Animal Spirits Podcast - Say Bubble One More Time. I Dare You! (EP. 474)

Episode Date: July 22, 2026

On episode 474, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss: the bloodbath in certain tech stocks, investor behavior in South Korea, a normal market environment, the Mag 7 shine has worn off, Nike lost its moat, why we don't have recessions anymore, boomers aren't downsizing, stocks vs. housing as an investment, Netflix is crashing, movies are back, and more. This episode is sponsored by YCharts and Vanguard. To learn more and get 20% off your initial YCharts Professional subscription to take Y for a spin (new customers only), visit https://go.ycharts.com/animal-spirits To learn more about Vanguard bonds, visit https://vanguard.com/audio Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Us On Social Media: Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

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That's vanguard.com slash audio. all investing is subject to risk Vanguard Marketing Corporation distributor. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben.

All right, Michael, the S&P 500 as of this recording is down about 2% from the all-time highs. That's obviously nothing. You can't call it anything. It happened. But there are a ton of stocks that are like having a bloodbathor. We've talked a lot about stocks that have been going up, all the semiconductors and I guess some of those that come in. But there's a huge blood bath right now. Can I ask you a question?

Yes. 5% pullback, 10% correction, 20% percent bare market. Yes. Do we want to give the 2% of name? Hickup. Stubbed toe. It's like when you stub your toe. Is that fair?

Yeah. Stings for a second. So I want you to go bottom fishing with me here. Oracle is more than 60% off the highs. I put in the crypto here too because those are that the consis tech. Ethereum is 60% off the highs. Bitcoin is 50% off the highs. Netflix, 50% off the highs.

I want to talk about them a little bit later. SpaceX is already 40% off the highs. That was really quick. Intel is 30% of the highs. off the highs. If you did the whole semiconductor memory space, DRAM is down 33%. So this is like the agony and ecstasy of picking stocks, obviously, that you can have this happen while the market is really still doing fine. You're a value investor right now in the tech space. Where are you looking? Well, I own Netflix. We'll talk more about it. I bought more. People are pouring dirt on

Netflix's grave. I bought more Netflix yesterday. We could talk more about that later. Which my body fishing, I think there's a lot of opportunities. It's really, really interesting that in an innovation boom, that this still happens. That the, this has to be the biggest, during a boom or a bubble or whatever we want to call it, maybe we can't call it a bubble anymore. The range of outcomes for the winners and losers has to be never been wider than this. For the space that's winning.

Inside the stock market, there is a violent separation. You know the phrase money goes to where it's treated best? I feel like that is like the theme of 2026. If it's not working, it's getting destroyed. And if it's working, it's working really, really well. Now, we saw a lot of the air come out of the overly crowded memory trade, which I thought, I think is fantastic. Yeah, definitely needed to happen.

You need this. I am, nothing is better. in my opinion, than an awesome up trend and letting some of the air out of over enthusiasm. Never like to see people lose money. I say that every time I say a comment like this,

but you need the wall of worry to emerge for stocks to ultimately go higher. And the wall is definitely back. And the bubble talk, I know we're going to talk about the bubbles later because we've been talking about bubbles a lot lately on this podcast. Could we maybe put a pin in the bubble talk

given that these names just had a 35% drawdown in two weeks? All right, listen, I think the crazier part about it is that so much other stuff is doing well. So I took the Russell 3000, which is the total stock market, call it like VTI essentially. It's 2,600 names now. We can't even get to 3,000. We used to be a country, you know? We used to be a lot of 3,000 stocks and the Russell 3,000. The Russell 3,000 stocks.

It's like 2,500 now because the whole, it's smaller. Are we sure about that? It's the Russell 1000 and the Russell 2000 combined. One thousand plus 2000. Whatever. I downloaded the Russell 3,000 and they gave me 2,600 names. 66%. I always put this into Calvic once a week to see, like, what's going on in the stock market?

66% of stocks are positive year-to-date in the U.S. stock market. Median return is 12.6%. That's pretty good. Yeah. Two-thirds of stocks, right, are positive. That's a pretty good year. I'm just saying it's really surprising that a lot of these name-brand companies are being slaughtered while this is happening to all the rest of the stock market.

Mm-hmm. It's interesting. That is interesting. It's like, we have to mention the banging in the background, Michael is single-handedly keeping mudrooms open for America and getting another new mudroom. It's a mudroom 2.0. It's running back. Now, I got a question. Did you use the same construction people that did your first mudroom for the second mudroom. Nope.

No, you aren't happy with it? Not really. When you walk into my house, there is a set of stairs, about six stairs going up, and there's like a little tiny nook area to the left. So if the four of us walk into the house, we have to do it single file.

It's a very small area. And so what happens, anybody who's listening with kids, knows that the shit piles up, the bags, the, tennis rackets, sneakers, whatever it is. It's so I need a butterroom.

So I'm cutting about, you know, I was going to do this later than the show. I'll do it now. You know my, that I'm on like a kindness streak trying to be, trying to be a little bit nicer, trying to breathe when I get upset and not yell. Okay. Right. When you have kids, that's impossible. It really is.

I know that there are people out there who don't yell at their kids, but, um, those people are like have no emotion or something. Yeah, I'm not talking about my kids. They get no, they get no grace. I'm talking about strangers because you never know, you know, life is hard and you never know what people are growing through.

Okay. So giving strangers a little grace. However, Ben, I live in a cul-de-sac. Not a lot of traffic here. Okay? A dumpster went into my driveway. And not two hours later, the town inspector comes through.

Holy cow. has an iPad and takes a picture of my house. Does that mean that someone call them on you? Yes. Whoa. And I think I know who it has been. Now, I feel like these people deserve no grace. I kind of want to knock on their door.

Here's how I know, here's how I suspect. There is a house in my block where I parked on my side of the street across from their driveway. and they put a post-it note on my windshield, asking me not to park there. These are the type of people that call the town on you. Could you imagine calling the town on your neighbor for not having permits? Now, it's not like I'm doing a ton of demolition.

I mean, this noise notwithstanding. This is going to be, this is a quick project in and out. I have a question. Is this a couple who is of retirement age and they have nothing better to do with their time? What do you think? Okay. Yeah, but still, why, why,

Why cause trouble for people for no reason at all? Nothing to do. This is why you don't retire because otherwise you just get in other people's business all the time. Anyway, back to the stock. Congrats on your new mudroom. Thank you. Here's the thing. One more thing on this.

When we were growing up, we did not have nearly as much stuff as kids have today. People did not have the lockers in the mudrooms and the spaces for kids, like cubby holes for kids. That stuff didn't exist when we were growing up. when we were growing up. We didn't have stuff. We didn't have water bottles? What is this bullshit? How many water bottles do you have in your house? Kids can't go anywhere without a metal water bottle these days? Our football coach, when I was in middle school, used to not let us have water as punishment.

That guy would be like tart and feathered on the internet today. Yeah, that's probably good that we don't have those type of assholes in our world. Fair, yes. True. All right, where are we going next? All right, so anyway, the de-leveraging, we've been talking a lot about the source, of, yeah, people are having fun here. People are going nuts in Korea. The 30-day Kaspi volatility surges to its highest ever, ever, including the dot-com bust and the great financial crisis.

That's nuts. There was some data floating around around the number of South Koreans that got margin called or liquidated or whatever. There's levels to this, Ben, to the degeneracy. I love seeing this because it's... We're a more mature market in a lot of ways. And so the behaviors that we see here, yes, still happen, but they get amplified in other places that are kind of coming up in the stock market world.

I love to see this stuff. I don't know why. It's everyone has to pay their tuition to the market gods at some point. It's fantastic. I'm sure there are people who got fantastically rich off South Korean stocks, but there are probably some people who bet on the right socks and still got, their face is just blown off. Love to see it.

How bad is South Korea doing? So the EWY is a South Korea ETF. It's down 26%. So people with leverage have been, they're down 75% or something right now. Good for them. All right. This is such a typically Ben Carlson tweet.

