Animal Spirits Podcast - The 10 Best Jobs in America (EP.121)

Episode Date: January 15, 2020

On this week's episode we discuss Vanguard vs Mark Zuckerberg, do people value work over family, chances of a recession in 2020, Apple AirPods as a business, why are there so many mattress stores, Sapphire Reserve is raising rates, the plant-based meat market 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, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt 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 Rithold's wealth management may maintain position, and the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. Michael, people are worried about index funds. Take number 686. Okay. I saw a couple pieces about this, but the one that I picked out was from the Financial Times. They are worried that Vanguard and Black Rock are getting too big. And the big worry these days is that index funds are not going to be stewards of capital

when it comes to governance. weren't there three this week? I didn't even see this one from the FTA. I saw the one from Bloomberg and I saw the one for the Wall Street Journal. I guess this is just the point in the bull market that we're at where people are worried that index funds aren't going to protect shareholders through their proxy votes. I get what they're saying here because they're saying that passive investing is getting too big and they're worried that they're not going to vote in the interests of the shareholders because they have to own these companies. So they're not going have any really pressure to do anything. I look at it the other way, and I think that as long-term

investors in these companies, they're going to do something. And on the other side of things, where have all the active managers and the mutual funds been over the years that have pushed for huge changes in companies? Have you ever heard of a story about that before where a group of actively managed mutual funds have made huge changes in the way that CEOs are compensated or something like that? It's never happened. Isn't that what activist investors do? Yeah, and activist investors is such a small piece. That's my point is that this has never been a big thing to begin with. So my hope is that a place like Vanguard can actually use their power for good and force some changes in some of these companies instead of the other way around. And they said that

Vanguard has 34 people working in their investment stewardship team, which is what they call it. And I just think this is one of those things that where people are making up to worry about and it's not really something that people should concern themselves over. I think this is just index funds are getting bigger. And even both. said in his book, his biggest worry is that Vanguard gets a little too big. But I just don't see this as being a huge issue because I don't think any other investment firms have done any good in this type of thing in the past. Were there any numbers that you pulled out of the article? Like Vanguard, I share, State Street owned X percent of companies? They just said Vanguard is basically

one of the biggest shareholders in virtually every major listed U.S. company. So because they're so big, here's my bigger concern as far as governance goes. And let me know. you think here. I did like a Vanguard versus Mark Zuckerberg or some of these tech people. Aren't we more concerned that? So Zuckerberg controls 81% of Class B shares for Facebook and he has 53% of voting rights in the company, in a company that has basically two or three billion people looking at it every day. Aren't we more concerned about something like that where you have one person controlling a huge company like this rather than some proxy votes from a company that owns shares? I would be more concerned about some of the share classes we're seeing in the tech firms where they're

allowing the founders to have control more than someone like Vanguard, who has proven time and again that they're looking out for the best interests of their shareholders over pretty much all other investment firms combined. And they've forced a lot of good in the industry. Could that turn to bad? Of course. But at this point, I think Vanguard deserves the benefit of the doubt. I think this is kind of a made-up worry that there's nothing else going on. But Al Gore is worried about index funds too. And this was in Matt Levine's latest, one of his Bloomberg newsletters last week. He said, I think the large passive managers have a real difficult decision to make. Do they want to continue to finance the destruction

of human civilization or not? Wow. Scorching. Yes. He was basically talking about their approaches to holding these companies feet to the fire in terms of climate change. But I never knew index funds were going to finance the destruction of human civilization. That's the news to me. I just learned that just now. I happen to believe that index funds and governance is one of the absolutely most boring topics in all finance. So as quickly as we can get off of this, let's do it. So last week we spoke about a bunk survey, how like 79% of people have a budget, whatever the number was. What we didn't discuss was the meat of the article was the top 10 weekly budget budget

busters. So let's just run through them. Online shopping was number one. I think I can agree with that because right now I'm wearing a Mike Tyson shirt. How much of that online shopping was done well under the influence of alcohol? I bought on Instagram. I don't drink at home. So therefore, I don't shop drunk. Instagram is definitely your number one off-the-cuff purchase, isn't it? Well, everyone has a budget until they see a Mike Tyson shirt, which punches them in the face. All right. Number two, grocery shopping. Grocery shopping? That seems like an odd budget buster when that's something that people mostly need. Shouldn't that be one of the items that is fairly regular that shouldn't bust a budget, leading me to believe that 79% of the respondents might be making this up?

I can't believe coffee's on this list. Did Susie Orman write this survey? Number three with subscription services. Okay, again, how could a recurring cost bust your budget? It should be in the budget. Yes. So you're getting back to the point that these people don't actually. have budgets. Is that the deal? Well, I wasn't even going there until I'm just talking this

at loud. All right. Technology products. Buying lunch every day. Household essentials. Coffee, food delivery, gym memberships, entertainment. So pretty much everything busts your budget. Life. Life is the biggest budget buster, according to these people from slickdeals.net. All right. Moving on. But sticking with this topic. Who tweeted this? I don't know. Somebody tweeted this. Torsten Slocke from Deutsche Bank shows a chart. Half of the population spends more than their income. That sounds about right to me. Really? Okay. Do you think that there's probably 50% of the population that more or less lives paycheck to paycheck and goes into credit card debt? Because again, the average credit card debt is in the $6,000 to $8,000 range based on my research.

