever. So Eric Finnegan from John Burns sent me every six to 12 months he sends me his demographic presentation that he does. And I pulled some charts here. And the thing is, part of the difference now between young and old people is part of it is things are just, you know, they are harder in some instances, but some of it is just life choices. So you look at annual birth by mother's age, and it's under 30 versus 30 plus. And for the first time ever, more people are having a child plus 30 than below 30.

It's never happened, right? So it was way different back in the 70s, 80s, and 90s. of course this one this is probably the one that gets people the most is that the first time homebuyer is 38 years old it really hasn't budged off of like 30, 31 since the last few years but you have the largest population group this year

is turning 33 to 37 if you break down the demographics into these cohorts of like four or five years and I think that's part of the reason that it's causing this. There's so many more of these 30 old people than ever before this is like the rabbit going through the snake right now it's young people.

And this one gets people too. So this is Americans reaching other typical adult milestones later in life. So this is percentage of 30-year-olds living on their own, married with a child, own a home, or have a bachelor's degree. And bachelor's degree is obviously the only one going up. And that's part of it, too, why people are putting off this stuff to later in life, because they're getting more education. And how many young people these days want to even settle down? I think a lot of it, this is life choices, too. Yeah, then this is like a structural thing, not just a real estate thing?

I think this is, I think part, most of this is structural. Obviously, this is the worst time ever to be a first time home buyer, but I think a lot of this is life choices too. People are going to school longer. They're waiting to settle down longer. They don't, a lot of people don't want kids till later in life. They want to enjoy it. Whereas in the past, it was like, eh, let's just do it. Everyone else is doing it. So, anyway, I just think the demographic, like, divide, though, is in, it's also, we talk about the luck of the draw thing with Jason's Weig and when you retire. A lot of the luck the draw thing is going to be, do I have rich baby when we're parents or not? Can they help me

with a down payment? Will they give me some money or will I get an inheritance from them someday? I think that's going to be luck of the draw too. Did your parents say, were they fiscally responsible or not? Does that some of the people, that's their retirement plan. We've talked about this. Anyway, you hate generational warfare. I think it's going to be worse than ever in the years ahead. Not going to get better. It's going to get way worse. Yeah, not my favorite topic. Okay, I shared this with you on Slack this morning. No, you know why?

Because it's just like a bummer. I don't like that stuff. It is a bummer. I totally agree. And I just don't see it getting better anytime soon. Because I was, you and I probably are in a similar boat here. I was so naive to the world around me when I was younger in high school and college. I knew nothing besides what was going on in like, I had the blinders on.

I didn't pay attention. I still remember when we had the Bush Gore. election. Me and five or six friends went to a house of our friends that had a party house because we were, I think we were a freshman in college. We watched the election. I don't even think people talked about who they wanted to win. No one really cared. We stayed up till three or four in the morning. They still didn't name a winner. And we all went home. And guess what? We never talked about it again after that once. We didn't, it never once came up in conversation. Yeah, if you asked me, I mean, I was a little bit younger, but whose policies do you like better?

I would say, uh, yeah, sure. The guy. But now if. If you're a young person, you know everything down to a T about these politicians and you're paying attention to this race in Iowa and this race in New York. And like, that stuff just didn't, wasn't on our, maybe that says more about me and my friends than anything back then. But I think that was more people, right? We didn't have to care as much. And today, young people feel like they have to know everything that's going on. All right. So there's this viral thing going around lately saying from Moody's, the top 10% of earners account for 50% of consumption.

We've talked about this a lot. this guy from University of California, this economist, what's his name? Antoine Levy. Yeah, Levy. He says, this isn't, this dad isn't right. It can't be right. And he says the biggest reason is rich people pay higher taxes.

They have higher savings rate. So he kind of backed into this and said, if you look at just the fact that people pay high at rich people pay higher taxes, he's saying I think some of the numbers are kind of, It's not like Moody's just fudging these numbers, but they're not exactly accurate. He said the number is probably more like 35% to 40% of consumption. That's still pretty high. I mean, does that change anything in terms of how you perceive the data?

The trend is going higher, but the funny thing is that the 50% number, no one even bad at an eye because it just seems like that's what it should be. You're right. And maybe that the point is the trend is moving higher and even if it's not 50%. The thing is, the top 10% does account for like 50% of the income in this country. We were talking with Stephanie Roth last week on TCAF about why a lot of the spending wasn't impacted by higher interest rates. And it is the top 10 percent, the top whatever percent, their ability to get alternative financing at lower interest rates and not have to slow down their spending is a structural change in the market. And I don't know what slow is that other than something, a credit event or something with the labor market.

But even then, a lot of these people are, I mean, certainly the retirees are insulated. from the labor market now. If there's a big labor market impact, the stock market will come down and it's circular logic. The stuff that we're seeing, wealthy people have never had more options than they do today

in terms of trying to manage their taxes or borrow money against financial assets. There are so many other strategies, yes, that wealthy people have, that you're right. They were kind of like the MAG7 companies that didn't get impacted by higher rates. It was the same thing.

So here's the other side of the equation. Uh, from Apollo, 25% of the U.S. population is a subprime credit score. That's pretty gnarly. I wonder, so what's the number on that? I guess... 680, I think. 25%? That's kind of nuts, right? No, that sounds right to me. Honestly, I mean, if you think about it, not everyone is in a mature financial position. Think about how many young, I said, the biggest cohort in the country right now is 33 to 37. How many people come out of college and their finances are awful? Is there a way to see your credit score over time?

