Animal Spirits Podcast - The Biggest Risk in 2026 (EP. 444)

Episode Date: December 24, 2025

On episode 444 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠��⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss what a normal year in the stock market looks like, time traveling through drawdowns, the case for small/mid cap stocks, how many stocks double each year, record cash balances, the economy keeps growing, financial nihilism, gambling, illiquidity risk in private investments and much more. This episode is sponsored by TradePMR & Fabric by Gerber Life. Find more details on TradePMR by visiting: https://hubs.li/Q03XS3Sj0 Join the thousands of parents who trust Fabric to help protect their family. Apply today in just minutes at: https://meetfabric.com/SPIRITS Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   TradeTMR Disclosure: TradePMR, Inc. Member FINRA/SIPC. Securities offered through TradePMR Inc. TradePMR, Inc. is a wholly owned subsidiary of Robinhood Markets, Inc. Please review the full Terms and Conditions at (https://tradepmr.com/asset-match-terms-and-conditions) for the complete rules, requirements, and obligations that apply to participation in the program. Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

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policies issued by Western Southern Life Assurance Company not available in certain states price is subject to underwriting and health questions. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Redholz wealth management. This podcast is for informational purposes only and should not. be relied upon for any investment decisions. Clients of Britholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael

and Ben. As we wind on down the year, yeah, can you believe it's over already, 2025 and the books? See you. It went so fast. You know, I'm a big, can you believe God? Oh, yeah. Can you believe it's already fall? Can you believe it's already winter? Every season, you say it. Yeah, I really can. If you believe Christmas is in a couple days, I can't believe. Well, when this comes out, it'll be Christmas Eve. We used to do the timestamp. When are we recording? You used to do that every show.

Oh, that's right. It's Tuesday, December 23rd. It's 9.09 in the morning on the Eastering time. I saw, but I didn't get there. But I feel like it doesn't matter for markets, because markets around the holidays do not matter. Whatever happens in the markets around the holidays, it gets forgotten or washed away. I guess we had the one year in 2018 where remember the market bottomed on Christmas Eve. I do remember.

The Mnuchin bottom. No, no, no, no. It was Boxer a day. Was it? Okay, I thought it was Christmas Eve. But it was a Steve Mnuchin bottom. Like, we were in a legitimate bare market. That's the only time around the holiday that I can remember that markets actually matter.

Otherwise, markets are on the holidays don't matter. They shouldn't be open, really, if we're being honest. Yeah, that's true. We got a GDP report this morning. Did you check it out? Yeah, I got it in the show notes here. Okay. I want to talk about it.

All right. Turns out it was a bizarre year for the markets, as I mentioned last week. This had felt weird. but if you zoom out and you just look at the annual return for the year and you look at the maximum drawdown, we've got this snazzy chart in Exhibit A. It's Exhibit A for Advice.com for advisors that are listening. The chart shows the annual return alongside the maximum entry year drawdown. And this year we had a 19% drawdown. We have a 17% return. Looks pretty much in line with every other year.

Here's the great thing about Exhibit A charts. They're updated. constantly, right? It's not ecstatic. Daily, daily, daily updates, right? Yeah. So as these numbers change, so too will be charts. But yes, you're right. If you looked at this in a vacuum, you'd say, man, this was a crazy year.

If you look at this relative to other years, most years in the stock market are crazy. Looks just like every other year. Yeah, it really does. Nothing to see here. All right. It's the same picture, right? Duncan will get that one. Something to see here.

What a show is that from? Always saw it. I gave in, there was a Slack channel yesterday, and I gave Duncan in office. reference and Duncan is a big office fan and he got it right away and laughed so I appreciate that you you're not you never watched the office right I think I saw the first two seasons think about the combined amount of hours you put into horror movies and you never watched Seinfeld or the office I saw four seasons of Seinfeld yeah but here's the thing I can't catch I don't have time to catch up on 60 hours of TV that's why I'm watching the offer it's one season I could do

that I don't have time for 60 hours how would I that's true the background shows though The thing is, without commercials, those are 20 minute episodes. Dude, I don't have background time. I fall asleep in my bed in three minutes. It would take me four years to watch it. Okay. All right. You missed the window because I watched when it was happening and then throughout college,

I watched every rerun of Seinfeld every night. Like, it's constantly watching it, right? Yeah, I'm not in college anymore. We had so much time in college. Like, I feel like I probably wasted. I had six years. I had more time than you did. And I 10xed that shit.

