Animal Spirits Podcast - Ring the Bell (EP.37)

Episode Date: July 11, 2018

The complexity of the trade war, tech IPOs, the surprisingly strong consumer balance sheet, the housing affordability index, a concerning economic data point, the burden of student loan debt, the staggering rise of esports 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

Welcome to Animal Spirits, the podcast that takes a completely different look at markets and investing, hosted by Michael Batnick and Ben Carlson, two guys who study the markets as a passion and invest for all the right reasons. Michael Battenick and Ben Carlson work for Ritt Holt's 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. We're going to start off the show today talking about what has been in the headlines for a few months now, and that is tariffs and the trade wars that are going on. So we are not economists. We don't pretend to be ones. We know what we read in the New York Times and the Washington Post and not much else. So with those caveats aside, let's just get some of the stuff that's going on. So the New York Times wrote in a highly intertwined global car industry, a trade war can play out in unexpected and costly ways. American automakers, which export an estimated 2 million vehicles increasingly rely on global sales as a buffer in tough times. And to that point, GM said that its supply chain

sprawls across 20,000 businesses worldwide and is in an operation of great breadth, scope, and complexity. So basically, this whole thing is complicated. That's my takeaway. I haven't read too any positive spins on the on the trade war but i i think the if people are trying to put numbers on everything i think that's probably a little too soon time to pump the brakes on that one because i don't think anyone really knows what's going to happen here there was the one positive spin i've heard so mohammed l arian formerly of pimco was on cnbc yesterday and he said he said everyone is it was kind of surprising because he usually focuses on the negative from what I've heard of him, but he said everyone is focusing on the left tail and what could

go wrong. He said there actually is a right tail where things really go well for the U.S. and everyone else gets dinged even more. And I guess you could kind of see by what's happening in the markets, the fact that the Chinese stock market is down, what, 20% or something, 23% and the U.S. has done relatively well where everyone else gets to the point where they see that the U.S. is actually going to come out a winner on a relative basis. Forget about absolutes because it sounds like on an absolute basis, everyone's going to lose, that maybe the other parties internationally start to come to the table and realize that the U.S. has the upper hand. Yeah, that's interesting. Well, here are some of the things that we do know. So taverns on

$34 billion in Chinese goods did go into effect on Wednesday at midnight, I believe it was. And Beijing has said that they're going to retaliate. So I think that this probably has a more real world effect, maybe than it does inside of the markets. Like, this is actually a actually actually affecting people's lives. As if, for instance, let's see, China imported around $14 billion in U.S. soybeans last year, and they said that they're going to be shifting soybean purchases to Brazil where they bought 30% more beans in May than they had a year ago. So obviously farmers are being affected by this. Right. So, yeah, it's obviously going to be a sector by sector industry by industry basis or for who really feels the pain on this stuff. The biggest one for me

is that I read the other day that this could increase the prices of Chick-fil-A sandwiches, which really puts a hamper on my lunch budget because I eat there all the time. Well, there's your left tail right there. So J.P. Morgan did a study, and we will link to the show notes. And they said there's a few paths that can go down. And, of course, we have no idea. Maybe there's an infant number of paths. But the worst-case scenario shows them knocking 1.4% off global GDP.

which, you know, you think like, oh, not so bad, 1.4% is, you know, so we're 98.6% intact. That's pretty good. But 1.4% is, like, trillions of dollars. Right. It's huge. And the thing is, when you read what the economists say about this stuff, and again, they're not soothsayers on these things, but it sounds like most of the pain is felt by the consumer. So a lot of these costs will be passed on the consumer if they can. And I think that's the hard part. So a lot of the stuff I've been reading saying that, If all this stuff happens, it could make the tax cuts that we had just a few months ago kind of moot because it will more or less for the middle class negate the money of their savings on the tax cuts because of what they're going to be spending on other products if all works out as planned. So that's interesting. This is another one of those headline risks that makes staying invested really difficult because it's so easy to imagine a multitude of ways in which this goes awry, right, where like things don't go well. It's very difficult to think about the right tail of this, but the market does not always get things right. But if you believe at all in the fact that the market is a discounting machine, stocks are flat year-to-date, at least the Dow is flat year-to-date, hasn't pieced up a little bit. We know that there are tariffs coming into effect. Like, if this was going to affect the market, I would think that it would have done so already.

