Animal Spirits Podcast - Stockpiling Cash (EP.104)

Episode Date: September 25, 2019

On this week's show we discuss Airbnb's need to IPO, WeWork's latest PR nightmare, rich people raising cash, why now is one of the hardest investing environments ever, do interest rates impact private markets, Disney Plus, why no one will ever buy Twitter, YouTube influencers, Jim Grant 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 EquityZen. EquityZen is giving Animal Spirits listeners half off their first investment minimum by going to EquityZen.com backslash Animal. That's usually a $20,000 minimum investment for accredited investors. We are giving it to you for a $10,000 minimum. Again, that's EquityZen.com backslash Animal to invest in the secondary market with EquityZen. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what their

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 Rit Holt's Wealth Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rit Holt's wealth management may maintain positions in the securities discussed in this podcast. So there's a lot of stuff going on.

A lot of stuff going on. Yeah, it's crazy. So much stuff. WeWork has sort of sucked all the air out of financial media in the last few months. And I think it's kind of deserved because it's pretty crazy story. But taking aside the WeWork thing, I think if there was a single company I had to invest in in the private markets, knowing nothing about their valuation and just sort of the business model, it would probably be Airbnb. Thoughts. Any of the unicorns? Yeah, any of those unicorn, well-known tech private companies that could be going public soon. They seem to have the least amount of hair on it, at least from a public

relationship standpoint. So Ramp Capital tweeted this, something like, what would you want to invest in? Actually, which were the choices that he gave? Let's see. SpaceX, WeWork, Peloton, Airbnb. So I'm going to select Airbnb. No, you would definitely choose Peloton because in Peloton, you think everyone is going to have one in 10 years. So these are how the results shook out. Fifty-four percent said Airbnb, 33 percent said SpaceX. 10 percent said Peloton, a three percent of psychopath said, We work. It just seems to me like Airbnb has the most rock solid business model. That would be hardest to sort of disrupt.

Obviously, the valuation, it's kind of valuation dependent. But the New York Times had a story saying it's called Inside Airbnb, employees eager for big payouts pushed the company to go public. And so it said last summer even, several employees wrote a letter to the founders saying, listen, we're ready to cash out. We want to go public. And they are pushing for it. And apparently, so they have like 6,000 people that work for them. And it says, waiting for the startup to go public has become a growing source of stress, many said, preventing someone from making career changes, starting a family, or moving on with their lives.

So they're kind of in limbo. And this is one of the things that I don't think you hear enough about is the employees at these startups. You hear a lot about the founders. And I guess, let's see, says they were valued at $31 billion. And a tranche of the employees have some of their equity expiring in November 2020 or mid-2020. and those shares will become worthless if the company's not publicly traded by then. So they kind of have to go public to give these people some liquidity. And we talked about this on our talking book earlier this week with Phil Hazlett from

Equities in something of a growing secondary market in the private shares. Obviously, these employees have zero leverage in this case. What can they actually do besides write this sort of letter to the editor? Well, I suspect that a lot of them, they have no power. Yeah, what can they do? Yeah. So I guess that just means that Airbnb will likely be coming public. Again, it's one of them that I would be interested in. But don't you think this kind of has the makings of the kind of company that will. Are you a price insensitive buyer a la index funds? Yes. As soon as they're added to the SP 500, I will be an owner. But we work as kind of sour people on private markets. I feel like Airbnb could change that perception a little bit. Maybe have a big first aid jump in the IPO. And then maybe you wouldn't be able to get it for a good price anyway. Just a guess. So Adam Newman has told several people that, according to the Wall Street Journal, that his personal goal has become the world's first trillionaire.

I'm guessing you're going to take the under on that one. This Wall Street Journal, like, there's been a lot of bad publicity for the company. This might be the worst one yet, don't you think? They just kind of added it all up. This felt like a shrunken down version of Super Pumped, the Uber book that we just read. Yes, but I think he might even be more delusional than Travis Kalinick, don't you think? Oh, yeah. So a few weeks after Mr. Newman fired 7% of the staff in 2016,

He had an all-hands meeting, and then after they told people they were going to be fired, employees came out carrying plastic shot glasses filled with tequila. And soon after that, Daryl McDaniels of hip-hop group Run DMC entered the room, embraced Mr. Newman, and played a set for the staff. Can you imagine? That's odd. It's bizarre. That's so, yes.

I also didn't realize he's the first cousin of Gweth Paltrow? Well, through marriage. Oh, okay. It says first cousin here. But she told the podcast interview. It felt like time stopped. I just knew he was the man that hopefully was going to help save the world. Actually, it says Ms. Newman as the first cousin of Guantanth,

uh, okay. Gotcha. So the wife is. You're right through marriage. They're not even blood related? Jeez. The other one, his wife, Ms. Newman, has ordered multiple employees fired after meeting him for just minutes telling the staff she didn't like their energy. Is there any scenario where this guy holds on to his job at this point? Unless they IPOed at $30 million now, or $30 billion, don't you think he's toast? Like, he's got to be gone. It seems like the bubble has really popped in these sort of founders that were put on a pedestal. Galloway's been talking a lot about this. It's a good thing. Oh, yeah. But how did they, obviously, maybe SoftBank is like the outlier here, but how have they led these

delusions, how have they let them last for so long? Do the venture capital firms have zero control over these people? Two words. Federal Reserve. Ah, the Fed manipulated them higher. That's true. Low interest rates lower. I don't know. Yeah. Yes. Well, you tried to say that the reason venture capital is so big the other day is because interest rates are lower, which I wanted to call you out about because it's a little ridiculous. Why? Do you really feel that way that all this money is pouring into private markets because the interest rates are lower? I feel like there's zero correlation between the two. Today, Bill Gurley said, he was on Patrick's podcast. And he said, quote, this is the most capital saturated time in the history of Wall Street.