All right. So I'm thinking right now, taking a second and I'm thinking, I would say if you ask me how many people have paycheck to paycheck, I would guess a big number. I would guess 60% of the population. But somehow... Yeah, that's pretty high. That's pretty high. That is saving absolutely nothing. This chart shocks me, so I don't know what to make of that. It basically looks like the top three deciles of people. So the top call it 30% by wealth are the only ones who are saving. Everyone else is just saving kind of a little. Unfortunately, I think this is probably accurate. So this shows monthly income after tax, less all monthly expenditures. All right. So let me ask a very dumb question. What happens to people whose monthly income doesn't support their average monthly expenditures? So they go into credit card debt, right? They go into debt. That seems to be like the first, the obvious thing. But what happens with their debt? Does it just keep building and building? I think, well, a lot of

credit card debt gets written off and they can't pay it. And honestly, I think if you get into a situation where you have too much debt, the first thing you do, instead of going to one of these loan aggregators, is call the credit card company and have them work with you because a lot of times their decision between getting nothing and getting a little bit of something and having them reduce the debt, they actually will do that for you. If you call these places, yes. I think Remit Sadie wrote about this and I will teach you to be rich that you can actually negotiate with the credit card companies for a lower interest rate. And it's the same thing. if you happen to accidentally miss a payment because they don't have it automatically done

or if you overdraw your bank fee, I've done this, I don't know, a half dozen times in my life where I've called them up and said, hey, I've been a customer of yours for six years. Can you just get rid of this fee for me? Something happened. There was something that happened where I missed it or it was an accident. And I don't know if I've ever been denied one of those requests before. As long as you're a decent customer for them, they're willing to work with you on this stuff. So, yes, unfortunately, I think people who save are in the minority.

And I think this graph is probably, so this is based on BLS consumer expenditure surveys, this is probably a pretty decent survey. Obviously, coffee was on that list of budget busters. Starbucks has a market cap of over $100 billion, which is pretty incredible considering they sell coffee. Obviously, a lot of what they do is more than that, goodwill and tangible stuff like that. So we were in Penn Station on the way home yesterday. We took Kobe into the city. We went to the museum of natural history, which was terrific. Perfect. We go into the Starbucks in Penn Station and we walk in and he goes, I want a cake pop.

So it just goes to show like the power of their brand. We've definitely gotten those for our kids before too. Obviously, he's never been in the Starbucks. No, but my point is, whenever we go into a Starbucks, we get him a cake pop. He sees the green label when we go into the store. He knows where we are. He sees the coffee and he knows that there's cake pops there. Mega branding. Yes. There was a survey that Pew Research. did, and they looked at all these different ways that people are satisfied or unsatisfied in terms of marriage and cohabitation. And they asked people, the percentage of people that say each of the

following is essential for a fulfilling life. And they list having a good job, being in a committed relationship, having a lot of money, being married, and having children. By far, the biggest, and they broke this up by men and women, the biggest one was having a job or career that they enjoy. For men, it was 57%. For women, it was 46%. That was far above even having a lot of money or having children or being married or in a committed relationship. And this kind of gets back to the stuff we talked about a few weeks ago about people working longer. Does that make sense to you that more people will find a fulfilling life beyond having a happy marriage and having children? It does. I get that. I think because people are independent and they could take care

themselves, but they want to find fulfillment at work, which is where they spend all of their time. So I could see having a job being ahead of a committed relationship. You know what's interesting? women list having children ahead of being married. Oh, that's true. And with men, it's the opposite. But don't you think this is probably why? Because the majority of the research on happiness and that sort of stuff shows that having meaningful relationships is far more important to you than what your career is.

No one looks back on their deathbed and goes, oh, I wish I would have worked 20 more hours a week. Don't you think why this is one of the reasons why people are overworked and tired and so busy and probably unhappy a lot of time because they put so much empathy. is on their career? You know what? That's a really good point you make. I wonder if you sat these people down who answered having a job is more important than a career. All right, here's the thing.

I don't think anybody would choose having a good job over a great relationship. In other words, I don't think anybody wants a bad relationship at home and a good job. But I think that they could do without a relationship and have a great job. I think a great job, people are answering that a great job can replace a relationship at home. And I get it. That's how I think they're answering it. The fact that you're spending 40 plus hours a week doing this thing, I understand why, obviously, having a soul-sucking job can be really rough because it's constantly beating over the head with

the fact that you don't like it. And so I can see the fact that it's just more of a something you're doing all the time. And that's why people see a need to have it to fulfill their life. So on Sunday, Sunday was a missile strike, I believe. It all kind of runs together now. Oh, no, no, I'm sorry. It was Tuesday. It was Tuesday night. When these things happen, What's your reaction? Are you just like, oh, whatever, this is just another event that's specifically forget about all the human stuff because that's obvious. I'm talking specifically market stuff. I'm guessing I know your answer, but what is it? When you read these headlines, you don't know how these things are going to play out and what the reaction is going to be. So my first reaction is kind of, well, this could be something substantial. I mean, you never know. And you see the overnight futures fall. How many of a percent? Who is trading these? by the way. People always say, oh, the pajama traders. Do we know who actually trades overnight futures? I mean, it can't be that big of a marker. That's got to be something that's easy

to push around. Well, I think that's why it moves so much because I think it's a fairly thin market. But on Tuesday night, I was very worried, I guess, obviously, for just the human part of it. But also, like, when the market's down a lot, I'm like, oh, great, here we go. You're ready to excuse yourself to make some hedging trades. In other words, I never, ever, ever think will be green by morning. Ever, ever, ever. That's never my reaction. So sentiment trader did this thing where he said, S&P 500 futures hit a 10-day low and a 52-week high in the same session today. The last time that happened was never. And you know what's kind of annoying the next morning, how you always see people joking and, oh, it was obvious.

