Animal Spirits Podcast - Passive is Eating the Market (EP.347)

Episode Date: February 14, 2024

On episode 347 of Animal Spirits, Michael Batnick and Ben Carlson discuss: why McDonald's is getting more expensive, the prospects for another bear market this year, fundamentals that drive stock returns, concentration in the S&P 500, Nvidia vs. China, tail risk strategies, consumer credit, commercial real estate, fixing youth sports, and more! Thanks to Spear Funds for sponsoring this episode. To learn more about the Spear Alpha ETF, visit: https://spear-funds.com/ 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.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com   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 Animal Spirits is brought to you by Speer funds. Ben, a couple of weeks ago, you asked me if I knew what the best performing ETF was in 2020. Turns out I did, right? It was the Bitcoin miners or whatever. Yes. Well, according to Morningstar data, the Speer Alpha Fund was the best performing U.S. equities ETF, excluding levered funds, of course, because they don't count, and excluding crypto equities. What do you think this thing owns? I mean, it's got to be a lot of AI stuff, right? So this is a tech fund. And so it says that they were early to the AI trend, and they bought Nvidia in size at the bottom, which is hard to believe that this is a stock that was down 66% not that long ago. And now it seems inevitable that it's at this size. But this fund was up almost 90% last year. Obviously, it's going to be a volatile fund investing these types of technologies. But I'd make sense that a fund like this would be the best performing equity fund last year.

So a lot of like B2B industrial type AI companies in here. Obviously, past performance is no guarantee of future results, as they say, but it's true. To learn more, go to spear-dashfunds.com. 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 Redholz wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Britholt's wealth management may maintain positions in the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. Michael, we just got off a new inflation print. It's funny to me that one decimal point or one tenth of a percentage point in economic data can have such a big impact on the market. because I think inflation came in at 0.3 and it was estimated to be 0.2, right? So if the 12-month inflation reading was 3.0, the headlines would have said, inflation continues to cool. But if inflation came in at 3.1%, then it's like, well, prices remain stubbornly high. You know, we are all investors.

We are all very rational creatures. In fact, well, a teaser. I've got a good story about some irrational investing myself for later in the show. Okay. I put the chart in here from the Wall Street Journal of core and overall inflation. I don't know. It still seems to go in the right direction. Here's what I would do if I was a Fed chairman. I would say, remember how we had that 2% target? It's 3% now. We hit it. I don't know. That's my feeling on it. Historical inflation is 3% call good.

You've said the biggest worry for this year could be inflation remaining high. I'm still not quite there yet to worry about it. even after this. Is that fair? That's one reading. The market is worried about it. However, it's been a long period of incredible returns. Effectively, we've gone straight up since, I don't know, when did we rip November? Every once in a while, the market needs an excuse to just sell off and take some profits.

Yeah. So the Russell 2000 this morning before the market opens, just looking to open down 3.5%. This sort of thing happens all this. time, obviously. So Bespoke tweeted, the S&P 500 has gone, this was a week and a half ago. So over 70 days without so much as a 2% pullback. Yeah. It's been, it's time, right? Now, even though we're saying, like, is the market irrational, are we overreacting? The answer is probably yes. However, this is not an irrelevant data point because what what this impacts greatly what the Fed is going to do in March,

which is probably off the table at this point, and even maybe likely in what they do in May. So it absolutely matters. It would be kind of funny if the market forced the Fed's hand and we had a quick correction. That would not be funny. Yeah, but there's going to be a correction anyway this year. I mean, I know you're joking,

but obviously the Fed is not going to react to a correction. Right. They'd react to a crash. Well, the Fed would react if bond yields kept going higher, don't you think? If bond yields spiked again, don't you think the Fed would have to react a little bit? By what, raising rates? By raising rates? No, no.

I feel like the market has the ability to force the Fed's hand at times. Which market? All financial markets. You don't think so? Not the stock market. Right now. Yeah, more of the bond market, but I don't know. So one of the inflation points people were talking about last week is that the McDonald's president on their call said that people who make $45,000 and under, that consumer is being pressured.

And they're not spending as much anymore McDonald's. You know what the secret to McDonald's is? Because people are complaining that, well, in New York, you can buy a big Mac meal and it costs like $18, which. Hold on, I've seen that. Is that true? There's no way. Yeah, I've got to McDonald's still. My kids love McDonald's.

Guess what? Yeah, where is McDonald's $18 at the airport at Yankee Stadium? I know it's not in the Yankee Stadium. I think people are making this stuff up. It's still, I think McDonald's is still relatively cheap. My kids, they just like the little hamburgers there. Do you know what the secret is, though, for fighting inflation, you have to pay with the app. Do you have the McDonald's app?

Mm-mm. You can get 20% off of your every order you do by using the McDonald's app and going to the deals. That's good information. Yes, this is what people don't realize. Not to be insensitive. Aren't people who make under $45,000 always under pressure? Well, I think I thought this was actually, we've talked about how there hasn't been any substitution happening

for people with inflation and they haven't changed their habits and maybe this is finally happening. But I think the ironic thing here is that this cohort is under pressure, but they're the ones who have seen the most gain. So MarketWatch did a piece for this. And they found that fast food wages are rising fast. faster than all workers. So look at this chart here. Hourly Compensation Index to 2019. Fast food workers have seen higher wage growth. And it's happened really in the last 18, 24 months,

the last couple of years, that fast food work. So one of the reasons that fast food is more expensive is because fast food workers are earning more money. And remember, we spent the most of the 2000s and 2010's lamenting. We need higher minimum wage. We need higher earnings for low wage workers. Guess what the tradeoff is for paying fast food workers. We're paying fast food workers. workers more. It's going to cost more. You can't have it both ways where you have the dollar menu and people who work there get paid higher wages. This seems like a fair tradeoff to me. Agreed. All right. So Michael Antenelli hit us up with a research project the other day. He texted you and I and said,

listen, there's already been two bear markets this century, or this, sorry, this decade. Right? We had one in 2020, which some people are trying to say doesn't really count as a bear market. The hell it doesn't. Exactly. That, that was honestly one of this outside of the great financial crisis. That was the scariest downturn I've ever looked for my life. The market was going down 12% a day. Yeah, March 2020 was the most volatile months since the Great Depression. It was, there was a down 11% day, a down 10%. It was, if you say that it didn't count, then, I don't know. You were living under a rock. So we had one then, and then we had, of course, the 2022 bear market was down 25%. So the question is, a lot of people,

people are saying, well, the market should roll over again. This year, the stock market is too concentrated. It's gone too far, too fast. We need another pullback. So the question is, has that ever happened before where we've experienced, call it three bare markets in five years? I dug into the day. Obviously, caveat that things that have never happened before happen all the time, it's pretty rare. The only times this has ever happened were World War II, the onset of World War II, and the Great Depression. So in, and I looked at this, and I need to give some caveats for my data here. I reset the bear markets after a 20% rise.

