Animal Spirits Podcast - Some Things We Learned (EP.25)

Episode Date: April 18, 2018

Why the next recession won't be like the last one, what could possibly cause market returns to be higher in the future, why states & cities are short on cash, the 200-day moving average and much more.   Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, the podcast that takes a completely different look at markets and investing, hosted by Michael Batnick and Ben Carlson, two guys who study the markets as a passion and invest for all the right reasons. Michael Battenick and Ben Carlson work for Ritt Holt's wealth management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritthold's wealth management may maintain positions in the securities

discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. The S&P 500 closed 2017 at 2673. And today on April 16th, it's 2675. So there's been a lot of back and forth, but no progress has been made. I think a lot of people forget the fact that stocks are up so big in the first month or so of the year. So we've had all this moving around, but from the end of last year, nothing's really happened. It's like the scene in Austin Powers where he's just moving back and forth in that car and hitting the walls each time. I love that one. So when I saw the news on Friday night that we were bombing Syria, my first thought was not the markets. I'm not that sociopathic. Obviously a lot of, you know, it's terrible people are

dying and tragic and all that stuff. But when Sunday afternoon rolled around. I don't know. I guess I was, I really wasn't sure where the futures were going to open, but I just assumed that we were going to be down like 1%. And I, you know, not meaning that we were going to open down 1%, but I just thought that that was like the initial reaction was going to be a sell-off. Why not? You know, things have been choppy. We had a sort of mildly ugly reversal day on Friday. Stock's already 7% off the high. I just thought it was an excuse to sell off. Why not? In 2017, the market didn't care about anything. Everything was sort of good news and this year it seems to be the opposite. What did you think when you saw the future's open?

And I'm sure you probably didn't see the futures open. But when you saw that, the market was green this morning, what did you think? You knew whale. I am honestly, at this point, nothing surprises me. But it seems like if you study the history of how markets have done during these times, it usually is counterintuitive. There are times when markets get crushed when this stuff happens and there are times where markets do just fine. It seems like to me the market is, if it would have sold off it would have been looking for an excuse to sell off from something like this and so i think this again shows kind of how resilient this bull market really is but i this is a pretty fluffy answer yeah i don't that's all i have is fluffy answers for this stuff because i

i don't check sunday night futures to see what i'm smart very smart i honestly just i tried to i stopped trying to put reasons behind this stuff because it just it doesn't make any sense most of the time that's my standard that's my standard answer now i have my tail between my legs Okay, so you were shorting S&P 500 futures last night? Is that what happened? Yes, but I covered immediately. Way to go. The first loss is the best loss.

So last week there was two articles in the Wall Street Journal. I'm not picking on them because I'm a fan of their work, but two articles talking about the housing market. And one of them was big banks find a backdoor to finance subprime loans, not something that would get you especially excited. And then the other one was rising home pricers. push borrowers deeper into debt. Tight supply, higher mortgage rates, makes home ownership out of reach from many pressure lenders to ease credit standards.

Again, not something that makes you especially bullish. When you see headlines like this, the immediate reaction is what? Double-dip recession. Oh, wait. Can we still have a double-dip recession nine years later? The statute of limitations. It's over. It's gone.

I think it is easy to try to fight the last war and look for whatever happened last time to happen this time around. And you had a piece on this last week talking. about will the next recession look like the last one? And history says probably not. But what happens when we see this from the last time is we start paying attention to those indicators and those buzzwords that sort of took us down last time. Yeah. So like is our auto is the new subprime? Yeah. And what's the next big short? And where, and it's just, it's never quite that easy. And because the markets are constantly changing and picking up on this stuff. And so I don't think it's ever that easy.