I had nothing but time. I was manipulating time. You know that guy? The manipulating time guy? He has four days in one day. Right. The wire, for example. I would love to see it, but it's not going to happen.

Yeah, see, I cut up on all of those shows, but pre-kids. My wife and I binged a lot of, like sopranos and the wire and all that stuff. So if you're 26 and you're listening and you want to get to some shows, don't put it off. Yeah, do it now. Because one day it's going to be too late. All right. Kyle T. tweeted, Oracle Stock reacted better to the great financial crisis. then it has the open AI deal.

This is a chart. It's showing the drawdowns up for Oracle. And in 2008, it fell, I can't even see. What is this? 40% something like that. I never would have guessed this in a million years. This is pretty nuts. How interesting.

Like, the bookends of 2025 started with, oh boy, AI is going to be a bubble, isn't it? Aren't we going to get a bubble? Isn't it, is it not inevitable that we would get a bubble? I don't know if you said that, Ben, but I feel like you said it. Yeah. Like I said every other, no, the pushback here would be, no, this is the bubble deflating. You don't get it. That already was a bubble.

But that, come on, that wasn't a bubble. That wasn't a bubble. Stop it right there. No. No. Hard stop. So Deutsche Bank did a survey, which, if any of the following, do you think, posed the biggest risk to the market stability in 2026?

And by far, the biggest response, 57% said tech valuations plunge, AI enthusiasm, wanes. Now, could happen. I don't want to be so cute and say, oh, if everybody's worried about it, that it can't happen. But I will say, if everybody's worried about it, it probably won't happen. I mean, usually the big risk is something that we don't see coming. But I guess you could say that sometimes it is like the most obvious thing. It just, that's what it is, right? Sometimes it is.

Yeah. But like everybody's already soured so dramatically on AI. Last week, Oracle, the FTA reported Oracle's largest data center partner, Blue Owl Capital will not back a $10 billion deal for its next facility, concerns about rising. I mean, this is great. The market is like the market is seriously pushing back, which I think is the best possible setup heading into 2026 and beyond. See, the second one here, new Fed Chair pushes for aggressive cuts and causes market turmoil.

I mean, that's just people like reaching for a risk. I mean, how would aggressive rate cuts cause market turmoil? some of these other ones I feel like these are just these are made up so our Fred Todd Sown posed a question he's showing the 10 largest weights of the S&P

and it's 40% okay so he's Todd said the question that we'd ask coming into 2026 is this what comes first 50% or 30% 50 I would agree

now I don't think I love those happen in 2026. It would have to be so dramatic. That's a big move. You're right. I mean, it would have to be, it would have to be them. Well, I guess you could do the math. I don't want to say what we would have. I think that'd be like a three or four year, five year thing. Yeah. Yeah, but 30 wouldn't surprise me either. Someone asked me this question on, asked the compound last week, I thought, and I put the chart in here because it took me some time to make this chart. I did the paint, you know, I put a line. I should have had AI do it for me. But it was like, hey, how should I feel if we had a 20 or 30 percent decline in the market?

And where would that time travel me to? And it's kind of crazy. If we had a 30% crash from here for the U.S. stock market, it would bring us back to January 2024. How did things in the market feel in January 2020? Right? Frothy. Right?

Back then, people were worried. So if we had a 30% crash, overnight we had a 1987. It would bring us back to the start of 2024 with returns. And it doesn't seem to me like people were that unhappy in 2024. How unhappy would they be, though? Very unhappy if that happened. Yes. I say this every time we talk about this. If you told me that we would have a 30% decline and it would like stop there, I think most people could live with that. In fact, if you're an equity

investor, you got to be a little. That was my point. And this person would say, hey, I'm still dollar cost averaging. That would have to be a good thing for me. Right. And I said, yeah, phenomenal. Phenomenal. But the thing is like, it doesn't work like that because if we fell 30%, well, what if we fall 50%. Yes. That'd be the worry. And that's what happened in 1987. People thought there was a depression. All right, Bank of America has this chart. U.S. midcaps trading at a P.E of 15 versus an S&P 500 of 2020 or of 22. And this is the Ford P.E. And it's showing that this is about as low as it's been going back to the mid-90s, the relative ratio of the valuations. And is it too easy to say small and mid-caps are the next international in

