Animal Spirits Podcast - Price Drives Narrative (EP.271)

Episode Date: August 24, 2022

On this week's show we discuss the ever-changing narratives in the stock market and economy, iron-clad rules of investing, why markets are so confusing right now, a wider bid-ask spread in the housing market, crypto's LTCM moment and much more. Find complete shownotes on our blogs...  Ben Carlson’s A Wealth of Common Sense  Michael Batnick’s The Irrelevant Investor  Like us on Facebook  And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's show is brought to you by Composer in a market like this, Ben. Isn't it nice to have rules to not have to overthink things or underthink? Don't think. Yeah, so the whole idea with Composer is you set rules in advance. You create kind of your own algorithms, I guess, and it's totally rules-based. You can completely take yourself out of the equation, which I think it's helpful because we've talked before about how every day in the market these days seems like game seven. You want a resolution.

We want new lows or new highs. and sometimes that just doesn't happen so quickly. And I think that's when emotions take over. And so I think having a tool of composer that you can just do these preset rules in advance, so you're making good decisions in advance, that's helpful. We talked to their founder and CEO, Ben Raulert, and I think it was August 8th for our talk your book segment. Worth a listen if you haven't yet just to learn more about composer.

And if you want to understand more and get on their tools, sign up, put some money with them. so they can invest your money on a rules-based framework, composer.trade. 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. Michael Battenick and Ben Carlson work for Ritt Holtz Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions.

Clients of Ritthold's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, I wrote a piece last week about narratives because we talked about that a little bit, how price changes narrative. But it seems to be happening faster than ever. Remember a couple of months ago, the prevailing narrative was the Fed is trapped, inflation is going to cause their hand. there's nothing they can do. If they want to bring inflation down, they can't have the Fed put anymore. Stocks can't rise. We're falling 40%. They're going to have to crush the economy. Yeah, then the stock market bounces. And then the other narrative was there's an imminent

recession or we're already in one. Then the stock market bounces 15%. We get a little bit of better economic news. And actually, we could have a soft landing. And actually, maybe we don't need the Fed put. The stock market can do this fine because they think the Fed's going to do the Fed put in the future or something. And all it took was that change in price. Here's another one. 0% interest rate. Oh, wait, hang on, hang on, hang on. Okay. Because I feel like sometimes their narrative is spoken about in this way that it's like,

oh, those dummies who are making up stories about the market. I think that's really kind of unfair because even though you're right in that, of course, narrative is driven by price. Of course that's true. However, in the most recent bounce, one of the reasons why people said maybe soft landing as possible is not because stocks were going up. It's a combination of the fact that stock. were going up because actually earnings were, in some cases, quite good.

And we were getting a little bit of a better economic news or at least less bad economic news. I agree. So my only point is it's not that people are like complete idiots and they're only making stories based on price. And I'm not saying that. I'm saying, but even if you like internally, I know these things like you don't have to follow the narratives, but when the market goes up, it feels like actually the economy feels a little bit like you can't help but feel those things.

I ride those narratives. I ride them all day long. So here's the other one. So zero percent interest rates were like this cause of. mass speculation. That's what caused this 2020, 2021 craziness. Now interest rates are up like, I don't know, six times from the bottom for like the 10 year. They're much higher than they were, 3%. We just had a whole week's worth of meme stock stuff with Bedbath and Beyond and all these other crazy stocks. The Daily Shot had this graph about meme stock performance since May,

how they're just crushing it again. I'm not trying to discount the fact that interest rates can matter in terms of risk appetites. I don't know how you could dispute that. Of course, that matters. I also think people are crazy and they love to gamble and zero percent interest rates alone are not the cause of people yoloing into bedbath and beyond because they saw it on a Reddit message board. Is that fair? Yes. We can have both things. It's not necessarily the Fed causing people to go on Reddit and yolo into bedbath and beyond options. People are more likely to engage in speculative activity when interest rates are lower because generally asset prices are rising and then greed takes over. That is true. But you're also right. I feel like that's recency bias, though, because

no, no, no, it is true. No, what I just said is a fact. When interest rates go low and they're trying to juice the economy and asset prices rise, eventually that leads to greed. That's not grasping at straws. That's a fact. And then the more prices go up, the more people go crazy and start doing irrational things. Okay. That's fair. I'm just saying it's interesting how these narratives shift and change over time. That's all I'm saying. Here's one from last week. Ryan Dietrich. Last week, the S&P 500 recovered half of the bare market losses.

This is a very good sign. As stocks have never moved back to new lows after this happened. In fact, a year later, higher every time and up 19.3% on average as well. We talked about this last week. Wanted to put a little skin of the bone here. Ryan put this out here. He put some nice charts. Meat on the bone.

What did I say skin on the bone? I feel like I'm the one that's usually bungling the phrases here, buddy. Get off my lawn. All right. Close enough. I feel like now I'm a little gun shy with always and never in the markets now, especially from the last, I don't know, six years or so, five years, I feel like always and never is, it's like I'm just waiting for the other shoe to drop on that, right?

I'm waiting for the other side of it. And I also feel like back in the 50s and 60s, there were no Ryan Dietrich's putting stats out like this. No one knew anything about this before. Like every time this has happened, then the next time this has happened. then the next time this happened. I feel like those things, they weren't. So you remember you read Robin Wigglesworth's book Trillions?

Yes. I was looking through some of my highlights this week. Merrill Lynch wanted to put out in 1960 an ad in the paper saying basically stocks for the long run, stocks provide better returns than bonds. This is from his book. And the SECs had no way. How do you prove that? 1960, there was not a definitive answer.

People kind of thought maybe, but a lot of people assumed, actually bonds are safer than stocks and bonds probably have better returns. This is the crisp data that happened at University of Chicago, the CRSP stuff. If you're an investment nerd like else, you know what that is. But it took them four years to go through all this data to do returns from 1926 to 1960 to prove that stocks are yes, better than bonds. At that time, no one knew this. It's so true.

Just the knowledge of or the uncovering of data might change everything. There was no Ryan D.T.R. to your point back then, one of my favorite quotes about the market, is, is it Benoit Mandelbrot? It's got to be Benoit, right? Yeah. I'm guessing that's, like, French. He wrote a book. Benoit Benjamin in the NBA back in the day.

He was on the Nets. I mean, the jazz. So, Benoit, Mandelbron. You've seen the tweet before? What? That guys just love to talk about names of old sports guys. Just guys being dudes. Remember, while we're on that, remember?

