Animal Spirits Podcast - Shopping Under the Influence (EP.117)

Episode Date: December 18, 2019

On this week's show we discuss some of the best charts of the decade from YCharts, the different types of Twitter accounts, when ETFs will surpass mutual funds, the new Bob Iger book, the best memes of 2019, how much does the Tooth Fairy get these days and much more. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by Y Charts. On today's episode, we are going to go through Y charts, charts of the decade that they sent us from their research staff. And a lot of the stuff I had actually never seen before. And I think that's one of my favorite parts about Y charts is that when I want to do some research, a lot of the times they have information on there that I didn't even know existed. And there's some charts in here that I had never even seen before. And so even though I've been using Y charts for about two years now, there's always stuff that I'm discovering. So if you want to try it out, call them up, send them an email, tell them Animal Spirits send you, and they'll send you 20% off of your first opening subscription.

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holtz Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritthold's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain positions

in the securities discussed in this podcast. Welcome to Animal Spirits and Michael and Ben. Tis the season, Michael, because we are at a perfect storm for content right now because we have the end of one decade, the beginning of the next decade. And so we're going to have such, and I'm part of this too,

So we're going to have decade in reviews. We're going to have the decade that's coming and what's going to happen in the next decade. We're going to have year-end reviews and then what's happening next year. So it's kind of this perfect storm of content, right? Strap in. Yes. And so we are here for this. Honestly, usually these are the kind of things that I'm snarky about, but I kind of enjoy these things.

I'm not going to lie. Maybe that makes me a dork. I don't care. Hand up. I'm a dork. So Sean Brown at YChart sent us this PowerPoint package of, of their charts of the decades, and their whole crack research staff over there, Caleb, Connor, Arushy, and Will put these together for us. And many of these I had actually never seen before.

So we want to go through some of these for their charts of the decade. And it's one of those things where you look back on it now and everything seems obvious. Oh, the Fed printed a ton of money and they lowered interest rates. And this decade was so obvious the Fed was going to manipulate things higher. And this is the way things were going to go. But if you would have asked someone in 2009, could they see this scenario happening where interest rates go lower and stocks continue to hit all-time high after all-time highs? I think we've had 28 new all-time highs this year. There's no way anyone would have guessed that. Even the most optimistic bull in the world in 2009 would not have guessed that. One of the missing ingredients is they probably would have predicted

higher inflation, which doesn't really show up in the official government data. Obviously, there is inflation in all sorts of places. But the fact that inflation is not running rampant, What is your movie ticket inflation, do you think, for the 2010s, since you go to the movies more than I don't know? Tickets are not that high. I guess between $12 and $14, depending on when you're going. Okay. All right. So let's get into some of these charts. This one's pretty good. So they looked at the U.S. job openings and job seekers over the past decade. And unemployed people at the start of the decade was close to $15 or $16 million. And the number of job openings was less than $3 million. That has completely converged now. to the point that there are more job openings than there are unemployed people. So unemployed people has gone from 15 million to fewer than 6 million by the end of the

decade. And job openings have gone from 3 million, call it to 7 million. Yeah. This is a pretty wild one. And so the ratio of these has gone from like four times as many people out of work as job openings to now it's completely flipped and it's like a 0.7 ratio. So this is, again, I heard the other day that, and I think we talked about it last week, the largest decrease in the unemployment rate ever from peak to trough, which is pretty cool. Okay, so the next one is showing the change of all currencies to the U.S. dollar. And this is surprising because at the beginning of the decade, Peter Schiff promised me

that the dollar was going to lose its status as a reserve currency of the world and the dollar was going to be hyperinflated away. What happened, Peter Schiff? In Peter's defense, he did not say when. That's true. It's possible to call me. But this shows the the U.S. dollar to the euro, the yen, the pound, Canadian dollar, all these different developed currencies and emerging market currencies. And the U.S. dollar is up anywhere from 20% to 30% in a lot of these cases. If you wanted to give one explanation for the reason why foreign stocks have underperformed, do you think this is probably the easiest one? Well, for U.S. investors, certainly. Yes, because if you're buying a stock in another country, you have to translate that

back into the U.S. dollars and the fact that U.S. dollars are up 20 or 30 percent. I've done this before where if you go back and look, when the U.S. dollar is rising relative to other currencies, U.S. stocks tend to perform better. When the dollar is falling, international and emerging market stocks tend to perform better. And so that's maybe like the biggest hope for people in the coming decade for their foreign stocks underperforming, that the U.S. dollar strength kind of wanes a little bit and comes back to Earth and these other currencies are stronger. And so maybe if Peter Schiff is right and the U.S. dollar does get completely decimated and it goes away, international investors will finally be happy.