Go ahead. All right. I want to make the case. Last week, you were trying to pigeonhole a bunch of stories that had no bearing on the market at all. You're talking about IBM. You were trying to make stories happen. You know what you said?

You said about IBM, this sort of thing happens all the time. Yeah. Do you know that a company with a $300 billion market cap falling 25% in a single day? I don't think that's ever happened. Yeah, but we have bigger companies now. So you can't say that because the size is so big. So let's inflation adjusted. Inflation adjusted or something.

All right. So inflation adjusted and say, yeah, probably during the GFC it happened like four times. Okay. So I think. Wait, hold on. You want to rewind 10 seconds? Does the IBM, I'm trying to pigeon all stories? Yeah, $300 billion software company falling 25% in a day isn't market moving story.

But back to you, Mr. Boren. You just talked about the fact that you're trying to be nicer. I don't believe you. Not to you. You're not a stranger. All right. Well, you just said you're going to go after this episode. You're going to yell at your neighbors.

I'm not going to yell at my neighbors, but they're pushing me. All right. So this is the most normal. I think we've gone through a period of normalization where this has been one of the most abnormal decades we've ever seen. I think that's pretty fair to say. I think we're back to almost a normalization point because GDP growth, is 2 to 3% right now. Inflation, 3.5%, which is right on the 100-year average, 3.5%.

The 10-year is yielding 4.5%. Okay? The U.S. stock market is up 11% six months into the year. Some people would say, no, no, no, that's a full year. But actually, I would say the average up year is up 21%. So this is like the most normal. Take a snapshot, the picture of this right now. In the World Cup, they do this with the square. I don't know why they do this. What do they do that with? with the cards? When they do VAR. Like, we're going to go for the replay. They draw a picture of a TV.

What is VAR? You didn't watch the World Cup. Never mind. I'm not going to explain it to you. Donnie, you're out of your element. Yeah, you're like a child that wanders into the middle of a movie. Everything is average right now. Everything is kind of normal market wise.

Now, when you tweet this. Is that a fair take? When you tweet this, are you like giggling? Like, you're just trolling the internet? No, because. This is facts. I'm saying the people who think this is the craziest thing ever and that this is normal. This is a normal market environment in some ways.

Through the prism of milk toast, if you are a snapshot investor, which I don't know, I happen to look at a screen during the day. I'm crazy like that. Then yes, this is a normal market year. If you look just at the averages of the economy in the markets, this is a normal year. Yeah. If you fell asleep in January, you know, Chris. keeps texting me pictures of his vacation,

I'm not Instagram. Why does he do this? I feel like I'm being a crumagion and I love him and I'm happy that he's happy. But I don't do this to him. This is my point to Chris. He treats me and Josh, like, where is his personal Instagram?

Remember back in the day that you'd get back from vacation and you'd do the slideshow for people of all your pictures. And no one cared to that either. You're right. All right. Great story in the Wall Street Journal. Anyway, normal year.

Okay, you don't believe me? It's pretty normal year. We had a 9% correction. No, I know where you're coming from, but this is a very exciting year. When I hear normal, I think boring. I think average, standard, typical. It doesn't feel like that to me, but I hear where you're coming from. All right.

Everyday investors are over the mag seven and into new AI darling. This is your whole thing about money going to where it is treated best. This is interesting. So they show net flows by individual investors this month and a ton of retail money went into SpaceX. A lot. And I guess it's all gotten slaughtered at this point. So do you think most of this sale has been people being like, okay, I was banking on a huge pop. It didn't really happen.

But they're showing these names. And I don't know, half of these names I've never heard of, Andas and Iran and it's still some Mag 7, but it's not the names that you'd expect to see. What is Andes? O-N-D-A-S. I don't know. Someone's going to tell us in the comments that we're idiots because we don't know all the stocks. Yeah.

It's interesting that we talked about buying the dip. Oracle down 60% has seen a huge inflow of retail investors trying to like, trying to catch that falling knife. Okay, I think they put these types of stories in here just for me. Davis-Cantrell, a college student based near Atlanta, has been investing for roughly two years and closely following the biggest AI players over that period. Listen, the 19-year-old recently trimmed as much.

Microsoft Holdings. I'm looking for aggressive, more high-risk growth stocks, he said. I just don't see Microsoft and NVIDIA fitting into that category anymore. Neither do I. I totally agree with him. Yeah. This guy's got to figure it out at 19. I didn't know what the stock market was at 19 years old. I barely, I really didn't. I just, I think it's hilarious that they asked a 19-year-old what he thinks of this market. And I think it's awesome that we read that quote and we're like, hey, credit to Davis. It sounds like this was AI. I don't know. Davis, no, that's a real guy.

All right. Citadel Security. I just want to say, the $300 million since the SpaceX, I'm going to guess that half of that money is out, or maybe that's a lot. Let's say a third of the money has sold. It had to be fast money. Yeah. Right.

Yeah. It is interesting, though. This makes sense. Citadel Securities had another report. They said, has retail started selling equities? No, the retail remains the strongest structural buyer of U.S. equities. We have not seen a single net sell day on our retail cash equities platform in July.

Second strongest month for retail buying since January 2020, the strongest July on our data set. So people are still going in. I love that this is still happening. That retail, that the everyday investor is still buying the dip, still making money. And I hear buckle up buttercup asshole in the back of my head. Just wait. Yeah, okay, fine, just wait. But you've been saying that for a long time.

Matter of fact, the Buckle Up Buttercup, was that an email to us or quote in a story? I can't remember. That was four years ago. How long have these just mean-spirited curmudgeon's been mocking retail? Right. Five years, ten years? Just wait, they say, as they sit in cash while everyday no-nothing investors get rich. This is interesting, though.

They show the leveraged ETF assets under management, and it shows the total. And if you show, they show semiconductors. So the total is $198 billion. Semiconductors are already one fourth, one quarter of that, which is absolutely insane because they were basically nothing before. So the growth was just so semis is $53 billion. Tech X semis is $76 billion. The other ones are 70. So these leverage ETFs, it's all technology.

That's pretty insane how quickly this new category can form. Right? It's like building a brand new town in a week or something. I did a talking wealth episode that's coming out next week, I believe, with James Seiford, our friend at Bloomberg. Have you ever heard of a company called Corgi? Ish? It's a new- Do people mention it? It's a new ETF company.

They're acquiring all the new ETFs, right? No. They're filing for hundreds. They're just spraying and praying. So they're bringing like a VC-style playbook to the ETF land, which is super interesting. ETFs are ETFs are having a moment. The number of launches is insane.

But so we've been talking about this a lot. $200 billion. When you amplify that for the amount of actual exposure, it's about half a trillion. And that's why you're seeing these wild gyrations in these memory names. Yeah, when you get, so your whole thing about IBM being kind of like,

oh, that doesn't happen very often. That's going to happen way more in the future now because of these single stock ETS and leverage ETS. Fair? Probably. All right. More of a bloodbath. I can't believe that Nike lost its moat. So Nike is down 75% of the highs.

I think it's at the same price it was in 2014. And my number one rule of thumb for stock picking. Never invest in fads. Like, Peloton was a fad. I sniffed that one out pretty, like every exercise workout thing is a fad. When's the last time you used your Peloton? Five years ago? No.

No, no, no. Three years ago. Okay. I can't believe mine. I bought it in April of 2020. It's still working. I used it last night. So going strong.

I did do a Peloton exercise class five weeks ago, not to break. Okay. Good job. But it seemed, Nike looks like a lot of these other fads. So Lulu Lemon is down 80%. Under Armour's down 84%. Gap is down 62%. It's funny.

Gap still never recovered its price from the dot-com bubble. I don't, never will. Come back a few times. I think Nike might be toast. And when I say toast, Nike is still my number one brand and there's not even anything close. Like whenever I buy any sports attire, I don't buy Adidas. I mean, I buy eyeclads, but whatever.