While we're on that this morning, you know who I Google this morning? I have no idea why there was definitely a trigger. I can't remember why. Remember the Lawrence brothers? Like Joey Lawrence? Like Joey Lawrence? And then there was the middle one who was in Boy Meets World. And then the younger one.

Wait, who's the younger one? The younger one was in something too. I can't remember. But remember those guys? Yeah. Where are they now? Blossom was probably too early for you, right? No, no.

I remember Blossom. I called the tail end. All right. Anyhow, getting back to Benoit. If the government seized your Google search records and said, why is Michael looking for the Lawrence brothers? That'd be kind of bizarre. He's got a tab up

Y charts, NASDAQ, Lawrence brothers Madlerbrot once said in his book, The Misbehavior of Markets, which is excellent. The trend has vanished, killed by its discovery.

In other words, once you identify trends, patterns, and not just you. If you have an edge and you don't tell anybody like Renaissance does, fine.

But once me, Dietrich, once we're tweeting, all these things 20 to 20. And listen, I respect data. You know, I respect data. But there's no like iron rules that just because something hasn't happened before, oil went negative. And right now, I feel like a lot of the iron rules are fighting each other. We talked about before how inflation goes high. What a kind of sense say last week? We were discussing like one of these two things that has never happened before has to happen. You also have a yield curve that's inverted. You have all these things

that are seemingly fighting right now for oxygen. And if you have these rules in place and you go, if this happens, I'm always going to do this. It's fine to have rules of thumb, but it's also okay to understand that sometimes there's exceptions to the rules. That's what I'm getting at here. Well said. So anyway, it is Tuesday morning. The market is about to open. We saw a heavy bout of selling. I feel like I'm on financial media. That's what they would say, right? A heavy bout of selling on Friday and on Monday. So the reason is as investors worry about inflation or worry about A recession? What's the worry? My opinion.

Sometimes stocks fall. I think good financial commentators should be able to at least semi-clearly articulate what's currently happening. Forget about the future. But can you at least describe reasonably what's happening today? This gets back to the narratives. This is why we need narratives because it makes us feel more comfortable to feel like we have an explanation, even when sometimes there's now one.

Here's how I explained the recent, what was that, a 60-day move higher? How long did it take to recover half the losses? Whatever it was, what happened? It was two months or so, yeah. Okay, a combination of two things. Expectations and positioning. That's it. People expected earnings to be way worse than they were, and they were positioned for earnings

to be way worse than they actually were. And so people were way off sides. You saw all of the sentiment indicators washed out, all of the fund manager survey completely off sides. They had to cover. They had to reposition, momentum, short term. It was all technical in nature. And then it stopped.

I'm not going to be trying to describe a reason why it stopped. It stopped because it stopped. It ran its course. Fair? Yes. I also think, again, the idea that we're going to get some fast resolution from this when this is a totally different environment that we had to deal with. Ball of wax.

Is that it? Okay. Well, it's just a completely different environment that we've had to deal with in a long time. And thinking that we're either going to crash and go really, really low, we're going to go back to new highs automatically. I think people just want one of those two things to happen. We want to flush. I can see now they're just going sideways, chopping and just pissing people off for a while,

it's funny people always say like the path of least resistance here is the stocks are going to go higher and it's like whenever they say what's going to make the most people angry i do like that phrase the path of least resistance but they say that and they only say it like the way they're positioned like if you want stocks to go up you say the path of least resistance here is higher it's got to be higher but i do think there is definitely truth in that statement when everybody is positioned one way the market will inflict maximum pain and in the case of like rewind six weeks ago it was higher people were not ready for that sort of bounce that makes sense all right let's talk about fun flows ben jonson of morning star did this thing on fun flows i feel like you know what that used to

be my crutch i feel like we used to talking about fun flows a lot of this show it's been a while it's been a while all right all right july marked the fourth consecutive month of outflows from u.s mutual funds and ets the longest streak at our data set which begins in 1993 so ben i ask you where did the money go want to cash that's kind of crazy that the longest streak since 1993. So even in like 2008, that there wasn't four consecutive months of outflows. That's surprising. He said that taxable bond funds saw a seventh straight month of outflows. This is the longest stretch of withdrawals. It does? Just from the fact of people seeing losses in their bonds and saying, I'm going to sell. It doesn't make sense in if you're a reasonable person and go,

wait, bond yields are now higher. I should hold. It makes sense in terms of people. Literal return expectations are higher. Yes. But when the valuations of stocks go down and and you said return expectations are hired, that's theoretically true, theoretically. But actually, in mathematical terms, when interest rates rise, expect returns of bonds go up, even though you have taken losses in your existing bonds. That's a fact, Jack. Alternative and non-traditional equity funds continue to see inflows in July. Assets and derivative income funds have grown 67% on an organic basis year-to-date.

That's a lot. Is that people searching for income or what? Now that interest rates are going up, people want other sources of yield. You got yield, finally. finally and then Valchutis actually tweeted just recently the streak for bond mutual fund outflows is finally over after 24 weeks that added up to record smashing $323 billion in year-to-date outflows they finally saw some inflos last week thoughts anything what's going on why the silence I'm thinking here I just think with both stocks and bonds down people are

probably having a hard time figuring out what to do next. If bonds were doing great right now, it would be a much easier decision for a lot of people, I think. But I think you're going to see the back and forth. Because the other weird thing is that stocks are down around 10% and bonds are down around 10% for looking at the total markets. They're both down around the same. There's not like an easy escape hatch right now. Cash, I guess, is probably the easiest one for a lot of people. But I think that's probably what's confusing a lot of people and why the market is going to potentially go back and forth again for a while. There's no easy escape patch right now. Any thoughts on this thematic

ETF thing? Also from Belchunis? I think in times of distress, that's when people decide to lean on their alternative investments. And then when the bull market takes off again, then they dump them. I think that's kind of how it works, the cycle of this stuff. People put money in the stuff they wish they would put money in before the draw don't happen. Nearly half of thematic ETFs. Oh, thematic ETF. I thought you're talking about the alternative. I'm sorry. Have negative since Inception returns, yet only 16% of the AUM is underwater, and they've still managed to

take inflows in 2022. He's a good sign for long-term viability. This is from Tom SeraFegas. I like that. Is this also a narrative thing where I think these thematic funds tell a really good story. It's going to be harder for people to let go of them. I don't know, because I don't know that people necessarily care about the story when they look at their performance.

But I think maybe, I don't know if this is good behavior. or bad behavior? No, that has to be. If we're looking at ARC specifically, that thing has gotten just annihilated. And that people are staying in it because of the story. Sir, sir, arc's not the only thematic ETF. It's by far the biggest one, though.