And I don't know. It is kind of interesting. The more you were able to dig into a lot of these numbers, it seems like on a weekly basis there's something that hasn't happened in forever or hasn't ever happened before. It sort of happens when you data mine this stuff, I guess, and you look for it. I guess my point is, if I was a futures trader, LOL, I don't know that I would aggressively be shorting, but I certainly would not be one of those people buying dip, I don't think. What do you think is harder? Trading overnight futures and trading this stuff on a minute by minute or event by event basis or trying to predict like the NFL playoffs, because I think that gambling on sports is almost just as hard as trying to predict this stuff.

Like, if I would have been gambling this weekend, I would have, I mean, that's what I'm saying. it's a gamble. I don't know how you can try to take these events and extrapolate them and understand what the reactions are going to be, not only of our political leaders, but of investors themselves. I just think it's so difficult. So yeah, anyone trying to do the victory lap of I knew this was going to happen. No, you didn't. No one knows what's going to happen with this stuff. Okay. So Barron's roundtable, which Jeffrey Gunlock excused himself from. I guess he's been doing this for the last few years. So he started to like do his own thing. Not going to lie. I didn't recognize many of the names on this list.

80% of them probably. Same. So I think Gunlock is absolutely like an influencer now, and I don't use that in a joking way, meaning so Balchunas tweeted, wow, BKLN, which is a symbol for the bank loan ETF, saw its biggest inflow in over two years yesterday after Gunlock mentioned it in his webcast. Very few people can move the needle like that. Isn't that kind of wild? That's surprising that it still does that because someone like him who makes a lot of pronouncements.

You think eventually the market would stop moving. So here was the headline from Barron's, and, of course, a lot of people had to talk about this. I just want to mention this quickly. So Gunluck is a macro influencer. Not to be confused with me, I am a micro-influencer. Yes. There was some list given about FinTwit's biggest micro-influencers or something, which, isn't that an oxymorin? Isn't micro-influencer kind of like jumbo shrimp?

I don't get what that. And you were listed as someone who replies a lot in your tweets. didn't really get the analysis. I was called a social butterfly. Yes. Which is an adjective that has never in the history of my life been used to describe me. Right. Me neither. That was a good one. So their headline said there's almost no chance of a recession this year, experts say, here's why. And they went through and they talked about how they're all, and here's the line that they have to use. I feel like these 10 veteran investors and economists convene in New York in Barron's offices. And they agree that there's almost no chance of recession is here. And their view of stocks is decidedly, albeit cautiously optimistic. I can't even. So Mario Cabelli, he's a well-known investor, has done really well for himself over the years. And I wonder if he just is an autopilot at this point that he's been doing it so long.

So he said, the markets will be up in the first half. You think he believes this stuff? Well, I mean, I don't know about that, but I get the impression, I get the impression, and I could be wrong, that he's still really doing it. Here's the quote. The markets will be up in the first half of 2020 and turned down in the last 90 days of 2020 because there will be a lot more uncertainty for 2021. one um what well are you kidding me obviously that type of commentary doesn't fly these days because why should that commentary ever fly that's what it used to be i know and that's what people want to hear maybe or they think people want to hear i mean is that the deal they're giving people what

they think they want to hear that's just the way that he's always done it he's been in this business a long time and that's the world he grew up and guess what if i was if we grew up then we would be talking the exact same way i think i think i don't know i just i don't know cautiously optimistic that people won't be talking like this in the future. Well, so, you know what, I'll take the other side of that. There will always be people who give these answers. Because what else are they supposed to say? No, I know that I'm positive.

You're right. People have to use these sound bites. I just wish they wouldn't. That's all I'm saying. And I know that they have to give this stuff, but I don't know. I mean, this thing's probably not going to last much longer. Is it the Barron's roundtable? I mean, it used to be these huge big, I mean, Bill Gross was on it forever.

Peter Lynch. It's never going to die. Oh, really? Never. Okay. See, I'll take the other side of that one. The Barron's round. table will outlive Barron's itself.

Okay. See, I said that Gunlock created a new one, and it was a lot of Fed haters and gold bugs, and I said that they should call it the rectangular table because of the shape of a gold bar. Anyway, so you shared this with me right after I was about to share with you the stat, and someone posted on Twitter that AirPods makes more money than Spotify, Twitter, Snapchat, and Shopify combined. And this tweet immediately went viral because that's, oh, that's pretty crazy. Everyone says Apple can't innovate.

And then you sent me the follow-up saying, this Neil Seibart guy posted, this tweet is incorrect. And he went through line by line why it was incorrect. And I'm not sure how many viral people saw the viral tweet and then saw the correction, but probably not quite as many. But even though his information was wrong, I wanted to look up and see what the actual numbers said. So I went on Y charts and you can break down all 505 components of the S&P 500, which there's 505 because of, of, what is it? Because there's some mergers and... It's dual share classes.

Okay, dual share classes. So there's 505 companies in the SPP. No, no, no, no, no. Hold on. 505 stocks. Stocks. There's 500 companies. Right.