2026? Right. International stocks, because the valuations were so low and it had all these these things going again, it didn't take much good news for international, it was a coiled spring, right? Took off. Isn't that, couldn't you make that argument for small midcaps too? Like, it's not going to take much for the valuations on these things being so much lower than the S&P 500 for them to outperform by a wide margin. Sure could happen. But I think there needs to be a catalyst, like people sowering on the AI trade even further. Don't you think the catalyst is lower rates, though? Because these companies got hurt by higher rates. Yeah. I think, I think this seems like almost too obvious to me. Well, but if you look, if you look, if you

you look to, if you look at that line, yes, it is low, the lowest, I guess technically, but it's been at that point seven mark for three years. Yes, you're right. Yes. And you could have said this for the last seven years, essentially. Yeah. Anyway, what a year. What a year it's been. Did you know, this might surprise you. A chart can make this. More stocks doubled in 2025 than in any year since when. Take a guess when. And I honestly don't know the answer, so I'm going to reference this.

2017? Good guess. Good answer. How great is Family Feud? I would have been awesome on that show. I used to watch it all the time. I was great. I always had the answers.

It's true. I feel like that's the type of show that everybody says that they're going to. Then you get there in front of the lights and you freeze and forget. I think I might be. the person that chokes if I'm being honest. But here's what I'm genuinely, I'm talented at Wheel Fortune. Okay. I'm not as, I'm not as good as that. Like the, for whatever reason,

I have the blanks. I don't do with that grid or wordal and such. I'm like Zach Alfenakis on Real Fortune. I just, I see it. So wait, what's the answer then? Oh, good question. The answer is 2013. How about that? Okay. Which was when the market finally hit new all-time highs again. 13 stocks doubled. So 2017 was a was an interesting year. That was a year where it was just straight up until the right, right? No drawdowns. There was like a two and a half percent drawdown, yeah. Only three stocks doubled that year.

Okay. So that was more of a stair step. And in 2021, which was a mania, was it not? Yeah. 12 stocks doubled. This is for the S&P? Yeah. Okay.

So how many did this year so far? 13. Okay. That does seem like a lot. Right? I double? That's a big number. Okay.

All right. We've spoken about this in the past how I personally feel mixed about giving a lot of money publicly, relatively a lot of money, right, to like a GoFundMe type of thing. Because there might be like a perception that like you're trying to like flex or show off or something like that, which is kind of dumb if you think about it. Like if you're just trying to give money for a good cause, you should give as much as you can. And now if somebody happens to get an ego boost out of it, whatever. We get psychoanalyst it all day long. But the bigger point is this. The reason why I feel comfortable and happy and proud to make those donations is, hey, it feels

good, personally, it feels good to give money. But there is an element of FOMO involved. Yeah, I think it's a positive. It's a great thing. And if your contribution encourages other people to contribute more to worthy causes, then everybody wins. And if some Dingleberry thinks that you're doing it to flex, that's their problem. So anyway, why am I even talking about this?

Wait, hang. So now is a great time of year to do this, though. And this is one of the things that we don't talk about enough. And I always mention this. You can automate your charitable giving. I do it on a monthly basis for like five or six charities. And I sometimes I'd remind myself to increase the amount. But I do it and I set it and forget it. And sometimes you even forget you're doing it. But I think that's the kind of thing where you dollar cost to average it to charity as well. I think it's a great. And they always tell us like we appreciate these, because they get a lot of gifts from the holidays. I get letters from these people sometimes saying we appreciate the automatic donations. Because the rest of the year we need money, too, not just around the holidays and these big bunches of, because they get a ton of donations around this time, I'm sure. All right. I'm glad you said that. See, the goodness is spreading. I am going to make that a priority for me in 2026 to give to more donations, give to more charities on a regular basis because I only give to one regularly, and that's definitely not good

enough. Okay. Anyway, Ray Dalio said, my wife Barbara and I have believed strongly in the importance of equal opportunity. I have been fortunate to live the American dream, and he goes out to say, you know, how fortunate he is. So that's why Dalio.org is proud to join Michael and Susan Dell in ceding and expanded number of the new Trump administration investment accounts matching the $250 contribution per child for approximately 300,000 children in our home state of Connecticut. So that's a $75 million gift, which is obviously amazing. And you're seeing