And I think it tells the story here that people are staying and still putting money in because they believe in Kathy Wood and a story that she tells. This is not a Kathy Wood story. He said nearly half of that thematic ETS of negative since inception returns, yet only 16% of the AUM is underwater. To my point, usually people chase performance, and they're not chasing performance now, they're chasing stories.

And I think that can change the way that you think about investments. They're adding to their investments on the way down. Exactly, because they're buying into the story. I'm not saying that's right or wrong. Some of them might be right, and that's a good thing, and they're showing discipline. But I think the reason that so many people are adding to thematics is because they believe in the stories that they're telling.

And I think that's a really good selling point for these things. One other nugget in here is that this, I think, implies that people are doing this responsibly with a small portion of their assets. That could be it. Because if it was too big a portfolio or whatever. Right. If it was too big a portion of their portfolio, there's no way that they would keep averaging down. That makes sense. I think that they're using core.

They're using index funds. And they're sprinkling this around the edges, which I'm totally, totally fine with. Core and Explore. That's what it's called. Core and Explore. We got chicken coming down. We got chicken coming down. Know what I had the other day?

What's that? I'm out of control, Ben. I'll admit it. I am out of control. I'm just eating like an animal. Ask your personal trainer for a diet as well. No, well, after future proof, I'm going on a diet. That's it.

I had talk about the other day. You know what the best thing about going on a diet is? If you go on a diet, you always say, like, it's going to start tomorrow. So, like, this is my lat. I'm going to really just blow it out today. That's how diets work, though. It's like, I'm going to blow it out for, like, the next day or the next week. and then the diet starts.

But so when I know that I have a diet coming, I just go crazy, which makes no sense in the world. I add a ton of weight just so that I can lose it. That doesn't make sense. But anyway, listen, that's how I do it. So I went to talk about the other day, which I haven't been to talk about in a long, long time,

and I pull up to the drive-thru, and the menu's like 20 feet away. I couldn't see it. I couldn't see it. And by the way, my eyes are fine. This was not a me thing. Like, my eyes are totally fine. No glasses, not to brag.

The menu is legitimately 15 feet away. I also feel like Taco Bell has the menu in fast food that changes the most. Like, they'll have something you love. Then it goes away. It's gone. But this is where I felt really screw. So I'm like, I'll have a chalupa. And I just got one thing.

And then I drove past the menu. And I'm like, oh, my God. They've got all sorts of interesting items on the menu that I would love to have. I went on a tangent because we're about to talk about chicken prices. So after Taco Bell, I'm totally off the wagon. I went to Wendy's. Again, I love fast food. I could eat fast food every day, but I don't.

I could, but I don't. I haven't had Wendy's in a long time. I had the spicy chicken sandwich. Easily the best sandwich in all of fast food fiefdom for my taste buds, okay? For my taste buds, that's the good.

We don't want to start a fast food. This is like summer radio when they have nothing else to talk about is you argue over who has the best fries and burgers. Listen, everyone has their own taste buds. My taste buds. You know another great thing at Wendy's? Enjoy spicy chicken sandwich.

What? The frosty at Wendy's. I don't know what they do. They're chocolate shakes. They call them Frosties are better than anywhere. The frosties are good. Okay. Getting back to business.

Chicken is down. I feel like this was a story for like three days. Like chicken wing prices are below pre-pandemic levels. People are losing their minds about this. Oh, really? In a good way. Like chicken wing prices just in time for football are lower than pre-pendemic levels. So I'm not even going to speculate on what the story is there.

You know what I bet it's going to happen? I bet you that Joe and Tracy are going to cover the chicken story. I want to hear it straight from a farmer. Why are chicken prices plunging? I know obviously it's inflation one on the other side, but that's a good thing. We'll take the ones where he can get him. All right. Let's move on to housing a little bit.

So this is from John Burns real estate. 73% of outstanding mortgages are locked in at rates below 4%. And they say it creates a powerful incentive to trade up in place and remodel. I do think, so Redfin had their update for the last week. And they said, slowdown starts to ease us drop in new listings, hamper's apply. I just feel like we're going to doubling down on this take. We're going to have a Duncan goes, wait. He went from one drive-thru to another. No, Duncan. I fell off the wagon. I had Taco Bell and a few days later said, you know what that? It's over now. Oh, okay. You didn't do it

on the same. Okay. I'm glad we figured that one out. I think in housing we're going to have a strike for buyers and sellers. I think it's going to go back and forth where there's just I just think it's not going to be much supply, so I still think it's probably going to be hard if you're in the market for a house to find one because sellers are not going to want to sell. The bid ass spread. The best spread is going to be too wide. So you're going to see these stories about people lowering their prices and stuff because they're pricing them too high in the current mortgage rate market. But also, when they get to the right price point, they're going to be snapped up really quickly because there is no supply. Can I say one thing about this? This is a good one.

So 73% of mortgages are locked out at rates below 4%. Okay. But what are the numbers? First-time home buyers, I think, are responsible for one-third of all purchases, something like that. Oh, here it is. This is from Logan Montessami. Logan wrote first-time buyers were responsible for 29% of sales in June. Jeez.

That's a really high number. I don't know what that number normally is. Here's another high number. Individual investors, 14% of homes. Meaning people who are buying to rent? Yeah. To rent it out? That makes sense.

So that's what we're going to see is household formation and investors are going to be the biggest ones. And then it's just going to be people who have to move. Last weekend, Portfolio Rescue, someone asked a question about, I'm locked in at 275, but now I have three kids and I just, I need a bigger house. Okay. Well, if you need a bigger house, that's it. That sucks. You need a bigger house. What are you supposed to do?

The funny thing is, I put it on Twitter and I said, what would you do in this situation? And the certainty of answers was, you stay. and you hold on to that 2.75 for life and you let the kids sleep in bunk beds. A lot of people said that. And then the other people said, no, you don't let this spreadsheet rule your life. If you have to move, you have to move.

But people had very strong opinions. Like the financial people, I think the truth is this. If you can't afford to move, then you move. If it's going to cost more and it's going to suck because you're going to feel it. But you could do it, then you do it. If you can't, if you don't have the means,

then there's nothing to talk about. You either can afford it or you can't. I think that's the thing that a lot of people don't get is, like, people buy houses if they can service the debt. So people, it's still going to happen. Here's another one from the National Association of Realtors. This one surprised me. So looked at the anatomy of a first-time buyer. You talk about first-time buyers are doing one-third of all purchases right now, or at least last month. $5.7. $160. 160. Bench press 200. 33 years old average, which is an all-time high. Household income is like $87,000. Median purchase price. Without looking, what do you think the median purchase prices. Now, you, remember, you're a coastal elitist, so you're going to go high here.