Okay. Because something like Google or Alphabet has two share classes. Exactly. So they estimated they sold about 50 million of these AirPods in 2019. So that's roughly $8 billion in sales if you take like $150 or whatever average sale price. So that's pretty good. So they may not be quite as big as that initial viral tweet made it. out to be, but I looked in over the trailing 12 months, that $8 billion in sales is more revenue

than 209 of the 505 companies in the S&P over the past 12 months. They're almost bigger than half as many of the companies in the S&P, 40%-ish. That's still pretty darn good when people say that Apple can't innovate. That's not as much of a viral tweet, but that's still pretty good. I would never have thought to fact-check that. That's just a tweet that you see that you just nod your head. You're like, oh, wow, that's- Exactly. And that happens a lot these days, too, where it's easy to just go, oh, wow, that sounds right. Someone must have done the work on this. Yeah. Okay. There's an article in MarketWatch talking about the best jobs in America where you can make over six figures and have less stress. I don't know if these were best stress adjusted jobs, but top 10, best jobs in America. One, software developer. Two, dentist. Three, physician assistant. Four, orthodontist, five nurse care practitioner.

So four of the top five are in the health care services. But dentist, number two, really? I think the thing is you're not being called into like an emergency if you're a dentist. Okay, so orthodontist was four. So some overlap there. But one of the reasons why I read in the article was like they have a schedule. So you're right. There's no emergencies.

They don't take their work home. You're not working 20 hours a day as a dentist. Probably not answering a ton of emails at night, although maybe you are them. But anyway, okay, moving on. Statistician number six, physician number seven, number eight, speech, language pathologist, number eight, oral and maxillow facial surgeon. I don't know what that is. And number 10, veterinarian. The problem with all these jobs is you actually have to go to school for like 12 years after college to get them. So I guess your stress is front-loaded by having

to go to a lot of extra school. Because basically all these are doctors or nurses or dentists or veterinarians, right? Where's micro-influencer? Mine must have been 11. Memologists. Mimologist. That's pretty good. All right. So Casper filed their S-1 last week, Casper Mattress that is. Have you ever bought an online mattress before? I have. It's kind of a fun experience when you open it. They do the dry seal package and they shrink it down and you cut it and it opens up.

Now, here's the question. Do you have a memory phone? That's not how mine went. I think I bought one online and it was just delivered to my house. Okay, if you have a memory foam one, they like shrink wrap it and it comes in really small and you open it up and it blows up. That is probably one of the best purchases that my wife and I have made. in our marriage, a memory foam mattress. Okay.

They are unbelievably comfortable. What I did was, I'm a great sleeper, so I think I can pretty much sleep on anything. I don't know if I have a preference for soft or hard mattresses. I guess I'm just easy, like, Sunday morning when it comes to mattresses. What I did when I bought mine was I think I went to, like, better business bureau or something and just Googled most comfortable mattresses. And that's what I did. A lot of people, one of the reasons why there's so many mattress stores,

So this is one of my long-running theory is conspiracy theories, and I think it's probably a very common conspiracy theory, is that all these mattress stores that you see are money laundering operations. They have to be, right? There's so many of them. It used to be Sleepies, and my wife and I had a run and Joe, like, every time we passed to Sleepies, we would say, oh, Sleepies. And then Sleepies was bought by mattress store, I think, or something like that. My office is right off of the main commercial drag in Grand Rapids on 28th Street. and that's where all the malls and stores and everything are congregated. And there must be 12 mattress stores with it on a five-mile run of this one street.

Why? What is the point? Well, there was an article that somebody shared, like the real reason there were so many mattresses. And here's a few takeaways. And I was not in my head. I'm not sure if I'm sold, but I get it. One, incredible margins. For example, a mattress that sells for $3,000 costs $300 to make. So huge margins.

Number two, and there might only be two, as far as I can remember. There's two that I remember. The second one was, when you walk into a mattress store, there's one employee. Yeah, that's true. But how often do people buy mattresses? Why do they need to have an inventory in the store? But my point is, they might only need to sell two a day to make the economics work, which is a lot better than selling mattresses online that lose money.

Okay. So is the deal that Casper is the next? Unicorn to Fall. Is that what everyone thinks? I honestly don't know much about the company. I didn't read the S-1 and nor will I. There are some more reasons. Number three, people want to touch them. That's why people are going to stores. Number four, stores are their own advertisement. Okay, so that's a pretty good one. These places don't need to advertise. You go on to Google and you put in a mattress store and you just go find one. Five, they steal each other's customers. That's a good reason in like 1996, not now. Okay. I'm just telling you, that's what's in this article. Number five, they

steal each other's customers. That's why they are located so close together. I'm not sure if that makes sense, but whatever. Whatever, the rest was fluff. I don't know. They should just combine mattress stores with Starbucks and save themselves in real estate. I still think that mattress stores are being pumped up by the Fed somehow. Good call. The money is making its way back. That's how interest rates. That's how we can afford interest rates to be so low. Yeah. We're at the point in the cycle where everyone is doubling up their mattresses. That's what's happening here. So there was a good article in CNBC about why Apple is moving, that it's not due to passive flows. And I tweeted this last week.