Is that fair? You have to have some sort of guardrails here. Yeah, yeah, yeah. So in 1938, 1939, and 1940. This is a rabbit hole because if you're down 50% and then you get a 20% balance, you're still very much in a bear market. But for the purposes of defining this table, it's fair. it's fair. Right, because the Great Depression was down 85%. And you didn't make new highs until

1954, so you could say everything underneath that constitutes. But you had 1937, there was a 50% crash. 1938, there's a 26% crash, 1939, 32%, and then 1940 to 42 was 35%. Of course, again, that was the echo bear of the Great Depression into World War II. But it has happened. And in my other counterpoint was you could look at historical data and say, gosh, it's really rare to have three bar markets in succession that quickly. But things also happen a lot faster these days. So it really wouldn't surprise me if that happened. But it wouldn't be my baseline. Yeah. I like historical data that's more like human pattern driven, right? This type of stuff, just because it, and I know you said this, just because this hasn't happened, it doesn't tell you

anything. Literally, to me, that means nothing at all. We can have a bear market again this year or not. I guess my baseline would be, though, if you want to use historical data as some sort of pattern behavioral thing, the fact that we already had two bear markets and we're at new highs, historically, the pattern would be, it's going to be a while until we have another one. Yeah. I'm not guaranteeing any of that would be the pattern. All right. So this is interesting from Ryan Dietrich and Sonobargeese at Carson Wealth. They looked at the drivers of returns over the last four years. So this century.

What do I keep saying century? This decade. And they found that 42% of the 58% gain over the last four years. So that's all the 2020s came from earnings growth. Only 7% came from multiple growth. I see earnings growth, multiple growth, dividend, total. I don't see manipulation where that's messing from the chart. So the idea that like, oh, this has all been expansion of valuations and it's not fundamental.

this run-up has been mostly earnings growth-driven, which I think would surprise some people. Interesting, correct? So here's another one from Sam Rowe. He showed this chart from Goldman, and it goes back to 1945, and it shows the S&P 500 plotted against earnings, and it's trailing 12-month reported earnings

versus the price index of the S&P. And they track pretty darn closely. There's times where the price gets ahead of it, especially in the 90s, there's times where earnings fall a lot, especially like the great financial crisis. And his whole point was people spend so much time thinking about valuations and PE ratios when, like, this is more important. Are they pretty close to tracking each other?

And the PE is kind of the margin of error in a lot of ways. But most of the time, as long as these two are tracking each other, it doesn't really matter what the valuation is because they're following each other. Does that make sense? Yeah, everything but the last part. I mean, valuation sort of matters eventually. Yes, at the extremes. But this is, again, the fundamental.

Because I think a lot of people do think, you know, everything has been falling interest rates for 40 years or 15 years, whatever it is, or trying to come up with other explanations for the fact that the stock market is rising when really it is just earnings. That's the biggest part of it. Valuations matter at the extremes

other than that 98% of the time. It's just not even worth discussing. Whether the market's trading at 21 times or 16 times, it literally doesn't matter. But the whole manipulation thing, and it's all fake, and it really isn't. It really is fundamentals and earnings. That's the stuff that drives us over the long term, and that is still fine. Great chart from Dean Christians at sentiment trader. A lot of comparisons for today versus 99, some fair, some not.

He said, can it get it more extreme? Anything is possible. Internet services went up 257% over a three-month period in 1999. And so he's plotting the three-month rate of change. And needless to say, this looks like, you know, a molehill compared to the mountain in 99. Again, that's to say nothing of the future. It doesn't mean that just because this isn't one of the biggest bubbles of all time that we can't have a nasty bear market.

It's just, you know, context, I think, I think matters here. All right. So I think last week or two weeks ago, I said if there really is going to be an eye bubble and it's going to, everything's going to happen, it's going to get way stupider. This looks pretty silly to me, this AMD price rise. You see the chart here of AMD. I think, so it was a $30 billion company in 2020. Now it's like $280 billion.

I'm sure it's down a little bit today. I'm not going to say this is a chart crime per se, but this is a price chart going back. is a non-logged price chart going back to the 1970s. So, I mean, come on. We're better than that. That's fair. But I'm trying to show how quickly this thing rose out of obscurity. So it added $130 billion in market cap since October alone for a $280 billion company. That's just a massive move. Can I just say one more? So over the last year, AMD is up 105%. So it doubled over the last year. I mean, there's been many examples of companies doubling. Over the last three years, it's up 78%.

So, I guess a lot of the move, it's just, it's in like the last three months, this thing is gone. You know, I'm playing, I mean, time frame matters a lot. If you scroll back, if you zoom out to five years, it's up 630%. So yeah, monster winner. Monster winner. Again, if you compare this to companies in the 90s, you had companies going up thousands of percent. I guess, and there's a million similarities differences.

The market caps of these companies today are much heftier. Okay. So this kind of stuff always gets me. NVIDIA is now worth as much as the whole Chinese stock market. You know, finance had this. A company's market cap hit $1.7 trillion, the same as all Chinese companies listed on a Hong Kong stock exchange. So a few people reached out after last week, and I said,

should be we worried about the concentration in the U.S. stock market and the fact that these companies keep getting bigger. And some people thought, well, Ben, that means you're bearers on the U.S. stock market, and that's not the case at all. I think that's a reason to be bullish that these companies are so big and so well doing so well. So I actually looked at, I've got a bunch of historical data on the top 10 holding. So right now, I updated it through last Friday. Top 10 holdings are 34% of the total. Microsoft and Apple are closing in on 15%, just the two of them. I think if you extend it out to the top 25, it's almost

50% of the total. I found a chart going back to the 70s. In the 1970s, when we had the nifty 50 thing, it got the almost 45% of the total. And so, relative to recent history, the 34% today and the top 10% seems high. Relative to the past, it's not that high. And check out the next one I did. This is, I looked at all the MSCI ETFs of different G7 countries. Wait, hang on, before we move to this, how'd the stock market do after the 1950s, I'm sorry, how the stock market do after the peak of concentration? The 60s were okay. So it peaked in the mid-60s. So the rest of 60s was okay. The 70s was not great, obviously. It's funny, if you look at this, as concentration was falling, the stock market did poorly. And as this

concentration- Very poorly. It was a 15-year bare market. It was really bad. Yeah. So I don't know. Maybe concentration rising is a good thing for the market overall. But the point is that it's not that out of the ordinary historically. And if you look at other country stock markets, we're nowhere close to as concentrated as they are. The UK, it's 50% in the top 10. Germany, it's 60%. France is 60. Italy is two-thirds in the top 10. Canada's 43%. I looked at China and FXI is 60% or so. South Korea is 50% and 22% is in Samsung alone. Japan is the only one that's more diversified. Japan is 26% in their top 10. So really concentration in a market cap-weighted index is the norm, and the U.S. is not even close to us concentrated as other countries.