I want you to remember this. Well, I was looking at the median price yesterday is at an all-time high over $400,000. No, the median purchase price for a first-time buyer, nationwide. Oh, okay, 265. Yeah, 250. And the down payment is 7%. Coastal elitist. Nailed it. And it's a smaller home. The average square footage. I just think you show this number of someone in New York or California, they would go, that's not possible. No way. So I'm just saying, the flyover states is where this is happening, it's still relatively affordable if you don't live in a high cost of living area. It really all depends on where you live. Location, location, location.

That's right. But the meeting existing home price for all housing types in June was $403,800, up 10.8% year over year. This is pretty crazy. This is crazy data point. 125 consecutive months of year over year increases, the longest running streak on record. Man. That will end.

When will that end? Hmm. February 2023. Can you imagine going back to 2007 to 2012 and telling someone the housing market is going to be this hot now? I don't think they would believe you. As always, everything is cyclical, I guess. You could say maybe in 10 years when the housing market is crashing, we'll say, can you believe what was happening in 2022? Here's another thing. How important is the residential real estate market to America. I'd say extremely important.

Yes. Cannot overstate its importance, psychologically, financially. So if the housing market starts to turn it, you're seeing some evidence that it might, that can also inflict some damage on the economy. Here's some evidence that it might not. Median days on market. How long it takes for house to sell? Lowest ever, 14 days.

So houses are still selling very very. very fast. I just think that we're getting to a point where just this is inequality on steroids again. But existing home sales plummeted. So I think you're right. You're going to start to see a strike. There's going to be just too big of a gap between where buys and sellers are. So to that end, from Redfin, about 63,000 home purchases agreements were called off in July equal to 16% of homes that went under contract that month. That's the highest rate in more than two years. So in Jacksonville, for example, 800 home purchase agreements were called off in July. That's 29% of homes that went under contract that month. And this is happening in Florida. Six of the top

10 regions are in Florida, which was one of the hottest areas of the housing market last year. Here's a quote. The last four buyers I've worked with have all backed out of deals. One of my clients asked the seller for money to cover the home being repainted. The seller said no at first. So my buyer canceled the contract, but the seller then changed their mind to repaint the whole house. My buyer still walked away because he decided he didn't love the home that much after all, and he knew he had other options, end quote. So this is a good thing. We're a little bit of return to normal negotiation. I can't imagine walking away from a house for repainting. Buyers are having some power again. So it's not a bad thing. It's actually a good thing. We desperately need housing

to cool off. It looks like it's happening. It was ridiculous how much power sellers had. You're right. The fact that we're getting back to negotiating, that's a good thing. Now we just needed to come to the automobile market. This median number at an ultimate lawyer, I don't know if that's stale or what, because we spoke last week. about the number of stale houses on the market is at a multi-hero, the number of houses that have been on the market for 30 and 60 days plus. I guess much like the stock market, there's just, there's a lot of back and forth here. Cross currents and conflicting data.

All right. Here's a survey of the week. We haven't done on these in a while from unusual whales. 84% of Gen Z wants a housing crash to happen to afford a home per report by consumer affairs. This is one of those things that in a vacuum, of course you want a housing crash. But this is one of those careful what you wish for kind of things. Well, they haven't thought the second order effect. Yes. If there was a housing crash, guess what? The economy is going to be crashing. You might not have a job. You might not be able to come with a down payment. That is the problem here, is that yes, of course you'd want prices to come down. But the situation that causes prices to come down means you might not be able to buy a house. The bank might not give you a loan. You might not be able to afford it. That's what makes this so difficult, unfortunately. Sorry, Gen Z. Let's move on to next quarter, guys. Maybe decent. Maybe actually not so bad. Kind of good.

to be the supermadian put out a chart second quarter sales growth for the S&P 500 is 6.5% on a real basis, which is pretty good. However, that's all energy. Energy is up 68% year over year on a real basis. X energy at 0.9%. That's not great. These are all real numbers. Healthcare 1,4, real estate 68, tech, negative 1.4%, financials, negative 4.4%, staples, negative 0.3%, communication services, negative 5.5%. Consumer discretionary, 7.6%, positive. People are spending. There is so much conflicting data out there. So looking at the energy sales growth, it's huge. It obviously stands out. It's bizarre to me that the oil price is basically unchanged this year. I feel like I'm not a macro forecasting guy, but I feel like if you asked me,

because of all the energy problems we're having, one, three, five years out, will oil prices be higher? I'd almost have to say, I'm 90% sure they'll be, yes, they'll be higher. But I feel like there's always something that could come along that would completely disrupt that theory. Maybe it's a recession, I don't know, but the fact that oil prices continue to fall. all is one of the things that is confusing to me. And so I don't know if that means like we're going into recession. The feds rate hikes are working or what? But why are oil prices flat on a year? And doesn't ask you as well. Okay. Not an energy guy. I wouldn't even pretend to give an answer. Nominal year of year sales growth is all positive. I mean, obviously, or maybe not obviously,

but it is all positive. All right. So what do we have this week? We had Zoom yesterday. You know the funny thing? I know we're doing this because inflation is high. But like when inflation was running at 2% a year for 10 years, we never inflation adjusted anything. Now we inflation adjust everything. I know why, but it's just, it's kind of funny how that works. Because it's like, it's not like inflation, if it goes back to some sort of long-term trend, I don't know if that's 2%, 3%, 4%. When it gets back, it's not like it's going to go to zero and just stay at zero. It's inflation is still going to be there. If the economy is growing, debt is growing, inflation is going to be growing somewhat, no matter what, anyway. Just an

observation we're still in the thick of it ben we had zoom yesterday which we're going to talk about we had macy's this morning you've got dick sporting goods you've got urban all right so a lot of retailers tomorrow we've got invidia stocksman acting lousy sales force these are big ones snowflake on thursday we've got dollar general dollar tree that should be interesting again so dollar tree best buy my kids we have a dollar tree half a mile from our house lots of fun great stores It's $1.25 now, so it's pushing up there. But my kids, if they're good, we can go to Starbucks and get a cake pop, and then Dollar Tree right next door, get two things from the dollar store.