Some of the valuation stuff or the valuations for all of these companies have just been going up and up and up and up, which is what happens in the bull market. So I'm not making some sort of grant statement of like these stocks have to crash. But I think Apple's PE went from like 14. It had a market valuation for a long, long time. and all of a sudden it's like up to, I don't know, pushing 30 times earnings or something like that. We'll put this in the show notes. Yeah, I found the chart on Y charts. It went from basically 13 to 26 over the last year. Okay. But that's not just price to earnings. That's price of free cash flow, price to

sales, whatever you're looking at. They've all been going on the same way. All right, so here's the point, though. Actually, you know what? This didn't make sense to me. When assets move, so this is one of the people who was making the argument that passive flows are making the stock's more expensive. When assets move from active to passive, Apple goes from being an underweight among active managers to a market weight. Wrong. Active managers set the weight. So the reason why Apple has its weight is not because of index funds. It's because active managers themselves are, quote, overweight or whatever. They are the weight. So I don't understand how active managers are underweight and index funds are overweight. That doesn't make sense.

But somebody put some numbers on this. Equity, ETF, so. just over $97 billion in inflows last year while equity funds still had net aflows. I'm guessing when they say ETS and mean index funds, I'm guessing. So about $3 billion in passive money shifted into Apple last year, which is relatively small in the context of the company's $1.3 trillion valuation. Well, it's hard to admit as an analyst that sometimes the reason that stocks go up is because no one knows what the hell is going on. There's no reason fundamentally that Apple's PE ratio should have doubled last year. It's just because all of a sudden investors decided we're going to add a 26 multiple on this instead of a 13. And you can do all the discounted

cash flow analysis or inflows and outflows you want. And if investors decide to do this, then guess what? It's going to happen. There's nothing that like push this up. It's almost, it happens magically where no one knows why it happened. And if you want to, oh, magic. Isn't that a better explanation than index funds? Okay. You just threw the old magic. card. Basically, it is. What other reason can you subscribe to the fact that all of a sudden investors just decided, let's price Apple higher? And it happened. I'm not saying that this is the top, but Ben just said that Apple's valuation doubled due to magic. Okay. I'll take magic over a discounted cash flow analysis over 12-month period every day. It's almost, I don't know. I don't

else to tell you. That's it. Are you keeping your Chase Sapphire reserve? Because JP Morgan just raised the fees, $100 on this thing, which I don't blame them for this because I feel like this is what happens when you get a set of rabid fans. This is why... Well, I don't blame them. They're running a business. Yes. I mean, if you're paying $450 is another $100 going to bust your budget? Probably not. Well, considering 50% of the people don't have a budget to begin with and overspend, maybe it will. Do you think that the benefits outweigh the cost still for this card? I don't know. I have, I mean, you could probably do, well, you could do some simple math. This is probably not an opinion.

Yeah. So here's, so it's five-fifth. Let me go through the, okay, what do you got? No, sir, sir. If you have been with Chase using the Sapphire card for however many years now, you've accumulated all those points. Unless you plan on draining them and leaving, which you're probably not going to do, you're going to pony up. And for that reason.

Yeah, the other thing is just inertia that once you get set in and you have all your bills being paid automatically through this stuff, it's hard to change. It's kind of a pain. So it's $5.50. And they said more than 40 million U.S. households have a credit card from J.P. Morgan, which is about 20 percent of the market, which is not bad. So you get a $300 travel credit every year. So if you buy an airplane ticket, pay for hotel, whatever you get. So that's immediately $300 knocked off the 550. You get your global travel thing so you can do the TSA precheck. They pay for that. And I guess now they added some Lift Pink, which do you know what that is?

Lift Pink? I don't. It's like a 1999 subscription thing for Link. So they're starting to partner up. And I think that... Wait, hold on. Say that again. It's a what? Lift Pink gives users discounted rides and other perks. It's like a 1999-a-month program through Lyft.

I don't know if it gives you... Oh, I thought you met 1999 the year. I'm sorry. Yeah. And then they gave some kickbacks from DoorDash. So they're still giving you some stuff here. I think unless you're one of these people that does the credit card roulette thing and jumps around all the time and is on like the points guy website. I don't think it really matters. I'm going to keep it.

Obviously, you didn't do much analysis on this, but I did. Study. I've decided to keep it. Okay. Well, thank you for crunching those numbers. Okay. So, we did a little sleuthing. I think people sent us some numbers. Last week, we talked about the millennial 401k balance. You keep saying these things that I don't know what you're talking about. Do you say we did a little slew?

Slew. What does that mean? You've never heard that word before? Is that S-L-E-U? Yes. Okay, in my head, I heard slew space thing. What is sleuthing? I have to Google this.

I don't know what that word means. Apparently, you are not a big fan of detective novels like I am. What is sleuthing? Like, you do a little bit of, you check into things and you do some investigation. Carry out a search or investigation in the manner of a detective. I'm sorry, I only read one Lee Child book. Okay. You ever heard that term from Sherlock Holmes before?

You know, actually, I just bought, hold on, somebody emailed me and said, or emailed us and said, Michael, before you move on from the detective books, you have to try a Sherlock Holmes book. I've never read a Sherlock Holmes book. So I read, I just got this book. The Hound of the Baskervilles. You ever read this? I've actually never read any of his books either. You should do some sleuthing. Okay. But the Benedict Cumberbatch one, I love that series. Anyway, we did some investigating. I didn't realize I had to dumb things down for my audience here into the 401K balance stuff we talked about last week, which I think it said millennials had like a hundred and some hundred and change average 401k balance. And you said this is ridiculous. We tried to look into some reasons for why it would be. And I guess it was the data showed people who had been in a plan for 10 straight years had those average balances. That's a pretty big asterisk that they failed to mention.