That's possible. And like you said, like China is, the Shanghai is down, is in a 23 or 24% drawdown. Yeah. So if we are to believe the markets, then again, I think that that would mean that the U.S. is the relative winner of this whole thing because we have the more dynamic economy. But I don't think that means that everything is going to be spared and all it's going to be good, especially with places like GM in the auto industry where there's just so many moving parts and the tentacles are all across the globe. But I think, yeah, it's never, investors never look at something with war in the name and think it's going to be a good thing. Like maybe they could have tried to sell this differently instead of calling it a trade war, calling it something a little happier. I don't know what that would be. be, but it is a lot of times where the way that these things are rolled out that can affect how investors view them. Even if we had the economic data ahead of time, like what this is going to do, GDP in two quarters out, we don't know what the market is pricing in. So global GDP can drop 0.8 percent, but maybe that's better or worse than the market is currently pricing in. So we have no way of knowing, like even if you had the data, good luck implementing a strategy around that.

And then lastly, just moving away from the market, the Chicago Tribune wrote a article. showing that a steel mill in southern Illinois laid off 2,000 people at the end of 2015 and 800 jobs are coming back. So there are some positive things happening in people's lives from this stuff. Yeah. In terms of markets, it's all, as you said, it's people say markets are discounting mechanism. I think a lot of it is just expectation. So now that this news is out there, are things going to be better or worse than the market assumes? And that's kind of what it all comes down to, especially over the short intermediate term. Right. So the old saying is they don't ring a bell at the top.

However, if they did, if there was such a bell, maybe it's right here in this article from the Wall Street Journal. IPL market posts blistering first half. So some pretty amazing stats and statements in here. So so far this year, 120 companies have used initial public offerings to raise $35 billion, which is the highest volume since 2014. The thing to me about this story, and I guess I can see how people would assume things are getting out of control, for years now people have complained.

that there haven't been enough IPOs and that the IPO market is broken and it's like finally we get it and then people say, ah, that's it. That's it. This is the top. Ring the bell. So I think you kind of can't have it both ways in these things where people have been complaining for so long that they want to see some liquidity in these private ventures. And then all of a sudden they come public. And I think the real tell here is the fact that a lot of them aren't shooting up when they go public. The performance hasn't been that great when they've got in the exchange. Yeah, that's a good point. So the head of technology investment banking at JPMorgan said, quote, this year we're finding the investor demand for technology IPOs is literally the highest we've ever seen in both terms of the quantity and quality of interest. I'm going to submit that as a candidate for things that won't age well. Okay, yes. I didn't see that one. That one is a little bit of a red flag. I'll give you that.

So one of our favorite resources that comes out on a monthly basis is actually also from J.P. Morgan. And it's called the J.P. Morgan Guide to the Markets. And this thing is really, just a treasure trobe of data from market data to asset class data to economic data. And the latest one, everyone's in a while, they actually update what they show. And the latest one has a bunch of new charts. So we kind of wanted to go through this. We'll post the charts to all to the show notes and kind of a link to where you can find it. I don't know, what is it, a hundred pages maybe. Can I just make the point that this podcast is getting a little bit old because I feel like we've done this, we did this earlier. Have we done this before? Yeah, I think we did. But there's always new charts. So you're getting

Deja, yeah, we're going through the new charts. Okay, so this is a sense of deja vu. So they had on consumer finances, and the one that really stood out to me was household debt service ratio. And so this data goes back to 1980. And we talked about this a few weeks ago, I think, but debt payments has a percentage of disposable personal income is now lower than it's been at any point since 19. Well, I guess it's a little higher than it was a few years ago, but it's lower than it was in 1980. And from 1980, it was higher than it's been until now. So more or less, the debt burden people are always worried about is not quite as bad as people think. Well, yeah, the consumer, according to these slides, is doing just okay.

And we speak all the time about student loan debts and mortgages and all these liabilities and auto loans or the new subprime and whatever, whatever. But people never talk about the asset side of the equation. This is something that we've spoken about earlier. But household net worth is at an all-time high. Things are actually doing, you know, things are actually pretty okay. And they show the consumer balance sheet. They say total assets is like $116 trillion.