That's a great activity to make a kid feel like they're actually getting something done in the day. Speaking of young kids, happy birthday of my own, Logan. He's three today. Oh, well, you go, big man. He made it. Yes. He's one of the cutest kids I've ever seen, I think. He's an angel. Peloton is on Thursday. I'm circling that one. They lowered their prices, then they raised them again. Did they?

Yes. So, like, two weeks ago, they raised their prices again. Because I was looking at it, I'm like, man, these are cheap. And they raised them again. I feel like that's a company that just, they don't know what they're doing. Someone needs to buy them. It probably needs to fall another 50% for that to happen or something. I don't know.

So we're going to start with Target. You know what I do twice a week? Robin sends me to Target. There's a Target six minutes away from my house. I text her that I'm here. I pull up, curbside pickup with, I don't know how they do it, But every time within two minutes or less, they come to your car and they drop off whatever you get. Under two minutes, every time.

They haven't figured out pretty good. We do that as well. It's great. You know who doesn't have it figured out? Never again. This is the second time that I've had issues there. BJ's. I pulled into the parking lot.

I checked in. It shows you what your items are. Okay, good. I'm getting some paper towels and toilet paper napkins and those sort of things. What is BJs? We don't have one of those. Who owns BJs? It's like Costco.

It's Costco. We go to Costco. We go to Costco. We went to Costco on Saturday or Sunday morning. Sunday morning, right when it open. That place, I'm good. Nope. I don't need to go again. It's too much.

Too many people. Too much, I can't handle it. Yeah, you can't go into the weekend. So anyway, so I check in, and after like 15 minutes, I'm just, what the heck is going on? And they don't even have a dedicated, like, curbside place. You just pull up front and double park, I guess. I get a text message. Thank you. Your order has been delivered.

Let us know if you're happy with your experience. Not I'm not happy with my experience. My order wasn't delivered. So I go inside and they tell me, oh, no, no, no, no, no. You get that text when we start preparing your order. And I was like, well, that doesn't make any sense. Why would you do it that way? And then I had to find the guy in the parking lot.

It was just terrible. All right, Target. They opened the call with this. Good morning, everyone. Back in June, we announced that our team would be undertaking a bold effort to right-size our inventory position in the categories through which demand patterns have rapidly changed. Listen, I don't really want to blame retailers too much because demand patterns did in fact rapidly change. Supply chain issues did in fact hurt them a lot. However, and maybe fool me, I got fooled. I think we spoke

about this last week, but I think people, again, read too much into the inventory issues. Thinking it was a big macro thing as opposed to a crazy pandemic thing. Right. They, said three years ago in the second quarter digital fulfillment accounted for just over seven percent of total sales in contrast by the second quarter of this year the same day portion of our digital sales accounted for more than 10 percent of our total sales this drove our total digital penetration up to almost 18 percent more than doubling in only three years i'm actually surprised that it's that low to people don't know about this yeah it's great here's the other thing though the fact that all of these retailers are screwing things up means in november

I'm going to get a very cheap TV. That's the only thing that matters to me. We need some new, I'm still holding out. We need some more patio furniture. I'm holding, I'm still holding. By the end of this, by September, after Labor Day, they're going to be giving this stuff away. You're going to be lemon out of lemon.

So Carl Clinton tweeted tweeted this chart, inventory to sales growth. It's just all the way down during the pandemic, all the way back up. It's all over the place. Jeff McHadder really good take this morning. So Macy's reported. So Jeff tweeted,

and he's a retail guy. He tweeted Macy's beats, guides lower, nails just about the entire suggested earnings release draft written up yesterday. Congrats, tough environment, crush up the optimistic. Share us slightly higher early on being predictable, not canceling Christmas and low expectations.

All right, so shares were up a little bit yesterday after I was on what they're doing this morning. Quote, elevated inventory levels in certain categories should have been on the big on card. Macy's blames excess inventory in the industry for lower guide. when you point a finger of blame, three point back at you, Macy's. And this is a little joke from Jeff. He said tourism remains below 2019 levels.

That'll hurt Macy's theme parks. Macy sees a never-ending consumer downturn based on its own failings and the same data all you people look at. And in conclusion, this is what Jeff's getting at here. I have very little time for macroeconomic takes in my retail calls. There's plenty of evidence consumers are buying what they want. And I think that's pretty much spot on. Consumers are very much a micro issue.

And I understand there's macro winds blowing here and there. But take a little responsibility. Do your job. Do your job better. Give the people what they want. Instead of going into a Macy's store, it's so much easier to just buy stuff online elsewhere. That's part of the problem probably. So they might see that their demand has been going down for years and years and think that

this is the end of the consumer when no, it's just easier to consumer to buy stuff elsewhere. We've spoken about this chart earlier. To me, this is on the list. It's hard to pinpoint one chart of the pandemic, but this is definitely on the list. The market cap of Zoom divided by the market cap of Exxon or vice versa. So Zoom at one point for just a minute was bigger than Exxon Mobile in market cap, which is hilarious. I think Exxon is now 14 times bigger or 15 times bigger. I can't remember what it was less than we looked.

I feel like that's the kind of company I just stopped paying attention to. It did balance is looking better, but here's the deal. Here's a TLDR. they have less customers or they're having a harder time getting customers and they're spending more in sales and marketing so here we go

total revenue for the second quarter was 1.1 billion up 8% year every year look at this chart bend that I made of the year of year revenue growth this is terrible and I understand they got killed during the pandemic

the pandemic made and broke their business like a lot of other people but look at this stock is down 85% still there were some things that I pulled out of the report that I thought were interesting for example

they have 3,000 116 customers contributing more than $100,000 in trailing 12-month revenue. Is that crazy? It's a lot of businesses. 3,000 businesses spending $100,000? I guess if you have a big enough business and you have to get multiple subscriptions. No? Everyone has a Zoom?

How many stocks are in the WorldShare 5,000? Yeah, but how many companies are there? There's way more companies. Okay. So that's up 37% from the same quarter last year. But, but, but, but, but, but, but. Individual customers are dropping back. Remember when people had drinks with each other on Zoom?

Yeah. Because it's hard now. Google Meet is free. Possibly one of the worst pandemic things that happened is meeting with their friends to have a drink on Zoom. Yeah, it was not fun. I did it a few times. But look at this.