I like the next chart showing top performing stocks this decade by sector. Was there anything in here that stood out to you? I think people would probably be surprised to learn that consumer discretionary was the strongest performing sector over even technology. Now, this is kind of a labeling thing. Amazon's in there. But Alta Beauty actually outperformed Amazon in the consumer discretionary and raw stores is right up there too, which is kind of surprising. I guess it's, I mean, the other one that

has just been lagging forever is energy stocks. So consumer discretionary stocks were up well over 300%. Energy stocks in total were up 5% for the decade, it says. And that's even with some of these stocks that were up 3 to 700%. So I guess the biggest surprise to me, just as that the fact that consumer discretionary crushed even the technology sector, which was the second best performer. So is Energy your top pick for 2020 or for the entire decade? Well, so they also showed one here that this one is kind of surprising

and kind of unsurprising when you see this data. They showed gas prices, and this is one that I would have never thought to look up on Y-Tarts before, but they show that gas prices are basically exactly where they started the decade at. They went as high as $4 a gallon, and that was in like 2011 when commodities have. their last gas up and since then commodities have fallen. And so gas prices have basically stayed the same over the course of the decade, which is, yeah, I guess when you consider the fact

that commodities are down and oil hit $150 a barrel in, what was it, 2000, I guess it was probably 2008 or 2007 when it happened and has been down since then. The other one here that is kind of a, should not be a surprise to anyone. Fangstock. So this is Facebook, alphabet Apple, Netflix. How does this work? How many A's are there? There's two A's Ben, Alphabet and Apple, and this show is going back to Facebook's IPO in 2013. Yes. And, wait, was it 2012? 2012. Yeah. And so just a equal weight of these things is up 35% annualized since then, if you rebalanced them. And Netflix is by far the biggest winner, actually, since then. It's up like 2,500%. But these other ones are all up well over two or 300% each. It was obviously a fang decade. It's throwing me off because it's,

showing alphabet, which is an A, and it should be Google, which is a G, right? Oh, well. Quote from the Wall Street Journal, Mr. Powell, the first Fed chairman without a Ph.D. in economics of three decades, doesn't always come to big issues with the firm view, but instead waits to hear what everyone says first. Some staffers have traced certain intellectual curiosities to economic debates he has been following on Twitter. He doesn't tweet. I'm going to say that I hope he doesn't get his ideas from Rudolph Havenstein. I was thinking that, too. Do you think, think, he's following all these debates where people show gifts or memes and just say how the Fed is behind

the eight ball and the Fed has painted themselves into a corner. Imagine Powell turning to one of his colleagues and like, this Jim O'Sherty guy is a riot. Yes. How many of these people do you think are just lurking on Twitter? People that are sort of well known want to know what's going on, but don't want to interact or really can't interact for political reasons. Do you think there's CEOs that are on Twitter like this that can't really interact? I absolutely do. And these are called the lurkers. I was thinking about an idea. Maybe I'll put this on a blog post. Maybe I'll just leave it in the podcast. There's a lot of people different, what is the word I'm looking for? Personality types on Twitter. So you have the lurker. Tell me if I'm missing anything. You've got the Steeler, somebody that just rips people off. Yes. They see a funny meme and then they make it their own. The quote tweeter, the manual retweeter. I believe Michael Kitzis is the only one who I'm still seeing doing that. So I'll just give him the title of that. The link sharer, the backpatter, the humblebrager, the complainer, the mimer, the deleter, people that are constantly deleting old stuff or bad tweets that don't go well, the joker, the liker, the sub-tweater, the blocker, and the broadcaster.

Did you have the fortune cookie motivational tweeter in there? Oh, the philosopher. Philosopher. Yep. And then I think everyone has their five people that favorite every single one of their tweets. It's like the supporter. Well, I called that the liker. Oh, the like, okay.

Yes. Okay. Yeah, I'd have to sit through some of those, but that's pretty good. And then. Thank you. Kevin Durant, who used to be the burner, but now he's like out in the open about going back and forth with people. Oh, that's a good one. I'll add that to the list.

So, yeah, I do think that a lot of people are on Twitter without having a public face. And it's so sad for Jerome Powell to learn how he's completely ruined the entire financial system in this past decade. It's tough. All right, ETFs to surpass mutual funds in 2024, question mark. So this was from Wealth Management.com and Diana Britton wrote this piece, looking at the current trends, and she's making a guess that ETS will surpass mutual funds by 2024. That seems pretty quick to me. think. So what is it right now? ETFs are at 4 trillion mutual funds are at 15, call it. Are you not taking into the account that $150 billion left equity mutual funds this year? That's true. It has been a record outflows. Do you listen to our podcast? The expectations of

the forecast for ETF growth in the mid-2020s is very aggressive. I mean, it's already gone parabolic, but this takes it to another level. And it's basically showing mutual fund assets to go down from here, which I guess that would mean that outflows, outpace, any gains in the market. Because that's the thing that's really kept mutual funds afloat, even though money has been coming out of them, the market is up so much and there's so much money in there that it hasn't really mattered. That's a good segue to this next topic. Let me ask you a question.