You think interest rates have nothing to do with this? I'm going to take that silence as an omission. You don't think there was more capital sloshing around in the real estate market when interest rates were much higher? I feel like risk preference and interest rates are not correlated until rates get really high. I feel like, yeah, low rates help and companies can borrow money, but I feel like this is more institutions that are looking to earn returns than anything. I guess maybe, okay, in a roundabout way, the fact that...

Boom! No, listen, in a roundabout way, the fact that... that fixed income rates are lower. Pensions and endowments are shoving money into private markets, but I think that would happen regardless of interest rates. Did you just become a Fed truther? I think I just became a Michael Batnik truther there. Do you really think institutional investors are looking at interest rates and comparing them in fixed income and comparing them to private markets? Didn't we just do this? Yes. I'm just saying that the link is pretty, it's pretty thin. Okay. Survey. The world's wealthiest families are stockpiling cash as recession fears grow. So UBS did a survey. The average, I think this was family offices, the average one had

$917 million, so quite a bit of money. So here we go. About 42% of family offices around the world are raising cash reserves. In the year ahead, 46% of families said they plan to put more money in direct private equity investments with 42% devoting more to private equity funds and 34% funneling more into real estate. You know what this means. Lots of cash on the sideline. I think this is bullish. I don't get this, that these people are bearish and they're afraid of a recession and they're going to put it into private companies. I just don't understand why people still think that private companies are immune from the business cycle.

Aren't they more sensitive? Yes, and the fact that they also usually come with way more leverage. So the swings are going to be much, much harsher in those companies. Returns in public markets are going to suck. Let's put it into private companies. Yes. I just don't understand. I think the, I mean, obviously, I'm guessing most of these people are pulling these thoughts

out of their butt like they do in most surveys, but I think people just don't know what to do. And am I coming around to your uncertainty idea, too? It's not uncertainty. No, listen, all kidding aside for a second, it is a challenging environment to invest. Does it not? We have relatively high valuations. We've had an amazing period for U.S. stocks, interest rates are low. This is not an ideal time to be putting, I don't want to say putting money to work because

I'm not like bearish or anything, but I'm just saying I understand where these people are coming from. Yes. And a lot of them want to look intelligent. And I feel like saying you're investing in the private markets makes you feel more intelligent. But don't you also think like when you're answering to somebody, you say to them, listen, we're going to put 30 your money in treasury bonds that are giving us 2.3%. Why am I paying you? And this gets back to the thing from last week about the IRA. They can say, look, we're earning 15% IRAs on these deals. You're doing amazing, even if that translates into similar returns as you get in the stock market. I think that has something to do to it too. This is like the new cocktail party thing, is private investments.

But it is, I mean, would this not be the most well telegraphed recession ever? Yeah, we've talked about that, but that doesn't mean it won't happen, though, right? True, true. I tweeted this like a month ago. I called this recession the next time it happened that's going to be everyone. I mean, everyone's going to say that. I told you guys. But again, doesn't mean it can't happen. Who knows? So you had a piece. this week that you're sharing some graphs with me on that saying the magnitude of this recession in terms of length or this expansion in terms of length is pretty long but the you know what it was under 200 words i'm going to call it a post okay what is it so that could have gone on instagram basically

pretty much that you're saying that was an insta that could have been two pictures with the caption yeah sometimes a picture says more than 200 words though right okay so you were showing the magnitude the length of the expansion is pretty long but the magnitude in terms of economic growth is really nothing to write home about, but the fact that the stock market. I was saying that the market has outpaced the economy. Yes. Which, do you think we could have said that for the last 10 years every year almost? So what? What's your point? I'm just saying, to your point about telegraphing the next recession, what's to say it can't go on for another four or five years? I think it can. Did I tell you that I'm already a Disney Plus subscriber? How is that possible? Who do you know?

I know people. Someone tip me off to this on Twitter. I guess I should have probably told you, but. Yeah, thanks a lot, Chuck. I don't know. If you subscribe to this, Disney, I don't know what it's called, some Disney membership thing. It's free. Wait, is this Illuminati only? Must be. You got early access to Disney Plus, and if you paid for three years up front, you got 33% off of your bill. Send me the link. It's off the look. Wait, is it live? Yeah, I did it already. I did it like a month ago. I don't know why I didn't tell you. Wait, are you even on Twitter? How is this possible that you have had Disney Plus for a month and you haven't spoken about it? I've been so ahead of this thing. Do you even tweet?