like more and more people are stepping up to the plate and doing this because they see all the other people doing it. They want to be involved. It's awesome. I like it. It was kind of like the Buffett thing. Remember, he said I'm going to give all my money away before I die, the Buffett challenge or whatever, and people hopped on board. I like, I've for years have been pounding the table that one of the ways to help with inequality or at least help bring more people up is get more people involved in the stock market. So I think any way we can do this. The thing is, there's a lot of people who hate billionaires for whatever reason. But then when the billionaires actually do give their money way like this, then they still, like, why are you giving it away this way? Like, I think this is,

I think this is wonderful. This is a great cause. Even if people go, oh, $250 per kid. kid, what is that going to do? So what? It's something. It's better than nothing. I think this is great. Nonsense. But also, it's obviously not just $250 because think about the next billionaire that's going to see this and say, you know what? That's awesome. I want to get involved too. And then guess what? Maybe the parents put 50 bucks a month in, you know, or the grandparents do or whatever it is. Like this is, this can build on top of it because someone got the first thing rolling. And I just think this whole thing of getting more people involved in the stock market is a great thing. And it's also smart because these billionaires own a ton of equities and more money coming

to the stock market just inflates our equities and makes inequality worse. And that's our whole master plan. It's great. But imagine betting against the stock market when every single decade, more and more people want to get involved and can get involved because the bear's entry are being broken down. I can imagine that being like a long-term bear in the stock market. But that's the key. I can't imagine being a long-term bear. How could you? Well, from 1966 to 1982, shut up. Yes. You don't how hard it was to invests in the stock market back then? We know, we know, we know. Right.

Okay, speaking of stock market worth, households from Wells Fargo have more net worth worth in stocks than in real estate. Now, this has happened before, so it's not totally without precedent. It happened for a minute in the late 60s. It happened during the dot-com bubble, dun, da, da, and it happened recently. I think this could be one of those things that we, in the past, you hit this point and then it went down. I think this could be the kind of thing where this one never goes back. Yeah, I don't disagree.

As topy as it sounds, it's not impossible to imagine this gap getting wider. Yes. And because some people are boxed out of the housing market, it's easier to invest in the stock market. This is the kind of thing I think we could see just this is pretty normal. I mean, the stock market can go up 20% of the next two years. Real estate won't. No, no way. We had a once in a lifetime lifting.

all boats for real estate. It's never happening again. Never, ever, ever. Here's another chart from our Fred Todd. Pace of equity, that's Todd's on a strategist. Pace of equity ETF flows remains elevated. So he's got this cumulative daily equity ETF flows. And it goes up every year. And this is kind of, this is kind of amazing that it continues to rise. Okay. I know I keep saying this. And it's sort of a rhetorical thing that I say, where's the money coming from? It's coming from a few places. It's coming from wages, obviously, first and foremost. It's coming from 401k rollovers. Yeah, I think that's the biggest one. I think baby boomers who are rolling over their 401ks are going to an advisor,

getting out of mutual funds in ETS. So slash, slash active mutual funds are finding their ways into ETF. So it's, but it is, it's unbelievable. We've got about about a trillion dollars, not quite, $900 billion coming into equity only ETFs in 2025. Okay, so this next chart is this, does this help my small cap case or hurt it? So it says small cast has been left behind and helps it. So this is total flows versus the, is that the 12 month change? Yeah, one year change. And the Russell is actually doing fine.

Like, I don't know what it's up this year, but it's at all time highs. It's up like 45% since the bottom in April. Small cap's been on fire since April, yes. And nobody wants any part of it. Yeah, I think lower rates are an obvious catalyst. So I think part of what happened... Now, if you own like a VTI, you own some small caps. It was like 10% or something.

But I think a lot of people in recent years have just said, all right, fine, just put me in a total stock market fund or an S&P 500, and I don't need this other stuff. I think... But you're right. So, like, if rates come down, some of these small cap stocks start seeing some help from AI and if money

finally starts flowing in that's the catalyst that's three catalysts right there what else do you need I gave you three catalysts usually get one

that's three what was the bottom in April the 8th so usually I have these things down pretty good the date April

was it April 8th I don't know what the date was okay for the bottom yeah you don't know what the bottom was for this year

the actual date Okay, yeah, I think it was the fifth. So the Russell 2000 is up 46% since the bottom, which was April 8th. Wow. It's pretty massive, right? You're right, and no one cares. Well, they also got hit the hardest, right? What was their drawdown?