I would love to chart mine. That's a good question. I don't know how that works. So you think that when you first graduated from college and you're working as a waiter, like your credit score was like negative essentially? Oh, I know it was. So the first job opportunity, the first real one that I had, I've told the story before, but it was at E-Trade in Garden City.

And the guy gave me an interview and was like, yeah, you're going to take over a book of whatever it was $100 million and you're going to talk to these people and you're going to try and upsell them and you have a base salary of $60,000 with some opportunity to make more. And I was over the moon excited. At that point, I had been unemployed. This is probably 2010, 11. So I was unemployed for like two and a half years, like literally unemployed. I was twitching.

I didn't eye spasm for two years because I was so. upset. And anyway, where am I going with this? Credit score, right. So I didn't get the job because when they were doing their background check on me, they found a ding in my credit report. And in the interim, the guy that hired me left and the new guy who replaced him brought in somebody else. So yeah, my credit score sucked and impacted my job, my life in a series way. It is. It can, it can tens of thousands of dollars of course. your life. Maybe hundreds of thousands if you had a good credit score. By the way, well, for me in the opposite direction, because my career trajectory would have

been way different. It can, it can totally change your, yeah. But thank God my credits suck because otherwise, who knows where I'd be? Not here, not talking to you, Ben. Okay. There are those forks in the road, right? Yeah, that was a major one. Yes. It is, this is something I would also tell young people. There are times in your life when you don't get a job or things seem really bad. I had many of those, and I thought the world is over. This is at the end of the world. And you look back at those and you go, gosh, I was so lucky that that thing didn't work out for me. Oh, yeah? Did you, did you ever apply to the Bermuda Monetary Authority? Things that bad for you? I lost a job once because I was trying to move to Chicago. My brother

had a condo in Chicago and I used his address. And they were sending all the correspondence to him and somehow he never got it. It was, and I found the email and then I said, I haven't heard back for me. They said, hey, we offered you the job, but he never responded. Yeah, that was a low point. That wasn't great. I think I went straight to the bar from there. Anyway, guess what? It worked out. I would have been miserable. It was like a real estate analyst job. It would have been awful. Wouldn't it worked out good. All right. Let's suck tariffs for a minute. We've had lots of conversations about why aren't tariffs having a bigger impact? From the Ramp Economics Lab, our Kerasian has this great substack. And he said, why are

terrorists so confusing? This is the big thing. So Ramp is this company that helps people pay invoices and automates a lot of the financial decisions. So they have a ton of data to come from. So he said ramp data from manufacturing retail sector invoices shows a slow and gradual increase in tariff coughs. The share of bills and invoices showing a tariff charge has doubled from 1.4% in 2024, generally 3% as of 2025 September. So basically saying it's still a very tiny number. It's way, so he goes through this whole thing in this and it's worth reading the article. But he basically says if you just looked at the announcements, you'd think, oh my gosh, this is unbelievable. But if you look at the actual numbers,

and how many companies are actually paying tariffs or consumers, it's way smaller than the announcements. So companies are finding ways to skirt around these or not paying them. It's not having an impact because the tariffs aren't being paid as much as one would think. And we actually have a podcast. When is it coming out? Saturday, maybe?

Saturday. Okay. All right. So we have a podcast coming out with him talking about this and AI, and it's really interesting stuff. So it should be out soon. All right. On the AI front, we talk as stock market people.

We talk a lot about the market cap, the tweets, the charts, whatever. And I don't think we spend enough time talking about the underlying fundamentals about what's actually happening. So I have friend Michael Sidgemore has a great substack and podcasts called Alt Goes Mainstream. And in the most recent edition, he wrote about what meta is building in Louisiana. the Hyperion thing that they're doing this interesting financing with Blue Owl and PimpCon, everything else. It's a 4 million square feet. It's a 4 million square foot data center

that's being built in Louisiana. That will deliver over 2 gigawatts of compute capacity to train future open source large language models. So for context, 5 gigawatts would be enough to power the entire city of Miami. So when you talk about the infrastructure, the data center, the KAPX bubble, this is where it is. You know, it is kind of funny. This is kind of a got-to thing.

But you could say, like, there's people who have been pounding the table and screaming for years. Like, why don't we build anything in the U.S. anymore? And they're probably the same people going, why are we building so many data centers? Now, you probably say, like, why can't we just build more houses and stuff? But this is one of those things that you're right. We're actually building stuff here. And these, this isn't just, this is actual, actual stuff that's going to matter in the future. So they say McKinsey projects that these data centers are projected to require almost

$7 trillion to keep pace with the demand for compute power. So if that is even remotely within the realm of what happens, where you're seeing $6, $7 trillion being spent over a given time frame, and ostensibly the spend is because there's revenue tied to it, such that the investment makes sense, if you get those sort numbers, then looking at it today, it's not outlandish. I mean, it's hard to, it's hard to think about numbers of that size, like of that scale. So, for example, all right, let me put this in the dock. I had Chartkid make this. So we looked at Apple reported last week. We looked at all of their different segments. And Apple, I think, did Apple cost $4 trillion?

Yes. Okay. Which is funny because Apple didn't get into the AI stuff. at all, and there's still at all-time highs and still $4 trillion. All right. The iPhone, over the last 12 months, has done more in revenue than Bank of America. The iPhone has done more revenue in the last 12 months than Meta, all of Meta. That one surprises me.