I know. I don't know. Someone tweeted a to me and I did it and signed up. And so we have three years worth of Disney Plus already. And we got 33% off the sticker place. Not to brag. Not to brag. But I think I saw at least a few Bob Igers. Is it Iger or eager? Igar. Iger. Well, there was an article that I read in Vanity Fair. Yeah, he had a Vanity Fair one and he had this New York Times piece. And so I feel like he's getting out there and doing some publicity because Disney Plus is coming out, which makes sense. So obviously is a good PR firm. Actually, well, that, but he's plugging the book. Yeah, he's got a book coming to but don't you think they timed the book with Disney Plus?

Like, I feel like this is all orchestrated months or years in advance. There are no coincidences. Okay. The craziest part which a lot of people picked up on from the New York Times story was he talked about Disney potentially buying Twitter, which is just, like, what would the Twitter rides be at Disney? People in a circle, like, with a fence around them shouting at each other? What exactly would it be like, Twitterland, where everyone hates each other and just walks around mocking people? So, read this quote.

Okay, the troubles were greater than I wanted to take on, greater than I thought was responsible for us to take on. There were Disney brand issues, the whole impact of technology on society. The nastiness is extraordinary. I like looking at my Twitter news feed because I want to follow 15, 20 different subjects. Then you turn and look at your notifications and you're immediately saying, why am I doing this? Why do I endure this pain? Like a lot of these platforms, they have the ability to do a lot of good in our world. They also have an ability to do a lot of bad. I didn't want to take that on. What would ever be the reason for them to take it? I mean, I guess maybe a partnership with ESPN somehow and the sports. angle, but I don't see why it would ever make sense for them to buy Twitter.

Well, because they're also a communications company with ABC. Yeah, but alternatively, like reading this, do you think another firm would ever want to buy Twitter? Like maybe in the early days? No, it's toxic. In the early days, maybe Google or one of those places. I was debating whether I was going to say this or not, but this is like a perfect opportunity too. So remember the other day, I told you that I took COVID to gymnastics. I don't know why I thought of this, but I guess it's been on my mind that the owner of the of the gymnastics class. Like, we're doing the class, and I was just thinking, like, this guy's a good life.

He's doing these classes for the kids. He does this. He goes home. He lives his life. And there's no bullshit on Twitter that he has to deal with on a daily basis. So you don't think that gymnastics owner is on social media at all? He might be, but I'm sure he's not getting. You don't think gymnastics's Twitter?

I don't think gymnastics's Twitter is a nasty place. Okay. But anyway, the point is that obviously Twitter is extremely critical to what we do. It's a part of everything. I don't even know how to, like, describe it. that's the good. The bad is that, oh my God, the bad is pretty bad. It could wear you down, right? Like, I'm just, I'm exhausted. It's a lot. So what I did was, I muted notifications from people that I don't follow. And my knee jerk reaction to this was like, when I heard about this was even a thing was, but isn't that the point of Twitter to communicate with people? And what if there's people that are saying nice things that you don't even acknowledge? I'm like, that's pretty shitty. But then I was like, however, it's just I am exhausted. And I feel like this is like, I needed a break. fake bait. You need to like a vacation. I just need a break. Now that we're getting harassed

constantly, but like it's just a lot of nasty shit. And I just, you know what? I'm sensitive. I don't want to deal with it like 24-7. It is just worn me down. So, you're such a blue checkmark. I know. I really am. I'm such a snowflake. So, but it's funny because I can override this. So I can click in the tweet and then manually see the replies, which sort of defeats the purpose. But you're taking a Twitter vacation from replies. Pretty much. And I think one of the things is a lot of people don't understand our sarcasm. It just goes over. the head of some people. You have a finite amount of bandwidth for shit in your life that you can deal with. And I just feel like there's so many trolls and it's just, it has worn me down. So

I'll be back to dealing with the misery. So everyone on Twitter try to be a little nicer to Michael because he has feelings too. Did you see this article in the Washington Journal about this fraud? No, the Charlton of all charlatans. She was called the Charlton of all charlatans. I believe it's actually in the Sports Illustrated, right? Did I say Walsher Journal? Yeah. This would have been a good name for your book. So she was ripping off.

Who was in the story? Rashad McCants, remember him from North Carolina? Do you remember my original idea for my book was, I wanted to do the top ten charlatans of all time? Oh, yeah, yeah. I didn't really think would play very well because it's kind of, I didn't want to, yeah, anyway. So they estimated that pro athletes, they claimed $600 million in total fraud-related losses between 2004 and 2018.

but a lot of them go unreported. So they think that it's about a billion dollars in fraud over the last call it 15 years. So that's one of the stats I kept coming across over and over again was people trying to estimate that. And that was really surprising the fact that so many people are just so embarrassed when they get taken advantage of that they never report it. So everything I read said it is really hard to pinpoint exactly how much money people lose to this every year because some people just don't want. And especially the funny one is, is that it's a lot of times it's the really wealthy people because they want to show how smart they are. And if they have to admit to their friends and family members or lawyers or whoever that they got taken in a scandal like this,

it's really embarrassing. And it takes, it's like they want to keep up that facade that they're smart. So they just eat it, which is crazy. Did you see that Amazon is ripping off allbirds? What's that about it? Is that kind of strange? Okay. The initial reaction to this was Amazon has some shoes that look kind of like the allbirds. And people are saying, well, yeah, they look like them. But hasn't this always happened? Don't you remember, did it shut down or some of them shut down, pay less shoes? Those would make shoes that looked kind of like, I don't know. I think this has been happening for a while.