and the fact that when you look at the data from a lot of this stuff, it's pegged to 2008-2009 bottom levels. They're not taking into account the fact of how much has recovered now. Right. So people are looking for the next recession to be catastrophic and to originate with the big banks messing something up like they did last time. Maybe, you know, certainly that's possible, but I would think that that's probably much lower possibility than most people anticipate. I did some work on this for a few articles that I've written in the past, and I looked at every single recession going back to the Great Depression. And so there's been roughly 12 to 15 of them. And you look at the duration of them and the length and the contraction. And there's

just, there's no rhyme or reason to them. They are getting shallower, I think, over time since the 20s and 30s, which makes sense for a more maturing economy. When you say that, you're talking about GDP. Yes. So that stocks. Yeah, right. So the contraction and, yeah. So, actually, the stock market selloffs have been pretty fairly similar across recessions, I suppose, but the contraction in GDP. So, for example, the first three recessions following the Great Depression, or including it were double-digit contractions in GDP. So it was like 27% in the Great Depression, 18% in that 1937, one that Ray Dalio brings up

every three months, and then 13% in the close of World War II. For comparison's sake, the last great financial crisis was like a 5% GDP contract. traction. So it's kind of insane that that was the worst one since the Great Depression, but we've had such big fall, bigger falls before. Where did this data come from? Is this like the NBER? Oh, I made it up. No, yes, it was the NBER. They have a whole list. It's kind of interesting. They listed out by like duration, the length to the next recession. I think the most interesting thing about the recent time period is the fact that the length between recessions is extending. The reason I asked was because look at, so they say,

that there's a recession from January 1980 to July 1980, and then from July 1981 to November 1982, I wonder what they used as like a reset. Maybe it's just two consecutive quarters of falling GDP. I think that's the definition. Yeah. So there must have been a snap back in between. What ends the recession? Positive growth, I would imagine. Gartman calling about them. Yeah. Yes. So since the last recession, the results, the returns from stocks have been tremendous, leading to elevate. valuations and just what most people, myself included, would categorize as something that cannot continue forever. We cannot expect the stock market to grow at, you know, 8 to 10% for the

next 10 years, given that it's done 16% for the last, and I think it's 16, something like that for the last nine, and again, off a very low level. But anyway, the point is that Corey Hofstein and his, actually, this is not Corey, I think he was one of his partners, Justin or Nathan, I can't remember, did a really terrific post. And one of the charts that they used was medium term, and I guess this is five to seven years after inflation, expect of return forecasts. And they pulled GMO, Morningstar, Research Affiliates, Vanguard, Bogle, JPMorgan, AQR. And what they found was a cross-the-board low return expectations. And, you know, you and I probably fall more into this camp than expect high returns. What do you make of this? I think it's all. I think it's

Also interesting, I don't think I've seen anyone predict average returns. Obviously, it makes sense to predict below average returns following above average returns, but I don't think anyone's even saying we're going to get 7, 8, 9% nominal returns. Everyone is really on the low end. So your point that we were discussing was, is it a contrary stance and I'll think that returns are going to be higher from here? Obviously, it might not be realistic and it certainly wouldn't be the call we'd make, but you don't see anyone saying this at all. Yeah, I think just to say one thing before we get to what could lead stocks higher. I think probably the most frustrating scenario would be three years of chop, a range-bound market. And I think we did that

maybe from like November 14 to March 16. I think we went like 16 to 18 months, just sideways. And that felt like forever. I think that would be like the ideal path of maximum frustration. Just we grow into the returns that we've had over the past few years, not by multiples compressing, or I guess multiple is compressing a little bit, but not by a deep air market, but just starts and fits, maybe a 15, 20% correction, but just going nowhere for 36 months. I think that would really piss a lot of people off. Yeah, because we've been conditioned to expect peaks and valleys in the markets. And I think, too, that that sort of sideways market would be the point of maximum frustration

for a lot of people. So in terms of what could send markets higher, we were talking about it this morning. there was a tweet from now this news. And it showed, this road charges your car while you drive on it. And this is some really neat looking technology. And maybe the answer of what, you know, what gross earnings at 10% or forget 10%, 5% to 6% for the next 5 to 7 years. Maybe it's just technology that we haven't seen, that we don't know exists yet. And if you want to find a group that is optimistic about the future, then look in Silicon Valley and tech people because they are constantly saying that the future is going to be better than the past, and technology is going to help solve a lot of our issues in this world.