Yeah, I don't think that you could say definitively that high concentration is good or bad. I guess you could say that maybe it raises the risk in the sense that if something goes bad with large-cap-tech, it's going to be bad for the cap-weighted index. But you could have said that five years ago when these names made up 19 percent, and it's been incredible because look how well they've performed. So I think it cuts both ways, but I don't think it's black or white. I guess this is just a feature, not a bug. And we've talked about this a little bit.

This is from FACSET. They look at floating rate versus fixed rate debt. For the Russell 2000 and S&P 500, S&P has over 91% is fixed rate debt, and for the Russell 2000, it's 51%. This is why I do think that if you're looking for a catalyst for what's going to unwind the fact that the large caps are dominating and small caps are still lagging behind,

it's rates falling. Doesn't that seem like the obvious catalyst? Yeah, because today, with rates rising a lot, the S&P's down 1.2%. And then Russell 2000 is down 3%. So this is still a rate trade, for sure. Yeah. Which I guess if you're worried about the inflation coming in a little hotter than usual today, that's why it, yeah, small caps. All right. David Einhorn was on Barry's podcast talking about passive investing. and he made the point that passive investors have no opinion about value, they assume everyone else has done the work, blah, blah, blah.

Do you disagree with that particular part of that statement? The only part I disagree with is I don't know when there was a period of time when the collective whole of the stock market was doing their own work. How much data and information did people actually have on companies back in the day? Warren Buffett talks about how he would literally have to send away to get quarterly reports. were basing their most of their stock picks on price or dividend yield back in the back in the day. They weren't doing fundamental analysis in trying to pick the best companies. They were saying, this company has a high dividend or this price is going up. That's why they bought stocks back in

the day, not because they were doing some discounted cash flow analysis. So I don't think there was ever a period of time where everyone was doing the work in the stock market. Okay. But I mean, I think the quote passive investors have no opinion about value is that part I agree with. The active managers are setting the prices and the index buyers are taking those prices. That's a fact. Yes. That's fair. And so he said, so you have a situation where money is moved from active to pass. When that happens, the value managers get redeemed and the value stocks go down more. It causes more redemptions of value managers and it caused these stocks go down more. I don't know if I necessarily agree with the fact that... That part... It's just because

right now, the growth stocks are the biggest part of the index. But what if we were in an environment where McDonald's and ExxonMobil and Walmart were the leaders? Like, it's not, I don't know this is a value versus growth thing. It's just, it just so happens that the biggest stocks are having an enormous impact on the index because they are driving the largest share in earnings by a gigantic margin. Yeah, and it's not like, yeah, we've talked about this. The growth stocks are doing well for a reason because fundamentally they're crushing all the competition. And I think one of the worst things to happen to hedge fund managers was the 2000 period where coming out of the dot-com bubble, value stocks and small caps just ripped and did amazing.

And you could go long, value, short growth, and you made a ton of money. There was no better time to look different from the index than after the dot-com bubble burst. Yes. And these hedge fund managers all did amazing. And I think they want that period to come back so badly. Yeah. And I don't know. Like if you think about it, the whole, they're not going to be.

many people setting prices. There's 11,000 hedge funds today. There's hundreds of thousands of CFAs. CFA didn't exist back in until like what, the 60s or something. Charlie Ellis did a piece on this where he said there's five billion shares hands on a daily basis today versus three million in the 1950s. How much more price setting do we actually need? That whole worry about who's going to set the prices. That stuff to me is ridiculous. The biggest hedge fund managers in 2022, and they have this top 10 list, the most recent one, they made an average of $860 million a piece, the top 25 hedge owners. Do you really think that those incentives aren't going to cause people come in and try to set prices and pick the best stocks? Like, that's the argument

that makes no sense to me. Like, everyone is just going to throw their hand. Like, the incentives and the money is too good for people to not want to try to pick the best stocks and do the work or whatever like he's saying. You can also say fundamentals are working right now. The the companies that are growing the most are being rewarded, the invidities of the world. And like Tesla is Tesla in a 50% drawdown? Why? Because the fundamentals aren't great. Right. However, I don't want to completely hand wave and be dismissive of the fact

that passive inflows are impacting the market. They just, they sort of just, they have to be. I don't, maybe it's overblown. But in the past, you had, you had closet indexing funds that were just charging higher fees. What's the difference? Fair. That's a fair point. So let's just talk about this.

So Jim Bianco tweeted chart, passive percentage of all ETFs and mutual funds is now greater than 50%. And he shows where the percentage of passive assets are. So in domestic equity funds, for example, they're over 60% of all equity funds. Again, it's not of the entire market. It's just a funds, okay? So 60% of the fund universe is 20% to 30% of the total maybe, something like that? So I guess the question is, how high can this number go? and would there be a time where it really gets out of control to the point where markets are truly, truly distorted and something's not working or broken?

Like, I don't think markets are broken. I think that's a bit of a stretch of a statement. I'm sure there are pockets where there is not price discovery and there's definitely, again, there can't be trillions of money coming into index funds without impacting the market. There just can't be. But I also don't think it's, I mean, the other extreme is that markets are broken. I just, I don't buy that. But my question to you is, do you think there was a point? How high can this number get before things start to get really screwy?

I think in the fund universe, it should be probably closer to 80%. They have 20% of niche funds and the arcs of the world. So someone actually, I did a CFA talk last week for my local CFA society. I sold a one at the New Holland Brewery. Good beers afterwards? Yeah. Nice. And someone asked me a similar question.

And my point was, I think the big worry is, I don't think that. there's longer-term structural issues, I think it's shorter term. If you have Citadel and all these computer-driven companies that are handling liquidity in a daily basis, if volatility happens and they decide we're pulling back, I think you could see more flash crashes. I think the short-term risks are bigger than the long-term risks, where you could have these air pocket periods where the liquidity providers pull back and say, all right, something's a miss in the market right now. We're taking a step back because things aren't working as our models would like. And then you have an air pocket, you have a flash crash and you have ETFs that are crashing 20% of today. Remember the ATF flash crash

and then a flash crash with the stock market that falls 10% of the morning? I think that kind of stuff could happen more. If you are an investor in either index funds or active mutual funds and you're sort of a passive participant in that you're buying and holder, you're not in the market every day, you're not trading every day, markets probably look pretty normal. But for a lot of these hedge fund managers, I bet you markets, I would say markets are broken. Certain markets are broken. These hedge fund managers that were used to shorting garbage companies down to zero. Now, these companies weren't going to zero because they were short of them.