And I do kind of get it, though, because my wife and I have both lost phones in the last year, and it's not cheap to replace. I will say that. services, which is the bell of the ball. This is the highest margin business. This is pushing their margins to an all-time high. Services business did more revenue than Target, $109 billion. If you look at the wearables, okay, the freaking wearables, dude, it did almost as much money,

$36 billion as Starbucks, which is $37 billion. Starbucks has $40,000 stores globally. I mean, Starbucks, it's Starbucks. Salesforce did $39 billion. Okay, turning to the Mac, the computer, the Mac did more revenue, $34 billion than Schwab. And lastly, the freaking iPad, the iPad, I know I'm saying it's not for three times, the iPad, which in my mind, I don't know what I would have guessed iPad is. I would have guessed $5 billion, $10 billion. The iPad did more revenue in the last 12 months in AMD.

That's a good chart right there. and they're buying back $100 billion in stock a year. So I guess that I was going to get to the 10 minute, but there was a chart. My point is we're not even, we're not even pretending to zoom in oftentimes when we're having these conversations. And when you do, when you look at some of the numbers, it's like, all right, I guess. So there's this number, this subtext called Understanding AI. And they show that the cash, operating cash flow versus capital expenditures.

And it's so this is for Google, Amazon, medicine. Microsoft and Oracle. And the operating cash flow is still, there's a huge wide gap between there's more than enough cash flow to cover all these capital expenditures. And to your point with Apple, it's because they make so much darn money

these companies. And they're not even listed on this. Obviously, it's not getting into it. Okay, that's good stuff. I'll give you that. All right. I want to play this video. Let me share my screen.

Okay. Somebody tweeted this from Neil DeGrasse Tyson. Did you see this, Ben? No. Okay, here we go. I've been doing calculations, as well as looking back at old NASA footage and raw data from satellites hovering above Earth. And I just can't escape the conclusion that the Earth might actually be flat. That's not me.

It was never me. Those aren't my words. That's what's called a deep fake. How wild is that? So wait, the Earth really is. flat? Yes, that's what I'm trying to. So, boomers are going to get scammed into the Stone Age and not just boomers. I got to call a couple of weeks ago I was with Chris, actually. Somebody from Germany was trying to log into my Google account. I got a push notification

on my phone. I hit no, obviously, 10 seconds later, I got a call from Google, right? It says Google on my phone. Now, Google doesn't call you, okay? So, but I, but I was like, wait a minute. What? So I was, I was getting scammed. Thank God. I hung up the phone. But that doesn't even scratch the service. Like that Neil deGrasse Tyson video and what's coming is going to make the crypto scams look like, uh, look like what? Look like my brain is breaking it. What does it look like? I walk in the park? Sure. Hey, you know that one. Isn't this, can't there be a whole industry that crops up because of this though? Like we're, we're going to be the ones that tell you what's real and what's fake.

Well, I guess that's what. Life lack or whatever. By crowd strike, for example. Like these cybersecurity companies are the obvious secular winners for the next decade. But it's wild what's coming. Okay. I got a data 7-1 for here. This is also understanding AI. It shows data centers are catching up to offices. So it shows annual construction spending for

data centers and other offices. And data centers is almost closing the gap to be bigger. Here's what I want to see from the Wall Street Journal. There has to be a story of which construction companies are getting rich off of this. There has to be someone who is other ancillary benefits to people who are working on these data centers and making money, right?

There has to be other outside impacts besides just the tech companies. Well, yeah. This is helping someone. Who's getting these contracts? That's, yeah, that's a good question. And I mentioned this to you and Josh last week. We talked to a farmland manager who said, because farmlands are, tend to be by resources that have a lot of water, farmland investments are now getting bid up and farmers are

making money because they're trying to buy. these data centers or build the data centers on farmland because it's so close to water because they need the water. There's going to be so many knock on effects like that. Again, people are probably mad like, wait, the build out of the data centers is taking away construction workers from building other offices and building houses and blah, blah, blah. But I still think like the fact that we're building this stuff in the States, that's a net positive for us. Yep. Lots of jobs. All right. I want to talk about AI and jobs. So this is from Wall Street Journal. Tens of thousands of white color jobs are disappearing as AI starts to bite. By the way,

Derek Thompson tweet, Derek Thompson made this chart like two weeks ago and everybody's stealing it. Which one? This one. Okay, so this is the S&P 500 versus total job openings. And it shows when ChatGPT launched, job openings crashed. I'm sorry, this is a massive chart crime.

Massive. This, this, if you're trying to say that Chad GPT coming out is causing job openings to fall that quickly, this is the Nicholas Cage thing. The number of people who drown in falling in a pool versus films Nicholas Cage appeared in. This is total correlation causation and this is a massive chart crime.

You cannot tell me. Okay, AI is going to have an impact on white color jobs. Yes. It did it immediately when chat GPT launched. Come on. Give me a break. This is a chart crime to the nth degree, correct? Straight to jail.

Well, two things in this chart. Number one, the blue line artificially got inflated during COVID, right? Joltz. That's the thing. It was, it was, this is part of the 2021 job market slowing down. Yeah. And then also, uh, you know what else happened when ChitbT launched or, I guess before when this

when the blue line actually peaks? Hmm. Was there a tightening cycle? I can't remember. Exactly. Everyone, the company is overhired. They raise rates. All this stuff.

Yeah. Yeah. Is AI going to have an impact on jobs? Yes. Is it already? So, John Lederary put this thing out. And there, there's these things like Amazon. what did they, they let go 35,000 people.