Somebody sent this to us. Thank you for sending that over. Yeah. So those numbers were, they seen it outlandish and they were. So technically speaking, those numbers were complete bullshit. Yeah, that's kind of a, you wonder how many people have over the past 10 years stayed in their plan for that long. That's got to be a small subset of the population.

So your boy, Derek Thompson, who's my boy too now, I've adopted him as my boy as well. We did a video with him. He is very impressive. How things go viral it was called. Yeah. Yeah. So he wrote a piece on vegetarian living in the Atlantic, why the 2020s will be peak meat eating, excuse me. In 1970, the typical-meeting is actually a good, that's actually a good, that's a good commercial for them, though. In 1970s, the typical American ate about 120 pounds of meat. In the 1990s, it was 130 pounds, and today it's 140 pounds. But UBS projects that the plant-based meat market will grow up by a factor of 20 this decade, reaching $85 billion in sales.

by 2030. So the meat of the article, pun intended, was... Can I just say, I don't buy this? Yes, you can. What don't you buy? That the plant-based meat market is going to grow that much. I do. You know what I buy? You know what I buy? This weekend. Matter of fact, I bought Beyond Meat. The company or the actual meat? No, the actual meat. And I made it on the barbecue. And guess what? I bought it again. It was pretty good. See, here's the thing. I think getting back to our budgeting stuff about the fact that 50% of people spend more than they make. I think paying for having a good diet and paying for this kind of stuff is something that's almost a luxury item for people. So I think it's like a

Peloton. It's people who have money can afford to do it, but the majority of the people can't. I don't think so. It's not that expensive. It is really, it's much easier for people to spend a little amount of money on food that is bad for them than spend more money and be thoughtful about where their dieting habits come from. Okay. Agree with that. I agree with that. I agree with that. that. So I think, I just think that this plant-based meat stuff, unless people are forced to do it somehow through regulation, I think it's just going to be a luxury item for wealthy people. Okay, I will, you know what? Or it's basically going to be vegetarians who are hardcore into this stuff or it's going to be a luxury item for the wealthy. That's my stand. Okay, fine. You're wrong. What is the reasoning that I'm

wrong? Well, I suspect that there are a lot of people such as myself who would be very happy to eat less me if there was an alternative. And I think most people don't care. Well, yeah, I mean, I agree most people don't care, but it doesn't take a lot of people to move the needle. Okay. All right. Obviously, we're coming from nothing. So obviously, this industry is going to continue to grow. But I just don't see it being this thing where it's going to be a huge competitor. All right. Well, here's the deal. $85 billion in annual sales by 2030. So we'll check back in 10 years. Okay. I need like a denominator for that $85 billion number to matter for me. Like what's the whole overall meat industry?

But yes, I think it would be more of a plateau than an XIV downward crash. So I'm doing the healthy eating thing, as I mentioned last week, and I will give another plug to the crock pot. This week, I made short ribs. Excellent. Okay. No recipe this time? I'm an improviser. Just some beef stock, some spices, paprika, cumin, salt pepper, et cetera, et cetera.

So whole third of you is a life now. Well, I have two cheek days built into the month. So it's not a life now. It's just a reset. I'm trying to get back on the horse. There's not a lot to eat. It's fairly restrictive, specifically in terms of like snacking. So I've been eating nuts.

I like cashews. I discover that I'm a cashew eater. That was in the Tim Ferriss four-hour body book that nuts are actually, that's a good way to stop wanting to snack. it fills you up. I'm fairly picky with my nuts. I don't like wallnuts. Walnuts are gross, right?

Yeah, I guess I don't. Nuts are just kind of okay to me, I guess. So here's this. Cashews, in one serving, which is like a handful, I guess 20 or so, 180 calories. It's a lot. I guess I don't really know calories on us. I don't like count calories that much,

so I don't know what a lot of calories even means. Yeah, not to brag. You have a six-pack, I know. You're the one who's talking about your diet every week on the podcast, not me. Okay. Earlier in the year. What? What? What? Do you care about the new Twitter reply thing? Is that actually going to go into effect? This says Twitter will put options to limit replies directly on the composed screen. So there's going to be several features where people can. So they broke it up into a global group panel or statement. Global lets anyone reply. Group is for people you follow and mention. Panel is people you specifically mention in the tweet. And statement allows you to post a tweet and receive no replies. This sounds like a lot of work. It is probably too many, but honestly, if someone doesn't want to see replies their tweets, and especially if there's someone who just gets crap all the time from people, who cares.

If they don't want to see replies, that's fine. You can reply to someone else who does. People were kind of up in arms about this one. I don't think it's a big deal. I don't think it's a big deal. People are like up in arms. If you're someone who constantly gets blowback from people and you're just over it, then, okay, turn off your replies. I mean, I don't see the big deal.

If you just want to have it a one-way street. No, listen, that's going to backfire. How come? In the sense that the people that always get shit, and they get shit from trolls, once the trolls find out that they're no longer allowed to reply, it's going to be 10 times worse. True, they're not going to be able to reply to that person. They're going to just sub-tweet and just harass that person all day long. Okay. I just, I don't know.

I don't think it's that big of the deal. Whatever. Who cares? That's the point. If they're going to do it, they're going to do it. And if you want to just not see them, then that's your choice. Yeah. Earlier in the year, and this is probably over the summer.

we were talking about what's going to win the Oscar? It's like all Disney movies. Is Mufasa going to win Best Supporting Actor? Remember that? And now all of the sudden, it turns out that, in my opinion, this was like a really awesome year for movies. It's not bad. Yes. It's much better than we thought.