Total liabilities is close to $16 trillion. So again, the assets just dwarf the liabilities, even though the liabilities are the only thing people tend to worry about these days. No, it surprised me a little bit about this. Pension funds are 20% of the asset side of the equation. That's probably, no, it's definitely higher than I would have guessed. Right. Cut that one in half probably.

So at our EBI conference a couple weeks ago, they had the guy who was the head of, or not the head of, he was part of the Illinois teacher pension fund. And what did he say their funding ratio was, 47% or something like that? Yeah, it wasn't great. And he actually said things are not dire. Well, well, for him, people were asking like, what are you going to do? And he's like, listen, there's nothing we can do. This is a political issue, not an investing issue.

So we're just going to continue to invest the portfolio as we would. And there's nothing we can do about the funding ratio because that's not on us. That's on the politicians who didn't put enough money in. So you could probably chop that one in half and assets would still be pretty good. Hold on. Before we move on, one last thing. The low for consumer assets in the first quarter of 2009 was $69 trillion. And now it is $116 trillion. It's pretty wild. So if you're doing technical analysis on this one, what would it be telling you? Oh, the clean breakout, blue skies ahead. The 161.8 Fibonacci extension takes us up to 175. All right. And that was Michael teaching Ben technical analysis. The one, the other one that stood out to me,

So there's a residential real estate slide, and they show the Housing Affordability Index. And this is average mortgage payment as a percentage of household income. And looking at this back in the late 70s and 80s, it got up to close to 40%. And obviously, a lot of it was the fact that there was 15 or 20% mortgages back then. And now it's at like 13%. The average is close to 20%. Just to reiterate, that's showing the mortgage payment as a percentage of household income. And it got almost to 40% in 1980.

That's pretty bizarre. That's, yeah, that's insane. So today it's 13%. I mean, all of these residential real estate charts look really healthy. Correct. Until the assets all fall 70 to 80% in the next depression, and then they don't look so well, right? Yeah, I mean, they look pretty good. This was definitely a new one under the, an economic slide, long-term drivers of economic growth.

So they broke this down into a few charts. One is growth in working age population. And this shows the growth from immigrants and native born, and both of them are heading in the wrong direction. Growth has significantly slowed, as has the growth in workers in another chart, the growth in workers and the growth in real output per worker is heading in the wrong direction. Which is kind of interesting because you would assume the productivity would be increasing because of technology, and that's not the case. I guess maybe because it is increasing in such a small slice of the population. And I guess this is, so this gets back to the idea from Bill McBride, who's my favorite economics blogger who says 2% is the new 4% in terms of growth. And a lot of that has to do with just the population growth from here. Yeah, this sort of reminds me, maybe there's a bad analogy, but I was talking to somebody last year who was saying that the NFL is in bad shape and look at the decline in viewership. And it's like, yeah, but look at the previous five years. It's skyrocketed. So at some point, the pie has grown so large that growth has to slow on a percentage basis.

Yes. There's a, yeah, this law of diminishing returns where we're such a mature economy at this point that you're dealing with such huge numbers. It can't exactly continue to grow as it did in the past. because it would just take over everything. So I think if you're looking for economic growth being higher, it's going to be outside the U.S. in the future, especially from the origin markets. And some shifting from the consumer to the federal budget, there is a gap here. This won't surprise anybody that we're spending more than the sources of financing

to the tune of $804 billion annually. Oh, is this a trillion? No, $804 billion. for the 2018 federal budget. Yes, $804 trillion. That would make zero sense. Just a little bit. So the thing that stood out here in terms of spending is not going to surprise anybody.

Social Security, Medicare, and Medicaid, $2 trillion. I got nothing. I mean, it makes, it just, well, defense too, but other than that, it just dwarfs everything. It is mind-boggling. Nothing else will move the needle. No, right. Yeah, taking care of these things will be something that no one will want to do until they have to, and it's probably going to be a long time until they decide to do something about it.