And you say, oh my gosh, but he looked at just in the fourth quarter alone, 7.5 million private sector jobs were destroyed. In the fourth quarter alone of 2024, okay, job gains, 7.7 million. Like, there's so much churn in the U.S. job market because there's so many people and so many workers that, like, these numbers, you have to put them into context sometimes. For sure. The unemployment rate is still 4.3%.

Although, I guess if we don't report it anymore, maybe it doesn't count. I know AI is going to have an impact. I don't see how you can say that it's having this big of an impact yet. That's my whole point. I think people need to calm down a little bit. It's a chart room. All right, where are we at?

All right, let's let me, if you would allow me to take five minutes on strategy. All right, so the company formerly known as micro strategy reported earnings this week. Charkin made this looking at the ratio of strategy, to Bitcoin. And this peaked a year ago, actually,

in November 2024. And it has been straight down for the last, really since July, it's been acting really funky in a bad way. The next chart shows the value of their Bitcoin holdings compared to the market cap.

And people are hemming and hung and hung a year ago. Why are they getting such a premium? Well, guess what? That premium collapsed. Matt also showed the market cap value divided by the Bitcoin holdings value. and it peaked out like 3.5 times, it's now 1.2 times.

Now, there's a lot of different reasons for this. I think the primary one would be that if you wanted exposure to crypto and brokerage account, particularly levered exposure, before all of the ETFs, before all the other treasury companies, this was the only game in town. So the earnings call itself, it was an hour and 50 minutes. There's 92 slides. Now, to me, I know a lot of people don't care about this, but to me, you listen to this toll call? No, no, no. I listened to a lot of it, but not all of it. It was Friday at 4 o'clock and said,

I think I'm done. 92 slides, hour, 50 minutes. I've never seen such a thing. And one of the things that they talk about was them getting a credit rating. All right, so this is Fong Lee. He is the president and CEO. I'm going to play this at 1.5 times speed. So if you're already jacked up to two, this might sound like a mouse. So you might want to slow it down. All right, here he is talking about the S&P rating? More pools of capital. So what is it B-S-P-S-I and as a B-Minesis, issue, or credit rating to strategy? And we think this is a big milestone, not just for strategy and for Bitcoin

but a big milestone for Bitcoin in itself. There's been a lot of discussion around whether we think this is a good rating or a rating. I think it's a solid starting rating. And I think even more importantly to have a rating, it gives us access to more pools of capital. So what does a B-minus rating mean? By definition that there's a stable, but go on.

The expectation that will continue to manage our capital structure prudently and that we maintain market access. Ooh, NBFI, keep going, Fung. A structure that's a framework that's called non-bank financial institutions. That's a framework that SEP uses to rate us. And importantly, at this point in time, Bitcoin is, we don't get any credit for the Bitcoin on our balance sheet when it comes our rating is deducted from our equity. They should get credit, but they think so, but all right, it needs to be seen.

All right, so here is Michael Saylor himself. Now, I will preface this by this man is extraordinarily intelligent. IQ off the wazoo. And also, there's a fine line between genius and crazy, respectfully. I mean, this sounds nuts. And maybe I don't get it. Maybe I just don't. But here's Michael. Listen up and, well, tell yourself what you think. Here we go. The second innovation is where we're replacing traditional risk with digital risk. Traditional risk, it's opaque, it's heterogeneous, it's discreet. You own 8,700 houses, or You own, you know, you're exposed to a portfolio of 47 junk bond issuers.

And maybe they're fine, but then there's a tariff or there's a trade war or there's a competitive change. Or maybe there's a strike or maybe an airplane crashes, you know, or there's a COVID lockdown. Whenever you have these kind of conventional real world issues, you have a discrete explosion. I don't know how that wouldn't impact heterogeneous or not. And I'm not quite exactly sure what that means. But I'm not sure why Bitcoin wouldn't be impacted by any of those risks. that he highlights, but who am I?

Or changing customs duties. So traditional risk is opaque, it's heterogeneous, it's discrete. On the other hand, digital risk is transparent. It's homogeneous. It's continuous. You can go to our website and we update the risk model every 15 seconds. And so it is completely continuous. We update the price of Bitcoin.

We update the volatility of Bitcoin on a continuous basis. We update the BTC ratings. You can plug in your statistical models into them. And of course, all the risk is based upon your outlook of BTC, AOR, VTCV, VTC, Vol, BTC price and BTC rating. So digital risk is something where you don't have to wait for a year for a credit rating agency to publish a new report to tell you whether your favorite airline or your favorite, you know, restaurant chain is riskier or less risky. With digital risk, you can literally plug into the website and you can recap. Now, there's seven innovations that was merely about one of seven.

I know a lot of people that are listening like Michael, please, enough. I don't care. Well, I care. I think this is one of the most fascinating stories in the financial markets. Michael Saylor has generated a lot of buzz, raised a lot of capital to power this perpetual money machine, had a lot of success up until, I guess, the peak at the end of 2024. It's been certainly a rough 2025.