And so I think that's probably the malady to think about. And one of the books I read, this was a few years ago now, was called Abundance by Peter Diamandis, and he goes through and he thinks that he actually does think that technology is going to be able to help solve a lot of the problems in the world. And in most cases, it's for the developing countries and not the developed countries like what we're in. And so I think that is maybe a case where you could say technology makes things more efficient and more productive for people that maybe the future could be better than some

people think. Yeah, I wonder if efficiency necessarily means higher earnings. But maybe there's like just new technologies, new AI, new whatever, things that don't exist that really send this thing higher. there was a really well-done study by the Wall Street Journal over the weekend. They analyzed 117,000 equity finance rounds into venture capital between 1992 and 2017. And there is a lot of really good data points in here. The crux of the article was that a lot of the funding for these deals are coming from Asia now.

And matter of fact, last year, Asia sent 40% of the record 15%. $54 billion into global venture financing versus 44% for the United States. And this gap has closed significantly because just 10 years ago, Asia's share was less than 5%. The other interesting thing here, I think, is that, you know, the venture capital industry is much smaller than people understand. I think, based on the amount of media attention it gets, it's really kind of a drop in the bucket in terms of global assets. So the fact that so much more money is pouring into this space, I think some people will worry, but it's still. still relatively small in comparison to even stuff like private equity or public markets,

obviously. So there's the soft bank is probably the biggest one that's making the numbers in Asia much bigger. So they have like the $100 million technology fund that they started. And so a lot of people worried that that a lot of the multiples are going to continue to go higher in venture world. But I think that it's going to open up the opportunity in this space. And that could be the impetus for future growth and productivity because so many things are going to get funded that maybe it wouldn't have in the past. So small relative to public markets, obviously, but some of these deals are getting like enormous.

So Chinese Led Venture funding is about 15 times the size that it wasn't 2013. And Jack Ma has this company called Ant, which it owns the mobile payment network, AliPay, and they're preparing to raise $9 billion in private funding. That's nuts, putting it at a $150 billion valuation. The chart to heaven is pretty cool, too. I mean, it pretty much shows throughout the 90s, the U.S. just dominated, you know, venture capital. It was, you know, in the 90% range. I think it was like 97% of all venture in 1992.

And now it's, what, 44%? It's pretty insane. And so I think what that shows is not just that maybe the technology is getting better, but the fact that the talent pool is growing. So there's talent all over the world now that can hopefully, you know, open things up a little bit. It also shows that the private market is much more mature than it used to be, raising such giant money. Like, this is maybe replacing the IPO.

Yeah, and part of this is the fact that there's so much more institutional capital and there's demand for these funds. So in a lot of ways, these funds are really hitting the demand from the Dowments and foundations and pensions. Right. So speaking of pensions. Nice. Thank you.

There was an article in the New York Times this weekend, a $76,000 monthly pension, why states and cities are short on cash. This one was, man, this stuff just seems to never stop, but this one really surprised me. So there was a head of a college in Oregon who's earning like $1,000, what was it, $76,000 a month for his pension. He was a football coach. He's getting $559,000 a year from his pension. Oh, sorry, this was another one.

This Joseph Robertson, who was the head of Oregon Health and Science University, is receiving $76,000 per month. It says they have more than 2,000 people who get $100,000 a year in their pension in Oregon. So one of the things that they did is really a head scratcher. So the article talks about how pensions are calculated, and it says, quote, the first way was similar to what most states do, basing pensions on each worker's final salary and years of service. Okay, that's straightforward. But Oregon's lawmakers included a golden touch, redefining salary to include remuneration from any source. And this is how the football coach ended up with a $76,000 monthly pension because

it included like outside money. Like, Nike deals, yeah. Things like that. Like, I don't know. So anyway, it's, you know, whenever we post stuff like this, we get a lot of response because this was, this is like very, very personal stuff that is, angers a lot of people for, you know, for obvious reasons. Which is part of the reason we're seeing these teacher protests all over the country, too. So you have these bigwigs who are bringing in a ton of money in their pensions. And then you're having cut back everywhere else. So they talk about how the other side of these big pensions is the fact that schools are having to cut back.