But supposedly the fixes are relatively easy. It's just politicians don't want to be the one to take up that cause. And then one chart that is certainly not a good thing is, and that Gare gets, bear is pretty excited, is federal net debt as a percentage of GDP, and this is just on the rise, right? Like, it's not going in the right direction, the chart on the bottom right. Yeah, probably from 30% in 2004 to 75% today and projected to be 96% by 2028, which I don't know how they make these projections. But on the positive side of things, it got to over 100% in World War II, and everything

was fine after that. So yeah, it's the question of how much debt the country can actually sustain, I guess a lot of it just depends on what the growth and interest rates are going to be in the future. And that's just something no one can predict. It's sort of funny. The CBO has based on assumptions. So they go out 2018, 1920, 21, and et cetera. And they're projecting real GDP growth, 10-year treasury, headlight inflation and unemployment. It's just sort of hilarious that they have an answer to all of these things. Right, like it's ever going to play out like that. Yeah.

So on last week's show, we discussed very offhandedly e-sports, and we both, I think, it's pretty safe to say, our initial reaction was to dismiss that. And we got a few emails from people, and some of the people said they kind of agree with us. They can't, they don't get it. A lot of other people, younger people, especially even one of the younger millennials in our office, slacked us and said,

you guys are completely missing the boat here. You don't understand what this is. and we actually had a piece sent to us by a guy named Ryan Kruger who did a really exhaustive research piece. And I actually wrote something about this because it completely changed my mind on the subject just based on his research and some of the other stuff we looked into. And this stuff was kind of mind-blowing to me, right? You read it first and you said, you have to read this. It's crazy. Yeah. So we get a lot of emails and, you know, like blog posts and stuff, and this is by far the best blog post that has ever been sent to us. It was

incredible. First of all, the guys are really talented writer, and some of the numbers in here are just insane. So one of the charts that we'll link to is daily minutes per user. Instagram is 21 minutes a day. Snapchat is 30. Facebook is 50. Video games is 85. That's pretty great. The other one, so it was, what did they say, the number of people on e-sports in the video gaming audience is five times the size of Netflix subscribers. Yeah, and there was a stat about how there's more people play games than watch like CNN and whatever, another major news network. It's just the numbers are truly mind-blowing. So we will link to this in the show notes. Yeah, Twitch is the one that I'd heard of before where people go to watch

other people play video games like Fortnite. And I'd never realize until the last few weeks that Amazon owns them. So of course, Bezos was in on this before anyone else. And it sounds to me like this is, this is almost kind of like soccer in some ways where it's so much bigger outside of the U.S. It sounds to me like, so they said the audience was four times larger in Asia than it is in the U.S. and especially in places like South Korea, I guess, where they have much bigger bandwidth for their internet connections and can have it come a little faster. I don't remember if it was South Korea or Taiwan, but e-sports is their national sport. Yeah, so I think this is one of those things where it's probably just much bigger

outside of the U.S., and that's probably one of the reasons we don't see it as much. And obviously, it's much bigger for younger people, which were the old, as we showed last Last week, we said we don't understand this stuff because we don't play video games, but I got so many emails and texts and DMs from young people after we said that, and they just said you're completely missing the boat on this one. This is huge with young people. So I think just the tastes, especially because all these young people grew up on the internet and they grew up with social media. So the way that they interact with this stuff is just completely different, I think, than when we were growing up. The audience on Twitch watched 355 billion minutes last year.

The other crazy one to me was the fact that he profiled a guy who works for the Houston Rockets and for GM Daryl Morley. And he's one of the sharpest guys. He was actually profiled in the new Michael Lewis book about Connman and Tversky. And Mori actually said the three dominant sports in the future are going to be soccer, basketball, and e-sports, which is kind of crazy. Who knows if that'll happen, but that's quite a prediction. Yeah. So the weirdest story that I saw this week, Reuters reported that Guggenheim Partners, which is overseen by billionaire Mark Walter, is facing a lawsuit, claiming it defrauded

investors by saddling an insurance affiliate with risky assets, assets, I'm sorry, and siphoning cash for purposes, including Walter's purchase of the Los Angeles Dodgers baseball team. How does that even happen? Ken Fisher is not happy. No. This is why Ken Fisher hates annuities. So, I mean, Guggenheim is an enormous asset manager. So this story says it as $305 billion of AUM.