Didis make some similar ones. I think New Balance does. Allbirds has become insanely popular. Wasn't it just a matter of time? Do you think this is really that bad? Haven't there always been knockoffs of this kind of stuff? If this really takes off, what are they going to make? They're going to do $40,000 in sneaker revenue.

Maybe this means all birds have to, they have to make their own model three like Tesla, A little lower price point one. Just back off, Bezos. Oh, okay. They're into everything. Is that the problem? Get off their lawn. Okay.

Yeah. People were really upset about this one online. Whatever, I don't really care. I don't know why. It's just, like, felt iticky. Okay. I mean, out of all the shit that they did, this is probably like the least offensive thing, but.

Yes. Okay. You're not having it. You have all birds? I don't think you have any, do you? I don't. I wear these. I don't know what that is.

You just show me the bottom of your shoe. I just pulled the muscle. I'm not going to be able to do March for the Fall this weekend, which, by the way, okay, seriously, that hurt. Are you going to bring your Peloton with you on March for the Fallon? Tell everyone what this is and how long it is. So March for the Fallon is an event that I know about through West Gray. I don't think he's the organizer, but it's basically to honor fallen vets.

It's a 28-mile walk. I highly doubt I make it 28 miles. I mean, come on. I've ridden a Peloton a few times. Okay, what happens if you don't make it? Do they, like, bring out a golf cart and take you back? There's no way I'm going to make it. I think you could sort of put up your arm, like Randy Moss running down the sidelines, and somebody will come get you. Oh, any good e-book recommendations that I should download while I'm walking? I don't really listen to books on tape.

I was sort of kidding. It's supposed to be like a somewhat social event where you're walking with people. Okay. So, yeah, so bring your AirPods so you can do the thing where, sorry, I can't. I'm, I'm honestly, I am bringing my AirPods just in case. Speaking of... In case, I need to, like, pull eject from a conversation. Maybe it's a little different in New York because so many people have them, but how awkward is it when you're walking out of your AirPods and someone tries to say something to you? And you have to do the, wait, huh? I'm sorry, I got all the time yesterday. Isn't it awkward? So somebody emailed me, what is a better analogy for investing, sports or dieting? And I think that there's good power loss to both. Okay. I just did a big sports piece comparing sports to the stock market last week. So that was a good one. I think it's got to be dieting, though. For your whole financial ecosystem, I think health is like the perfect analogy for your finances.

I was going to go with sports, but that's only because I don't know anything about healthy food. Yeah, but you write a Peloton. I mean, investing in stocks is like riding a Peloton. Buying a house is like financing a Peloton for free. No? Sorry, I keep poking the Peloton one on this one. It's a lot. I'm doing the dice thing too many times with the Peloton.

Yeah, get some new material. All right. Okay. So there was an article. I believe this is the Wall Street Journal. talking about what's going on in football. Like, despite all of the evidence, teams are still not going for it on fourth down.

They're still kicking field goals on the three-yard line. And I think that this goes to the Keynes quote. Is it Keynes or Keynes? I feel like we've had this talk before. Cains. Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally. I don't really agree with the second half of that statement,

but I do agree with the first half, That was a good Cain sub-tweet there. I mean, right? If you succeed unconventionally, it's all good. True. It has to just be job security, right? Because there's no reason for these decisions to be made other than that. So are you saying that maybe the quantitative world hasn't impacted the NFL as much as the NBA?

All of the data is there. It's not like it doesn't exist. Okay, for instance, Stats LLC said that the Cardinals were the first, was it the Cardinals or might have been a college game. One team was the first. was the first team in more than three decades to kick three field goals from inside the five-yard line while losing. Yeah, that's pretty rough. So then Bob Sieve-Roe wrote about this, and he made a good point.

The parallels here are obvious. In football, it feels risky to go for it, right? It feels safe to kick the field goal. But we know that's not true. It's the opposite. And it's sort of the same in investing. You think that bonds are not risky because they don't fluctuate a lot. But if your goal is to keep up your standard of living and inflation a lot,

sort of things, then actually bonds are risky over the long term. I think a lot of it is due to like the outcome orientation of sports. So you can say something is better on average. Like this works six out of ten times. But if you do it in the wrong situation, that one time and it's wrong, then the headlines aren't going to care what the averages say. So I think that there's just an outcome. It's really hard for a coach to stand at the podium and say, listen, process over outcome.