It is for me too. Nike's still my number one brand. Maybe that's why I'm so shocked by this. It seems like it's done based on the stock market. But, I mean, the numbers suck. Like, the numbers are not. good. You know, I'm a big gaps get filled guy, and there was a big juicy gap up at 52 that I think probably will get filled. But I don't know. So Nike's at $43. Is the stock ever

going to trade at $90 ever again? I don't know. I don't think so. I don't think that in two or three years from that, we're going to be talking about an amazing, put the stock price aside. I don't think we're going to be talking about how Nike we gained its mojo. There are all these brands from our youth that just don't really exist anymore. MTV was a huge brand we grew up with, Sports Illustrated. The biggest. It feels like Nike is going to be put in that dustbin. And I can't believe it.

This really does shock me. Well, it's not going away. Nike will be around for the rest of eternity. But the stock market is telling it maybe this is like the buy signal of a lifetime. But it seems like, okay, this company is they're not what they were used to be. It's not going to be again. The fundamentals of Nike's business sucks. It's not too well.

Right. Yeah, they kind of blew it. All right. This is kind of cool. Someone sent us this. Zuck Data on Twitter. I think he must be an AI guy. Oh, he works at Data Analyst at Blockworks.

He says, are you hearing the word bubble everywhere these days? I counted every mention of bubble across hundreds of episodes from two of my favorite investing podcast. Can you spot the trend? So he pulled up Animal Spirits and the compounded friends and looked at how often how often we say the word bubble. And he did some graphs in here. And there was not much mentioned at all, 2022 to 2025-ish.

And now to start this year, massive. He's doing an eight-week rolling mean. I wonder how he did this. Showing that the bubble talk for this show has skyrocketed this year. But you know what? Credit to us, we are a reflection of the market commentary that's floating around. We are,

we're pushing back on the narrative. Yeah, we're a concurrent indicator, though. We're not like a leading indicator, right? We're talking about what's going on, everyone else is talking about.

We talk about what's happened, but I think it is interesting and notable. And I want to clarify one thing about this. When I'm saying, my opinion is that this is not a stock market bubble, in general, right? Like, I don't think the SEP 500 is going to fall 70%. I can only talk about,

the stock market. I have no idea what's actually happening with the supply chain bottlenecks and there's no compute. Like, what do I know about lithography and this? And I know, I know nothing. And as much as you do, nothing. Yeah, but the thing is, even the people who do know that stuff, they're not good at predicting what's going to happen to the market either.

Well, that's true. I'm just saying, I'm just saying to the audience, like, I don't, I know our audience is not counting on us to tell them that Micron is overestimated demand. Like, we can't do that. But I don't see a bubble in stock market. And if people say, well, the earnings aren't sustainable, and that's where the bubble is, hey, dude, the market agrees. The market is saying the earnings aren't sustainable.

We think this is like a great insight. That's why these companies are trading like 12 times forward earnings. So this chart from Peter Callahan at Goldman from Daily Chartbook, the forward P.E. multiple gap between semis and the SP 500 is at the lowest levels of this AI era. So the market agrees, it is not contrarient to say these earnings aren't sustainable. It's not going out on the limb. Literally, that is consensus. Right.

So if the market was, was vailing these things at 50 times forward earnings, you'd go, okay, this is crazy. They think these earnings are going to continue or continue to grow or whatever, but that's not what the market is saying. Right. So duality research has this great chart that we've shared before. it's the distribution of forward PE ratios. So he shows the percentage of S&P 500 companies,

as well as the percentage of the overall market cap that trade in various buckets. So, for example, Alex says that more than 300 names, 61% or 40% of the total market cap trade for a forward P.E that's under 20 times. So this is the, if you've been a portfolio manager who has railed against overpriced tech stocks for years, this better be your year.

This is like, this is when you pound the table on the stock pickers market. I would hope so. I'm sure there are people who've said for years to their clients, listen, we can't invest in this, everyone's invest into this, over concentration, overvaluation,

all this stuff. This has to be your year. Has to. He also shows a FOIP broken down by sectors. And just look at this. Basically, everything is going down and through the right,

for the most part. everything is compressing with the exception of, I don't know, industrials are hanging high, I suppose, in real estate, but everything for the most part, Felt word peas are coming in. This is like the opposite of what happens in a bubble. These charts make it, if you just showed me these charts and didn't tell me what was going on in the market, I just took up from a coma six months ago. I'd say, all the market is rolling over. Yeah.

Not the market is up double digits. I'd say, oh, the market's probably down 12%. And this is happening with the backdrop of all-time high earnings. and margins and acceleration. Like, this is not a bubble. Stop it. It might turn into one. That's not what this is.

Yeah. I tend to agree. The hard thing to square is there's bubble-like behavior in places like South Korea and retail investors, but that will, that's all, that's never going away. I think that's the new normal. If we have a five-year bare market coinciding with the recession where people just lose it all, yeah, they'll stop speculating. But, hang on. Absent that. If we have a financial crisis that, like, the stock market falls 40%, the Reddit crowd is going to be shorting stocks.

Maybe. You don't think that's going to happen? Or do you think they're just going to keep piling in? Like, they're going to go where the momentum is. I think. Also, I don't even want to say what I was about to say. Keep going. All right. Let's move on from the bubble talk. We can't say it enough. I'm going to say it like five more times just to up our ranking on this guy's data. Bubble, bubble, bubble, bubble. All right. I was thinking about this in relation to my normal economic environment. I know you think I'm trolling.

I'm just putting out what the data said. Why don't we have recessions anymore? It feels like, now, a lot of people, I put this question out there, and I looked at the National Bureau of Economic Research has it, the data going back to 1857. So look at all these 20-year blocks of how many recessions did we have, and pretty much for 100 years, we averaged four to five recessions every 20 years. And since the 70s, early 80s, that has completely, it's flipped.

The recessions are shorter in months, and they're fewer in magnitude. We don't have recessions anymore. Now, some people say, well, the reason we have recessions this decade is because fiscal deficits and government spending and monetary policy. And I would say, if that stuff stopped us from having recessions anymore, it's worth it. And I know that's obviously not the only reason that we don't have recessions anymore. You couldn't possibly say, no, that has no impact. Of course it does.

Policymakers have figured out how to manage the economy better. And that's a wonderful thing. We don't have recessions anymore as much as we used to. You know how Bill Simmons will sometimes say, how does, like, I don't know many MVP's LeBron has, but let's just say, how does LeBron only have three MVP's, right? And I'll zoom in. Let's actually look at it year by year and say like which year was you rob. And then let's assess it that way.

So to answer your question, I want to do something similar. Oh, 2020 for sure. That should have been a recession. Should have been. Totally should have been a recession. But so zoom in the 2010 post-GFC decade. Obviously, we were coming out of the worst recession since the Great Depression. right? So consumers, balance sheets, governments, corporations, everybody was healing and it probably

took three to five years after that, at least. Yeah, but 2011, everyone in their brother said double-dip recession, Europe, the European debt crisis, this is going to drag us into the recession. Like everyone was saying that. Yeah, fine. That was, yeah, yeah. Yeah. But we were, to me, like, that was still post-GFC. That gets lumped in with post-GFC. That was not that far removed. It was. Yeah, you're right. That would be like 1937 after the Great Depression kind of thing. Right. Same thing. And then the mobile cloud, hyperscaler, mag, what was Scott Gowley's book? The Four Horseman? Like the tech giants

dragged us out. I'm going to say us. I mean, the stock market and making people rich with it. The tech giants dragged us out of that. Well, I think technology is definitely one of the reasons that we don't have as many recessions anymore. Well, I think the economy is more efficient than it used to be. The technology stocks have turned, have turned the United States of America into the stock market. And the stock market fuels everything. So then we had a slowdown.

Pandemic, obviously, fiscal stimulus. That stopped a recession. 2022. Inflation, interest rates. We genuinely would have had a recession if it were not for a, a recession. If Chad GBT did not come onto the scene. I don't believe that. I 100% believe that.

That saved the stock market, but there wasn't enough spending then to stop a recession. No way. There was not enough spending. The stock market saved the economy. I 100% believe that. No, it was really the wealth effect.