Can he get his mojo back? Are buyers buying what he's selling? Is raising capital a business model? The FT did a good piece on the credit ratings, the credit ratings of strategy and what it means. And they said, what makes this episode remarkable, this is the FTA, is the company's craving for validation from the very stratify establishment it claims to reject. Strategy presents itself as a bulwark against the debasement of fiat currency, yet it seeks legitimacy from two of the oldest and arguably

most discredited pillars of the ancient regime, sell-side equity research analysts, and credit rating agencies. And that's not even mentioning the palpable desire to gain membership in the S&P 500, the companies pursue of conventional approval betrays more than a little self-doubt about its own purportedly disruptive project. So one of the interesting things on the call is what they're doing,

and I mentioned this last time, with their four different preferreds where they're trying to strip out the volatility risk and like somehow shift all of it into the dividends of the preferred or the interest payments, whatever.

And he talks so fast and it's like, it's hard, honestly, because he's so much more, he's so much smarter than I am. I'm picturing you in your mudroom. as Charlie Day from what's always sunny with the lines and a pictures

and that's you. Daniel, make that one happen for me. Make Michael as the, that guy. I can't keep up. So then the FT goes on. The last thing, then I'll stop here.

Actually, that's not true. One more thing. The FT says, the company argues that it's $71 billion treasury of Bitcoin offers a massive buffer

of collateral to service its obligations. But this exposes what S&P calls a currency mismatch between strategies dollar-denominated liabilities and its Bitcoin denominated as

assets. Fixed income investors take on the risk of this mismatch without sharing in the Bitcoin upside, receiving only a dividend while being exposed to potentially ruinous losses. And as S&P notes, if strategy were forced to sell Bitcoin to meet its obligations, it would likely occur during a downturn precisely when the collateral is losing value. I did forget one last quote that I wanted to highlight. An analyst asked him about price action. Now, this was last week, Bitcoin had been in a pullback, but things have accelerated the downside this week. But he didn't really answer the question.

At least I had trouble finding an answer in here. But let me know what you think. Or again, let yourself know. I think Fong highlighted some of them in the discussion of S&P credit ratings issues, right? The fact that Bitcoin is not viewed as capital by the traditional credit ratings industry. So I think the view of Bitcoin and a collateral value of Bitcoin and the traditional views under Basel rules, under the rules that govern our banking system, our insurance companies, and our credit rating agencies, I think that that's a structural thing.

You know, like when FASB didn't allow you to recognize gains, but they made you recognize losses, and you had indefinite and tangible accounting, that was pretty crippling. I think that we fixed that, and I think that fixing capital risk rules, you know, will be a big one. I think the second is banking acceptance, custody, and credit, banks issuing credit on Bitcoin. So we're hearing rumors, and we've heard that a number of major banks in the U.S. in the first half of 2020, 6 will start to buy Bitcoin, sell Bitcoin, custody, Bitcoin, and issue credit and margin lines against the native Bitcoin asset. That will be great for them. That will be great for Bitcoin. That will be great for us.

That will accelerate adoption. And so I would say neither of these are things that I would ask for government helpful. All right. So I didn't really hear an answer there. I think it's, it's as simple as the market for now is no longer buying what strategy is selling. Maybe they can get their mojo back. We'll see. Time will tell. And forgive me if this is of absolute no interest to you. I can't take my eyes off of it. I'm not going on. I tuned out a little bit ago. I know. It's okay. It's okay. You know, let me ask you a question. So Bitcoin is $108,000 now. It's up 15% year today in a very risk on environment when the dollar. is getting crushed, right? If I'm a macro person, here's the Winnie the Pooh meme. I just put it in the dock for you. This is the new macro thing. Stocks are an inflation hedge. First, Winnie the Pooh. Second, Winnie the Pooh, stocks are a debasement hedge. That's how you macro right there. That is good. Are you a little surprised Bitcoin's only up 15% year today? Because I kind of

thought, once it hits 100, like, who boy, who knows? I'm kind of surprised that. Now, to be fair, it's up 60% over the past year. Well, sentiment in Cryptoland is like in the toilet. So, I mean, because I, and I do you think gold is a big part of that? The fact that gold is going nuts, I feel like there has to be some envy from the crypto people this year going, oh, man, gold is doing what we thought we were going to do this year. Listen, I don't think any, I don't think any crypto person would say that they're like, now there's like, there's very, there's hyper rational, logical sensible people who are like, guys, calm down, zoom out, 100,000,000, like, chill, it's not going to go up 70% a year. It's a major asset class at this point. Like, everybody needs to pump their expectations. Yeah, like I said, it's up 60% of last year.

Just this year, 2025, if you're looking at it in a vacuum, Bitcoin is kind of just middling. No, it is middling. Absolutely. So given the backdrop, given gold, given Mac 7 names and a lot of the speculative names like the Aklos of the world and the quantum stuff, absolutely, you wouldn't, you would think that Bitcoin should be doing much better, for sure. That was Yemen. Yoman's work there. How do you say that word? Yoman? Sorry. Yeah, I know for a lot of people, they're like, they're fast voting or just any of the episode. It was an interesting story. All right. You've been on it, too. So the K-shaped stuff. This is from NAR. Let's get to housing.

They do this on an annual basis. Change and sale by price range, year over year. This is a number of sales, not like how much it went up. The biggest cohort that's getting more sales is the million-dollar houses, 20% of the total now. Whereas under 250K is 8% of the total. More houses are selling for a million dollars or more than any price right now, which is kind of insane when you think about it, but that's kind of our new reality. Yeah, I bet it also.

It's insane when you think about it, but then it makes a ton of sense when you think about it. The people who are able to buy houses, like you said, don't have to worry about much about traditional financing. They have portfolios that they can use. They are buying the higher price houses. Yeah, they're not worried about mortgage rates. They have home equity they can use.