But then the media is like, what do you mean? You just lost the game, idiot. Yes. And that's the way things are. went on, you see the replays over and over again, and yeah, people think about that stuff. It's about job security. I totally agree. Also, Ryan Rosillo had a good one on his podcast the other day. He was talking about the dolphins tanking. And he said, everyone is getting up in arms about the dolphins tanking. But if they had a GM who was from Harvard or Yale and used

like all this quantitative stuff like Sam Hinkie did with the Sixers, that people would be calling them a genius. But because they don't have like that Ivy League person there, people say they're idiots for trying to tank and they're giving a bunch of crap. So it's like if you have that smart person doing it. People can almost like, they're like, oh, okay, they're using quantitative studies. So them losing on purpose makes sense like the 76ers did, which I totally agree with. It's all about optics in a lot of ways. That's like a good Winnie the Pooh meme. On top, Dolphins tanking and on bottom Sixers tanking. Yes, exactly. Is what the hinky guy did really all that impressive? Like, how hard is it to lose on purpose? And people thought he was like the

Messiah because he is from Stanford or Harvard or whatever. And then this Dolphins person is a little less well known. They're doing the same thing. But now there is. idiots for one of the tank. I don't know. I kind of, it's obviously somewhere in the middle. So this is a theme that we keep talking about. It's interesting. The influencer bubble, I mean, the air seems to be coming out of it. Are you finding this to be true? I feel like you're taking anecdotes here, and I'm not sure it really is coming deflating. Try to make your case for me here. Now, hold on. What's that syndrome where you buy a car and then you see that car all over the road, or you buy a dog and you don't stop seeing that dog? Like, am I looking for this?

It's possible. I think honestly people are... Wait, is that called, is this a form of confirmation bias? I think people are just covering it more, but give me your evidence here. There was an article in, I believe this one was the New York Times, that YouTube is taking the blue check mark. They're basically making a lot of viewers unverified. And, I mean, obviously the influencers are freaking out. Somebody wrote, quote, I'm really sorry to the creators who are being unverified on YouTube today. This decision is really pointless and it's yet another change not a single person asked for. please know that you are still valid as a creator, and I hope that a stupid checkmark

doesn't discourage you, said James Charles, a prominent YouTuber with more than 60 million subscribers. I guess I never knew that being a checkmark on YouTube mattered, but apparently for some people it does. I think that's where it does matter. So it helps you get way more subscribers or pushes you up in the search listings or whatever, right? SEO stuff.

So now they're saying that the channel must not only belong to the real creator, artist, public figure, or company that claims to represent, it must also represent that. a well-known creator that is widely recognized outside of YouTube. So they are literally pricking the bubble and letting the air out. Changing the rules. Okay. By the way, the person who sent us a really, really long email on me saying literally too often, I just caught myself, you're right. I'm doing it wrong. They are not literally pricking the air out of the bubble. I guess it's figuratively. I'm sorry. That's the thing. Maybe all the comments you usually get on Twitter are now going to migrate to our email inbox. So

careful what you wish for i thought about that while we're talking about youtube we should mention too that at the compound youtube channel where we have some other videos for the firm we're going to be doing an animal speed's playlist there and we are now using some actual nice cameras to do our video clips and we're going to do three to five minutes of highlights every week so again go to the compound and find us there i guess we need a checkmark to get more followers i don't need a check mark i am who i am ben that's true and actually you want some more more evidence that the air is figuratively coming out of the bubble? Okay.

I feel like you're way, way early on this, but keep going ahead with your influencer bubble stuff. Okay. Calla Kintanilla tweeted some survey from, I think it was interns. Look at this graphic. When it comes to loyalty, brands come before products and influencers often don't influence. So they said our interns say their loyalty lies with. 41% said the brand, 26% said the product, and only 4% said influencer. I don't buy this. I don't buy this.

Boom. No way. I feel like this is a bad survey. This survey backs me up. I think it's legit. I feel like the Kardashians are the total opposite of this where people buy whatever they say. Okay. That's an outlier.

Okay. Can we talk about something else while we're talking on Instagram real quick or social media? What percentage of memes on Instagram would you say? And I'm still getting like, I'm still pretty new into the Instagram world. What percentage of memes on there are literally just, oh, I just said it again. Oh, you did it. You did it. But this is true, are literally screenshots of Twitter placed on Instagram.

Okay, so? I'm just saying, like, Twitter was there first. So what? Allbirds were there first. Look what Amazon did. Okay. So Instagram is the knockoff allbirds to Twitter's Albird. Is that you're saying?

Instagram is pay less shoot. All right. Moving on. Wait, we should have spoke about this earlier, but you read this gallery piece where I hadn't really thought about this, but this is a great way to put it. How did this happen? How did we get to the point where we were. were worshipping at the altar of these idol founders. And he said, we've witnessed a

halving of journalists since 2008, while the number of corporate communication execs has tripled. In sum, the ratio of bullshit to spin to watchdogs has increased sixfold. I thought that was so spot on. So you're saying the fall of traditional media has led to an increase in people being able to just spot whatever they want? That coupled with the number of corporate communication executives. Yes, I do think so. Something else I was thinking of. Are there any big tech founders these days that are actual likable people. I've read all the books on Musk and Zuckerberg and Bezos and Steve Jobs. Didn't you like the Spotify profile? That's a good one. All right. He's probably one of the few that is, okay, he actually sounds like a pretty decent person and not, he's not willing to, like,