So they showed a Beaverton school district was rich as right out of Portland. So they're saying a nice area had to get rid of 75 teachers last year because this mandatory pension contribution rose by 14 million. And that was after shedding 340 teachers in 2012. So there is another side to this where it's not just people's retirement that could, it's the schools that are really getting hit. So they talked about in the article about raising. taxes and cutting pensions, which is completely unpalatable. And what could really bring this

to a head, because everybody thinks like, well, how far, how long can we kick this can down the road? What can really bring this to a head is maybe three years of flat returns and maybe a bare market and maybe a bare market in recession would really bring this forward. It is pretty amazing that we've had nine years in a row of equity gains and a lot of these pensions are still in trouble. And I don't know how that says a lot about their long term planning, obviously, but I think part of it could be their asset allocation policies haven't been great too. But you're right. If we see the other side of this, we have a prolonged, not just a bare market, but a prolonged bear market where they really have to sort resetting their expectations,

there's going to be definitely some pain in this space. I think, I mean, we've spoken about this a lot on the show, and we're probably going to continue to because it's such a big issue. This certainly ties into the retirement crisis that this country is facing, but it's going to be one of the dominant issues, in my opinion, over the next few decades. It's not going away, yeah. And so, switching gears to a country who maybe doesn't have as many pension problems, the Germans actually, there was an article in the Financial Times, and it was called Why Germans Save So Much. And so this is pretty interesting, I thought. So they said German households save about 10% of their disposable income, twice as much as the average European Union or American person.

In the UK, the savings rate was actually negative in 2016. What's more, the German savings rate is remarkable stable over time, unaffected by economic crises and interest rate changes. So this is pretty amazing. And what they've determined in the article for why this is the case, a lot of it is sort of cultural. Like scars, scars from World War II and the Weimar before it? I think, yeah, Weimar, I think was part of it. And they just, they really, that's just the way that they do things, they plan ahead.

And I think a lot of it kind of translates into, like, German businesses, too, where they're really efficiently run and they plan ahead. And I think a lot of it is really just culture, which is kind of interesting. I don't think they have as much of a consumer culture as we have. So there was a study that I came across recently. Speaking of planning ahead, it's just, it's so hard to picture ourself in the future because it almost feels like it's a different person. And one of the studies that I think the University of Michigan did or somebody did

was they put goggles on these studies faces and showed them images of themselves like in their 70s and followed these people's saving habits and it had a huge impact. Like they saved 83% more than people that saw strangers like 30 years. in the future. So obviously that's not a practical nudge. We're not going to put goggles on everybody's head to show them what they would look like in 40 years to save more. Well, especially for young people, how easy do you think it will be to get a 25-year-old to think about themselves in 40, 50, 60 years? It's impossible to get someone to plan ahead that far. So I think we need some sort of nudge like that to get people to think about

their future selves. If somebody offered you $1,000 today or $1,500 three years from now, And call it $100,000 versus $150,000, whatever the number is, but that sort of variation, I think most people would take $1,000 today versus $1,500 in three years. But that's a 14.5% compounded return. If you ask somebody, how much would you invest if you could get 14.5%? They would probably say a lot, but when given the choice between investing $1,000 or getting $1,500 to three years, they probably would take the $1,000.

Hey, Buffett, did you do that compound annual return calculation in your head right now? Thank you, though. Okay. Down a paper. Supposedly Buffett can do that kind of stuff in his head. You should have I could do that with a calculator sometimes. But I think it's also true. And when you think about the culture aspect of it, I think a lot of people's financial habits are really impacted by their surroundings and their family and their family's choices. So how how easy is it, how hard is it going to be for a parent who has credit card debt and doesn't save very much money to pass along good financial habits to their children. It's, you know,