These were garbage companies that would have gone to zero anyway that they were taking advantage of on the short side. That doesn't exist anymore for all, because of all of the meme shit. Well, that, there used to be a time. Now, I guess Peloton is a counter example, but just in the agriculture. we get, that is a function of markets that are broken. The Hertz going bankrupt and then going up 200% that day or whatever the situation was. Those are features of broken market. So, like, at the micro level, there are definitely structural issues that...

Yeah, but those are one-offs. Those are tiny. Okay, but still, like, that's a big, small part of the market. All right. So, Jake Kinek had a good take on this. He said, do index, does index money impact valuations, of course, but I'd note the biggest bubble of the last five year were SPACs, direct listings, private rounds, crypto-NFTs, collectibles, self-storage, and private credit.

One thing all of them have in common, they were never or barely invested in index funds. That's a fair, that's a fair counterpoint. How is that a counterpoint? I don't know. How is that a counterpoint? Because the whole thing is that, like, index funds, the money keeps going into them, so it drives up valuations and the companies in the indexes keep going up. And there was so much silly behavior that happened outside of index funds that I think

index funds are so low on what you should be worried about in terms of what's going on in the markets. I think it rarely, it should barely even get a passing mention. There's so much other stuff to worry about in the markets. My last thing I'll say about this is that if you were to look inside the market, there are plenty of winners and plenty of losers. The market is sussing out the winners from the losers. And who had this chart showing like 90-day correlation between S&P 500 companies? And it's, it's low.

The market is, the market for mega-cap stocks or large-cap stocks is functioning pretty well in mind. This is what you can't say as a hedge fund manager that you should be saying is I can't beat the NASDAQ 100 for the past 10 years. That's why my returns stink because the NASDAQ 100 has been so strong and I couldn't go all in on these stocks like everyone else. That's what they're complaining about. Yeah, I get it. So you blame index funds because it's impossible to beat over the last 10 or 15 years

just concentrated ownership and Apple and Amazon and Google and Microsoft and video. If index funds did not exist. these companies would still be the biggest winners. Yes. I agree. That's a good point. And they all crashed in 2022 as well. Right.

All right. I like this take from Taleb, which, have you actually read any of his books before? I read, I think I read Fuled by Randomness. They're kind of hard reads. That book was a hard read for me. Black Swan, I think, is a better title than it is a book. I mean to throw shade at him, but his books are kind of hard to read because he's a really smart guy. So he says, he, he quote tweets this story in Bloomberg about how black swan fund manager says start ring about rate when the Federer cuts rates.

And I think a lot of these black swan managers have turned into just perma bears because they know that's good for their funds. And so Taleb says one of the biggest mistakes by finance idiots is to conflate tailor risk awareness with bearishness. Believing in black swans does not equal perma bears. And I love this take because that's so true. like the understanding that they're going to be outliery events does not mean that you have to be bearish all the time for them to, he's saying, yes, I know these are going to happen, but you can't predict them.

That's the whole point of a black swan. I think I've heard a lot of these guys say having exposure to these tail rush strategies allows you to be more long and sleep at night. And I think that I love that idea. Yes, that's the best sales pitch for it. Yeah, I think the problem is when you package these strategies into

like a I'm thinking to say passive but it's not passive like a rules based strategy like if you pack it in like an ETF wrapper they don't have they haven't really worked very well I think that everybody in theory

would pay would bleed I don't know four to six percent a year in order to get a 30 percent return when you get a fixed spike whatever the numbers are right problem is in reality it just doesn't look like that

like they bleed a lot more than than that yes I With an option strategy, I think you have to understand how the pricing of these things change. Like, I would much rather invest in a hedge fund that does this professionally and pay two and 20 than buy one of these in an ETF wrapper. I think that's fair. It's just, it's, I know why they're trying to sell the bearishness because when stocks are going up,

these strategies are just bleeding money every single day. But from a portfolio's perspective, great. If you think about this as insurance, like, I don't want to cash in on that. We know that blowups in the market are inevitable. They're inevitable. They're guaranteed. They are permanent features of the market that cannot be, cannot be done away with. I also think the best form of a tail hedge is just holding more cash because you know you're not going to bleed returns.

Yeah. And I'm guessing if you compared the returns on a tail risk strategy to T-bills over a longer-term time frame, it's probably pretty close. And the T-Bills doesn't lose you money nominally. But the point is, like, people don't mentally live in long periods of time. When there's a blow-up, to be protected from that matters a lot mentally. T-bills protect you, though. I think T-bills are the best tail-risk strategy there is.

But you know what I'm saying. They don't offset losses everywhere else in your portfolio. Right. But to your point, you need someone who's really going to get the bang for the buck when that happens. You need to see, like, a 300% return to offset anything if you're- Yeah, you don't want to bleed 8% a year and then get a 15% return when these things. Like, the risk war needs to really be asymmetric. All right.

Here's something that's bullish for financial advisors. This is from the Wall Street Journal. More Americans are turning 65 this year than at any prior time in history. They show the people turning 65 by year. And next year, it's going to break another record. The year for that is going to be higher than this year. But I think it looks like next year is going to be the actual record of people turning 65. So we have roughly 4 million people turning 65 every year from now until the end of the decade.

20% of those American 65 are older were employed in 2023, which is nearly double the share of those who were working 35 years ago. Today's 65-year-olds are wealthier. The median net worth of 65 to 74 was 410,000 in 2022, up from 282,000 in 2010 inflation-adjusted dollars. I think there's just a wave of money coming into financial advisors in our in the coming years from older people who need to know what they do with their money. That's bullish for annuities. It's just, it's, we've never, ever seen a demographic this large, this wealthy before that's going to live as long as they're going to live.

We've never seen it. So, I don't know, anyone trying to guess the ramifications of it. And I also think the 20% of people working still, someone sent us an email to our, what do we call it, personal emails, personal responses. saying that I was a little too Goldilocks about the fact that we've kind of ended the retirement crisis and saying there's still 40% of people who really don't have any money saved and all this stuff.

I think a lot of people are going to have to continue to work longer as well, the people who don't have a lot of money saved into their old age because people are healthier and living longer than they were. So I think the labor force is going to continue to get older as well. and a combination of social security and help from their kids. Yes, right, which is, or a circle of life. All right, consumer credit still has a lot of room to run. Another one from Suna Vorgis at Carson, who, again, really good charts.