rip her throat out just to pursue his business. You know who seems like a great guy, just somebody that you want to have a beer with? Mark Zuckerberg. Yeah, totally. Not a robot at all. So did Did you read this Jim Grant article at Institutional Investor? I did. They did a profile on him. He writes Grant's interest rate observer. He's been doing it since the early 80s. I have a take. I'm sure you have a take. Yeah. Well, after the crisis in 2008, everyone that I knew that were an institutional investor said, like, you have to subscribe to this. And so we did, and I read it. And it's really long. He's one of these throwback guys who writes a newsletter. He wears a bow tie, and he's a really eloquent writer. He writes

really well and he gets really in depth on its conversations. One of the points of this article is that a lot of times he's just wrong. He was pretty good he got ahead of the CDOs in 2008 but pretty much most of the stuff he's written since then that were big calls have been just

blatantly wrong. And one of them, it says he's a long term hyperinflationist and they actually said listen, he came up in the 70s and he admits that probably colored his views in a lot of ways. He's constantly talking about Fed manipulation and how it's going to lead to hyperinflation. And the question of the article, one of the big questions was, should subscribers of something

like this, should they care that this guy is wrong way more than he's right? No. You don't think so? No. And here's why I think that, I don't know if he gets a pass is the right word or the right way to put it. I think he definitely gets a pass. I mean, he's been doing it for so long. No, but for sure gets a pass.

I think that he deserves a pass because he's not managing people's money. Right. But this is the kind of thing that. He's writing for hedge fund managers. Yeah. And big investors read, I feel like they're up on the smart stuff that's going on in the markets and that they are reading someone that they should be reading and it's really intelligent. So what's the problem?

I mean, I don't know. I guess it depends with people are actually taking his words to heart and acting on them. Who cares? I don't know. All right. Yeah. I mean, it's a form of entertainment. It's a form of entertainment if he's a great writer and he does uncover certain things

and make you think about things in a little bit differently. these are big boy and girls that are investing people's assets that are reading him. I don't think that he should shoulder any blame for anything. Yeah, that's true. It's on the investor. I just know a lot of investors followed his dire warnings all the time and to their own detriment. But yeah, I guess you're right. It's more their fault than his. Now, if he was doing this and simultaneously managing money, then I could understand maybe some, I don't know, if outrage is the right word. Yeah, and there are a lot of people who do that. Yeah. So if you're writing and I think it's fair game. Okay. Actually, we skipped over this, but did you see this article? Maybe the

influencer bubble is deflating, but the meme fluencer bubble is inflating. Institutional investor wrote, Are you trying to walk this one back? No, no. If he drinks White Claw and wears a fleece vest, he might just be a fin meme influencer. And they said the raining, actually, we mentioned liquidity last episode, who they called the new rainy king of financial memes. I'm going to the ramp capitals had in that ring. I don't know who this person is. And I didn't really realize there was a financial Instagram. I've never even heard of this before. I actually just started following him on Instagram maybe a few months ago. He's got some good stuff. But the thing that I thought was interesting was the people that follow him. So it's mostly men under 35. Between 85 and 90% of

somebody's followers are between 18 and 35. Only 10% of the audience is over 35 and excuse about 80% male. And these are the people that I'm no longer listening to on Twitter. It's basically investment banking people, right? Pretty much. That stuff flies. So it's like making fun of people for wearing fleece vests with their logo on it. and EBITDA jokes and that sort of thing. I get it. Yeah. I get it.

All right. So the streaming war seems to have picked up. It's intensifying. Who's Peacock? Is that NBC? Yes. There are more streaming channels than there are channels. Yes.

It's going to be ridiculous. It's out of control. I'll still probably get most of them. And I saw some chatter about a Save by the Bell remake or continuation. Oh, really? I'm surprised they haven't tried that before. And there was another remake talk that did not go over well. The Princess Bride.

Yes. The internet canceled that very quickly. That thing was done. All right. So how do you pronounce farm boy's name in real life? Kerry Elwees? I don't know. I think it's Elwiz.

Didn't you say you've never seen this movie? Was that you or someone else? No, God, no. That's like one of my favorites. Okay, good. I'm just making sure. Actually, well, two things. Two random things.

I got a few random things. One, last week, FedEx had its fourth worst day ever. And I got a notification on my ring. Fourth worth day ever of what? Stock. Okay. Was the first worst day ever when Tom Hanks crashed his plane? Not bad.

Six of a time. And I saw a FedEx person delivering a package. And I just kind of thought like, it's sort of funny how most people on a day-to-day basis totally and rightfully don't give a shit about the stock market. Right. Like, you think that person delivering my package had any idea what was going on with that stock? Or should he care at all? I don't think I care at all.

The FedEx had his fourth worst day ever, but was there a reason for it? Uncertainty. Uncertainty was at an all-time high for FedEx that day. It was cited. Are they worried about Amazon? Is that the deal? Or why? Who knows?

Who cares? You said earlier about these founders of young companies. And maybe they have some. attitude problems and they're not necessarily great people, whatever. Put that aside. When you read about what's going on with some of these private companies or some of the technology that's going on, doesn't it make you bullish on the future? Not necessarily on the stock market, but just like progress and humanity and stuff like that. Yeah, I like the fact that there are people out there who are trying to make things better in their own way, whether they're delusional or not. Yeah, I can get behind

that. Whether they're delusional or not. Did you read the T. Boone Pickens thing? He had like a final message that he's shared on LinkedIn. Very good. All right. So I just want to read this poem. Not a big poem guy. Are you a poem person? No.