Let's look at some of their financials. They have gross margins of 75%. Software is a good business. Not bad. Maybe you knew that. But look at all their spending. R&D, 15%. Sales and marketing, 36%,

which is a 10% year over year. year. Don't 98 basis points me. GNA, 11.9%. So once you whack all that, they're operating margin. They have a 4,729 basis points on here. That's a flag. 15 yards penalty. So when you take all that out, their operating margins are 11%, which is not where you want to be. Growing 8% a year. So they have this huge margin of safety that they're just spending all. Look at that sales and marketing. They need to get customers. They did put this in nifty charge. So anyway, I thought 3,116 customers was a lot. I want to highlight a substack called the transcript. I remember Scott Chrysleroff? Oh, yeah. He follows all the quarterly earnings calls. So Scott Chrysleoff and

Eric Makaya do this thing called the transcript that's on substack. They have to pay for it. They also do podcasts and they cover a lot of the earnings calls and they break it down. So for example, here's what they do. So there's like one section on the consumer and they say some retailers are seeing changes in consumer behavior. So they grab a bunch of quotes. For example, The CFO of Walmart said, as the year has progressed, we've seen more pronounced consumer shifts and trade-down activity. As an example, instead of deli meats at higher price points, customers are increasing purchases of hot dogs as well as can tuna or chicken.

Private brand penetration has also inflected higher. And in the food category, specifically the private growth rate doubled compared to Q1 levels. Sorry, that's Walmart. But then he says, the transcript says, others aren't. So other consumers are not seeing changes in consumer behavior. Sorry if that was confusing. Here's a quote from the CEO of Lowe's.

At this point, we are not seeing indications of material trade down. If anything, we're seeing the opposite with continued strong demand for our new and innovative products at higher price points. So there you go. Back to the real estate thing, I think the remodeling boom could last like the remainder of the decade. I think with that low mortgage rates and equity in their homes, I think home equity lines of credit, even with higher rates in the years ahead, people are going to go, why don't we just redo some stuff instead of moving? way easier. We're already here. I think the remodeling boom has legs. I think you're right, especially given what we said about the mortgage rates. And then one more thing that I want to point it out, consumer activity may depend on the income levels. Again, there's just, I feel like sometimes

the word nuance is overused, but in the case of our economy today and what companies are saying, it's appropriate. There is so much conflicting data. Here's a quote from a CEO, the CEO of Coles. Interestingly, in our higher income customers, we're actually seeing more customers and they're spending more. So it correlates to where the economy is creating, like I said, pressure. We're really seeing that in that middle income customer. Those are the ones getting squeezed. That makes sense. Like all other parts of the economy feels like. All right, Bloomberg had the story on SPAC King, Chmoth, and how he's kind of gone silent. And this was some of the stuff I have in here. Back at the height of the boom in early 2021, he fired off a burst of tweets,

one after another, but his latest SPAC exploits. Like in January, when he retweeted a post of the performance of the SPACs he invested in and tacked on a JZ lyric for emphasis. I think his lyric was, I'm not a business man, I'm a business comma man. Get it? Only one of the six stocks mentioned in the threat is trading higher today than it did at the time. The median decline is 79%. So I don't know what he would say to make people feel better about this. He's got a bad performance. It is what it is. I feel like rich people don't care anymore because this guy did fine. I'm sure he cashed out. He made some money. It sounds like most of the stocks are trading below the $10 level where they need to be at. I just feel like, I just feel

Rich people, if they do this kind of thing, if they do a pump and dump, if they do some sort of the celebrities doing NFT stuff, I feel like they just don't care anymore. I would not buck at all rich people with what you're not did. Okay, but there were a lot of rich people who did shady stuff during that time period. And I don't think that there's a lot of remorse going on saying hand up. I misled a lot of people. I said you should put all your money into this crypto thing or this NFT thing or just SPAC or whatever. I feel like if you have enough money, you just don't care anymore.

Well, what's the incentive to apologize? I don't know, to be a good person, not be a jerk. No, you'd get killed harder. All right. I think it would be nice to see some remorse. But I feel like there's so many people that love certain... Listen, I would love to see remorse, too. I'm not saying that I would.

I'm saying from their point of view, what's the incentive for them to show remorse? Exactly. There is none. I don't know. Again, maybe a guilty conscience. I don't know. That's all I'm asking for, is like, just be a good person. Is that too much to ask for?

No, I would like, but you don't know what's in their heads. what if Tramath is like insanely depressed right now? How would you know? Well, maybe he's depressed because he's skipped leg day. I don't know. My point is you don't know where these people's mental state is at. Maybe they do feel bad. Anyway, I don't know. Yeah. Trying to, there's no better for the doubt. I'm just trying to. That was advocate. That's fair. You're right. I feel so sad that I made billion dollars pumping and dumping stocks to retail investors. How will I ever survive? Yeah, no. Well, when you put it that way, when you put it that way, it's not great.

there was a thing out yesterday. Am I getting more mature? Because usually I see it the worst in people. That's true. Am I turning a corner? Am I the cynical one now? All right. The average reservation wage, which is the lowest pay level that Americans would be willing

to accept for a new job, rose by 5.7% to $72,873 in July. And I thought about this. I said, hey, wait a minute. That can't be right, can it? Maybe it can. Maybe that's what they say. average annual salary is $53,000. I'd never heard of this reservation wage thing. If you look at this chart that's in Bloomberg here, in 2014, it was $50,000. Now it's almost 75. That's a pretty good

jump. Back to the negotiating stuff with, what are we talking about negotiating earlier? Houses. It feels like people could finally potentially negotiate higher salaries. That's one of the good offshoots of inflation, if there are any. All right, crypto ads. This is from Bloomberg as Well, spending by major crypto firms fell to $36,000 in July. That's the lowest monthly total since January 2021. It is down from a high of $84.5 billion in February when the industry flooded the airwaves around the Super Bowl. Something or nothing here.

Nothing. My take, everyone in everything is momentum in some form. When things are going really well, there's going to be more money spent, there's going to be more buybacks, there's going to be more M&A, there's going to be more everything. And then when things are bad, it goes away. Momentum rules all. How's that? True. The obvious yes, but to this chart is there's no sports right now. True. I mean, it did peak the Super Bowl. When football and basketball come back, will crypto spending be what it was? No, definitely not.

How about this? But will it be above $36,000? Yes, it will be much higher than $36,000. in the fall when basketball and football are back. Remember when the Coinbase QR code was going to revolutionize crypto? Remember that for like a day? Also, one more. Do you think Matt Damon feels bad about doing his crypto spot?

Fortune favors the brave? Yes. I think he would undo that in a sec. He would give all that money back if he could. Probably. 100%. If I know Matt, like I think I do, he would give that money back.