People had locked in low interest rates that we've paired their balance sheets. That's why we did never recession. There was not enough spending on Chad GBTBT to cause a non-recession then. No way. That's a huge part of it. But the stock market rebounding

because the chat GBT GBT called the stock market to rebound. If there was no rebound in the stock market, we would be in a way different place today that we were in 2012. Here's the point. It's always something now, and a lot of it is policy. Like, I think we've just, the one thing, the economy is bigger and more mature than it was. Like, we were in emerging market back in the 19th century. So, of course, there was more boom and to busts.

We were more of an industrial economy. So it was like plant and equipment and depreciation and, right, like that inventory and all this stuff. And now it's a service-based economy. So that's a big part of it, too. We're more diversified. We're more dynamic. But policymakers, and some people hate this. Some people want the doomers want a recession.

I don't even want to give those people any oxygen. When you say some people, it's like, yeah, it's a few pundits. And like, less than 1% of the population wants everything to blow up. These are morons that don't deserve our airtime. I kind of thought we got rid of these people, but I got tagged on this tweet a million times. So this guy on Twitter says, if we divide the S&P 500 by the Fed's balance, line is basically flat since 2008. I do too.

So many people said, hey, can you please address this? And someone said, hey, this seems like a blog post me. What this guy is saying seems true. And I can't believe people still believe this. I just thought I'd address it really quick. Fine, what's the tweet? The guy stopped the chart in 2024. And if you go forward from 2024,

the correlation goes away. So the Fed's balance sheet has actually contracted in 2024. Can we just stop? Just stop, stop. So the Fed's balance sheet has literally contracted since 2024. 2023 contracted too. And the stock market is booming. I don't, I don't, I think people forget that the Fed literally tried to put us in a recession in

2022 by taking a rate from zero to five percent. If you're still obsessed with the Fed's balance sheet and for why the stock market isn't where you think it should be, you're an angry person and things are not going well. I'm sorry. Yes. I don't want to talk about this. Except for. So here's another reason why things remain strong.

This is from Torst and Slot. unemployment has been below the fed's 4.5% near-e estimate for a record-tying period. 57 months in a row, the unemployment rate has been under 5%. And if you take away that COVID period, which was kind of this fake thing because people lost their jobs, yes, but they were being paid sometimes more from unemployment insurance. Like we've had below 5% unemployment for almost a decade, essentially. Right? Take away the COVID period, which kind of doesn't count. That's one of the reasons things have remained so strong.

Let me ask you this. People have jobs and they're going to spend if they have a job. Over the next 30 years, will this trend remain in place of fewer recessions? Yes. We're looking at like, and they're not going to be economic. I mean, sure, there's going to be a credit cycle eventually, but it's going to be more exogenous shocks. It's not going to be like typical. We're not saying no recessions, obviously.

There will be recessions. The business cycle exists, immutable force of nature. But... No, but if you're using the playbook from the previous 80 years, you're going to be wrong in the future. You just are.

It's a totally different environment now. All right. Let's talk about technology world. Okay, this is from the Washington Post. A bunch of people were posting this on social media. I thought it was interesting. It has to be very weird to work in the technology industry right now because you're seeing certain people

get like, not just life-changing amounts of money, but like certain individuals are getting like, buy a sports team amounts of money. It's like, it's insane. And other people are every day going into work going, oh my gosh, when am I going to get? Because the tech industry is not going to, they're going to be the first ones. They're the first line of defense. Like, right?

They're in the, what do they call it in like Braveheart? Like the people of the first line, you know, like that those guys are probably going to get killed. They're going to get rolled over by that big log thing that rolls really fast, you know, and all the arrows. The tech CEOs are not going to have any like sympathy for the, their employees. If they can replace their job with AI, they're going to.

So it has to be a very weird place to work, look. You could get life-changing amount of money, or you could have a job tomorrow. So the Washington Post did this thing. I don't have I have very few people in my life that work in this world. Yeah, I'm just saying, so they interviewed a bunch of these people. It has to be, so

they said at tech companies, leaders obsessed with winning the AI race have tasked their workforces, of coders, lawyers, and HR professionals with becoming the front line of the transformation. They're being measured by how quickly they can automate their own jobs while watching their colleagues get pushed out in successive waves of layoffs. So they said 800,000 tech workers have been laid off since 2022. Now again, a lot of that is overhiring, whatever. So they posted this one thing about there's a 31-year-old tech startup worker in San Francisco, didn't want to say her name. She said that her

engineering manager husband told her a few months ago that he needed to focus all his energy on becoming an AI native and requested that she'd take on almost all parenting responsibilities with a couple's preschool age daughter, she complied. And she talks about how this is like surreal and it's weird. And they have a combined income of like a half a million dollars.

So they're doing pretty good. But they're saying they can't get a house. And it's funny to me that a lot of people on the internet were up and arms about this. Like, oh, this guy said he's not, you know, he's going to focus all this energy on his job. Pre-1990s, this was just life.

Yeah, is this a fucking joke? Dysopia? We're talking about a 31-year-old. couple with a two-year-old where one of the spouses is working hard? Oh my God, life. This is a sign of progress in many ways, though, that this is the way that people think now. Because, again, she described her experience as surreal? He better get some shares out of this or something, though, from open AI.

But also, what if this guy is secretly taking naps under his desk because he's tired from having a toddler? I'm doing that out there. Can I say one thing? Are we getting got? Is this like manufactured by the internet? Is this a three hour interview that was put together in a way that the author, editors knew it would go viral?

I'm pretty sure that's what happened here. No, that's the whole thing. That's the whole thing. There's no way that this is real that this person is despondent. I would hope. And maybe I'm, maybe I'm naive and kidding myself. I hope that this person read this article and thought, this is not what I said.

I really hope that's what's happening here. Because I don't want to live in a world where a 31-year-old making half a million dollars with a two-year-old is despondent because her husband has to work hard. I just, yeah, you're right. Again, the madman era, even like the era that our parents grew up in. Like this, the one parent working a lot not being around was just normal. That's why they called, like, there's a whole latchkey generation. That was the whole thing.

Like, your parents are working a lot. Some parents are working multiple jobs. You come home and you let yourself in and you watch TV and make yourself a TV dinner or something. That was just life before. Maybe a sign of progress. Again, I just think if you live in the Bay Area or you are a tech worker, your life is very weird right now. It has to be. Yes.

It has to be a very weird place to work and live. Yes. Chart from A16Z, share of U.S. household with pay AI subscriptions. We've made this point a bunch. It's hilariously low. We're not the ones that thought of it. But it's at zero.

It's 2%. I mean, it's up from zero, so it's up a lot. But households and mass. This number's going to be 10%, 20%, 30%, I don't know where it stops. But isn't it just going to be like most people will have a paid license

through their employer and the individuals will mostly use the free service? Unless they really make the free ones so bad that you have to pay to get, like, don't you think most people are never going to pay? I don't know. I have no idea how people are going to use AI. I don't know. Or will it be a Netflix bundle?

You get Netflix, Hulu, and open app. But when we're, like, the thesis that I'm using in my brain, which I could be way off, I have no idea, when we're talking about, like, will the demand continue to be there in 27 and 28? I think people are being so short-sighted. Of course it will be there. There's a massive runway, you're right. We're just starting. And I think the stock market breaks our brains a little bit because we saw the news last week about this new moonshot AI company in China,

another open source model that further amplified or exacerbated the memory stock sell off. I think we're just, every time this happens, a stock market, we just lose sight of the bigger picture, which is that this is just starting. I think so we got a good. So we got a good email about this. Some guy wrote us a long email saying he's on the front line of this. And I said last week that AI doomers are wrong. To this point, obviously, I don't know what the future holds. He says, I think we have at least another 12 to 18 months of jobs netting out to something not ugly. I fear, however, once all these governance process and integration steps get commoditized, we'll see some pain, which basically means like get over the hurdles, get through the red tape. Well, I don't subscribe to the idea that AI will create tons of new jobs we never thought of because we'll just point even better AI and robotics and 3D printing at those too. I do think the same technology will invent different offsets and offer better quality of life in the wrong one. I still subscribe to the idea that just no one knows how this is going to work out. Like right now, there is no disruption. Like wide-scale disruption. Well, I'm glad you said that because

last week you were pretty emphatic, like the Dumeers are wrong, but we're not seeing the data. And it's just way too early. It is. I think the Dumers will always be wrong. I think the tech leaders that say like 50% of all entry-level white-collar job, I was like, come on, I just, I don't believe that. I understand. That's the thing I don't believe. We will continue to draw conclusions that are way too early. Yes.