And so I suppose, you know, the thing is, it's funny. A lot of times you see these frauds and hucksters just like these individuals who scam people, but it's probably almost just as easy to do it within an enormous organization like this where things can just slip through the cracks. Yeah, I'm very much looking forward to the details of us and seeing how this plays out. Okay, so this is something we've talked about before. And there was a story in the New York Times, and this is our survey of the week. and they wanted to know why younger people are not having as many babies as people did in the

past. And they did a survey. So take it for what it's worth. But the number one factor for people having fewer babies is that child care is too expensive. Okay, that I buy. But this is sort of a funny survey in that there's like 20 different choices. Yeah, people could give multiple reasons. Wait, hold on. I just saw this. Worried about climate change? So is that the, I don't want to bring a baby into this world. Was that a write-in or? The funny thing is, is the one of the very bottom, don't think I'm a good parent. That should actually be the top, probably, right?

I mean, some of the other ones, so worried about the economy, can't afford more children, waited because of financial instability. I guess I kind of want more leisure time. I kind of see these. But honestly, I don't think a lot of people when they're deciding on having kids or not are looking at child care. But maybe that's for people who want to have multiple kids and they have one and realize. But it is, I mean, that's more, for a lot of people, that could be as much or more as another mortgage payment. Yeah. For each kid, it is insanely expensive. I'm not having a second child until the 10 year goes above 3%. That's my reason. I'm going to wait until the S&P is firmly 10% above the 200 day moving average. So there was a story about student debt. And the crazy thing to me was not just this person's story, but that he was, he's just one of millions of people that are just really, really, really struggling.

So this was a, I guess was it a blog? I don't know, this kind of was going around being passed around on social media. And it was a story of a guy who took out more than, what, $100,000 in debt to go to college. And I think he went to NYU. And now he's an editor at the New York Times. And this is the one that really got me. So this is a line from the story.

He says, I will reiterate that I am a 30-year-old married man with more than $100,000 of debt who makes less each year than what he owes. Buying a pair of pants is a major financial decision for me. And the big backlash on this one was initially a lot of people said, well, this guy's an idiot. He took out way more money than he should have. You know, this is on him. And he does take some personal responsibility in this.

Yeah, this guy wasn't throwing a temper tantrum. No. And he was saying, look, look, my parents wanted to send me. to college and they said they're going to do whatever it takes to do it. But the big factor here is the fact that a person of that age can actually so easily take out debt that large and have no recourse for getting out of it, like discharging it in bankruptcy or something. So I think that's one of the biggest parts here is the fact that we're just allowing 18 or 20-year-old

kids to be able to take out six figures in debt without actually giving them enough to enough information to actually think through that decision. Yeah, so somebody made the analogy, like, I don't feel bad if somebody makes a bad investment in the market. Why should I feel bad if they make a bad investment in education? And I sort of understand that mentality, even though it doesn't resonate with me. I do feel bad for people that are uneducated and make really poor investment decisions, whether it's in college or in the markets. I think that, you know, financial illiteracy is a huge problem. And to your point, like this kid's parents, he came from a lower middle class income, and his parents thought that

the way to get ahead was to get a good education and a good education means college. But to your point, like, when you're 17 years old, what the hell do you know? And if your parents didn't go to college and thought that that was the solution, like it's, it's understandable to feel a little bit of sympathy. I'm sorry for millions of Americans that are dealing with this. And there was coincidentally a tweet later on or the next day, when I was 17, I was, I went to get a limp biscuit tattoo, and when they wouldn't let me because I didn't have a guardian's approval, I cried and punched a lamppost. Three months later, I was allowed to take on