Do you think that stocks are more likely to be up double digits next year or down double digits? If I'm using history as a guide, then... No, no. Well, use whatever you want. Hey, I'm answering the question here. You can't tell me how to answer it. If I'm using history as a guide, stocks are more likely by a factor of, I don't know,

two to one to be up double digits than down double digits. How does that sound? Obviously, you do not read the disclaimer that past performance is not a guarantee of future performance. Okay, so you're just going to guess instead then instead of using history as a guide? Yes. Okay, so what's your guess? Well, I'd say 60, 40. 60% of me thinks that they're going to be down double digits.

I'd go with 40% as the other. So if we're going to use history, since 1926, stocks have been up double digits. And when I say stocks, I mean the SB 500, and I understand that the SB 500 did not exist before 1957, I believe it was, assume me. Stocks have been up double digits 54 times and down double digits only 11 times. So if we are using... Did you steal this data from me? No.

This is from one of my blog posts. I just did it this morning. Listen, it's public data. I sent you this blog post last week. I didn't read it. Okay, obviously. However, stocks are definitely, I would say you could use this past history as a god. Stocks have been up or down double digits 65 times and only up or down single digits 28 times.

So more than two times more likely to be up or down double digits than not. Yeah. I knew this because I wrote this blog post like a year ago. But keep going. I wrote it two years ago. You stole it from me. So the survey of the week comes from an article. that Michael Santoli wrote over at CNBC.com, which we'll put in the show notes.

The consensus strategist forecast for the SEP 500 for any given year typically falls in the 5 to 10% range, which we know it doesn't make sense, but that's just what it is. The average strategist predicts a gain of 6.5% next year. This is kind of interesting. The maximum of a target is only a 9% higher, so a pretty cautiously optimistic crowd. Why don't they even do these anymore? Well, because I don't know. Who looks at this stuff and says, yeah, this is how I'm going to invest my portfolio because

someone from Credit Swiss thinks that the stock market is going to be up 8% this year. What's the point of this? Actually, Santoli says this 1928, the SEP has showed a gain of between 5% and 10% only 6 out of 91 calendar years. So I'm using total return data. So I guess it makes things a little bit different. But then they take these forecasts and then six months into the year, whatever's going on in the stock market, they update them. And then three months left in the year, they update them again. Just stop doing it.

Just stop. No. It's useless. No one uses this stuff for anything except to make fun of it. This is for us to mock. That's exactly. That's it. Wow, that was about as animated as you get.

Okay, what's your target for the year end? Let me look at my notes. What index are we talking? I think everything is a second half story, so you've got to take that into account. I'm recklessly pessimistic and you're cautiously optimistic, so should we average those two? My year-end forecast for 2020 is, drum roll. 2987. Okay. With dividends, that means...

Okay, so you're picking it to stay the same. No, that's about a 6% decline. And yes, I just made that number up. Okay. So, last week, I made the point that mom and pop are not the biggest drivers of the stock market anymore, and it's mostly institutional. And Jim Bianco wrote a piece at Bloomberg that kind of talks about what I was saying here that things have become more professionalized, but he put some numbers on it. And he says, the single biggest influence in investing today is the modern wealth manager.

So according to Investment Advisor Association, the U.S. has 13,000 registered investment advisors employing more than 436,000 wealth managers. And they direct more than 43 million accounts with a combined net worth of $84 trillion. And that's-caviot, caveat. Yes, that's not money. That's how much these people have in terms of real estate and cash. another holding total assets total assets businesses whatever but anyway these are the people with 84 trillion dollars in net worth that are having their money managed by professionals and he's also showing this survey from TD Ameritrade that said 88% of wealth managers are using ETFs now and it kind goes through all these different flows but again it's getting to this fact that there's just more

professionalization of the markets and it's not these retail investors that are putting their finger in the air and figuring out which way the wind is blowing today and then making a decision about what to invest in. Oh, should I invest in AT&T or Verizon? That's not what's moving the market these days. It's what these wealth managers are doing. And I think maybe that's one of the bigger trends of the past decade that a lot of people have missed for why U.S. stocks have done so much better than the rest of the world

because we have this more professionalized marketplace of wealth managers that are keeping people in, you know, keeping people in diversified portfolios. and then you have this whole rise of target date funds, which is close to $2 trillion now. I think it's just... I don't know that I buy that. It's never been easier for people to have a more coherent investment strategy than it is today. You don't buy that? I don't know what that has to do with the performance of stocks and bonds, but...