So FTX generated more than a billion dollars in rep. Wait, real quick. Yeah. Showtime. I feel like it's one of the few streaming stations that just gets totally overlooked. I think Showtime and Cinemax could merge because I feel like that's like people don't pay attention to me more. I feel like Showtime plays Rounders a lot.

Why are we talking about Showtime? They had an Edward Norton thing, the Edward Norton collection. It was American History Acts, Rounders, and Primal Fear. I clicked down the other day. So what a great trio. Oh, my God. Can you imagine? I remember the first time I saw Primal Fear like it was yesterday.

That reveal? The ending, yes. But those three movies today would be TV shows. They would not be made into movies. But Rounders, it still holds up. Oh, I watched it. Damn right. It holds up.

It's a great movie. Did you know? Oh, I just saw the poster for the new Knives out. Edward Norton's in it. Oh, he is. God, I love that guy. All right. So, FTX, God, I love that guy.

Same. He's the best. FTX did more than a billion dollars in revenue last year, which was more than 10 times what they did the previous year. Guess what? Coinbase did over $7 billion and was seven times what they did in 2020. That's surprising to me, that Coinbase is that much bigger than FTX. I wouldn't have thought that.

Would you like to walk back your take on Coinbase versus Robin Hood? And for the record, did you say? Did you say that you would rather bet on Robinhood? By a hair. No, then I changed that tape. You pounded the table by a hair. No, my biggest worry was, what if FTX eats into all that revenue of Coinbase? Their competition means that they kind of peaked already.

So now you're not worried? What if Coinbase peaked in high school? I'm just asking the question. All right, you read this New York Mag piece about the three aerobiles. capital guys. I did. This was, so Sam Begandfried from FDX said, it was really good. That was one of the better things I've read in a while. It sounded like that. I mean, someone is probably going to be doing a book on them, I would imagine. It sounded like long-term capital management. So San Begand-Fried

said, I suspect they might be 80% of the total original contagion. Holy cow, this is great from the fund's investment objective to achieve consistent market neutral returns while preserving capital. Sure. Sounds great. I feel like in some ways, so I might have mentioned this before, I had some friends in college who there was a bunch of people from their high school who came to our college. And they said, wait, in high school, those guys were dorks. Now they're pretending like they're cool. But I feel like that's something you could do in college. You can try to change your personality. So there's this thing from the story. And they said, these three-eos capital guys start out as FX traders. And they said, we FX traders are partly to blame for

this because we knew for a fact that these guys were not able to make money in FX. But then when they came to crypto, everyone thought they were geniuses. So I feel like these guys graduated from high school, FX trading, to crypto in college and try to change their personalities. and it worked for a while. This is great, though. One of the founders sent out a tweet in May, Supercycle Price's thesis was regrettably wrong. There you go.

Just a little. There's your remorse. I know there's no counterfactual. It would have been really interesting to see how crypto would have behaved in this macro environment, absent Terra Luna blowing up and taking three hours with it and taking the whole industry with it.

Maybe you could say that this always would have happened because when the music stopped, you would have found the cockroaches. You would have found the bomb. And there was something, whether it was these guys or something else, or lunar or something else, something would have blown up when the macro story shifted. So maybe that's wishful thinking. I kind of agree. There was another article in the French of times. Yeah. Did we get duped by all these smart people are going to crypto thing?

because all you heard for months and months was every smart person in tech that I know is leaving tech to go to crypto because no because that wasn't just the stories you read these people are not smart I'm sorry that's not intelligence what they did it's hubris it's borrowing money it's not intelligence no no no those are not the same thing they could have a high IQ they just got swallowed up by this that doesn't do with intelligence that's what I mean maybe people are confusing high IQ with actual intelligence like being smart there's a difference But to your point, did we get dup? No, because there's all sorts of data on where people are going for their jobs.

People are flooding to crypto. But you're right, there is a big difference between high IQ and smart. And speaking of smart, we were talking about this yesterday. So the FT had an article on Alex Machinsky from Celsius who started trading their funds and that blew up, as we know. So one of the things at the center of this was GBTC in the sense that, that was an arbitrage that disappeared. The Bonoitte Mendelbrot.

The arbitrage disappeared. The premium went to a discount, big time. Both three arrows and Machinsky's wouldn't take the L because they were holding out hope that the discounts would either go neutral and or that would happen when the SEC allowed GBTC to convert to an ETF. So did the SEC, and this is obviously speculation, we'll never. know, did they say we're not allowing the conversion because we're not going to bail these guys out? It would be crazy if that was one of the reasons. They actually knew more than we knew. They knew the exposure and they said, we're going to blow a few people up first before we let that ETF happen. I think that there's certainly a chance. I'm not usually a tinfoil guy,

but there's definitely a chance that that is something. It's an interesting theory. I also kind of like it to be right, to be like, sorry, you guys did this on your own. Okay. I just have two quick things. Do you want to talk about this Empire State real thing real quick? Sure. I asked last week, why is it called the Empire State? And no credit to you and Josh, because you guys did not know, even though you were from New York. Had no idea. George Washington is the one who did it because he said that New York is so important, it's going to get a seat at the Empire. A bunch of people sent that to us. Thanks for everyone to sent it. I never knew that.

So there's been talk. We talk a lot here about streaming. Where's the bundle? Who's going to bundle them all up? Because it's very annoying. To go into a prime and scroll. And then, You don't find anything. You got to go to Netflix. And then you got to go to Hulu and HBO and Disney. Where's the bundle? I have news for you. I can't speak for every TV.

But since I've replaced my Samsung line TV with a new Sony TV, my Sony is bundling my and I love it. How so? I just saw this yesterday. When I go to the homepage on Sony, it shows like 90s movies, comedies. I'm like, whoa, what is this? From all different places.

All of my options and it shows where they are. So it shows you HBO Max. and not only does it show you it so like you have to go into the app no no no you literally click on whatever movie you want to watch or whatever show you want to watch and it opens up and it takes you right to the app how cool is that interesting i never heard of that sony is the bundle if you're in the market for a new tv Sony is the bundle all right so ben last week on monday you came to town early i took you on the jet ski and we floated did we take a spill yeah we took a spill but otherwise it was pretty smooth sailing i brought sean on the jet ski now Our Discord users know who Sean is. Sean is our research right-hand guy. He's the guy behind the guys. Sean was an offensive lineman. He was a tackle, I believe.

He's 6-6-290. He went on the back of the jet ski. And immediately we're like, so I googled, what's the maximum weight occupancy on a jetty? Because like I said, I'm bulking as well. It's not just so I'm bulking. I'm carrying an extra 10 pounds. I'm carried an extra 10 pounds.