$119,000 in loans to go to art school. This was good. That was pretty good. So I wrote about the college thing a while ago, and what I found the numbers were the average college debt is only like $17,000, not terrible. And 7% of current borrowers have debts in excess of $100,000. So it's not a huge majority, but there's way more people going to college these days. So even that just that 7% is a pretty large number of people who have insanely huge balances. And just coming out of school, there's no way that your starting salary can take care of that in most cases. Yeah. So we got an email from an investor in Columbia. This was really good. So this guy wrote us. He says, hi, my name is Juan and I'm a 23-year-old from Columbia. I've been listening to your podcast for a

while, I wanted to ask you for an international investor like myself, is it convenient to invest my money for retirement in the U.S.? He wants to, basically he wants to find an American broker. He said he's seen some options for places like TD Ameritrade. So he wants to know if he'd be hit by a lot of taxes, fees, and he said he wants to invest. The reason he wants to do this is because there really aren't any good index funds in Colombia. And he says we only have 34 stocks in our stock market. And the ones that have investments in the U.S. are mutual funds. that charge 3% and aren't really any good. And this is, answering his question is a little outside of our realm of expertise

because we don't have any clients like this or have never really experienced this before. But what we told him was obviously do a cost-benefit analysis of this, but also this just shows how lucky we are in the U.S. to have so many investment options. This guy is basically out of luck just because he lives in a country that doesn't have a lot of investment options available to him. And isn't it insane that there's 34, stocks in the Colombian stock market? I think Meb wrote about this or, or is it the guy from North Star Capital, I don't remember, but one of the countries, Denmark or something like that

has had like 10 stocks in the index. So when you're looking at like a country's cape ratio, it could be like, you know, two or three stocks can be outliers that make that whole statistic irrelevant. But yeah, that is pretty wild. So I mean, we argue about two or three basis points and costs and on ETFs like it's going to matter. But we have so much access to funds and strategies and any, you know, free trades anytime you want, I think we kind of take it for granted sometime that a lot of people around the globe don't have that. So I think when you look at like the home country bias data

from a lot of places and a lot of it shows that people in other countries have way more money than they showed in their home countries, a lot of it is because they have to, not because they want to. And so I think I've gotten a few emails like this in the past where people want to, you know, they want to diversify globally, but they pretty much just can't because I'm guessing the fees and the taxes are so onerous that it doesn't make it. any sense to begin with.

Yeah. All right. Some list of the questions. What are some of your favorite finance business movies and or TV shows? The top of my list is always office space. I watched that movie a few months ago and it aged extremely well. I mean, that was in the late 90s and it still plays well today. You know, the technology is a little outdated.

Yeah. Are there any finance TV shows? Billions, I guess. Billions. Do you watch billions? We watched the first season and I think we had twins and kind of got lost in the shuffle from there. It wasn't because we didn't like it. It was just because we whittled on our TV shows. I think probably my favorite business show that was underrated with House of Lies, which was a show

with Don Cheadle and Kristen Bell. It was about the consulting industry. That was on Showtime. Just got over a few years ago. I really like that one. I mean, Mad Men was about advertising, you could say. So that's kind of a business show. I think Boilerm is one of the most underrated finance movies of all time. I love that movie. I think Boilerm is properly rated. I'm not sure who you're talking to. Oh, properly rated? Okay. Yes, I think that it's appreciated for the excellent movie that it is. Well, my theory is that nothing is properly rated on the internet. So if you're saying boiler room is the only thing that's properly rated, I guess I can, I can, I, when you see the finance arguments on Twitter, the only movies people ever bring up are like trading places.

I feel like no one ever brings up boiler room. So that's why, what I'm using my rating system on. I also thought another underrated one from the financial crisis was margin call, which was Is that Richard Geer? No, who was in that? Jeremy Irons played the Richard Fold character. It was basically a fictional version of Landon. Wait, Richard Fold? Oh, sorry.

I've never heard that before. Oh, sorry. Isn't that what they? Okay, Dick Fold? Sorry. That was a good one. I actually thought that the, what was the big short movie? I thought it was kind of overrated.

I agree with you there. The book was so good. A lot of people said they loved the movie. I thought the movie was just kind of, eh. It didn't do it for me. You know, it's a good one that might be underrated? I'm not sure how people rate it, but the one with Ewan McGregor and Bairings Bank. Yes, which is a story probably a lot of people don't know.

What was that called? The Nick Leeson story. I don't know. I can't remember what the movie was, but it was about Nick Leeson who bankrupted a bank trading in Japan in the 1980s. Hold on. I'm going to Google it right now. While I'm doing that, Boiler Room is got 78% by the audience.