Okay, taking out the bond piece, investors, let's say investors are better behaved and they're sticking with their portfolios longer. Does that kind of make sense that yields and sales? stocks have come down, like the earnings yield has come down a lot because people are staying longer and valuations have risen? I think you might be reaching, but this race is a good point if you allow me for a minute. Adam Sandler was on Howard Stern, I don't know, three weeks ago. Hang on, before you get to this, who are you a bigger fan of Howard Stern and Mike Francesa? Because I feel like these are your two gods. No, no, no. It's not even close.

Mike Francesa, everybody's sort of in on the joke that he's just a total cartoon. I want to be disrespectful, but he's, no, I would put him in a much separate bucket. Howard Stern is my guy. Okay. Anyhow, Sandler was talking about the interview that he gave with the New York Times, and he hadn't given a major interview like that in like 25 years. And he was talking about it, and he was talking about the interview he gave in the 90s. and he was reading it back and he said, and I'm paraphrasing, he said, I don't remember saying that.

I don't even think that. I don't know what I think. So this struck a nerve with me because oftentimes when you and I are like having this dialogue, I will listen to the show 48 hours later on Wednesday when it's released and disagree with something that I said previously because I think like I don't have fully formed opinions on everything that we talk about because we're just sort of going off the cuff. You yelling at your phone? That guy's an idiot. So I disagree with myself often. And it's funny, just the way that he said, like, I don't know what I think. Now, there was somebody that watched YouTube videos of ours who did not like that I don't know what I think. So Josh and I do this thing, what are your thoughts every few weeks where we don't know what the questions are in advance.

So sometimes I don't really have a great answer, which is, you know, it's fine. But somebody wrote, stop wasting time. When your guest answers three to six questions with the caveat, I have no idea with the attitude. I don't care either. Come up with a new guest or come up with a new guest or come with new questions. Yeah, but I feel like you are willing to admit what you don't know, but when I make an opinion, you say that I'm wrong right away. So you know what I don't. You say, no, that's a dumb idea. You say what I don't know, but you know what you don't know. Now, I didn't say that was a dumb idea. I just said, I don't know about that. But a further point is that you are much more thoughtful and deliberate about what you say, whereas I don't really have much of

a filter and doesn't really look so good sometimes. There's a lot of stuff I don't know too. I think I I'm a bigger take machine than you. That doesn't mean I'm right. That just means I have more takes. But, okay, so speaking of this, sticking to stuff we talked about last week, so. Hold on. So just to put a bow on this, I disagree with you. Okay.

By the way, put a bow on this is something you can only say on a podcast. You would never say that in real life anywhere else. Yeah, because if somebody said that to you, you'd be like, what are you talking about? Put a bow on what? Yeah. You know, people often ask me. That's another podcast thing. Okay. So last week we talked about, doesn't make any sense that the U.S. has a bigger share of GDP, a smaller share of population, and an enormous share of market cap.

Can I just say one last thing? You got it. It's very possible that if I say something and you think I'm an idiot and you disagree with me, it's very like that I disagree with me too. So please just save your emails because it was probably a very half-baked idea anyway. Yeah. All right. Go ahead. Once a week, I think you write from a burner account to tell us how wrong we are. I was just spitballing.

It doesn't make sense that the U.S. has a 4% of global population. but 24% of GDP and 55% of market cap. And I put the numbers down and I wrote a blog post about this because I just got thinking about it after talking about it last week. And I was not necessarily saying this is right or wrong. I'm just saying this is the way it is, does it make any sense? And I put the tweet out and I got a million replies. And it's funny because some people will always say, of course it makes sense.

What do you think was going to happen? And they would say that no matter what happened. So it could have been that you run this simulation 10,000 times. And this happens to the U.S. 9,000 times. But in the other thousands, something else happens, and Great Britain keeps dominating the world in the 1900s or Japan takes over or Germany or China, whatever it is. And that's what I was just trying to get at. Does it make sense that this happened? There are structural advantages the U.S. have, but does it make sense? And a lot of people gave me some other answers that I didn't really have before. I didn't really say. What was the best one? One of them was the fact that our financial markets are just much more trusted. So you have foreign firms that come here to list their shares in IPO in the U.S. which is a really good telling signal that we have things figured out in our markets. The other one was just the fact that we have this rule of law and a lot of the other countries

can take over their stocks of their biggest corporations. The other thing was a few people did try to actually meet saying that places like China and India have different share classes. And so those numbers aren't exactly right, but that's like a few percentage points. So it's kind of a rounding error here or there. The still trend is still kind of the same. The other one is just the fact that a lot of countries have more private companies that privately held, whereas we have more public companies, even though that number is dropping.