My favorite poet is Tupac, actually. Okay. Anyway, continue. This is a stanza from a poem called Indispensable Man. And I thought that this was quite deep. All right. Talking about death. Sometime when you feel that you're going would leave an unfillable hole, just follow

these simple instructions and see how they humble your soul. take a bucket and fill it with water, put your hand in it up to the wrist, pull it out and the hole that's remaining is a measure of how you'll be missed. You can splash all you wish when you enter. You may start up the water galore, but stop and you'll find that in no time. It looks quite the same as before. That kind of gave me chills. That is like really, really powerful.

Yeah, pretty good. You are a cold son of a gun. You feel nothing, Lobowski? Yeah. We're just a speck in the universe. Is that the idea? Yes. Okay.

No one's going to care when we're gone. Yes. You know what? When we are long gone someday, this podcast will live on forever. That's our bucket. All right. Getting back to less serious things. I have a fairly serious morning routine question for you.

Okay. Hit me with it. When your alarm goes off, do you get right out of bed before you answer? I'm going to say you do. Yeah. I probably lay there for a couple minutes. More or less. I'm not a snooze guy.

Don't hit the snooze. Big snooze guy, usually twice. I could totally see that. Yeah, you seem like a snooze guy. Okay. That's it. You don't ask for more of my morning routine, Tim Ferriss? That's all I cared about.

Okay. All right. Listener questions. This is a pretty vague one. How much you do have in savings? $47. Did you put this in here? I didn't.

Maybe I did. I think the question was in terms of how many months of living expenses. And I think that... Okay, emergency savings. I think that it really depends. depends on your job. Okay. How so? Explain. If you have a very stable job and it's not necessarily impacted by the economy, I guess that's sort of ridiculous. You should always have an emergency fund. But like, if you've been at a job for, I don't know, eight years and you're moving

up the ranks and things are going well and you have like extreme stability or you're an owner or something like that, then you can probably afford to have less in cash. I don't know. I'm making this up three months. I think a lot of it depends on what your other fallbacks are. Like, are you willing to fall back on, say, like a zero percent credit card for 15 months to get you through or a home equity line of credit or it really depends on what your, if you have other means of savings to tap into like a taxable investment account. So I think a lot of it depends on what your other sources are. Like, do you really need six months in cash? Some people do. Some people don't. But don't you think it's also just personal preference. Like some people

like, definitely. Yeah, I just don't want $50,000 sitting in cash because I feel like there's just opportunity costs. Okay, fine. Yeah, I'm that way where I don't think it needs to be 12 months, like some personal finance people say, I think that's a little too excessive. And I think some people, to get to that point, would have to forego like any other types of savings to get there. And it would be tough for them to ever even begin saving for retirement or something, or the 529. Well, it also depends on your portfolio. Let's say that you have literally, and I'm using it properly, 100% of your portfolio is in stocks, then maybe you can have a year or two in cash. That's a good way to bar ballot. Yeah.

If you're the type of person that actually invests when the market pulls back, and you want to have more cash. There's not one right answer. It's a whole wide range for purchase. Recommendations. Okay. This might be controversial. So I tweeted last week that I was going to see Rambo opening night. Of course you were. Because it got slammed by the critics, and I thought that was a pretty bullish sign. Wait, have you ever seen any of the other Rambo's? Yeah, I saw the last one in the theaters, and it was very violent, and that's right up my alley. So I'm sure that I would like this one. I mean, those ones aren't, I don't think the Rambo movies are classics to me like the rocky ones are for him. No, I don't put them in the same category at all. So the critics, the critics gave it a 28% and the audience gave it an 84.

Shout to Eric Baltunas who nailed this. I can't believe the spread was that wide. I did not think it was happening this way. But so what I did, I went the other way. I was a little bit worried because at Astra, I don't even know if I saw the coming attractions. I think I might have. but Brad Pitt, space, big screen, my type of film. So I went on Ivana Tomatoes and the critics gave it an 83 and then I look up to the right and the audience gave it a 43. And I was like, oh boy, that is not what you want to see. You hate to see that. And what did you think of it?

Well, I'm getting to it. So this properly calibrated my expectations. I knew what to expect. If the critics love it and the audience hated it, it was probably slow, probably a fairly disappointing ending, very theatrical, that sort of movie. Lots of character building. Yeah. So if I saw the coming attraction and then went directly into the theater, I would have thought

it was the biggest piece of shit ever. But because I saw this, I sort of recalibrated my expectations and I actually liked it. And I feel like I probably ordinarily would have hated it. But I enjoyed it. So did you like this better than his other movie, the Quentin Tarantino one? Yeah. Oh, yeah. Maybe I saw this at a good time in my life because there was a lot of father-son plot stuff. I thought that the effects, all the out-of-space stuff was great. However, I completely understand why the audience panned it. It was slow. You're a big rotten tomatoes guy. I am. I lean on it quite heavily. I always am more of an IMDB person. I like the idea of comparing the critics because I would just always throw out whatever the critics think.

well yeah no and I'm with that and there's never been a movie that I wanted to see and I was like oh this person didn't like it so I'm out it's more of a way to frame expectations just so I sort of know what I'm getting myself into fair anything else oh one more thing I forgot to mention earlier and I forgot to put this in the dock two more things I might be coming around to your view that the Irishman might be a debacle that was my corner way before anyone else I can't believe I'm saying this but Carl Kintanilla tweeted that the runtime on this movie was like 210 minutes. Ooh, okay. Are you out of your mind? Who has time for that? It's a long movie. I mean, that cannot be true because that's well over three hours. I'm sure it has to be cut down, but...