I don't know. I just, I don't think a lot of people look at this and go, oh, this is great. Awesome. Ben, you know, you know, you know the line in a naked gun, the late Leslie Nielsen says something like he's driving with Ed, the big guy. And he goes, everywhere I look, I'm reminded of her. You know what I'm talking about? Yes.

So there's a phenomenon. Which I watch the new one. I'm going to talk about it in my recommendations. Okay. There's a phenomenon and it has a name. I can't remember what it's called. Where you buy a car or you get a dog and then you, like, you see them like you've never seen them before.

Yeah. Right. Yep. So that's happening with me now for the, for the Dan Wang book that we keep talking about, like the lawyers versus engineers. Now, it's so obvious in this article because it literally, this is what the article was about. But this guy Michael Riley does, he covers, he covers D.C., that's his beat for Bloomberg.

And he wrote a really good profile on ACHLO and the history of nuclear and funding and the mismatch between venture and the industry and all that. It was really well done. So they spoke about this guy who is an early investor in Acklo. And his whole strategy was basically to replicate the Uber Playbook. Well, like go into a place, just do it, ask for, don't ask for permission. Just, just regulatory change. Forgiveness, yeah.

Like, just make it happen. So the article said, Uber deployed lawsuits and regulatory assaults so regularly that the serial entrepreneur Michael Bertov said in 2023 that hailing an Uber account amounts to hiring a law firm that just happens to have an independent contractor driver nearby. It's army of lobbyists and aggressive political maneuvering, cowed politicians from New York city to New Delhi, the company's playbook inspired a new term regulatory entrepreneurship. In trying to apply that model across industries, Churi, who was the original investor, the original venture guy, and I forget his first name, and Toaklo, he built a company that

is little in common with a traditional VC operation. Here's a kudagra. Rather than hiring mainly MBAs, trust ventures is stacked with lawyers. Churi and his team devote much of their time to dissecting regulations looking for loopholes. So I have no opinion on like, you know, is this dirty?

Is this good? Is this necessary? Is this what you need to enact change? Whatever. Like that's a whole other nuanced debate. But this is the world that we live in in the United States where everything, I feel like the default answer to everything

can we do with this is no. Because of legislation. So now you know why so many business leaders and entrepreneurs and venture capital people were Trump supporters because the promises were deregulation. We're going to cut the red tape and let you do whatever you want, right?

Yeah. Now, say what you want. Obviously, a lot of people are not supporters, but there is a lot of over-regulation and is there the risk, the not so little risk that we cut too much fat to the bone and we over-deregulate? Sure, of course, there is.

We definitely will. I imagine the stuff is going to happen because of this, But we got here for a reason. Yeah, we obviously went too far on the other direction. All right. This headline stuck out to me immediately. Kraft Heinz, CEO, wants of worst consumer sentiment in decades. That's from Bloomberg.

So they reported, the CEO said, we now have one of the worst consumer sentiment. Okay, I just read that part. The company expects full-year organic net sales to be down 3 to 3.5%. He cited, it's slower growth in emerging markets and pressure on the U.S. retail. They cut their outlook. All right, so obviously my thinking is, hey, wait a minute. Maybe there's just other things happening that in the industry, more so than just like, yeah, the consumer doesn't buy ketchup anymore because they can't afford ketchup. So, Bloomberg says other big package-

You can't afford ketchup. Right. Other big package food companies have, yeah, how bad do things have to be without being insensitive for you to say, no, I can't get ketchup? Right? Right. We buy, listen, we buy a lot of ketchup in the Carlson household because my son, he, he'll fill up half his plate with ketchup. When he has a burger and fries, I got him a T-shirt last time I traveled somewhere that says, I put ketchup on my ketchup in the Heinz logo, you know?

So it's not our problem. Sorry, Kraft. We're doing our part. Same. Kobe dips apple slices and ketchup, which is- Everything, right? Kids use ketchup forever. Yeah, it's gross.

All right, analysts have said that these companies make the kinds of processed foods Americans are moving away from. Now, obviously, Heinz makes a lot more than just ketchup. So how's this for a nonsense quote from Mondalee CEO? the government shutdown going forward will not help with the confidence of the consumer. Bro. Your company's not struggling

because the consumer is worried about the government shutdown. Get out of here. Ben, did you watch a show of ridiculousness? Or are you even, like, familiar with it? Yeah, Rob Deerdeck. Okay. He stole the show from Tash, Daniel Tash. Do you remember Tash Point O?

Yeah. Okay, so we used to watch that one, and Rob Deardke stole the idea of ridiculousness from Tash. Point O. Got it. Okay. I never saw the Pasch 2.0. I'm sorry, but I was familiar with it being a thing.

I used to watch that one. Anyway, so apparently there's like a new shit has come to light. There's a lawsuit and this was unearthed. It was literally the only thing they'd play on MTV for like 24 hours a day. So this dude is making $32.5 million a year. They do 336 episodes a year. Isn't that wild? Did you ever watch Robin Big back in the day?

No. I know what it was the thing. He was his bodyguard or something? Yeah, I like that show. RIPA big, he passed away. All right. Anyway, I just thought it was wild that he makes that much money content and business. And obviously, MTV is a Paramount Studio thing.