I still think I'm kind of, yes, it makes sense 70% of the time, 30% of the time, I still can't really wrap my head around it. But I think the people who think that this is the way that it had to happen no matter what, I think that's kind of just letting the winners write the history books kind of thing, where I don't think that you could run the simulation of the world 10,000 times and it doesn't come out like this, that United States is dominating in all 10,000 times. As a Patriot, I take umbrage with what you just said. If this is a simulation and Elon Musk is running the show, like hitting the button, then I don't think this happens every time. That's all I'm saying. Speaking of Tesla, did you know, Ben, that the stock price is up more than 100% since the

lowest in June, and it is near an all-time high. Did you know? I did not know that. So how far below are we from funding secured, though? 420. So not very. So it's back up to 383. And it was down to in the 180s? Wow. So less than 10%. That's not bad for a company that went bankrupt like 18 months ago. Not bad at all. So Miles Udland has a new, I guess, newsletter, for lack of a better word, that he sends out weekly. It's quite good.

I like it. And in the recent one, he spoke about lack of viewership, particularly in the NBA. Some good charts in here, hours spent watching pay TV per month, just collapse. particularly with the younger people. The only one who had a change in hours was not surprisingly people that are over 65. Question. Is this a survey? Because this is showing people in the ages of 18 to 24, change in time spent watching

pay TV is down 62% since 2010. All right. Listen. No, I'm asking, is this a survey? It might be a good survey. It kind of has to be a survey, right? Because you don't know exactly what everyone is watching at the same time. Disney CEO, Bob Eiger, said of cord cutting trends,

I don't know what the floor is, nor do I think the floor is anything close to being in sight. And speaking of, you just finished the book, The Ride of a Lifetime, which was excellent. I'm probably three quarters of the way through it. I broke a person where I was going to get this in recommendations, but I think I've said before, my personal rule is typically, I only read nonfiction during the week and then it's fiction or movies on the weekend. I didn't know that. Yeah, it's kind of a, you know, whatever, kind of a personal principle here. And I broke it this week to keep reading Iger's new book, which is called The Ride of a Lifetime. How many different puns do you think he went through for Disney before coming with a ride of a lifetime?

It was great. Wait, why is that so punny? Just because there's like rides at the parks? Yeah, Disney ride. He had to do a Disney pun. But I thought that the Shoe Dog book by Phil Knight was the best CEO book I've ever read, which was last year. This one is just as good or maybe better. Don't you think that this trend of these people getting to the ends of their career and wanting to think back and reflect? Steve Schwartzman just did one. Schwartzman did one. Knight did one. I was reading. the book Titan, which is the biography of Rockefeller, and what is it, like 600 pages, it's pretty good, but you've got to slog through a lot to get to the good stories. Wouldn't you much rather read a book written by someone who had experienced it themselves,

and it's much shorter? Like, this was such an engaging read. And you were right, the first intro chapter hooked me in immediately. That was heavy, right? Yeah, I did not see the comment. But wait, the point is, the reason why I brought this up was because there was a chapter, I don't know if you're there yet, where they spoke about transitioning to Disney Plus and giving up all the revenue at Netflix, and they didn't have money to pay the people that

were working on Disney Plus, but Iger was like, don't worry about it, blah, blah, blah, blah, blah. So this was not as big of a no-brainer. Oh, easy decision as you thought. They've got thousands and thousands and thousands of employees. Honestly, this is the first time I'm kind of on, I think you're on the same side of me here is that the CEO pay gap is just ridiculous that they're earning 10,000 times what the average worker is or whatever it is. Reading this book was the first time I thought, oh my gosh, maybe these CEOs and some

these big companies do earn it because when you hear all the stuff that he had to deal with in being CEO of Disney that I guess I never really even thought about like all the different business lines they have. He's looking at scripts of movies and I kind of thought like maybe some CEOs are worth this money for the crap that he has to deal with. I also thought it was really enlightening that he would be so open and honest about what he went through with his predecessor, Michael Eisner. He was very open and honest about that relationship. It's almost like CEOs are like politicians so they don't really ever say what they want to say or what they truly feel. And so the fact that he could open up about it now that he's retiring, I thought that was just