So he's showing credit utilization rate. It's a percentage of available credit. So this is kind of like my 0% credit card strategy, which got an email last week from Chase. Dear Mr. Carlson, we're increasing your credit. I didn't even ask. They just did it. That's how good my credit score is. I need to up my credit. My credit capacity. I got a call from the guy that does all my insurance today. Hey, time to pay the auto and the homeowners. It's a lot of money. I was like, is this going to go through? As I gave my credit card, he's like, and you're good.

Wait, what Stone Age are you living in an insurance person calls you to tell you how much you owe? You don't get an email about this and just pay it online? I thought I had set it on auto pay. No, I have an insurance broker. Okay. Which was wonderful. Love it. Okay.

One of my favorite emails from the last couple weeks or comments was someone said, Michael needs to get a fridge broker because you have an insurance broker or a car broker. That's good. You know, so just one thing. And the home insurance is so much money. It's unbelievable. And it's the type of thing that nobody thinks about like your homeless an investment. I'm sorry.

If you net everything out, taxes. insurance, maintenance, like you'll get, you'll get 1% of year on your home. I think that's what Zillow says. Plan to spend 1 to 2% of the value of your home every year if you add all those ancillary costs in. Maybe Michigan is low, but my home insurance is not that much money. All right, mine's a lot. What do you think people net on their house like over a 20-year period?

I think it's like 1% to 2% obviously depending on a million. I wrote about this. It's the most impossible asset class to figure out the, what actual return is because you have to add the leverage piece in. It's really difficult to understand what the actual return is because if you're putting only 20% down or 10% down, you have to include the leverage on it as well for what's the all in investment at the beginning. So yeah, the costs are high.

I'm just saying just to net everything out, all of the money that you put in, the down payment, the annual thing, all the money you put in. Closing costs, your favorite. Yeah, versus all of the, all of the money that you get out, it's one to two percent. That would be my guess. Yeah, you beat inflation. I think for some people, though, it's probably closer to 10% a year, depending on when they bought, because of the leverage involved. Fair, fair.

I'm just saying, like, when you talk about the people that bought a house for $150,000 and sold it for $450,000 over 30 years, well, yeah, that's a great return, except you're not netting a CVS receipt-sized list out. Yeah, my parents have been in their house since 1991, same house. they've put new siding on, new roofing, new windows, new flooring, all the, they've probably spent more on upkeep in fixing a house than they bought it at in 1991, I'm sure. Yeah. Which brings us into home equity. So, Sonu's chart here shows credit cards and home equity as a utilization, like percentage of available credit, how much is being used?

And credit cards are right on average. 24% was a pre-pendemic. So this goes back to 2003. Home equity is below average. It got as high as 50, 60%. in the 2000s and 2010s. Now it's only 40%. And I think that home equity is effectively locked right now because rates are so high. But my point is if we do get a slowdown and there's higher unemployment or whatever, there's room to run here for people to go higher on their credit

utilization. People are going to be tapping that equity and then re-spending those credit cards. It's not like they're just going to say, you know what, I'm just going to pull back. I think people are going to be spending. I just had to throw this in here. here. This is from JPMorgan, the consumer balance sheet. It's total assets versus total liabilities. Look at Scandown. That's the Derek Henry, Mark Ingram meme. Right? So total assets is 171 trillion. Total liability is 20 trillion. It just dwarfs it. It's good. It's good news, right? Yeah. So at my CFA talk, I was talking with some people about telling how you and I were walking on Kansas City, the commercial real estate stuff. It's like the biggest

thing, biggest risk everyone knows about. And everyone, I keep asking people about this. I'm like, So what's the solution? And everyone kind of just shrugged their shoulders and go, I don't know. I don't see a solution. There was a story in Bloomberg where Janet Yellen said that while losses in commercial real estate are a worry U.S. regulators are working to ensure that a loan loss reserves and equity. So do we just get a bailout here? Is that what's going to happen? Because this is a risk that literally everyone sees.

Like, do the banks eat a little bit, but then the government also bails them out? I don't know. I don't think that there would be a lot of appetite for that from the public. I'm looking for a chart. What if Yellen said, listen, you guys can all stay home and keep working remotely, but we're going to have to bail these buildings out. Otherwise, you have to come back and work at them. Fair trade-off?

How about the lenders take some loss? and the equity value goes down. That too. How about that? How about capitalism? It does just seem like the risks that are staring you in the face are never the ones that cause like the system-wide panic. I just feel like this is the Austin Powers meet, Austin Powers steamroller coming at you.

Get out of the way. Get out of the way. That's what a great thing. Yeah. No, I don't, I don't, I don't know. I think that there's just a sloth. Slow bleed, and yeah, some equity gets, gets, uh, gets, uh, concussed. Concussed?

Concussion, yeah. I was going to say, uh, dented, damaged. All right. Last way we talked about layoffs and discharges, and we said, what's the difference? We didn't know. Jessica at CNBC. Many careful newsrooms will only use the word layoff when there is a chance that worker can be called back.

So I think seasonal business, including aviation, uh, where they lay people off and then bring them back when trouble gets busy. I didn't know that. I didn't know that. I didn't either. Discharges. can be firing or a resignation, but the employment has ended. No chance of being called back.

That makes sense. So discharge is worse. Yeah. All right, the more you know. Okay. James Safer tweeted on Friday, GBT had an outflow of $51.8 million, which was the lowest of the day.

All right. Interesting. Maybe all of the money that is going to leave has already left. That's crazy to me that $20 billion are going to stick in GBT and pay one and a half percent fee? Well, they have no choice. Assuming that this is in a taxable account and assuming that you have a big gain,

which you do because the prices are up a lot, you're not going to pay either short term, certainly not short term, or long-term capital gains. You're not going to pay 20% to save 1%. Which is why they kept the fee so high because they knew that. Yeah. This is simple arithmetic. So can we assume that a lot of the reason for Bitcoin falling was pressure from gray scale, all the outflows?

But if you net it out, the flows were still positive. I don't know. Maybe it fell because there was a huge run and it was a little bit of a little bit of a sell. I don't know. I don't know. But no, I don't think that GBTC outflows were the reason why Bitcoin pulled back. I don't know. Nobody knows. I still think that a lot of it was lower than expectations, but the prices come right back, so what do I know? Fine, whatever. All right. Investor behavior story time. Bad behavior from myself. Now, before I embarrass myself, I have to point out that I get the big things right. Max at my 401K. Every month, I contribute to our good advice platform in my taxable account. And all of that money is not touching it, never, ever, ever. It's long. long term, it's index funds, buying hold. Set it and forget it.