Anyway, that was a faceblower for me. All right, a lot of people shared this meme with us with two dads one into each other at Costco. Dad. Uh-oh, here comes trouble. Other dad. I guess they let anyone in here, both dads, and it's Tom Cruise with just cackling. So good. Yeah.

that's that one got me here's another good one uh somebody said hey what was that ai podcast that ben mentioned last week a million people ask me just so you know people in the future we do show notes on our websites a wealth of common sense dot com or relevant investor dot com that is links to everything we talk about so if you need because people ask me and i share but if you need to know we have show notes on our websites all right well get this no longer will you need to go to the show notes or email ben directly because this person asked Google, which said, it gave him the answer. He said, Animal Spirits AI podcast and it gave him the answer. Wow, that's pretty good. That's pretty cool. Right there. All right, there was this robot thing on Twitter and went nuts called Neo,

the home robot. And there was a video and they showed it. It says it can do your laundry. It can clean for you. See, the person that folds your laundry, their robots are going to take their job. Now, and it says you can, I think you can buy this thing for 20 grand or pay like, $500 a month for it. And this had like 67 million views on Twitter. And I just have to say, and it sounds like there's some caveats. Like, I guess there's going to be like someone watching the robot through a screen for certain tasks and like controlling it for you. So it sounds a little sketchy. And I'm sure it's not ready for prime time. But I'm not usually an early adopter of technology. And I don't know how this thing's going to do. Who knows? That's true. You just

discovered Apple Pay. But I will be one of the last people though. I'm going to wait like five years to by a robot. I'm not going to be the one who buys the robot and have the robot come put it in, like, choke me or something. Like, I've seen enough movies. I'm not going to be a first adopter of a robot. And here's the thing, I don't want a robot to look like a human. Why can't it just look like, why can't it be a box with tentacles that come out? I don't want it to look like a person. That's way too creepy. If you walk in your house in a dark room and the robot's just sitting there, how creepy is that going to be? I don't want to have, I'm not going to be the first adopter of the robot. And listen, if you buy a robot and the robot kills you,

no one can feel sorry for you. If you buy the first version of the robot and it turns on you, like I-Robot style, you can't, it's like going skydiving and you die. Like, sorry, no one feels sorry for you. Fair? Daniel's getting uncomfortable. He's moving in a seat. I'm sorry. But if you buy the first version of a robot and it turns on you and it kills you, I'll go to your funeral, but I'm not going to like, I'm not going to shed a tear. Sorry. Um, robots are coming. they definitely are but i'm not i'm gonna wait right well of course you are i saw my i mean listen i think i think by definition most people are going to wait for a twenty thousand dollar robot purchase true all right but yeah they're coming um all right so i got into the i gave up on baseball

like 15 years ago i just don't didn't care anymore it's too long too slow too boring i had other stuff going on um i got really into the playoffs this year i watched the tigers play they barely lost the mirrors and i kept watching and i watched and i got really invested in the blue jays and Dodgers. I watched most of the series. I really wanted the Blue Jays to win because I hate the evil um players that spend too much money. Um, and John Smoltz was the, the announcer, the announcer, the announcer. So I sat up and watched the whole, uh, game seven the other night, like one in the morning or something. Uh, awesome game. I felt so bad for Blue Jays fans, our fellow Canadians that always listen to us. But John Smoltz is the announcer for Fox and he's really, really good.

And it got me thinking. I forgot the very first boss I had in this business. John Smoltz has some Detroit tides because he started out his life at the tie. I don't know if he's from Detroit, but he started off with the tigers and the tigers traded into the braids where he got all good. My boss had had a professional athlete as a, as a customer as a client. He had some family office clients, but mostly we worked with institutions and had a really bad experience. And someone said, hey, John Smoltz was recommended as a client to you. And he'd like to talk to you because your other clients had such a good experience. And my boss said, no, not talking to him. And I said, whoa, whoa, whoa, whoa, whoa, whoa, no, we got to take this meeting. This is John

Smoltz. And he said, I have a hard and fast rule. I never work with, I will never work with a professional I think again, the demands are too much. They were divas. I don't know this guy from anyone else, but I'm not going to even take this call with him. And I was flabbergasted. But looking back in it now, I love that he had that hard and fast rule.

Like, these are the clients I'm going to work with. These are those I won't. Anyway, that's my John Smold story. Wow. All right, recommendations. Can I go first? Because I got a handful here. First of all, I have a horror movie that got me the hebi-jeebies.

You know, you say I'm a robot because I don't have those feelings. I got it. Okay, which one? This is because my son, he now likes our chat GPT to say, hey, we like this movie, type it in. Other movies like Tremors, other movies like Beetlejuice. So we've been using that a lot. So yesterday we watched Aractophobia,

and that movie makes my skin crawl. Absolute, like, because it feels real. It's not one of these weird that... I hit spiders. I do too. And so that movie, I mean, if you lived in the house, I don't know if you've seen it in a while, but you would literally burden that house to the ground before you...

Stayed in it, correct? The whole house was swarmed with spiders. Yeah, disgusting. I did re-watch, like, an hour of it a couple years ago. I mean, John Goodman as the exterminator and Jeff, it's a really... He was at his breakout role? Probably not, but it... That's my earliest memory of him.

Yeah, he was in Raising Arizona. It was probably his breakout one. Okay, so I did watch Naked Gun. It's on Paramount right now. And I love the originals. We've talked about this. And obviously, Leslie Nielsen... Wait, what's his...

No, Liam Neeson. Let me ask you this. Was it better or worse than you thought it was going to be? I belly laughed probably five times. Like, hearty laughs. And so he's obviously, it wasn't quite the same as the originals, but there was enough good jokes in it that I really laughed hard. And that was all you can ask for.