great. And I really hope that people of his stature continue to do that because I thought it was just a really great book. And he is a great storyteller. So yeah, I would much rather read something like that than a biography that is 700 pages. And I have to learn about who their fourth aunt was and what she did and where she grew up. Last thing, Disney, is the Mandalorian slowing down a bit to you. I'm not enjoying it as much as I was. I kind of gave up after three episodes. I kind of was going to wait to see if people said, but it kind of slowed down for me. Yeah. Honestly, Disney's just great at branding. Like the baby Yoda thing, no one even cares if the show is good, just because they created this baby Yoda thing that they can sell for merchandise for 20 years

and the future. It doesn't matter. All right. I saw somebody passing this around 52 things I learned in 2019. There were some cool factoids in here. Drunk shopping could be a $45 billion a year industry. I totally believe that, given what's going on with the Instagram, but this must have been a survey. Okay, so I found the actual survey. Oh, okay. The point was that this is surprising. Only 6% of people regret their drunk purchases. No way.

So here's the numbers. 79% of alcohol consumers, which is kind of a funny label of people, an alcohol consumer, have made at least one drunk purchase. The average annual spend per drunk shopper is $44. If you would invest that money in 30 years, it would be worth. clothing and shoes are the most common drunk purchase. That's probably because these people are on Instagram. And Amazon is a drunk shopping platform of choice. I'm not going to lie.

I've done this before. Not drunk, drunk, but after a few drinks, I've made some purchases. It's happened. How about you? Not that I can recall, probably because I was drunk. Okay, yeah. Some of the T-shirts that you wear, you had to buy them. You had to be a little buzzed up, right?

I don't know. Okay. Any other things from the 52 things in 2019? that David Perrill learned? I am the proud owner of this Ricky Vaughn T-shirt. Were you a big Major League fan?

Huge, especially the second one. I much preferred Omar Epps to Wesley Snipes. Okay, that's kind of a bad take. There might be a bad take. I haven't seen either of those movies in 15 years at least. And oh, by the way, while we're on that subject,

we each watch trading places, so we're going to do another random watch down Wall Street, It's probably a week from tomorrow. It'll be out next Monday. And yes, just in time for the holidays, since that's kind of a holiday movie. All right, the ringer had a piece of the best memes of 2019.

And some of these I didn't know. I'm going to go to, here's the ones that didn't work for me this year. You know which one probably should have worked but didn't? The Stonks thing where stocks was spelled wrong on some stupid video, and it was S-T-O-N-K-S, never thought that was funny. You? Didn't do it for me. Agreed.

The one where the ladies pointing and crying and yelling at the cat from Real Housewives, I'd never find that one funny. I don't know. Yeah, I don't get that one either. Okay, here's my favorite memes of the year. You can tell them, some of these might be old and I'm wrong, but the Paul Rudd, hey, look at us. That one's never going to get old for me just because Paul Rudd. Hey, look at us.

That one's never going to get old. I thought the Winnie the Pooh one was kind of underrated, where it's regular Winnie the Pooh and then Rich Winnie the Pooh? That is one of my favorites. Okay, before we get into listener questions, I have some parenting stuff. So one of the greatest forms of leverage you hold as a parent is around the holiday time when you can invoke the Santa Claus. And I use claws with an E there, kind of like the movie, because you can try to get your kids to behave better if they know that they're not going to be getting as many presents, that sort of thing.

If you don't listen to us, you're not going to get. And so my five-year-old, going on six this spring, it worked pretty good last year. We talked about how we were going to text Santa if she didn't listen and didn't get ready in the morning and that sort of thing. And it worked pretty good. She really wants to be in the nice list. Yesterday, we told her she had to get ready for Christmas party. And she said, well, we don't have to get Santa on the horn and tell them that you're not listening. And she said, well, Santa Claus isn't real anyways. And I wasn't ready for that as only five years old. My wife and I both kind of looked at each other and didn't know what to say because it sounded like she kind of believed it, kind of didn't like she was testing us. I think she's still kind of leaves. But it's kind of relief. Like the parent lying stuff, she lost her first tooth a couple months ago. And so we did the tooth fairy thing. But then she's asking us questions and we have to keep our stories straight. Like we're fugitives on the run who are not trying to like get caught by the cops because she's like, well, after the tooth fairy takes your teeth, what does she do with them? And I'm like, whew, let me look it up on my phone. So I had to

Google, what does the tooth fairy do with her teeth? The internet tells us that the tooth fairy, and we paid $2 by the way, which I don't know how that works on the inflation scale. Wait, I was just about to say. Is that too high? That's awfully high. You think that's low? You can't give anything less than two. I suppose you could give one, but it's quite stingy.

She doesn't even know what money is at this point. It doesn't matter. Wait, are you paying her in fiat or? Bitcoin. I put the code underneath her pillow. But we look up on the internet and it says, well, the tooth fairy takes all the teeth and then she builds a castle out of them. And I'm kind of thinking, that's gross, first of all.