So I feel like that's properly rated on Rotten Tomatoes. Okay. What do you think? I'll give you this one. I'll give you this one, okay? You seem to really want it. Okay. The Ewan McGregor is rogue trader. And holy shit. It got a 30% ofotted tomatoes. Underrated. A few years ago, yeah, it's more of a good finance story than a good movie, I would say. It's one of you and McGregor's early ones. Okay. Send us some of your favorites if we missed any. Another question. For someone who has started their career in the insurance industry, what would the best way to transition into the

asset management world? So since this is literally what you did, maybe you can take this one. Okay. This is literally what I did, but I don't have any advice because it took me two years and a lucky meeting with Josh to get into the space. I remember getting an interview with Morgan Stanley and I was so excited. I was like 25 or no, maybe 20. I don't know. Whatever. I was young. I didn't know anything. And I walked into the guy's office and he had the intelligent investor on his bookshelf and I was like, okay, I'm in the right place. And he's talking to me and he said, all right, take out a piece of paper. paper and a pen and write down your natural network. And I was like, oh, no. It was like, oh, this is the exact same thing I was doing, the insurance, just selling a different product here. So it's really hard. I don't really have great advice. I would say probably the thing that I didn't do enough of was having the chutzpah to reach out to people, you know, via email and not saying that necessarily would have done anything, but you got to be, nobody's going to. to um nobody's going to uh what word am i looking for hand you a job in a silver platter

vouch for you or right yeah you have to yeah you have to i agree i get questions like this a lot too how do i get into this part of the SMAN industry or this part and what i think what you have to do is really try to figure out how the skills that you've learned in your current job can translate so if you're in the insurance industry you're probably selling stuff and so it's kind of it can kind some people maybe don't like to be in sales, but no matter what job you're in sales is going to be part of it. So I think figuring out how to translate those skills into a new job is key. But again, that's not going to help you find a job. I think you have to actually, like you said, build a network, offer to take people out to coffee and lunch and pick their brain and let them

talk about themselves and how they, because there isn't one single route that people took to get to their current role. If you talk to people, there's never just a simple follow these 10 steps and then you're going to get there, it really comes down to, like you said, building up a network, getting to know people, understanding the industry and making sure that you can actually explain how you're going to help someone as opposed to just shooting out 100 resumes at people or something. The other thing is that the asset management industry is such a wide net, and I think that that's sort of where I got lost. I was interviewing for wholesale positions and analyst positions, and I didn't even know what jobs existed, but I knew that I wanted to get into the industry.

So I think it really helps to find out or figure out like what's out there and what do you want to do and go after that and be very specific. Don't just tell people that you want to be in finance because that doesn't help. Which is actually a good thing. There are so many different routes you can take in the asset management world or financial services industry that I don't think you have to pigeonhole yourself right away just because you're young. There's a lot of different routes you can take to get to where you want to end up eventually. And just I wouldn't worry about being exactly where I want to be at a young age because very few people find their dream job. you know, so young. Yep. Okay. What do you got this week for recommendations? All right. I'm going to start off first with a de-recommendation. A few weeks ago, I said I was into trust on FX about the Getty family. And halfway through it, it was actually pretty intriguing. And then it immediately fell off a cliff there. And it was terrible at the end. And I didn't like the finale. And I would de-recommend that one. All right. So if you follow Ben into trust, follow him out. Yes. I'm covering my, I'm putting on a heavy short on that one. I just started reading Waco, a Survivor Story, which is I really got into that series when it came out in January, I believe, and I said that was probably my favorite show of the

year, and I think that stood the test of time. And I started reading one of the backstories, which that mini-series was based on. So if you really were into that, it's pretty good, and it's kind of interesting to hear. I don't think he's telling the whole story because he's probably kind of biased, but he's actually one of the guys that was in Waco and survived, and his writing exactly what happened. You're doubling down on Waco. Yes, I'm really severely getting into that. I read the Boglehead's guide to the three fund portfolio this week, and I was actually sent this.