You and I over the next couple months and years. But like, this is going to take years to play out. Yes. I still think my favorite take on this was the guy who said, like, AI is going to keep us on the same trajectory we've been on. I still kind of think that's probably the baseline I'm thinking of. We'd love it. All right. This made me happy.

stubhub right in the face. I shared my story years and years ago, several stories about how upset I was with Stubhub's shenanigans where I allegedly listed my same set of tickets seven times. They charged me thousands of dollars because I couldn't deliver the tickets. Like just a garbage organization. And it turns out, CBC ran a story.

Stubhubhub's marketplace for fans is run by a mass scalper SEC filings reveal, CEO Eric Baker runs a side company that resells millions in tickets on StubHub. So this guy's basically running a hedge fund, providing like short-term financing and cornering the marketplace. And estimated 70 to 80% of all tickets on global resale sites are controlled by mass scalpers, according to a... So wait, is this, this guy, will this guy say, no, I'm like Citadel?

I'm providing the liquidity here. Is that what he would... Is that his defense would be? I don't know. I don't know. I don't know if they would... I mean, isn't it also the thing that these, like, these tickets go on sale and they're picked, they're picked up by the bots and the, like, it's all, it all does seem very, it doesn't seem very efficient the way they do things, obviously. Yeah.

Fans are going to do. Who would you use instead of sub-bub now, like Seatkeek or some other, as I know there's a million of them? Uh, tick pick. Okay. I think they're the cleanest of the bunch as far as, as far as I could tell. Um, this is unbelievable. The NFL suspended Cardinals personnel executive Ryan Gold after he placed a $25 wager. parlaying the result of the team's first five draft picks.

He was paid out $732,000 in winnings. Is this the boner of the year award? What a dumbass. Are you kidding me? Wow. Okay. You didn't think you were going to get caught? What a payout. I mean, yes, obvious.

How many of your friends put the bed in, man? I wonder how he got caught. Did he literally put it in himself? I'm assuming it was a friend. I don't know. But either way. Yeah. All right.

And other truly unbelievable news, here's a headline. Trump, oh, truth social to sell Wall Street firms the fastest access to Trump's post. This is not a political podcast. We often don't talk about what's going on in the White House because I don't care. But this is a market story. So I'm going to talk about it. All right. Trump Media and Technology Group has unveiled a paid-for licensed data feed that will give banks

and trading firms, the fastest access to post from influential truth social accounts, such as President Donald Trump's, whose posts often move global markets, the product called Truth API, will deliver posts from the 10 most influential accounts to customers at a significantly faster pace than a regular push notification on the truth social platform, a spokesperson said, this is absolutely mental that the president of the United States is selling his tweets faster, that the market moving tweets, How, who is happy about this? If you think this is good, you're an idiot.

So I guess all the people that worry about the government debt and all these other crises, I guess this would be my bigger worry is that everything is such a financial market now that it finds its way into our biggest politicians and that they say, The president! What? Yeah, the level of grift is, um, it's not good for faith in our markets, obviously. obviously. Yeah, no, this is insane behavior. Don't like it one bit. No, this is not pushing the country. So, you know, I think I mentioned this before. I didn't finish it. I

rewatched the movie Dave about the 1990s when Kevin Klein looks like the president, the real president has a stroke. They bring him in. It was just such a simpler time. And I know that politicians were bad back then, too. But you couldn't, you literally couldn't make a movie like that today. Because everyone would go, what? Like, the funny thing is, though, he ran on a platform of full employment. And I wanted to be like, Dave, if you run on a platform of full employment, it's going to be high inflation. People are going to hate it. Right. Anyway, all right, boomers were supposed to downsize. They're buying bigger homes instead, store from the Wall Street Journal. Wealthy, older Americans are ripping up the traditional script for aging. So the script is,

you have to buy a home because it's your biggest and best investment. And then when you retire, you downsize. And then young people will move into those homes because boomers don't need bigger houses anymore. And they say, especially for wealthy people who have a lot of money, that's just not the case. Eight of the clients for Merrill Lynch Financial Advisor this year retired, every single one of them upsized. Only one client has downsized in the past year. This guy, this financial advisor says the historic retirement play of sell your home and buy a smaller one just isn't happening. They say the new demand for even bigger properties is another way boomers dominate the housing market. They count for 42% of homebuyers, the larger share of any generation.

They're often cash buyers giving them an advantage over younger purchase. Now they ask these people, why are you buying a bigger home? And one was like, listen, we have all these, grandchildren and we want a bigger home. And so it's like, you can't get mad at these people for doing what's in their best interest or what they want to do, obviously. But this seems like a script that was something people thought would happen. And for a lot of people, it's like, no, I have a lot of wealth. I'm going to buy a, and they interview this couple that went from like a 2,500 square foot house to a 5,000 square foot house. And again, this is just wealthy individuals. But here's something from Kyla Scanlan. She wrote this in the New York Times.

empty nesters now own about 28% of large homes in the U.S. Millennials with children own about 16%. So there is something where the baby boomers are holding on to their big houses. They're not, they're saying, no, no, no, we like this, we're happy where we are. And again, you can't fault them for this. But this was a big thing that, like, no, no, no, this is the next step. This is supposed to happen. This is supposed to make me mad, right?

Like, this is... It obviously does make some people mad. Yeah, I think, listen, this is not an awesome situation. but who are you getting mad at? Like, I think these people are people acting their own self-interest. Like, they're, they want bigger houses for their,

to have their families over. And yeah, this is, this is what it is. I made the point last week that the middle class rising out of the World War II is in economic anomalies, never happening again. And Kyle put in her piece

that the post-war generation is the only American cohort ever handed a starter home ecosystem by federal policy, where the government, literally said, we're going to back all the loans, we're going to help the builders, we're going to build the suburbs, we're going to build houses that Americans can afford. And we're going to give them low mortgages and, you know, it's the only time the federal

government has actually said, like, we're doing this. And the only reason they could do it is because there was so much goodwill coming out of the war that they had to do it. Like, you couldn't have that type of federal program today. No one would agree to it. Even though, obviously, it seems like it would make sense for young people. So my question is, and Allison Trigger had a piece of people. about how like the stock market for younger people starting to take over as how like housing as your biggest investment because housing just doesn't keep up with the stock market because of this

what if just this new idea takes hold for young from enough young people that okay fine the stock market we've been talking about this a stock market is just the thing it's not the house anymore pure research says one in four adults younger than 40 say buying a home is a good investment one in four older generations it's way higher I don't think we've thought through what if this is the new script for people. Like the new narrative. People need houses to live.

I know, but what if enough young people say, I can't, it doesn't make sense for me to spend 55% of my budget on a home when I could rent and spend 35% and put the rest in the stock market. Well, they have two options. Why don't you actually, I think they have one option in this case. Move. And I hate that sounds very callous because. But a lot of people don't want to do that.

That is happening. The other option is, what is the other option? Like, there's no, a lot of suburbs don't have rental homes. And if you are having a family, you can't live in a 650 square foot apartment. And the funny thing is, so someone sent us this story. Now, hold on, hold on. One other thing here, a lot of the population, obviously not all, but a lot of the population is getting help from their parents. Like, that is what's happening.

When people are buying houses. Like the people with the baby boomers with money are in a lot of instances helping their kids. You're right. Down payment and a lot of baby boomers, a lot of baby boomers have a lot of money. And it sucks for people who don't have a parent with money, obviously. Right. Okay. I was born into a family where my parents aren't rich.