Set it and forget it. I also contribute quite a healthy bit to my SEP IRA, not to brag. And in my SEP IRA, I buy individual stocks, which I'm probably not going to do for too much longer, because eventually the number will get large enough that I don't really feel like doing that anymore. For my taxable brokerage account, I essentially stopped picking stocks and I held bond to five of them that I held, and I converted it all to index funds. And any new money is going index funds. I just decided, you know what? I just, it was fun for a while to trade stocks.

It's not my thing. I'm clean, I'm washing my hands of it. So in my step IRA, I have like, I don't know. I don't know what it is now. 11 stocks, something like that. And I'm not actively trading. I'm buying holding. Again, at some point, I'll probably convert them to index funds. But I do, I don't do it because I think I'm going to beat the market. I love to do it. I love it. I have fun. I enjoy it still. So for now, I enjoy it. All right. So a couple of weeks back, I was talking about the money that I have in my high yield savings account. And I took, I took 40 grand out of it. And I put it in, I said, you know what, I'm going to have some fun. I'm going to, like, do some trading. Like, not like,

not like into picking stocks where I'm going to like buy and hold, but like just have some fun, buy some speculative stuff. And I bought like PayPal and Snap and Enphase energy and a few, some other bullshit. I told the snap was going to crash 30% on earnings. So, listen, not so bad. So the $40,000 that I put in there is now, it's now $34,000. So I said, you know what I want to do with this $34,000? I'm bullish on Bitcoin over the long term. So I said, I don't want to be trading stocks. It's just like, I'm over it. I've been there, done it a billion times. So I was going to take that $34,000 and move it into my Robin Hood account where I own my Bitcoin and Ethereum.

What I could have done, and this was like last week when it was at like $42,000. What I could have just done was buy the ETF. Bought the ETF, right. Right? I could have easily just bought the ETF. But I said, you know what? No, no, no, no. I want to keep it clean.

I want my retirement stuff here. I want my Bitcoin in my robinit account. So it's all in one spot. Right? I'm not crazy. That's like a thing people do. It's just like mental accounting or whatever you call. You just, you want it.

I don't want to have Bitcoin in three different accounts because I also have, yeah, it's a mental bucketing. And then as I'm waiting for my cash to clear to move it to my robin account, I missed it. Bitcoin took off. Bitcoin went from $42,000 to $50,000. So now what are you doing? What am I doing? I don't know, waiting for a pullback. I don't know.

But I share all this to say, listen, we're all human, right? Like this is, we all do dumb shit. As long as you get the big things right, you can afford to be a jackass. That's true. Margin of safety. I, too, look at the maximum retirement counts as, like, the biggest margin of safety that there is. As long as you know, that's okay. Yeah.

Yeah, you can afford a few mistakes other places. Anyway, so that was fun. We're going to start an ongoing list here of body, fridge, sep IRA. No, no, no, my step IRA. I behave very well my step IRA. Oh, no, I'm just saying you're missed up here. But that was not on my step- I really missed that much.

I know. No, it's not a, listen, I'll be fine. No, my step-I-R-A, I behave well. Because it's money I can't touch. Worry about it tomorrow. All right, this is a Rorschach test, this headline. Sam Altman seeks trillions of dollars to reshape business of chips and AI.

Open AI chief pursues investors, including the UAE for a project possibly requiring up to $7 trillion. So what's the Rorschach test? is that this is either people think this is a huge bubble or it's a huge opportunity. Is that the Rorschach test? Well, it's either, oh my God, this is, this is, that's the top, right? $7 trillion.

I mean, that's a lot of cash. I'll be honest. I didn't read past the headline of this story. Would it be even possible to come up with that much money? No, I don't think so. But the other side of the argument is, oh my gosh, look how much money is going to be coming into the space. How could you possibly fade it?

True. this is why every new venture deal is in AI right now, right? Because they assume that money's going to come in and they'll get bought or whatever. Okay. This is from Apollo. This seems high to me still. Actually, one less thing. Just as I'm mentally circling back to like why I've made decisions to stop trading those stocks,

because if you don't, if you're like just buying stocks you don't believe in, you're going to get shaken up by the volatility in two seconds. And I'm not even talking about SNAP going down 30%, but like even a stock that you buy that goes down 12%. Like, if you don't believe in it, you're just, you're going to bail. Here's the other thing. It's way easier to forget about index funds. No one checks in on index funds on a daily basis.

People check in their stocks on a daily basis. It was too much. And oh, they're going to report earnings today. And I got a lot. And it's just easier to ignore bland, plain vanilla portfolios. That's one of the, what's one of their biggest selling points for me? Mental alpha. There you go.

All right. Despite high mortgage is 31. percent of homes sold above their list price recently. This got as high as 55 percent, it looks like, in the crazy period. But this is still higher than it was from all of 2012 to 2019 or 2020. And it's rolling over. This still seems high to me. I guess this is because supply is still so low. But can you imagine if you were dealing with 7 percent mortgage rates and you still had to pay above list? What a kick in the pants. Ooh. This is higher than it was for the whole decade.

All right. So they have this housing outlook piece, so I pulled a few charts. This is a tors and slack. 63% of all mortgages outstanding were issued after 2018. I mean, we're never going to see a refi boom that big ever, right? That was the

biggest refi boom in history. Wait, say that number one more time? 63% of all mortgages outstanding were issued after 2018. That's a crazy high number. Whoa. Isn't that higher than you would have

expected? I'm shook. That sounds ridiculous. How? I know. I'm guessing because a lot of the earlier mortgages were retired paid off. Wait, wait, wait, wait, wait, wait, whoa, whoa, whoa. This is active mortgages. Is our refinances including it included in this bucket? Because that would make a lot of sense. Because everybody refined. Oh, that's what I'm saying. It was the biggest refi boom in history. Okay, okay.

Here's another one. I completely missed that. Getting back to the boomer demographic thing, the median age of all homebuyers is now 49 years old up from 31 in 1981. This is just, you can slowly see the boomers moving up. Every year it goes up and up and up a little bit more. Kind of crazy. All right, survey of the week. I think I have two surveys. Maybe just one. Remember a couple weeks ago how you said, so you're saying people can't trust their feelings about the economy? And I said, yes, they were wrong. I think, I just think most people are bad at the economy, and not because they're idiots. Some of them are. I mean, let's be honest.

But a lot of people just don't pay attention to this stuff because it's so outside of their realm of reality. So for the first time in four years, McLaughlin finds that more Americans say America isn't in a recession than it is one. So for the last four years, more people have been saying we're in a recession than not. I just think people are just bad at the economy

because they just, it's not part of their reality to think about the overall economy. If you ask the average person on the show, how's the economy doing, there's no reason why anybody would actually be aware. Right. Unless... Let me pull up the BEA data or the Fred data. Like, these people aren't thinking that way.