Yeah, you're right. And it took a long time for them to hit all-time highs again. Yeah, right, the drawdown was bigger. How much was it? I guess it was, yeah, it wasn't that much bigger. It was 25% or so. 24% and something like that. Okay.

All right. So we talk a lot about how all the clickbaity headlines and the negativity and stuff, like it feels bad and people want to blame the media. But mostly you should be blaming the people who are reading it. It's us. It's all of us, the collective week. I blame the you. You are such a, you can't, you're a clicker. You just, you see it and you got to click.

So Morning Star, Brian Armour did this piece. So we're keep the kids are home today. Oh. Oh, nice. Nice PJs, dude. Everybody is sick. Oh, we had that too. Okay.

So, I got myself a flu shot the other day. And Robin goes, you didn't think to get your family one? And I said, well, I told you that I was going to get one and you seemed. Come up so high. Oh, look at Kobe's teeth. Oh, we got that too. I said, you seemed disinterested. So you goddamn money to care of myself.

Listen, when you're on an airplane, you put your mask on first. That's true. If I get sick, it's all over. I'm a baby. I can't be sick. Man, I'm hoping we're past. My kids still get colds all the time, but we just had one in our house. But when our kids went through daycare, I went through a three-year run where I was sick

all the time, just constantly something. And I hadn't been sick in, like, years. I feel like I'm finally through that. All right, so clicks. I'm sorry. So, yes, so we complain about it's, if people are reading it, they're going to keep doing it, right? And you have to blame the people who are consuming it. And I think that's the same thing with ETFs. We complain about this stuff like all these leveraged ETFs and these single stock

ETFs. And guess what? That's what people want. And alarming, this is from Morningstar. They looked at all the new ETFs. It was a record year of 750 new ETFs. Roughly half of all new ETFs were strategies that track single stocks, derivative income, defined outcomes, or digital assets. And an alarming, 27% of new ETFs build their strategy around a single stock and added leverage, short exposure or option overlays. So you complain about this stuff and say, like, people, is there weapons of mass destruction or whatever?

People are going to blow themselves up doing this stuff. The volatility is crazy. You're putting three times leverage on a single stock. And guess what? This is what people want. And the companies are going to give it to them. I think as long as the products aren't, like, offensive, right? Like some of the 90% yield products that are obviously...

getting people into products they don't understand. Other than that, I guess I just don't have a problem with it. People can buy what they want. Yes, exactly. But I'm saying, yeah, people complain about these things, and this is what investors or traders want, and they're going to do it. Yeah.

All right. This is another blow-your-face one. This is from Citadel via Daily Chartbook. Households continue to hold near record cash balances, 98 percentile historically. This is going back to 1950. So, yes, we had higher cash balances in the 1950s, but look at this. This is household cash as a percentage of total financial assets.

And this thing since 2020 took off like a rocket ship. Now, obviously, it helps that interest rates rose. But in a bull market, would you have assumed that we'd have record amounts of cash? I looked at this chart and I said, there's no way this is true. This can't be true. This is crazy. That's crazy. Do you think a lot of this is, I don't know, some money.

money came out of bonds. Like, I mean, that was the easiest trade of the decade, pretty much. If you went, if you decided bond rates were on the floor, I'm going to go to cash and cash is yielding 5%. I'm not going to deal with volatility in bonds. You think that's part of it? Mm-hmm. I'm trying to come up. What do you think? You think there was like any implications of this? Well, they're, they're trying to say this is dry powder, but I think this is just, I also think it was a decade of zero percent interest rates. I still think, I still think, I still, I still underfunded. Cash was underfunded. I think this money stuck. Not literally, but like it's not,

I don't think it's going to move. But this is a percentage of total financial assets. So real estate had a huge boom in this decade. Stocks had a huge boom. And cash still grew as a percentage of those assets. That's the surprising thing. Okay. You mentioned this before. The economy keeps growing. This is a little thing I've both in Wall Street Journal. U.S. economy plus robust growth in third quarter. Robust. See, that makes you sound smart if you say that. grew at 4.3% annually in the third quarter. And the economy keeps growing, and a growing number of people came to seem to just not believe it. This is the most hated economic expansion ever. And it's not a close second. How many people would believe you if you said, yeah, the economy

grew at 4.3% real in the third quarter? Bring that to your holiday dinner and ask someone, how much did the economy grow? Most people probably tell you it shrunk. Now, remember, this is on an inflation-adjusted basis. How does this keep happening? The economy just keeps growing. We ran a poll in our channel on YouTube about the debate we had last week or the question that we posed. Would you go back to 2019 wages if it meant 2019 prices?