And second of all, I just can't keep all these lies together. So I just want them to figure it out sooner than later. Is that bad of me as a pair? My wife was heartbroken. Me, I don't, I just, I can't keep up with all the lies. What do you think? I understand where both of you are coming from. I see both sides.

So Brent Beecher wrote his annual letter. And he does something called the Scout Network. So Brent Beecher runs a very non-traditional private equity company. they don't take management fees, they don't lever the company up, they don't use any debt, they're not looking to flip it in five years. They're basically looking to be like a mini Berkshire, for lack of a better word. They're looking to find a home for these families forever and ever, a forever home. Right, buying businesses.

Right, they're buying businesses. So this thing that he created called the Scout Network is if you refer a deal to Brent and his team, if they close the deal, they will send a check for $100,000. and a $25,000 adventure of a lifetime vacation. And we'll look to this in the show notes for what they're looking for specifically, but good-sized companies that have at least $2 million in net earnings on an annual basis. So if you know anybody that runs a great family business with a long track record and all these sort of things that Brent is looking for, there you go.

You think of what I'm thinking? What are you thinking? What kind of EBITDA do we get on Animal Spirits podcast these days? can we sell ourselves, sell the podcast, and then get the bonus as well? I don't know that we could double dip, but given that your daughter is getting $2 a tooth, it might be a few years. What are you going to give? Five bucks a tooth?

I haven't thought of it. Okay. It's mostly just that I don't really carry cash, so I don't know. All right, listener questions. Are you more likely to live and spend your entire retirement fund and die or leave it to an air? So... Wait, what? So this is basically saying, this is just the crux of the question, but the idea was using the typical standard withdrawals and stuff, 4% rule or whatever it is.

Is this like a personal question or the royal you? Is he asking? The royal you, like, are you more likely to outlive your money if you start drawing it down using like 4% or 5% withdrawal rates? Or are you more likely to leave more money? And we've done a little bit of work on this, but Michael Kitsy actually did a piece on this where he looked at the terminal value of a 60% 40 portfolio after 30 years using the 4% initial withdrawal rate. And actually, in the majority of the cases, you end up with way more money than you give away. And a lot of times you end up actually with more money in principle than you started with by the end of it. Because in a lot of the

Do I really have to do it? Do I really have to do it? Do it. Now show Japan. Okay. Yes. There we go. But because rates of return over time have been higher than 4%. That would make sense that most of the time you'd actually end up with a larger sum so that's a good place to be like that's a good surprise to have that you have more money than you wanted well we're talking about such a small percentage of the population yes most people can't i mean a lot of people don't even have any savings at all all right don't play that card now though this is a real question for someone who has money you can play that card anytime you want how much money okay but whatever the point is you could get good luck and bad luck with return sequences and that sort of

of stuff, but I think unless you retire into the Great Depression, you're probably going to be fine, right? In most people- No, no, I'll take the other side. And most people update their plan accordingly depending on what happens in the market. So they're not just taking out the same set amount each year. They're adjusting based on what their lifestyle is and what's happening in the markets. Are you saying most people that have $3 million will be fine? Quit bringing up these straw man aren't arguments here. It's not straw man. We have to be specific because I'll agree with that. If you have $3 million, Yeah, you'll be fine. Okay. So do you think more people are going to just die with their money than they are to leave it to someone else?

I forget the question. Okay. The point you're making is more people will probably be living off of things like Social Security are working longer than spending down their retirement savings. Yes. Okay. All right. Just get out of here with those straw man art arguments. I make those two, but get out of here with it. All right. Wait, this is a dose of your own medicine, sir. You don't like how it tastes? I don't know. I'd love to hear your thoughts on how you think people have different. ages should think about the risk of owning a business and how their investment would look in respect to their overall portfolio. So people in the late 20s, a $20,000 investment in a business might seem like a small risk, but compounded over 40 years, that would be $300,000, whatever. Basically is- $300,000, if you put that into Amazon. Yeah, that's true at the IPO. So it's basically saying

expected returns from a business are harder to calculate and the chances of success are much more slim. So it's saying, how do you think about that type of risk depending on how old you are? I would say a privately owned business, at least in the early stages, is what, 10 times riskier than public equities? Yes, when you consider the amount of small businesses that completely go out of business and go for broke, that would make sense. So I would say size your position accordingly. If you're in your 20s, you could afford to go bust.