Yeah. Like, listen, if we're in a global recession and you've got unemployment at 10%, everybody knows that we're in a recession. But aside from that, aside from extreme periods of time, I think people have no, little to no idea of what's going on in the overall economy. It's also the same thing with the stock, like, how is the stock market doing? Most people probably couldn't tell you how it's really doing. even if they're invested in it, probably.

All right. Young people are crushing it. This is Liberty Street Economics, which is the Federal Bank of New York. It's kind of funny how the Fed has their own blog post. Liberty Street Economics sounds like something an economics professor would just name is blog. That's what they did.

Good blog. This gets back to our young people doing fine. Younger adults far outpaced other groups and wealth growth since a pandemic. So let's see. Individuals 39 and younger wealth increased by 80% since 2019. in Congress, 10% for those age 40 to 54, and 30% for those 55 and older. Young people have seen by far the biggest increase in wealth.

Now, the retort, I know we're not talking to commenters here, but let's just put that news resolution on hold. A lot of people tell us, well, of course, because the older people still hold all the wealth, so of course there's going to be a huge increase on a relative basis because young people hold less wealth. Okay, yes, they're starting from a lower base, but it has to start from somewhere, right?

I think this is a good thing, don't you? And it says the biggest reason was not housing, but the biggest reason was because young people shifted to equities and mutual funds. They're holding more financial assets. Maybe the Robin Hood effect was a positive. So young people actually put their money into stocks, and that's one of the reasons that they saw a big wealth increase. All right. That's a win. This is what happens as you age. You get married. You buy a house. You invest in stocks. you have more money. Yeah, I mean, that is, that's a big jump.

It is, right? It's huge. Wait, people age just 40 to 54. Did they panic sell? What's going on here? That's a good question. Only 10%. I'm kind of surprised by that,

especially since the housing and everything grew. I thought, yeah, Janaxers are soft. I've always said that. They think they're hard, but they're not. All right, a generation of all time. Somebody tweeted to us. This is from Douglas Adams, the salmon of doubt.

I've come up with a set of rules that describe our reactions to technologies. This goes to Ben being rather pessimistic on the Vision Pro. Anything that is in the world when you're born as normal and ordinary and it's just a natural part of the way the world works. Number two, anything that's invented between when you're 15 and 35 is new and exciting and revolutionary and you could probably get a career. internet. Number three, anything invented after your 35 is against the natural order of things. It's funny because it's true. Nailed it. Did you watch? I was going to say, wait a minute, I grew up and I had to, I dealt with the internet when I was a young person, but that falls in my 15 to 35. Yeah, very accurate. Did you

watch the video that I told you to watch of Tim Urban working with a vision pro on? Yes. I don't think the work, I think the movie aspect of it is probably the thing I'm most intrigued about, the working on it and having all these screens and moving around and typing with my hand. That doesn't look like it would be any more efficient than the three screens I have in my desk already. I don't see why that would be more efficient. Not everybody has three screens. To me, that looked like a pretty damn exciting. Okay. I don't think the work stuff to me, but. Yeah. It's funny because on that video, he said, think about how expensive it would be to buy a screen like this. And I was thinking,

well, you spent $4,000 on the Vision Pro. So I don't think you're actually saving money here. But again, I think the movie big screen part, which you've been excited about, like you want to wear it on a plane, even though you're going to look like an idiot, I think that's the part that would most excite me. I can't wait. Every time I see people do like demos and stuff, I'm not a buyer at $3,500. That's absurd.

There's just not enough applications for it yet, but it's inevitable. My favorite tweet about it was you never see a single young woman wearing one of these in public. It's only single young men. Of course. It's Vision Pro, it's going to be a prophylactic. Let's be honest.

Somebody emailed us. This made me laugh. Speaking of the Vision Pro thing. Boomer Ben, a.k.a. The Grump of Grand Rapids is becoming the get-off my lawn guy right before our eyes and ears, and I love it. Someone has to do it.

Listen, this is middle age. They grew up on Grand Rapids. This also made me laugh. Another email. Hey guys, weighing in on the wide V guy thing, Ben mentioned when you guys were discussing the airplane seat survey. After Boeing figures out how to not have doors fly off the plane mid-flight, maybe their next order of business could be to work on the locations of where the seat supports are bolted

to the floor. It's never right at the line between the two seats where the armrest is. So if I'm a big guy who likes the aisle seats, which I am, and the seat supports ports is eight inches into my space, I have to make the decision to put my foot a little bit into the middle seat zone or to squish myself with the leg cramped territory. And that's my take a middle seat etiquette. I'm totally fine conceding the armrests to the middle cedar. Just give me back the few inches of foot space. That is true. Where those bolts are, because you want to put your, you have to have your feet somewhere to stop it from veering over. But I think he's also making

an excuse for being a V guy. He's he's telling on himself of being a V guy. Yeah, the self, self-admitted Viga. I had been, as somebody who is now on the inside of coaching youth sports, I'm asking you to make a change from the inside. I know we live in different parts of the country, but it's got to be a grassroots ever. It's got to start somewhere. On Saturday morning, I took Kobe, who is six years old to his baseball, like a evaluation, I guess, for lack of a better word. There's 10 coaches. They all sit at a desk, and they watch the boys take ground balls, pitch, and bat. The problem is the window for six-year-olds was they told you to get there at 9 o'clock.

So we did. I got there at 9 o'clock. And we didn't get seen until 10.20. It was absolute madness. And you know what people get when they're in crowds and the lines are long? People start to get frustrated. And could you, this is, you know, people have ideas about how things should work. Especially with little kids.

It was really quite foolish because by the time we got in and actually did the thing, the coaches, their eyes can't be everywhere. So the whole experience, once we got to the front of the line, it took two minutes. They watched him take ground balls. But by the time they're pitching and swinging, the coaches aren't even watching. It's the biggest waste of everybody's time. So this is the weirdest thing to me about youth sports is that they have them do tryouts from such an early age. Because at that age, you're trying to tell your kid, like, do your best in put your best foot forward. and these kids, they just, they don't know any better.

They're sex. Who cares? So, yeah, it used to be, listen, you're on this team because this is a neighborhood you lived in or this is the area or this is the age you signed up for, not like the coaches are going to be evaluating the players and how fast they are and how it's just ridiculous to me that young kids have to go through, and obviously the pressure comes from the parents, but of trying out and trying to prove themselves as opposed to just playing and figured out there where you have some kids who are really bad and some were good on the same team that that's a thing about it that irks me is like,

why are we putting pressure on these kids at such an early age? Because they're going to end up hating it. It's nonsense. You know the midwit meme? Yes. That was the Super Bowl. So you had the midwit saying Chiefs win. You had the geniuses saying Chiefs win

and yet the people in the middle, the idiots like me. Who said, but everybody knows the Chiefs are going to win and yet the Niners are favor minus one and a half. Of course the Niners are going to win. So credit to me, I did win money on the game because I just, I had no conviction. So I teased everything.