What do I do now? Yeah, that fucking sucks. Yeah. But to your point about moving. So someone sent us this story. The top 20 metros are the largest share of millennial homeowners. Number one, Grand Rapids in Michigan at nearly 70%. We've had a lot of people.

We have a lot of friends. It used to be like if you lived in West Michigan, it's because you grew up in West Michigan. We have a lot of friends now with young kids who've just moved here from other states and we're kind of like, what's your tie to West Michigan? Nothing. We just moved here for jobs. We moved here because it was a good place to raise a family.

So there are people who've just, and it's a very affordable place compared to the coasts, obviously. Housing is a little more expensive, but I think you're right. that, unfortunately, might have to be the case. But I still think, I think you're poo-pooing this idea of the stock market, overtaking the housing market in terms of like, this is your biggest investment. No, to be clear.

I don't think we've thought through what happens if that is, takes hold for young people too. I'm not saying that. What I'm saying is I don't think people are going to say to their spouses to each other, we're not going to buy a house because we want to invest in the stock market. I think homeownership has become obviously unaffordable and young people have been crowded out. and therefore have been putting their money into the stock market. That's obviously what's been happening. But people as they age and have families need more space.

Yeah, but I do think it could just be the house comes later. Stocks earlier, house later. That is what's happening. Yeah. Okay. So every time... Also, this is like a borderline national emergency for the people that are impacted by this. And it's not like 10,000.

Yes, but the reason it's not a national emergency is because the people who own homes have gotten fabulously wealthy from it. And the homeownership rate is 65% of this country. So it's not a national emergency because it's a minority of people, unfortunately. Right. And I feel for them. Every time something's happened to your house and you tell someone about it, of course, the first thing I say is the joy of homeownership.

I've had many joys of homeownership in the last month. So this is the people who think that houses like always a great investment. This is just in the last month for my house. Garage door wouldn't open. We had to get a whole new set of wheels and tracks. In our home, we bought brand new. We built the house when my kids were born. In the same month, my wife had twins,

and the next month we moved into a new house. I don't know how we did it. So our house is nine years old. So the great thing about having a new house is like, the upkeep and maintenance right away is nothing. That's a wonderful thing about having a new house. Like, there's nothing like, oh, no, this went out. But now stuff is starting to go out.

The garage doors went out. We had moles in the garden bed. They had all, they make these little tracks, you know, the moles, little jerks. Had to have some guy come. I said, how do you kill him? how to get rid of them? He said we stuff carbon dioxide down the hole. Oh, wow. Anyway, our house is white, so we had to have a whole house washed, right? They come spray this stuff,

and then they wash the house. The light fixture is my house. You know, I have a farmhouse, whatever, modern farmhouse. They have those lights that kind of hang over like this, you know? They look great. I love them. But my kids play basketball, and the balls are constantly hitting these lights. So the light is, like, hanging like this now. And new light fixtures. was, dryer went out, washer went out, had to get a new washer and dryer. Okay? And why they did it, hey, why don't we come clean the dryer vents, too? This is all in the last month for my house.

By the way, got a new washer and dryer last week, and they got it installed yesterday. It was very fast. I have no more sticker shock for prices that are too high. Like, oh, my gosh, I can't be so high that prices. My new sticker shock is when something is actually not as high as I thought it would be. And the cost of a washer and dryer. $2,800. We bought a new one.

a new set for our house in the lake four years ago. And the price hasn't changed in four years. And I think last, when we bought, maybe it was a supply shock thing. But I couldn't believe that the prices weren't higher than they are. How much was it was a washer drawer? For both the set. They're each $1,000, I guess, a piece, $2,000 for the total. Not bad.

That's what we paid four years ago. I couldn't believe it. I thought it would be way higher. Anyway, the joys of home ownership. All right, let's talk about Netflix. Jake, our friend at Economic, who used to actually blog at Economic, don't do it anymore.

This is almost hard to believe. Disney spent $129 billion acquiring Marvel, Star Wars, Pixar, ESPN, and Fox, $182 billion in today's dollars. Throw in all their legacy assets and the entire company's market cap is $169 billion. Yeah.

If they could do a Doc Brown, Delorean, back in time, would they not do Disney Plus? Knowing what they know now, would they not do Disney Plus? Oh, yeah, I do they do a lot of things differently. But yes. We said this at the time that

streaming is a really bad business model. All these companies were losing hundreds of millions of dollars. Peacock, Paramount, Disney, HBO, chasing Netflix. Netflix was a coyote that ran over the cliff and then ran back and everybody. And now it seems like Netflix ran over their own cliff

and hit the ground as well. So Netflix and Disney are both in a 50% drawdown from the highs right now. And Netflix is obviously, they're the obvious winner of, streaming. They're the best technology platform. They don't have the best stuff for sure. But they won. And they're still down 50. And the thing is, I think a lot of people assume like, okay, fine, they don't get the Warner Brothers deal. I think that'll help the stock. It hasn't. It hasn't really changed it. And is it, is this just, are people just realizing, yes, this is just

a crappy business? It's kind of hard to believe. So Netflix's operating income is up into the right. in 2022, Disney had $12 billion and Netflix was six. So Disney was 2x. Netflix is about to pass Disney's operating income, which is wild because they don't have the parks. And the parks are wildly profitable. Streaming is not a bad business for Netflix. So Netflix is growing at 12 to 13%.

Now, their growth is slowing down. Their margins are 30%. So their margins look nothing like these media companies. But the problem is for Netflix and I own the stock, it's not a small position for me, and I bought more of it. The problem is that Netflix is still in the content business, and it's still a hamster wheel business, and their daily average views is not really growing anymore. I mean, it's growing 1.5% 2%.

So it's really, it's just really hard. So people are saying, like, yeah, it's not a, it's not the growth story it once was. I got to be honest, I dipped it. I dipped to Michael Batnik Bigtoe in Netflix as well, even though I keep. So my average cost is like 90 bucks. The stock is 67. I've said as many times it's true. I've been really good at taking losses fast, probably to a fault.

In fact, not probably, definitely to a fault. I don't have a lot of like double-digit losses, like even 10% losses, which cuts both ways. I'm really bad at holding on stocks, right? But the history of Netflix would tell you this is, so I look at this. I don't buy that, though. So anyway, Netflix is a stock that I'm down 30% or 27%. But I don't buy that history says anything.

History says nothing. History says that it has declined and come back. So, yes. So since it went public, it's had a 60% drawdown, 75%, 56, 86, 82, 76, and now 50. So it's had these massive, massive drawdowns. And it tells you nothing going forward. But this is what makes stock picking so hard because you look at that and you go, oh, man, every one of those times I should have bought.

And then this time you go, yeah, but now this time is different because it's actually a media company and the growth is slowing. It's not a growth play like it was before. This is what makes it hard. Correct. So right now, Netflix is trading on a market multiple, which is kind of hard to believe because it is a premium brand still growing with awesome margins. So if you look at the financial profile, it doesn't look anything like traditional media. The reason people, the reason these other companies wanted to get into streaming because they said, we want the same PE Netflix has. Correct. But it went the other way instead. Netflix is now coming down to them. Yeah. Anyway, I am as somebody with a vested interest, but even if I did it, I'm just very

curious to see how the market values Netflix on a go forward basis. Because right now, obviously, to say it's pessimistic as an understatement. I thought this is very interesting. We've been talking about the season one to season two drop off. And I thought Ted Sarandos made an excellent point. So they spoke about this on the call. He said, we are not seeing any material change in our second viewing and our second season viewing compared to season one. Our second seasons are performing well within our bands of expectation. Very often we see drop off from season one to season two. It's very common in the industry. It's even more so with us because we launch our shows so big. Our global reach, our discovery mechanism, releasing all at once, this enables us to find a very

large audience early. Our shows tend to start really big, while most other places, their shows start pretty small and occasionally grow from there. I think that's very valid. Think about White Lotus season one. Like nobody, I mean, obviously, there's a brand new show. It took a while for that to gain. You had to discover it. That makes sense.