it's, that's almost impossible probably. So I think a lot of it is, is sort of what's handed down to you since there really aren't many classes for this stuff. Yeah. So you would, so you wanted a piece in Bloomberg this week and I got a fair amount of pushback. I think probably because of the would you say, would you say there was blowback or was it pushback? Like, how aggressive was it? No, not that, well, it's not that aggressive because I think if you read the piece, it comes off better than the headline, but the headline says don't use the 200-day moving average as a cell signal. And part of this is because the media places want to get people to listen to read the stuff. But my whole piece was basically looking at the 200-day moving average, which maybe you can

explain what is the 200-day moving average and why do people look at it? So the 200-day moving average is the, if you add up the previous 200-day closes and you divide it by 200, what you do is you get a much smoother picture than the daily gyrations of the markets. So what I use a 200-day moving average for is just a quick snapshot of what the market is doing. Is the market trending higher? Is it trending lower or is it without a trend? Meaning, is the 200-day increasing, decreasing, or is it flat? And just taking a quick peek at that tells you a lot more than looking at the day-to-day noise of the market. Good explanation. And the 200-day moving average is pretty close to like the past 10 months of the market because they're only

2502 trading days in the year. And so a lot of traders and investors alike will look at the 200 day as a key technical level to understand whether markets are sort of like you said, an up trend or a downtrend. And so last week, we, the S&P actually went under the 200 day movie. Two weeks ago, I think. Yeah. So you wrote about it. It was like the first time in like almost two years that had happened. So people were worried, does this mean that the stocks are now going to completely fall out of bed? And the point of my post was not to say yes or no, you should use a signal, but the point of my post was to say that nothing works every single time. Well, taking that a step further, the Fed tends to be less manipulative when stocks are below the

200 day. Yeah, the recovery team hops in when stocks are falling, obviously. And so I showed some data. And the data is pretty clear on this. So the average daily return above the 200 day moving average historically, which historically it's been above like two thirds of the time and below one third of the time. So the average daily return above is like 0.1%. The average daily return below is negative 0.1%. And the volatility below the 200 day is roughly 25%. The volatility above is 14% versus like an 18 or 19% historically for the entire market. So what the 200 day moving average shows you in terms of up trends and downtrends is, are we in a more volatile, lower than average return market or a less volatile, higher than average return market? And so the way that we look at

it, and we've, again, we've done a lot of work on this, is what type of environment are we in? And can it allow some situational awareness to sort of tell us, you know, what's going on so we can prepare for a different range of outcomes? Here, here. So we got a listener question this week about a 529 plans and we're going to bring Bill Sweden for this one because that's more of his specialty than it is ours. What's you're thinking around how much you are targeting to have there when your child, children reach college age? What's your rule of thumb when it comes to the optimal amount of money to having a 529 plan by the time your kid turns 18? Let's assume you can afford and are willing to fund it as much as possible and there are no other 529 plans with your kid as

beneficiary. My gut says roughly half of your expected college costs. All right, this is a lot. I'm just curious about your thoughts for the initial plan. Bill, take it, take it away. So three just huge benefits to participating in 529 plans. The first is obvious that it gets funds invested in the market, which I think is pretty good. Markets have positive expected returns over time, and most have these age-based index allocations that are more aggressive when the child's young and a little bit more conservative when they're older. But the second thing I want to mention that just to take advantage of our state tax benefits. So 34 states plus the D.C. District of offer a state tax deduction for 529 contributions, this can be significant.

So, like, Ben, what would you do for, let's see, a 6.8% guaranteed rate of return in the first year? How would I like that? Yeah. Yeah, that'd be okay. Okay. So if you think about things on after tax basis, a plan contributor, let's say in the state of New York, can contribute up to $10,000, and then that comes off their income tax returns.

So my tax bracket is about 6.85%. And so if I contribute $1,000 or $100 or whatever it is, I get that state tax deduction upfront in year one, which I think is pretty cool versus waiting around for the market to kind of appreciate over the years. So that's two. And just a couple other just quick state tax benefits out there. Colorado, West Virginia, South Carolina, New Mexico, and Colorado, or excuse me, offer unlimited tax deductions. So you can effectively just make that contribution in year one and deduct 100% of it. A case that I was working on with a client just this year, they had some assets, say, for college, but hadn't invested in a 529 plan up to this point.