I teased like the Chiefs up to plus eight and the Niners up to plus 10. And so no harm, no foul. But on the last play of the game, on the last drive in the fourth quarter when the Chiefs were driving, if instead of kicking a field goal to send it into overtime, how'd they scored a touchdown,

I would have won the final in a large box pool. And so, spoiler alert, I didn't. But fun game. Okay. The box game for Super Bowl, and I'm sorry to Alex, who runs this for our company. I told him this. It's the slot machines of Super Bowl games.

It's not fun. Oh, it's fun. It's fun. There's got to be something more fun than the box game. It's not fun. It's like total random. Well, I'll tell you what's fun. I put 22 bets on the game.

That was a hell of a time. I did a great time. Lots of fun. Okay. But my only analogy from this game is betting on the Chiefs every year is betting on the U.S. stock market. Like some years it's not going to win, but most years, I've bet on the Chiefs for five years in a row.

A couple of years I didn't win. Every other year, I won. Like, before the season, I put a big bet on the Chiefs winning the Super Bowl, and most of the time it wins, and this year it won again. I really can't believe they won. After that Christmas game against the Raiders, it was just like, all right, they're just, they're done. They just don't have the weapons.

That was a correction. Patrick Mahomes is the vanguard of the NFL. Don't bet against him. All right, recommendations. In the Super Bowl, there was ads for movies. which the worst part about it is, you see a little teaser trailer ad than it says go to whatever website

to see the full trailer. That's crap. Give me the whole trailer on the, what? Like a 30 second just tease. Where do you watch the game? So I said to Robin, I said to Robin,

will you by yourself? The kids, my wife. I said to Robin, could I just, can I please watch the Super Bowl this year by myself? I actually really want to watch the game. I just want to watch the game one time,

by myself. She goes, we have people coming over. So I was like, well, can I go upstairs? So you lost. So I didn't really get to see many of the commercials. You want to watch Superboy yourself, but people call me Grumpy, the Grump of Grand Rapids. Huh? Well, I just want to focus on the game.

You're the loner of Long Island. I just wanted to focus on the game. That's fair. So anyway, we saw the preview for Twisters, which is a sequel to Twister. And my son, he watched every, every, my son is like addicted. action movies every day. It's a what action movie you're watching today? Have you shown him Twister yet? So we've got Twister last night.

So good. So good. Just an unassailably great movie plot. And it has Bill Pullman, wait, is it Paxton? No, it's Bill Paxton and Helen Hunt and Philip Seymour Hoffman. Philip Seymour. Killed it. And Conner Roy from Succession is in it. And just what an excellent, and usually I'm

Carrie Alwas? Yes. Is that pronounced his name right? I don't think so. Usually I'm anti remaking a classic like that, but That was such a 90s action movie. The new one, I think, looks great. So my son is all in, and he watched Twister, and he is, he's in. And we watch a new action movie, like, once every other day in our house now, because he's just a junk.

Have you shown him Planet of the Apes? Because that trailer looked incredibly good. No, he saw that trailer, and he said he's in, too. And he also said he wants to watch a quiet place, which I think is a little too. That's not enough. No, not for that age. I finished all three seasons of slow horses in the past couple weeks, and it's one of those shows where I got done with it, and I'm sad that it's over. Gary Oldman is like one of the better characters of the past 10 years or so I think in this show

and six episodes like I told you and it's it hits all the things you want from a spy it's like the Russian sleeper cell the rogue agent from M5 that MI5 that goes off on his own and it's all these things that you want from a spy show but then it's always it's never what you expect it to be or never what it seems very very good show on Apple. Apple, it's few and far between it. They have some high quality shows occasionally. I just heard a, I just heard whining in a door slam. Oh, it's snow day to day.

All right, one more. I think I've mentioned this one before, but this is a Mike White movie. He's the White Lotus guy. I think he is just the master of, like, internal class struggles. I think he's so good at this. So Brad's status is a Ben Stiller movie. Never heard of it. It's an Amazon one, I think.

And I feel like certain movies hit you hit you differently at different stages of your life. So he's a middle-aged guy who takes his son on some college visits. And it's him. The whole thing is Ben Stiller, is interned a monologue thinking through he's upper middle class,

but he's not nearly as successful as his friends from college. And he's going through like, why didn't I become as successful as them or as rich as them or have as much, you know, as much money as them? And then it's like, well,

if I did have that much money, my kids would hate me and I'd have to do it. And it's all this class struggle the whole time. It's just, it's, it's as much of a good of like a mirror up against culture as it is a good movie, but I, I enjoyed it. When they come out? Like 2017, it's an older one. Hmm. It's called Brad's status.

Older one. Oh, my God. I know. 2017. Did we, I don't think I ever asked you about burning. Did you finish that movie? I did not. I need to, it was a little, it was a little slow for me.

Really? Slow for you. It was a little, yeah. You said it was, it was a little slow. I mean, it was slow for me. But, you know, you're a slow movie guy. Okay, so I'll keep trying, but it was kind of hard to watch. Wow. Okay.

I mean, I don't have to watch it. I thought you liked it. Anything from you? I don't think I, uh, I don't think I watch anything this week. Okay. No crappy horror movies? Whenever we go through the email inbox, I can always tell which emails I can skip because I'll see like four demented movies listed at the bottom.

Like, oh, this is a Michael email. I can skip this one. You know, our emailers have been, some emails come in and say, this email is for Ben. Yes. That's actually helpful. Or this is a Michael email. But I can always tell him there's a list of, like, demented words at the bottom. That's for you. What are I even watching? Really not much. I don't know. What happened last week? I did watch the fifth episode of True Detective last night. And bad, isn't it? It's just not great. True Detective, season, what is it, season four, is the 2022 stock market.

So the 22 stock market hit a new, all-time high, the first day of trading, and then crashed from there. So, like, the first episode was intriguing. And you're like, oh, this is going to be interesting. It's bad. It's a bad show. It's like, ugh, I don't know what happened. I feel like they, could they salvage it with a great ending? No, I don't think so.

I'm not, I don't even care about the storyline anymore. Yeah, yeah, that's not great. I'm going to keep watching, but, ugh, bad show. Well, there's one left. All right. Thank everybody for listening. Enjoy the rest of your week. Animal Spirits at thecompannews.com.

We will see you next time.