And succession as well. Like, it takes a while for these names to find traction. Yellowstone didn't hit it big until like season three, I don't think. And that didn't really happen because of the pandemic, right? So I thought, as I'm really, I'm like, I have bullshit excuse. No, I think it's valid. All right, let's talk about The Odyssey. I think he's the reason that you also have kind of faith.

I have faith in him as a leader. Yeah. Right? Yeah, I do. I do. I do. I think that, by the way,

this is an example where, like, I'm not staring at the screen saying, like, the market is wrong. Why are you selling you idiots? I totally understand the story in what's happening. I totally understand it.

I don't think the, like, so I'm not pounding the table, the Netflix will all of a sudden, like, get re-rated higher. But I think that I'm, based out of all those companies I mentioned at the start of this show.

like where would you buy blood of the streets? Netflix is the one to me that makes the most sense. Netflix is the only company that I understand. Right? So like as an investment, I'm going to hang around. I couldn't tell you the first thing about Intel or SpaceX. Like,

are there trades in there? Like yeah, for Netflix, we're doing both first level thinking and second level thinking. Boom. All right. Let's talk the out of sync.

Two and a half times thinking. I'm really upset. I saw it last night. I'm really annoyed that I didn't see it in the, in iMX, but it's sold out through August. It doesn't really matter. Doesn't really matter.

Yeah. Yes. The people would, like, you have to see an IMAX because you can see the, come on, it's a movie. You have, you have weekend, I'm trying to be nice. You have, you have a bad attitude here. I think those IMAX people. The IMAX people need to settle. I mean, you're wearing an IMAX hat, but the IMAX people need to settle down

just a little bit. Like, fine, make more IMAX theaters then. IMAX is my biggest position. Okay. What do you mean make more? It's expensive. Hold on. So there was a side-by-side video of Stan. We used to watch movies on a tube TV. Come on. It's better, but like, can't be that much better.

All right. Let's just move on. So, The Odyssey did $124 million domestic. Define, there's some variety, defying expectations to set up the RRA to spectacle for a long, long journey in theaters. The ticket sales are notable as Nolan's biggest- Wait, did it really defy expectations? I thought the expectations of this were massive. No? These ticket sales are notable as Nolan's biggest debut since 2012 is The Dark Night Rises, as well as the third largest opening of the year following Toy Story and Super Mario. They're also impressive not just because The Odyssey is a three-hour-long movie,

but because it's rated R which limits who can buy tickets. So look at this domestic box office openings for movies directed by Christopher Nolan. Biggest since Dark Night Rises. So in between there, we've got interstellar, Don Kirk, Ten, and Oppos. He really is the guy right now, isn't he? He's like, he's the man. Significantly, significantly bigger than Oppenheimer. So this is from IMAX.

Second biggest domestic weekend ever. It still kind of blows my mind that Oppenheimer was as big as it was. That might be one of his greatest accomplishments. Christopher Nolan's? The Oppenheimer, if you just explain that movie, it's unbelievable how big it was. Yeah, massive. It's kind of, I mean, kind of a boring movie in a lot of ways. He's, he's, for regular people.

He's the only one. Who could have done that, right? To put my Dan Ives hat on. Nolan is the godfather of IMAX. He's the only one that could do what he's doing right now. So IMAX had 24% of tickets. 45% of tickets were premium format. Highest pre-sells ever with $50 million.

All right. So anyway. Needless to say, movies are back. Adam Aaron, this chairman and CEO of AMC, on the call said, in AMC's entire 160 year history, there has never been a quarter like this one. Domestic box office hit $2.99 billion. The highest second quarter in seven years. Fifth best quarter in the past 50 years.

Obviously, there's an inflationary component in here in premium tickets. The overall domestic box office was up 10.7% year over year. six different films had $75 million opening weekends or more. And we've still got a bunch on the docket. We've got Doomsday, Avengers. We have Spider-Man. We have Dune 3. We have Resident Evil.

There's the Tom Cruise movie Digger that I think is going to be big. And I've made a lot of bad calls. I mean, too many to count on this show. But this was one of the good ones that I had been. So I was reminded of this by Sean Rousseau, who said, Michael, you made a hell of a call. And I thought I would take a second to go back in time because, Ben, you said let's revisit this conversation. So we're going to. All right.

Let's talk to box office. 2025 was only $350 million below the previous year for a kind of underwhelming year. That's not so bad. Really? I thought people said this was like a banner year for the year. for movies. No, it wasn't. We had Avatar, we had Zootopia, we had Minecraft. You don't think so? Sinners and one battle after. There was a lot of movies people talked about. It was, it wasn't. I'm telling you, it was down $350 million. This is a secular decline. I'm totally selling your

theory that 2026 will be higher. Every year is going to be lower from now on. This is it, man. It's over. 2026 will be higher than 2025. No way. Sorry, man. It's done. movies are done. I don't think you've realized this yet. They're done. Unless they double the ticket prices, movies, like, as a thing, it's just, it's slow,

it's, it's not cyclical, it's secular. I have more experience than you do on this topic. You're blinded. You have blinders on because you go to the movie all the time. How do I, that, dude, the opposite. You have no idea because you have never been to the movies. I go frequently. So for it.

And look at the numbers. You look at the numbers. People would rather watch a movie at home than go to the theater. It's true. It's easier. Of course that's true. Of course that's true. And that is already reflected in the revenue.

That's not going to happen in 2026. That's been happening. Right? 2026 is not the year that people decide to watch movies at home. That's been happening for the last decade. It's just slowly but surely eating away. So it's going to continue to get worse. All right.

So I tell you a story about how I took Robert to see the handmade. And you're like, what's the handmade? By the way, the handmade did $400 million in box office. I still can't believe that. That movie stunk out loud. I'm almost done. I'm almost done. I'm not an idiot in the box office.

I understand numbers I've been down every single year. I'm just saying I think 2026 is the year that it comes out. about musicians now. They're dead money. No one can't. I don't think the Michael Jackson one is going to make money. All right. If you're hanging your hat on Michael Jackson biopic for 2026, I'm going to be the winner here on this bet. We'll check back in an ear. Okay, I was wrong about Michael Jackson. Can I defend my honor? No, they don't have to defend your honor. Michael Jackson did a billion dollars in boxes. By the way, honestly, I didn't realize that you were going to look bad in this clip. It was just about making me look good. But so what, I'm wrong with the time. This just happened to be one of the times that I was right.

Can I caveat your take that movies are back, though? Because... Why does it have to be caffeioted? Well, because big... I got the numbers here from my friend Claude. He has a little bray on. So, if you inflation adjust the numbers from 2014 to 2019,

every year it was essentially $15 billion in box office. Okay? Inflation adjusted. This year, so far as $5.3 billion. So let's say it stays on the same course and we double the first six months to the last six months. So you'd be looking at $10 billion

in ticket sales versus $15 billion pre-pandemic. You're still 30% below pre-pandemic levels on inflation-adjusted basis. Talk about moving the goalposts. So I'm saying big movies are back, all movies, not back. I said 2026 would be higher than 20-25, and you're saying it's still below pre-pendemic levels. I mean, of course it is. I'm not saying we're all the way back. Okay, so we get $5.3 right now.

Last year, it was $9 billion. So it's on course, but it's basically on course to be the same. You're not quite there. I know Dune and the vendors are probably going to help. Numbers are up 11% year over year. Okay. Movies are back. This is great.

We celebrate this. I think it's a little bit of recency. But it's not back to, I was saying pre-pendemic levels is never coming back. That's true. Okay. I was wrong that it's going to go down every year. You're right. I was wrong about that.

Anyway. But it's not pre-pendemic numbers. So you know what? That's gone. That's toast. You can watch, you can watch The Odyssey. at home and have a terrible time. I will be seeing The Odyssey in the theater.

But I will see it in a regular theater, not the IMAX. I will definitely be seeing the Odyssey. My kids are going to camp next week. I'm going to see the Odyssey. I can't wait. Okay, could you please see it on a big screen? Just please see it on a bigger, the normal screen. Our IMAX seats are not comfortable.