But obviously, if you can get an instant state tax deduction and then just pay the tuition out of your 529 plan, that makes a lot of sense to do. I also want to shout out Louisiana. Do you guys know how many folks you have listeners in Louisiana? Any idea? Six. Six. So the six Animal Spirits listeners in Louisiana, the Louisiana does matching contributions, up to 12% of your contribution. Holy cow.

Which is nuts. Yeah, they, yeah, let's move to Louisiana if you have kids or twins and another child. And that state will be installed within two years. Well, I think, to their credit, I mean, they're encouraging people to participate in saving for college. I think that's great. So that on top of a $4,800 tax deduction, so if we're talking about, gee, you know, we're hoping that the markets return 5% or 6% a year. The fact that the state of Louisiana is willing to give you a tax break plus match 12% of your contributions is a lot. Now, obviously, there's some income limitations there.

That's not for everybody. But even somebody making $100,000 you can get a 2% match. in Louisiana. We all have young children here. How do you guys think about the fact that we have no idea how much college is going to cost at that point? How do you factor that into Bill, you obviously can give this from the perspective of a dad or a financial planner, but how do you even take that into account when planning for something that's 16 or 18 years away? Yeah, and that gets to the listener's question, which is they seem to be, you know, thinking targeting 50%. My view is, I think if you look back, college costs on average have increased

about 7% a year for the last 10 or 20 years. I don't have the data in front of me, but it's nuts. And it's really, there's no slow in that demand. So my thought is, particularly while a child's young, and if you have assets around, there are really few better places you can go for tax advantage savings than a 529 plan. And the questioner alludes in this a little bit later in their email, but you can't always adapt and adjust these plans later on. So I think it makes sense to at least take advantage of whatever state tax break.

there are out there. Not all states have take state tax deductions, but that's literally free money. And then just adapt and adjust as you move forward. So I think having too much money in a 529 plan is probably not a very likely scenario. It certainly could happen. But even if that does happen, if you have more than one child, you can change a beneficiary. You can roll over funds to another beneficiary. That's an easy as a piece of paper with your 529 account. Or you can pick a nephew or niece or have a transitional beneficiary and just plan on saving that asset for your grandchild. Meanwhile, it's compounding in an account on a tax-deferred or potentially tax-free basis. There's really few assets that are like that out in the world. Terrific. Thank you,

Bill. Thanks, Bill. My favorite tweet of the week came from you, Ben Carlson. You wrote how to be I'm honored. How to be a billionaire, parentheses per the internet. Sleep 10 hours a day, read six books a week, Meditate for two hours a day, post-motivational quotes, wake up before 5 a.m. every day, work 14 hours a day, work out two hours a day before work, but also have a good work-life balance. Voila, that's it. By the way, I kind of weep for America and the fact that the number of people who told me that's actually 28 hours, like I was serious. But the whole point of this tweet wasn't, it kind of blew up.

It went a little viral, which was surprising. But I think people are a little sick of like the life hack stuff and the fact that like people say if you just do these two things, you'll be a millionaire, or if you just read this one book, all of your ills will be solved. And so that was kind of my line of thinking here. There's no way you're going to be able to follow the morning routine of a billionaire and become a billionaire just like them. There's just so much that goes into it beyond what you see in your latest life hack blog poke that it's just... All right. So let's poke on this for a minute. So speaking of things that people are tired of and look super thirsty. Let's talk about Patrick O'Shaughnessy's

two things I learned. Okay. Which you are now a member of. So here's my thoughts. Patrick started this maybe three weeks ago, four weeks ago. And a friend of his who I like on Twitter as well, Jeremiah started doing it as well. And I got to tell you, I really enjoy reading it. I really do. Okay. On the other hand, I was hesitant to do it because it looks super thirsty. And I was thinking about like why exactly does it appear this way? And I think it's so ridiculous, the subtlety that makes it look this way.