That's when you want to take the risks. So if you're in a good job and you're 45 years old and you've got a family to feed, like you're probably not going to quit your job and go to a... Those are always the worst stories, though. You see the story of the person who mortgages their... house and went into credit card debt so they could start their business, and then it worked out. And oh my gosh, what an amazing story. You never hear about the 100 times that didn't work. But yes, I think when you're in your 20s, that's the time that you want to take some risk

and let things ride a little bit because so what? You're in your 20s. You have plenty of time to make it up a little bit. All right. Any other recommendations this week? I also saw the Seth Myers stand up. Got to be honest. What do you think? Very good. Very good. I had no idea he he wasn't Jewish. I just assumed. His name is Seth Myers. He was a very good storyteller, right? He was very talented indeed. What else? So I finished murder on the Orient Express. Fun little book. And did you know that she sold a billion books? Her books have been bought more than anything in the world outside of Shakespeare and the Bible. Holy smokes. A billion copies sold? Yes. And unfortunately, it did not translate, at least not for me, to the movie, which I did not care for.

The movie had an amazing cast Johnny Depp, Penelopee Cruz, Michelle Pfeiffer, Judy Dench, William DeFoe, and others and the scenery was beautiful. For me, that was about it. I found the story to be convoluted. I didn't really get it. I didn't care for it.

Okay, book was better than the movie. I also, I fell asleep, but last night I started watching when Harry met Sally. Have you ever been to the deli before? Is that Katz's Deli? Yeah. So Rob and I were laughing at the scene.

She's like, that would never happen in real life, obviously what Meg Ryan was faking an orgasm in the middle of a restaurant. But imagine the movie theater when the lady next her said, I'll have what she's having. Like, everybody was definitely cracking up. So anyhow, I think it's terrific. Billy Crystal's amazingly talented. Meg Ryan was absolutely gorgeous in that movie. Whatever happened to her, Meg Ryan in the 80s and 90s had to be the best actress on the planet. Between her and Julia Roberts, maybe? Yeah, not only was she beautiful, but she was excellent. She was really, really good. Have you ever seen that movie? Yeah, a long time ago, but I remember liking it.

Yeah, it was very good. Again, I'm only halfway through, but very good. Okay, so I don't know what this says about my movie tastes of late, but I watched the movie Six Underground, which is the Michael Bay film on, I don't know if you can call it a film, action flick on Netflix. So this is with Ryan Reynolds, and it's like Michael Bay on steroids because it's just ridiculously over the top, so much stuff gets blown up, sparks are flying everywhere, and you've got some Ryan Reynolds, one-liner, sarcastic jokes here and there.

the plot is just like ridiculous and for whatever reason I like thought it was awesome. I don't know why. So Netflix has released Maybe just hit you at the right time? I think I just need it's yes, it's like turn your brain off

and if you can get over the fact. There's nothing wrong with garbage, a garbage movie. Go ahead. I have a thought after you have a thought. Go ahead. So Netflix in the last three weeks has released the Irishman, marriage story and six underground.

And unequivocally the Irish men and marriage story are better films. They're better cinema. It's better acted. Movie critics are going to like it more. I enjoyed six underground better than marriage story in the Irishman. I don't know what that says about me as a movie goer, but... We're not here to judge. I enjoyed that one movie more. I was kind of surprised afterwards because I went into really low expectations. I think the thing that sets it apart from something like Fast and the Furious, which I thought were just kind of cheesy, is that you have Ryan Reynolds, who doesn't take himself too seriously. And when he gives the sarcastic one-miners,

it kind of makes you realize like, okay, he's in on the joke, too, that this is ridiculous, but he... You're on the record. You're a Ryan Reynolds stand. Yes, I think Ryan Reynolds is the funniest guy on social media. Did I use that word right? Yeah, but you can't say that if you're older than 30. Sorry. Okay, so speaking of liking garbage movies, Dan in our office sent this to me. Quentin Tarantino's top three movies, or I'm sorry, top three films of 2019 in terms of what did he like the best? number one was the Irishman

Number three was Doctor Sleep The sequel to The Shining which neither of us saw And number two Was a punchline of this podcast Crawl That's amazing I can't even

Listen Crawl was okay Wasn't a terrible movie Certainly I mean top three What? I don't even know if it was top 300 But there you go

Just trying to stand out a little So Rodin Tomatoes Has a book coming out called Rodden Movies We Love. Cult Classics, Underrated Gems, and Film So Bad, They're Good. This looks like a good coffee table book. I'm in. When does it come out?

Don't know. Okay. Count me in. All right. I think maybe in the next couple weeks, we'll have a couple shortened holiday ones, and we'll do some of our favorite books and movies for the recommendations at the end. Something like that. All right.

Crawl might be on Michaels. We'll see. Send us your favorites. Animal Spiritspot at gemal.com, and we will talk to you next week. Thank you.