I would rather be in one of the recliners. If I'm going to sit in a movie for three hours. Anyhow, congratulations to Christopher Nolan and movie fans across the globe. What an unbelievable movie. He really is the man. Even I didn't care for Tenet at all. And that's his lowest number by far.

It just didn't work for me, but he still took a swing. So I appreciate him as a movie maker. Okay, Ben, we've been talking about GLP1 land a lot on the show in recent weeks. KFC is closing 207 U.S. restaurants. I'm sorry, they closed 2007 restaurants between January 2025. March 31st. That wipes out roughly 5%. That's a lot of its domestic locations.

I don't know what's going on overseas, but they added 2,9171 internationally. Chick-fil-A's probably eating their lunch too, don't you think? I would think so. Places like that, raising canes, those kind of things? Also, Uts, Oots, the potato chip company? Is it Outs or Uts?

I have no idea. Well, they are going private. The stock is down 70% and they were just bought for a nice little premium. So whoever owns Outs or Outs, the stock, credit to you. I've never heard of these chips. Is this a New York thing? Maybe it's an East Coast thing.

I don't know. Okay, I got a story for you. I think I told them briefly, but I tell the whole story. So my daughter plays in a summer league basketball league. So I'm walking into in the parking lot, and there's two guys in the parking lot, me and another dad. And he's probably 100 yards away from me. And he puts his hand in the air and he goes, there he is very loudly at me.

Did you think it was a fan? No, I thought it was another parent. And I kind of squinted and I'm like, I don't know who this guy is. Then I thought maybe he's a fan. And he got closer and he realized he didn't know him. And he goes, kind of looked both ways and just is like, okay, and just kept walking. Just nothing. He thought he thought I was someone else.

He didn't acknowledge it? No, didn't acknowledge. Just kind of looked at me, kind of looked side to side and then kept walking. That's weird. Yeah. He should have said something. All right. Let's do recommendations.

All right. Speaking of, I watched some movies. I went to the movie theater this week. I took my kids to see monsters and minions last week, minions and monsters. It seems like the people who make those movies have to be on some sort of drugs the way that they do the plots,

but they're entertaining, and I laughed like five times. My daughter, Kate, loves the minions. She's seen every one of the movies like six times. You should take your kids to Universal Studios. It's really good. I'm sure they would like it. And it was only 90 minutes.

That was the best part. And I barely only dozed off once. My wife and I watched Obsession. And the only thing I knew about this movie, is a guy makes a wish that a girl loves him. That was in the trailer. That's all I knew. And I know this movie got huge supremely high hype. And I, so my expectations were probably like, I got, I bet it rain it in a little because the hype is so high. Can I, I, I, you loved it, right? I loved it. It was so good. And it's not really my,

I don't know how you even describe this movie. A thriller, a suspense movie, not really horror. It's hard to even, like, pigeonhole it, but. You know what? You know what? There's some movies that are so good. that expectations can't ruin it. Like, Hail Mary and The Odyssey, there are just movies where it's like, I'm just going to tell you flat out, you're going to love this movie

because sometimes I don't want to raise the bar too high and then you're disappointed. If you don't like this movie, you're an idiot. But here's why this is so impressive to me. So I know this is like a young filmmaker. The movie just felt really high quality with a bunch of people I've never seen acting a movie before. I've never, I didn't know any,

there was one guy who was Conan O'Brien's right-hand man He was in it for like five minutes. What's his name? I didn't even know who you're talking about. The dad in the record store. They worked. Oh. But he was the only actor in the whole movie I knew.

I knew none of these actors. And I thought the two leads were both really, really good. I thought she was way better than he was, but he was good, too. So the lead actress, she is, she has a big role. She had a big role as a result of this. I'm happy you liked it. How great was that movie? My wife loved it, too.

It was just really, really well done. And there was so many things like, oh, I just love the choice. and it just felt like a high quality movie. I can't explain it. Like, you could make that movie be very low budget, low quality, and be like, oh, okay, it's kind of interesting, but not great. But it was just a really good, well-done movie.

And that kid, Kari Barker, who directed it, I think he's like 23. Right. Yeah. It was just, there was a lot of very creative choices. I really liked it. Okay, so you mentioned our Watchables is your favorite podcast.

They did, she's the one last week. And they actually did Hitch this week, which is kind of hilarious because my daughter and I are in a rom-com binge, and we just watched Hitch, which just, that's got to be one of the funniest rom-coms of this century. I haven't seen either of these. Okay. I can, so the Ed Burns, I mean, huge Ed Burns,

I thought I was the only Ed Burns fan there is. He's made all these movies. It's about him and his family in Long Island. That's why you probably could like it. I don't know where in Ireland, because there's all these different places in Long Island, but I've always really enjoyed his movie. They're not great movies. They're just well done and they're always about family.

And so I've always really appreciated him. I didn't realize that there was like an Ed Burns fan club out there because I'm a member, and obviously the Rochbles is too, so I enjoyed it. And finally, I have a book recommendation. How to Get Rich in American History by Joseph Moore. This guy actually sent me a note when my book came out, and I didn't know he was. And he was on Meb's podcast last week, but I'd listen to it. And this is the most unique finance book I've read in years.

Oh, wow. How to Get Rich. It's a history of the financial advice people have gotten over the years. And it's really... Oh, I love that idea. It's really, really well done. And it's like this stuff that you... His whole point at the beginning is,

like, you don't realize how good we have it today. And how he said there's never been a better time to get ahead than today. And he talked about how, like, in the 19th century, in 18th century, like, pre-Civil War days, there were so many different currencies. No one thought about saving money. It was, you got the money, you spent it immediately because that currency might be gone in a month. Yeah.

It's just, it's really, it's a really fascinating book. And it was, he's a history professor. And it was just, and he talked about how he decided to try every form of getting rich that's ever been invented, and he talks about how he got rich, being a broke college professor. It's really, really good. I loved it. I will certainly listen. I love this.

That's very cool idea. What do you got? Just the Odyssey? So I watched the second half of the World Cup finals, Argentina versus Spain. Okay. You picked the worst game to watch. I had a great time. Okay.

I thought it was absolutely riveting. And I feel like a total schmuck because I missed the entire thing. And it turns out... There's so many good games. It turns out I'm a fan. Yeah. I loved it. I was glued to the screen.

I thought it was excellent. And the fact that you say it was a terrible game, and I know, like, I guess by all the accounts, it wasn't a great game. But I loved it. Well, I watched the next one. I'm not sure. but I genuinely felt like an idiot like I listened to

Simmons and Chris Ryan and some other guy the soccer guy and they were recapping and I really did feel like a schmuck I missed the whole thing great sport I liked it

one final thing I was at Fanatics Fest last week and I was in line for quite a while I bought a Knicks poster and had them all sign it Jalen and Oji weren't there so I have to find them

track them down at some other point So I had some time waiting in line sitting down. Anyway, I said that to say that I binge watched season two of the agency. And I thought season one started out awesome and then it petered off from me. I didn't really, like I thought it was like the horse meme, the horse to donkey meme. So I was sort of iffy on season two. And I watched the first two and I sort of was going to turn it down and then somebody told me to pick it back up.

So fantastic. I thought it was so good. It was so much better than season one, I thought. This is a very underage. It's funny. I started season two last night. And one of the very first scenes in the show is Michael Fastbender, Jeffrey Wright, Richard Geer, and a guy who plays Big Nalti on the Wire, all sitting there having a drink and a cigar.

I'm like, oh, my gosh, look at the firepower in that room right now. Jeffrey Wright is so good in that show. The whole cast is great, but... So the thing I like about it is a lot of these spy shows, it's like a season, this is the whole story. Then the next season you go to a new story. But it's a continuation of the story from the first season. season. It was excellent.

Truly. Truly excellent. I can't wait. I'm one episode in. It's a very underrated show. All right. That's about it. Yep.

Okay. Animal Spirits at the compound news.com. Personal emails. Personal responses. I answered a bunch of emails this week. I know you don't think I, you know, fulfill my quota, but I did a lot of answering emails this week. Okay.

You shamed me into it. Thank you for your service. We'll see you next time.