But I think it's just saying two things I learned. It seems like you're trying too hard. But it's weird because are we not on Twitter to learn? Like isn't that the whole point? It's just saying those words makes it look. like you're seeking something. I feel like you're having an argument with yourself right now. I'm just going to step back in life.

I totally. Hold on. Don't stop me. Don't stop me. So you know what I think that this is analogous to? So I don't really go on Facebook that often. But for some reason, seeing a picture of somebody with their family on Facebook or whatever, you're like, oh, get lost. Like, it's so annoying. But seeing that, but seeing that exact same picture on Instagram somehow doesn't bother me at all. Okay. I can see that. So pick your places of where to share it.

So I think that if you were to just tweet something instead of tweeting two things I learned, I think the crowd would receive it much differently. It just seems like you're trying too hard. So to put a ball in this, am I going to stop? Maybe. I'm just embarrassed enough to stop, but I'm enjoying it. But I'm enjoying it enough to keep going. Okay.

I'm going to hold you to this. Maybe you should do some beta testing where one day you just share something and then the next day you say, today I learned. Maybe you can shorten it to TIL. No, no. TIL sucks. I know, I'm joking. But we are on Twitter to learn, are we not?

But if you say that you're learning, it just sort of crumbles. I get it. I really do get it. Look at this jerk. He's reading books. Okay. So, anyway, so speaking of things that I learned, so I was writing, I started to tell you about a post that I was writing last week, like the what-ifs.

And you had mentioned that Bill Simmons did something similar to that in his book. So I am going to write this post. I did read Bill Simmons book, or at least half of it. I did read that section, and I'm not copying him. But anyway, so I'm reading his book, The Book of Basketball, and I am thoroughly enjoying it. I think it's hilarious, it's informative, it's insightful. I'm a big basketball fan, so I really, really love it. So some of the things that I learned from the book, so Bill Russell won 11 championships

and 13 years, that I knew. But what I didn't know, what I learned from that book is that there were only nine teams in the league when he was doing that. That is pretty crazy. So my first thought was, oh, well, that explains it. Like, of course he was winning because there was only eight other teams. But then the second thought was that, well, if there was only eight other teams, there was probably a lot less dilution. In other words, like if you're doing a fantasy, if you're doing a fantasy football league and there's six teams, every team is stacked.

If you're doing 14 teams, it gets a little bit thinner, right? So this was proven because Bill Simmons talked about in the 1970s. 71, 72 season, the league expanded too fast, and the talent got diluted, and the team sucked. The Lakers had a 33-game win streak, and that season witnessed four of the 13 longest winning streaks ever. He had a top-10 list of streaks that will never be broken. Oh, sorry, that was separate. My bad, bad bullet point.

But anyway, another thing that was interesting in the book, he had a top-10 list of streaks that will never be broken, and the 72-win bowls was on that list. Which the Warriors just beat two years ago. And then the last thing that I learned will not. the last thing that I learned, but the last thing that I'll share, and I promise I won't do this on Twitter, things that I learned from this basketball buck anymore. Baltimore used to play in the Western Conference. Baltimore. Was it the bullets at the time? Oh, the bullets. Yeah. Okay. That's interesting because I'm all the Washington. Okay. I did not know that. And then the only, so I usually

don't do this, but I somehow ended up reading five books right now at a time. That's usually how I work too. I'm always, unless I'm reading something really good, I'm constantly dabbling in different books. Yeah, I'm usually not, but I'm usually one book at a time, but I'm kind of enjoying this. So anyway, I will share the one book that I finished this week was speaking of Patrick, another book that he talks about all the time, the fish that ate the whale. It's the story of this guy Sam Zemore, I believe his last name is. And he took over a company called United Fruit, which I think now is Chiquita Banana, but he's a Jewish-Russian immigrant, came to the states with nothing and had a huge impact, not just on the fruit,