I've kind of gotten to know the guy who runs that forum, Taylor-Ler-Morres' name. This is more, I mean, it's a really short book. It's like 70 pages. It's more or less a historical look back at the three-fund portfolio, which is the three total index funds, stock bond and international stock. And it's kind of a victory lap, I think, in some ways for Van Gogh. guard. But there are some stats in here that kind of blew me away. And the reason they sent it to me, I actually have a little blurb in the book because I wrote out the three fund portfolio and

the Vanguard people seem to like that one. So have you ever been on the Bogleheads forum before? I've poked around. Okay. Yeah. I mean, it's, it is kind of crazy. Like they have such a rabid fan base. And so this says, as of this writing, the new forum is getting up to 4.5 million hits per day and as many as 90,000 unique individuals on a daily basis. Wait, what? So wait, hold on. So this is the Bogleheads Forum. It gets up to four and a half million hits per day on the website, visited by almost 90,000 unique individuals on a daily basis. Wow. And there's the top. So I mean, these are people that get on there and they share advice and they're all vanguard nuts in many ways and they ask each other advice and it's really quite crazy. And they talk

about, they actually have an annual conference now. And they said the first conference was 20 people in this guy's Miami condo and Bogle came and they just had a big dinner table and Bogle took people's questions which is pretty crazy now it's a huge event with a few hundred people

but so that was an interesting one if you're a big huge vanguard fan and finally comedians and cars getting coffee was back this week it's finally it's actually on Netflix for the first time. Did you ever get into this one? I did and I was going to recommend the same thing okay did you ever watch the previous ones

or just is this the first time you've watched I haven't seen, yeah no I've seen previous ones but I never watched like every episode. I've seen every episode. It used to be on just the internet. He just had a website for it. And it was just kind of like a YouTube thing. And now it's on Netflix. And I think all the prior seasons are on Netflix as well. And I think it's one of my favorite shows on TV. It's the episodes are only 15 or 20 minutes long. You and I are both huge fans of stand-up comedy. And I love hearing the process these guys go through to come up with jokes. And I think Seinfeld is just, he's like a straight

shooter, right? Yes. So the two episodes that I watched were Gallifanakis. And before I get to the other one, one of the parts about that was like, did you watch a Galaphanakis one? Yes. How he said that people always think he's joking. Yeah.

He cried at his sister's wedding and no one believed him. Yeah. Because he just, people think he's always doing a bit or something. And then the other one that I saw was Dave Chappelle. And Seinfeld made such a great point. the when Chappelle told him he was the youngest of three so I felt like huh you seem younger now yeah that was interesting isn't that funny how that works but that's so true perception yep so I am I am the youngest of three where are you I'm the middle child of three ah that explains everything

yep okay anything else that's it for me you got any other recommendations okay so I have two recommendations that I'm probably going to spend the rest of July on one of them is huay 1968 a turning point in the Vietnam War and this was written by the same guy that wrote Blackhawk Down, which I never read, but I did see the movie. And it is, he's a great writer and the story is pretty, pretty wild. The 1960s are just a really incredible time in U.S. history that I'm really finding fascinating. And alongside of that, I'm watching the Ken Burns documentary, which is ridiculously long, but it's so good. So I'm on the third episode, and every episode is like a movie. So the third episode is, it on PBS? Yeah, so it's on Netflix now. The third

episode is like an hour and 50 minutes. So this is going to take me a while. So, I'm probably not going to have much new material over the next few weeks. But what's pretty awesome about Netflix is that you can download some things now. Not everything. But like, so I'm able to download an episode of the Vietnam War and watch it on the subway, which is pretty cool. Okay. So one of the things, one of the quotes in the book is more bombs have been dropped in North and South Vietnam by the beginning of 1968 than had been dropped over Europe in all of World War II. Wow.

Huh. That's pretty good. And I think that is, that's it for me. Okay. Shoot us an email. Send us your favorite business movies, business and finance movies and TV shows. That's not necessary. You don't have to do that.

Why? We may have missed some. I doubt it. Okay. All right. Fine. Hey, I'm always up for a good... There's so few rewatchable movies these days, which I know you disagree with.

I totally disagree with. I'm sorry. There are no rewatchable movies these days. I've watched Jurassic World 75 times. That's one. All right. Let's wrap up. just saying we're in a bare market of rewatchable movies animal spirits pod at gmail.com

have a good week thank you