Let's guess the Rotten Tomatoes on that movie. Okay. I'm guessing high critic scores, and I think the audience scores are going to come in low. I think it's going to be tight. I say the critics give it a 67, the audience gives it a 62. Okay. I think it'll be a muddle through movie where you don't hate it, but you don't love it. Yeah, man.

People think it's going to be Goodfellas casino. It's not going to be that. I am still reserving my first class seat on the train, just in case. Ooh, I think you're back in coat. I think with this one, you're on coach. I'm in the luggage, Ben. You're in coach. So I don't know if I saw this correctly, but Ray Dalio has like an app.

Is he pulling a Jeremy Renner? Did you see that? Yeah, he transitioned. He's trying to become a, he just wants to be a motivational speaker for the rest of his life, I think. He's a meme influencer. Yes. Do you think he's on financial Instagram? All right, what do you got?

So I'm late to this, but you've probably read Titan by Ron Chernow, the John Rockefeller bio. He's the best. Took me a long time to get to it. I'm just not a big biography guy, but this one was great. I love the description of the oil markets in the beginning of like the industry because it doesn't seem like a lot of it has really changed today. He talked about the fluctuations. Obviously, the fluctuations are much worse back then.

But in 1861, the price of a barrel of oil veered between 10 cents and 10. $10 a barrel. In 1864, it was been $4 a barrel and $12 a barrel. And when it was just first getting off the ground, like there were so many boom and bus periods. It was crazy. And all this stuff about him being kind of this, I think about writing a piece about comparing him to the current tech CEO leaders because by all counts, he had like this really good guy and really ruthless businessman. His personal life, he was very, he went to church a lot. But in business, he was a monster. His children were basically never allowed to do anything, but they still, I don't it's a very good book. One of the better biographies I read in a while. I'm halfway through

talking to strangers from Gladwell. I want to save my ton of thoughts. Ben, Ben, that Excel said it all. Yeah, I mean, it's good. It's not one of his books where you can walk away with like that one, 10,000 hour rule or whatever. There are some interesting chapters and some of the chapters kind of, they almost contradict one another. I think you could probably get the best insights from this book from his podcast tour, which he's been on already. You could get the best insights from this book from listening to our podcast, which we're going to highlight. Yes. So we're going to do, hopefully, the end of this weekend, it'll be ready for next week a rekindled of some of his earlier books.

I don't know about that. I don't know about that. We're going to try. Also, we knocked out unbelievable on Netflix last week. Oh, Robin's watching that. Which is a true story, really good. It was like eight episodes. It was a little slow at times, but procedural drama about a serial rapist.

And the detectives were played by Tony Collette and Merritt Weaver, who, was in Nurse Jackie, if anyone watched that, it was very good. And the fact that it was a true story, it was almost painful to watch it sometimes, but it showed how these two women detectives took down this serial rapist and it talked about, like, it went from like the start of the case all the way through to catching him. And it was really, really good. And the fact that it was true just made some of the stuff, like, almost hard to watch. And they did it through the perspective of not only the detectives, but also the victims. And they didn't really spend time showing like what his motives were, which I thought was kind of an interesting angle. It was very

good. And finally, yeah, I was just about to say no detective books this week. No, I guess not. I don't know what I've been doing. I've been, Ryan Rusilla moved his podcast from US Pan over to the ringer, and he had Simmons on his last week. They get together once in a while. They did more to the NBA. I'm throwing this out there. I think those two together is the new Cornheiser and Wilbon from PTI. I think they're the Cornheiser and Will Bonn of podcasting. I think they have a very good rapport. They, yeah, I just love their takes together. And they kind of needle each other a little bit and push back and forth. some of their thoughts and in PTI I think that was like the original that set off a wave of like

all these other shows and arguing and kind of where ESPN is these days and that was like my original show I used to watch which I haven't seen in a while I got one more okay I forgot to mention that I read go like hell ever hear of it no well you probably have heard of the movie that's coming out Ford versus Ferrari oh yeah yep with Matt Damon and someone else so these are my favorite types of books that tell a story and also incorporate some historical nonfiction into it where you're reading it and it's a good story and then they talk about like what was going on in the climate at the time and you're like huh that's interesting so there's a lot of those I'm looking forward to the movie and the book it's a it's a full recommendation no all right

full send all right animal spirits pod at gmail.com again we want to thank equity zen for sponsoring this episode remember to go to equity zen.com backslash animal to invest in the secondary market. If you're an accredited investor, you can have a $20,000 minimum investment taken down to a $10,000 minimum. Again, equitiesend.com backslash animal.