I saw in 1917 over the weekend. Holy moly. If you are at all interested in seeing it, that is a movie to see in the theaters. And I'm not, I never, I just like to go watch movies. I never really noticed, like, the score or the camera angles, but this was so epic. The way that it was shot was so glaring. Like, it was impossible not to notice. It was the idea where they tried to shoot it in one continuous, it looked like it was

supposed to be one continuous shot, right? Pretty much. And to the extent that you can understand what it's like to be in war, which is obviously impossible, I've never seen a movie, a war movie, do as good a job as making you feel like, Holy cow, this is war. Okay. I love the World War I and World War II movies. Obviously, there are as many World War I movies, so I'm in.

I'm like four months behind you on movie recommendations because we just wait until they come on streaming. So we finally watched Joker this weekend. And I thought it was really good. It wasn't, I didn't think it was amazing, but it was really good. And I think there's a case we made that three of the best comic book movies ever are in the Batman saga. So the two Batman sequels, and then Joker, I think those are probably, as far as I'm concerned, are the best comic book movies ever made, probably, unless I'm missing something. I have to think about that. Because I'm kind of anti the Avengers ones.

Yeah, I like the Avengers. But so the Joker did the best. He got 11 nominations, and this is kind of wild. 17% of the Oscar nominations went to Netflix movies. That's not bad. That's pretty good. So my three favorite movies of the year, I think in this order were 1970. 17, knives out, and either uncut gems or the Irishman.

Once Upon a Time in Hollywood was my, by far, I liked Joker a lot, but once upon a time in Hollywood, I think is probably the best one that I saw. Well, everyone is talking about parasite. I have not seen that yet. Anyhow, all right, let's move on. Okay, so quick follow-up before we get to listener questions and maybe one of the worst surveys of the year, we had a few people tell us this. And one of our advisors, Paul Zodner told us, last week someone asked us, well, what if

I front load my 401k so I can maybe potentially get more of a lump sum type of investing. A lot of plans, you could be foregoing your match, your company match, if you do that, because they make you, to get the full match, you have to have a contribution every time. So I would look into that before ever thinking about front loading your 401k. We kind of missed that last week. So just wanted to mention that. And a bunch of people sent us this. I don't know where this was from, but they asked people if they could locate Iran on a map.

and they show a world map, and then they showed where people actually chose to find Iran. And it wasn't even close. I guess they said 28% correctly identified Iran, but some of these choices were in the ocean and in America. There was a few of them in Michigan. I don't know how people ever trust surveys sometimes, and obviously we do, but this is just insane, correct? Well, there's no way that these people actually realistically guess that Iran is in the middle of the Atlantic Ocean. No, no, no, they're just being jerks.

Yes, that's the thing. That's why you can't trust this stuff. When you were in like middle school or high school and they'd give you this survey of how often do you drink or smoke or do all these bad things? Right. I would never answer those honestly because I was always concerned that they were using this information against us. I don't know why people would lie for an Iran thing except if we try to be funny. But there's no way this is real. So are you noticing on Twitter?

It seems like there is just, it seems like it has reached a fever pitch in terms of the VC scorn. Somebody tweeted like, oh, there should be a startup where you can have like a private backyard or rent a backyard. And so it was like, do you mean a public park? Yeah. You saw that? Yes. So all the stuff with the S1, it seems like there's a lot. And there's a ton of sub tweeting about substack, which I just heard of this weekend.

I think it's like a service where you could have a subscription to a new. newsletter. People get so angry about people trying to make money. I think that's like one of the one of the key realizations I've had over the last few years is anytime somebody tries to monetize something, there is blowback. I think the big reason we've seen the blowback in VC is because the tech world has basically been on the right side of history for the past 10 years or so. The VC world has really sort of won in many respects and they're now starting to see some failures. And I think people are applauding that because they don't like to see people be so successful. And when you have success, you start thinking that you're smarter than everyone else. And I'm not

saying everyone in that field, obviously, but some people do. And so I think that's why there's been this period of blowback. Honestly, there's backlash to everything. That's just the way the internet works. Are you saying that people aren't happy for other people's success? Yeah, I'm going to go out on a limb and say sometimes, I think that's what happens. It's a combination of like overconfidence and people just being over it and everything has, I mean, we're going to get like baby Yoda backlash eventually, aren't we? Is that the only thing that's safe these days? Nothing is safe. Listener questions. I wanted to get your take on pausing retirement savings. My wife and I in your mid-30s have been diligent retirement savers after the last decade of high returns

and in a high allocation to equities. We've managed to hit a million dollars in our combined accounts. Congratulations. Recently welcomed our second kid and bought a home and wanted to try to save some non-retirement money after the family changes and down payment outflows. Do you think it's ever okay to completely hit pause and retirement saving if you have quote unquote enough at this point in life. Yeah. I do. Here would be a caveat. I would imagine it might be hard to go back because I don't think this would be a permanent setting. But if you need to take, I don't know, two years and refill the coffers because your expenses have gone up and you've already done so well, I don't see anything wrong with taking pause and then getting back on the track. William Bernstein

had this quote where this is kind of about something else, but he says, if you've already won the game, why keep playing? And I think that's something where if you've already been good enough at this point to save seven figures, I mean, that money is not obviously safe forever. If you're continuing to a high allocation of equities, it's going to go down at some point. But sure, if you've already kind of figured out how this all works and how to have diligent saving habits, yeah, why not transfer that money to something else and make yourself a little more secure because as we know, having kids brings about a lot of different costs and kind of shoring up your finances in other places besides retirement is probably not a bad idea because those costs

aren't going to get any easier as the kids age probably. So yeah, I think you can always hit the pause button as long as you understand that you still need to give yourself a margin of safety and potentially keep saving someday. All right, recommendations. I don't know if you saw this and well, you didn't see the movie, so maybe you're not surprised, but uncut gems, snubbed, zero nominations. Yeah, I mean, I don't know I don't really care about the Oscars that much So I can't really get like up in arms about this stuff Have you ever gone back 15 years ago and go