business but like on the entire world like literally what so this was one of those rare books that started like good and kept getting better i think it usually works the the opposite so the fish that ate the whale it gets two things i learned today thumbs up okay before i get into my recommendations since we are as they all know an anti-survey podcast i just wanted to read this survey that this this research paper that was going on on twitter and so this shows how how maybe bad it can be to just follow surveys at their, you know, at what people say. So this was an in an NPR last week and it said in a 2013 study, 19% of teens who claimed to be adopted actually weren't according to follow-up interviews with their parents. And then when you excluded these

kids who gave extreme responses on other items, the study no longer found significant difference between adopted children and those who weren't on behaviors like drug use, drinking, and skipping school. So the whole paper had to be retracted. And then in another study, fully 99% of of 253 students who claim to use an artificial limb, we're just kidding. So it's, which is so, teenagers are just the whole, the headline is teenagers are the worst, which is kind of funny. But you read all these stats these days about how teenagers have never been more depressed and they never like go out anymore and do stuff.

And I just think that it's so hard to, to follow these, especially with teenagers. Like, and again, this is again why we are an anti-survey podcast. But we will use them when they support our beliefs. Yes. Well, confirmation bias, obviously. So I'm first for recommendations, I have to give you kudos. on the show Dark on Netflix. This was the most addicting, mind-bending show I've seen in a number of years.

It kind of reminded me in some ways of Lost, but did you ever watch Lost back in the day? Okay. But they actually, like, go back and solve a lot of the mysteries of this show. Like, in Lost, they left a lot of things open-ended. So, loss is a perfect example of something that starts great and just fizzles out. Totally agree. And this show, like, I mean, they, like, you were left hanging a lot of times. So this is the perfect binge-worthy show

because they really tie up a lot of loose ends and really answer some questions for you. So this was, now, did you watch it with subtitles or the voices dubbed over? All right, so I watched it like you did where it's sort of confusing because it's voice dubbed over German. But I was told that it's available.

Yes, because it's a German show. I was told that it's available with subtitles, which I would have greatly preferred. I just didn't see that as an option. Someone told me that too. The problem with the subtitles is you can't look at your phone as much because you have to read.

That's legit. That's a very good point. But yes, this show is amazing. It looks like there's going to be a season two that won't be out for a while. But I really, really liked it and highly recommend. That's probably one of the better shows I've seen in a while. Your mind is just like racing after you watch it. And you just want to get to the next episode when you start watching.

My other recommendation this week, I just finished the book The Disappeared by C.J. Box. This is probably, though, this is for sure my favorite fiction author there is in series. So he wrote this first, the first book. I thought, hold on, hold on. I thought Jack Reacher was your favorite fiction author. I know. I honestly, now that I've gone back and forth and like the last few Reacher books haven't been this, haven't been this good. This guy continues to, he puts one out of a year since 2001 every year. So that's, what, 17 or 18 books. And it's about a game warden in Wyoming named Joe Pickett. And he always finds himself in problems and he's solving mysteries. And so for, since

2001 he developed the characters and like the guy's family is growing up and his friends that he and it's just it's kind it's like mystery but the way that he writes the narratives and it's also kind of you're learning stuff about like the outdoors and stuff that I never would have known how many how many things do you learn yeah I'm going to do it two things I learned from Joe picket next week and let's see so the only other okay my lukewarm recommendation for the week come my daughter turned four this month and we took her to a trampoline park now on paper a trampoline park sounds amazing when you get there so it's i mean it's basically like a football field full of trampolines sounds awesome right then you add in the fact that

there's millions of little kids there and it kind of has a faint smell of sweat and poop or something i don't know it was it's it's not great so lukewarm on that one i don't know if i would recommend taking a group of like 10 kids to that. But how long did you last? We were there probably an hour, but 30 seconds in, she took a knee to the face, her own knee. And I thought we were done. But she had fun. I guess that's all that matters. But it wasn't quite as great as I would have thought. If you would have had the place to yourself, it might have been great. But yeah, lukewarm recommendation on the trampoline park. All right. You got anything else in the hopper? That's all I got.

All right. Thank you for listening. You could email us at Animal Spiritspod.com. See you next week.