It was like an hour and 20 minutes. That was great. Okay. So the House of Dynamite was literally one of the worst movie endings of all time. Holy shit. Right? For a movie that tried to be good, it was one of the worst movie endings ever.

It really was. That was the horse meme, the, whatever, the crap in the back. I'm usually like, I can forgive a bad ending because I know sometimes the planes are hard to land, but that ending completely invalidated the entire thing and not just the ending. Idris Elba's entire existence of that movie, I'm not saying it was his fault. As soon as he came into the movie, it went to shit. There was so, and no spoilers. Do not watch this movie.

Okay, you're welcome. Don't waste your time. It was a waste of time. Oh my God. Did you rewind as soon as it ended? Did I skip a part? That's what I thought. Wait, did I miss something here?

What were they doing? Who thought that was good? All right. Speaking of the horse meme, I watched weapons on HBO Max. Now, I know this movie had a little buzz. I think you kind of, you liked it, weapons? I know you saw the theater, right? Okay.

This movie was the horse meme. Okay? And I know this movie got some buzz. I thought the first hour of the movie was like riveting. It was, oh my gosh, what's going on to these kids? And Julia Garner, who was in Ozark, I think she is fantastic. But then they went, and her storyline was great, and Josh Brolin was pretty, and they did all these different, the same story from different points of view. I thought it was really good. In the last hour of the movie, I thought just, it was a car careening off of a cliff. It was the lady from Uncle Buck, Cheney for Uncle Buck, or not Sheenice, I can't remember the Uncle Buck's girlfriend, and she's also in Field of Dreams. Just the payoff, I thought was so, so bad. And the fact that it was like two hours and 15 minutes, this should have been an hour and 30 minute movie. I thought this was the total horse name. So, it was.

Here's my analogy for movies this year. I feel like 2025. Wait, hold on, hold on. Hold on, hold on. Before we get off weapons. You having a strong take on weapons would be like me telling you that Uncle Buck doesn't work. You're not allowed to have an opinion on horror movies because you're not a horror movie guy. And the last, the part that you didn't like about weapons when it got silly, that was like

obviously intentional. It was comedy. And I did see it in the theater. And the entire theater was cackling because that was the intended purpose. It wasn't supposed to be like, huh, that's a weird ending. So you don't get to, you don't get to weigh in. Sorry, no offense. It was an unintentional horror comedy?

No, no, no, no, no. It was very intentional. It was intentionally hilarious. You were supposed to laugh at the end. The whole last, I'm sorry, it was awful, terrible. Didn't work at all. It was really. All right, well, guess what?

Transplants and automobiles? Stupid. but you have these two 40 you have these two middle age guys are crying with each come on my point is it's not it's not no no no no i love transplant but my point is you're you're getting upset about my weapons review no no no my point is this is not for you to weigh in say get off my lawn here's my theory about movies in 2025 because we've done this a lot um sinners i thought was a good movie not a great movie um the pta one you said everyone's saying this is a classic but it's it's It's just a good movie.

I thought weapons is kind of the same thing. So here it is. So Michael Mopenson had this piece about Ted Williams and why he hit 400. And the reason is because the level of competition was wider back then. There weren't nearly as many good people. So now there's a higher average overall,

but it's the, you know, people are just better. And I think that was the Ted Williams thing. So in the 2000s, I'm going to land this plane. Kanye West, everyone called him a genius in the 2010s ring rapper. I think if he was in the 1990s, he would have just been another rapper. He would have been good.

He would add some hit songs. People never would have called him a genius. And it's because there was no other good rappers at the time. And so my point here is there are so few good movies anymore. Anytime that there is a good movie, a decent movie, people have to say it's the greatest thing ever. Okay. I totally agree with that take. But also, if you ask me, if you ask me, should I watch weapons, I would say, no, it's not for you.

Because it's genuinely not for you. Like, I'm not surprised you didn't like the ending because it's not for you. But the first hour of the movie I thought was really good. It was really interesting. Yeah. And I, and I, I did, I, I enjoyed the Shadow Weapons. I had a great time. But like, I agree with you.

Is it a, no, stop. Is it a classic? No, it was a good, it was a good, hard movie. It was fun. I had a good time. All right. Any recommendations for you. Did you watch weapons?

Did you love it? Yeah, see? Daniel love it. He gets it. Any other recommendations? No, just, I just do recommend House of Dynamite. I'm pretty dry right now. Oh, you know what's annoying?

I want it. I really want to watch the Scorsese doc. it's like six episodes on Apple TV come on that's a two hour movie at most I don't have time for six episodes of Marty that is a lot see that's they should have audible for documentaries yeah I would two times the shit out of that

I really want to watch it yeah so you should just be like do you need to see a documentary I guess you want to see some movie scenes but okay okay let's do some plugs let's plug talking wealth yes so so we have a a podcast channel called

Talkin' Wealth. And we talk about stuff in our day job, stuff going on around the industry, who's making noise, what should advise us be looking for? So you can find that on our YouTube channel. It's a YouTube Talking We also have a podcast version now. It's you, me, and Josh,

talking to people about what's going on in the industry and new exciting products and services and strategies. And yes, take a look. What else? All right, that's enough. We went long. Sorry, Daniel. It's going to take a minute. Is our FBA conference going to be a podcast or not?

Yeah. Okay, I don't know. Animal Spirits at the Compound News. Thank you, everybody, for the listens, for the emails. Love hearing from our audience. Have a great week. We'll see you next time.