And so I'm like, ah, it's pretty dicey. So we went out a little bit. I made a right. I see the water shop. I'm like, nope, we're going to go this way. Made it left. We're going behind the boat. And I'm like tense because I feel the jet skis all over the place.

And I'm like, dude, no, we're turning back. We 100% would have flipped. You're like a car with real, real drive. I told you, you needed to let him drive it. Pretty much. And I took my first jet ski spill. I took my first spill. Personally.

So I was in fairly rough waters And I hit a wave wrong I was probably going like 40 I wasn't going like top top speed And I knew that I was going down You know what I mean? Like I saw the wave come I was like oh boy here we go

I went in the water Hit the water Did a nice pretty tumble Got out of the water My jet ski is like 50 yards away I swam over to it Both my AirPods were still in my ear How crazy is that?

Both my AirPods are still my ear One of your AirPods in your ears While you're jet skiing? Yes That's brave When I was swimming One of them fell out but the AirPods still worked when I got back on my jet ski, which was remarkable.

Salt water didn't. So anyway, last last thing, I'm getting my new jet ski after this show today, which has Bluetooth, so I will not be riding around with the AirPods anymore. That's good idea. I put my AirPods through the wash last week. They came out still working. Does it still work? Yes.

Didn't put in the dryer, but they went through the wash in an accident. Yeah. Recommendations. What did you got this week? What's your email here? Let's hear it. All right. Somebody email does.

Did you say this? I see it now. The subject line was Michael's taste in movies is dot, dot, dot, and then here's the body of the email. Great. Two exclamations. Brawl and Cell Block 99 is epic, and Bone Tomahawk is fucked up in the best kind of way. Hey, Ben, for a man who won't go to the theater to save his own life, why in the world are you solely judging movies by the box office success? That's a fair point.

If that were the case, Minions of the Rise of Gru should be your favorite movie of the summer. Anyway, if you want another nuts movie, I rewatched life the other day. Oh, that's a good movie. I like that one. Jim Gillon Hall and Wynelman. It was a very fun alien movie and pretty effed up as well. I agree.

Thank you. Thank you for the email. There's a difference between picking the best movie in terms of box office and picking one that made $79,000. I bet Vince Vaughn ran out four theaters and self for that. Okay, okay, okay. What do you think Lobowski did at the box office?

I bet it wasn't high. Probably not, but. Oh, actually, okay, it was a common brother, so it did well. All right. It did well. 46 million. I watched the unbearable weight of massive talent. That's the Nicholas Cage one.

We rented it yesterday. If you're a Nicholas Cage fan, it's, it was so meta. I mean, there was a few parts I laugh, but it was, you know, the drawing of the horse where the back half of the horse looks really good and the front half looks bad? Yes. It was kind of like that where, like, after the first half hour, 45 minutes, they kind of got all the good jokes out. And then it just kind of kept going. If you really like Nicholas Cage, it's a decent movie.

I wouldn't say, like, you have to drop everything and watch this movie. It was kind of entertaining. Here's something. So I read that last week I mentioned a book by Bob Evans, Robert. Evans. And I forgot to mention the name. It's called The Kid Stays in the Picture. Here's something from, he was talking about Mario Puzzo, the guy who wrote the godfather, the book. In Merrick, my hometown. Is it really? So he's talking about how they were writing this movie called the Cotton Club.

I've never heard of it. It's a Richard Geary movie. I guess it bombed. So he says, it was 1982. My fucking luck. Interest rates broke an all-time high, 22 and a half percent. Financing anything was impossible. I don't know how the world continued to work at 22.5 percent interest rates for people. to get stuff done. How did the economy not completely just grind to a halt? Wow.

Anyway. Yeah, I think that's all I got. All right. Oh, wait, are you watching the new Game of Thrones? I can't remember if you watched the old one or not. So I stopped watching Game of Thrones after season two or three because I realized I wasn't paying attention

like an idiot and I had no idea what was going on so I stopped but I did watch the one... I was paying attention and I still didn't know what was going on. I never knew anyone's name. The one of that. What's it was Hustle the Dragon? that was freaking awesome. That was a hell of an episode.

I feel like there's, I think Game of Thrones was eight seasons. So I put a ton of hours into that show. And I feel like getting into a new one, it kind of feels like the same thing with new characters. So half of my brain says, do you really need this again where you have a show where you don't really know what's going on?

You don't know any of the characters. The other half of my brain goes, oh, wait a minute, this is actually kind of entertaining and good. So I'll keep watching it. It was pretty good. 10 million viewers. It was the most watched series premiere in HBO history.

That's crazy. Are you watching industry? First episode, back into it. We watched one. It is excellent. Excellent, excellent. First time I watched, I've had this movie on my mental list for a long time. I don't know why I never watched it.

Eyes Wide Shut. You're a TC guy. Of course you've seen that, right? That's like one of the few TC movies I've never seen. Isn't it effectively a porno? No. It's not? No.

That was exaggerated. That is 100% worth watching. That was a very good movie. Very good movie. Okay. Yeah, for some reason, never watched it. I think the porno stuff was a little bit misleading. Yeah, very good.

Definitely watch that. Okay, last thing. So, Sean is making two cameos in this podcast. Sean told us that the departed didn't age well, and in fact, he prefers Black Mass. So obviously that's a ridiculous take, but I had never seen Black Mass. It's good. I watch it over the weekend, so it is a good movie. But relative to its cast, listen to this cast.

It could have been better with my feeling. Totally. Yeah, it could have been way better. Like, it was good. I was entertained. Johnny Depp, Dakota Johnson, Joel Edgerton, Jesse Plemons, Benedict Cumberbatch, and there's a bunch of that guys. Kevin Bacon, Corey Stoll, Adam Scott, Jeremy Strong was it? I don't remember that. Tons of high-octane actors. You saw Kevin Bacon of that guy? No, no, no, no. No, he's not that guy. But I'm looking at the actors.

So David Harbors of that guy. Peter Sarasguards at that guy. Anyway. I just thought it should have been better for that kind of movie. It should have been better. And the departed is. a, come on, come on. Departas is departed. What are you talking about? Didn't age well. Also, speaking of an ending that blew you away the first time you saw it in a theater, I still remember that. Yeah, the double. Yeah. Very good. All right. We went long. We had a lot to say. Busy week. Animal Spiritspot at gmail.com and we will see you next time.

Thank you. Thank you.