Ah, that movie I loved wasn't in the Oscars So it doesn't matter anymore I see this as like movie critic stuff So it doesn't really bother me Yeah, I agree with that sentiment Now that I'm watching a movie I am going back and seeing what won But I mean, yeah, fair, who cares

All right, here's what I recommend I recommend that people subscribe to Miles Edlin's newsletter Have you been reading it? It's quite good He's very good, yes What's it called? Go Miles. I'm late to this.

Okay, yep. We'll put a link in our show notes for it, but it's very good. Have you ever seen the 7-5? No, what's that? It is one of the best documentaries of all time. I'm not a huge documentary watcher, so maybe I can't say that, but I'm going to say it. What's it on? I'm going to say it anyway.

Netflix? It's on Netflix. I saw it years ago. I actually saw it in Ardy Lang's apartment. Remember I told you I went to Arty Lang's apartment that one time. Josh and I did a podcast with him. Humble brag. He was the one that introduced me to this.

It was amazing. So it's basically about cops, crooked, cops in New York City that become gangsters and drug dealers. It's a true story, obviously, hence the documentary. It's called The 7-5 on Netflix. Cannot recommend it highly enough. And lastly, and I'm not trying to one up you, Ben, because last week you were talking about how the Godfather might be the best book you've ever read. Turns out that I also am reading one of the best books that I've ever read. My colleague, our colleague, Jonathan Novi, recommended a book called American Tabloid, which is by this guy named James Elroy,

who wrote LA Confidential and the Black Dahlia. And I know, Ben, you're probably sick of me hearing me talk about this. I've been talking to you a lot about it. Ben just nodded. Noted in the affirmative. So this is a detective book. No offense, Jack Reacher. This book is historical fiction. Takes place between 1959 and 1963. And I say historical fiction. The lines are so blurred between what's real and what's not. It's Jimmy Hoffa and Howard Hughes and the CIA and the mafia and the Kennedys and they're all in the book and Jack Ruby and Castro. And I will warn listeners, if you're going to read this, it's sort of shocking how graphic this book is and the language that they use, specifically the racist language that they use. But it makes you feel

exactly like you're in 1959. It is such a mind-blowing experience. And I was thinking, like, this should have been the Irishman. This was the movie to make. But then I was like, wait a minute, can't make a movie. This is, it's too complex. There are too many characters. So then this would meet the most epic 10-part series on Netflix. If anybody has a direct line to Ted Sarandos, make American tabloid. This would be the best thing ever. All right. That's a pretty strong sell. I got it in my queue. I will be... I'm not even finished with the book. I've got 100 pages left, but I can already say, holy gazoli, this book knocked my socks off. Okay. I started reading The Economist Hour on your recommendation. Very good. And there's a lot of stuff in there

that I really did. It's kind of a good history book for some of the stuff that you didn't know. I think you'd have to be a pretty big markets nerd to like this stuff. But I like it. I like how he said when Kennedy was campaigning to be president, he promised that we could get 5% GDP growth. And then after he made the promise, he went to a bunch of economists and said, hey, is this possible to actually get 5% GDP growth or did I just make a promise I can't keep? I thought that was pretty funny. So that is a very good book. Again, I think you need to be a market nerd. I rewatched Inception recently on Netflix. It just came to Netflix, I think, in the last couple months. Just half-assed research by me. Is it possible that's the best movie of the century?

Inception. Can not agree more. Love that movie. I went through the list. And I, the cast in it is a amazing. Tom Hardy plays like a small role. I saw your Joseph G.L. I didn't know. I mean... Because I tweeted about it. Because I ran out of characters. Fair enough. But wait. What else was even on the list? A few people said Gladiator. There honestly wasn't much social network, some people said, but I think Inception is probably the best movie of the century so far.

And finally, those three were very good. Mark Maren's WTF podcast had Brad Pitt and Leonardo DiCaprio on it last week. And it was like 45 minutes really quick. I probably could have listened to four hours worth of it. It was just, I thought it was amazing. and Brad Pitt had mentioned that he watched three times all the way through Mark Marin's show which is called Marin on, it was on IFC

I guess I never watched it. It's on Netflix. So I plowed through the first season. It's okay but if it was good enough for Brad Pitt, I thought it was good enough for me. He said he watched the show three times all the way through because I think it's because it was about the show was basically kind of like Seinfeld. It's about Mark Marin plays himself as a podcaster and then kind of has these things that

it's okay. It's not bad, but it's like a 20-minute episode one. it's not bad and I thought good enough for Brad Pitt good enough for me so I'm skipping that sorry it's not good enough for me all right send us an email animal spirits pod at gmail com follow us on Instagram for michael's memeology is that right did I get that one right I think we're to animal spirits pod there too and we'll talk you this week