And it was about a 50-50 split. Now, we have an affluent audience well above, well above average income. And even still, it was 50-50. Yeah. So could you imagine if you pose this question to the average person, I think it would be like 80, 20 would want to go back. And I think... Did we make the lost joke last week last time we did this?

No. What lost joke? Like we have to go back? Oh, no. One of the great reveals in television history for me blew my mind when that happened. I just think most people underestimate how much. their wages have grown relative to prices. And I think the people who say that would be hurting if we really did go back.

I don't think so. If they sell their paycheck, the first time they had their paycheck, they would go, oh, no. Now we have to go back there to the future. I don't think so. I think the psychological damage of inflation is so obvious at this point. All right. So if I was more creative, I probably would have done this. You know the meme of the Grim Reaper going from door to door, and then they put the thing that it killed?

I should have done this, but so I'm oversimplifying here. But let's say in 2022, AI started right as inflation peaked at 9%. AI kind of killed inflation or helped kill inflation, the spending. 2023, AI killed recession predictions. 2024 AI swamped the housing recession. Didn't matter. We had AI. 2025, it was tariffs.

What's going to matter more? Tariffs or AI. AI mattered way more. 2026, I guess it's AI versus the labor market. Is AI just going to keep winning every year against these challengers? When you say, wait, what do you mean by AI versus the labor market? So I'm saying you had this bad thing happen in the recession that could have brought it down, right? You had these things that are, these things that are happening, and it's like one of these is going to matter more.

So we're either going to have a recession, and this is going to slow the economy, or no, AI is going to keep propping it up. And guess what? This whole run, and again, I'm oversimplifying. That wasn't the only reason. but will AI just keep thwarting these things? In terms of through the lens of the stock market, yes. In the economy, in terms of what's going to matter more? Like, yeah, the labor market is slowing, but why does the economy keep growing?

And why does, right, everyone keeps talking about the labor market, the labor market, the labor market, the labor market. Guess what? The economy just grew 4%. So obviously it doesn't matter yet. The labor market hasn't mattered because of all this other stuff going on. Will AI continue to be the thing that just dominates? Yes. And it'll matter more. I kind of think A.I. will probably keep winning.

Me too. Top. Maybe. So this chart from Charter shows that fears of recession, and I think to your point about this being a crazy year, this is Polly Market implied chance of a recession. In April and May, the chances of a recession, this was from betters, people putting their money on the line, was almost 70%. And had we kept those terror policies in place, I think it probably would have happened.

So, like, I think those fears were not out of line at the time. But it just shows how, and now it's almost down to zero. I'm getting involved in, uh, in recreational prediction markets. I don't know what I said recreational. Um, I think there's some value there, Ben, I got to be honest. All right, so here's a, here's a, here's a value in what? In predicting recession? So here's your prediction that I made.

I spoke about this with, I spoke about this with Vlad. And there is something in a bettors brain, at least in my brain, okay, where if I'm on FanDuel, I don't want to bet on things that are minus 500, right? I don't want to bet 500 to win 100. That's terrible odds. But if you tell me that there's an 83% chance of something happening that I feel really strongly about, I say, whoa, that's a 17% free return. It's the same thing.

So, for example, on polymarket, not on polymarket, on calci, betting that the Seahawks won't win the Super Bowl, okay, is only 86 cents. I feel like that should be 97 cents, 98 cents. Seahawks aren't winning the Super Bowl. By the way, it would be hilarious if they do. But they're not winning the Super Bowl. Sam Darnel, get out of you. What are you nuts? Did you stay for the Rams game the other night?

That was pretty good. That's pretty impressive. Well, that's why the outspiked. Okay. Did you see him last year? And the rest of his career, either way, for 86 cents, so I can get a 14% return that the Seahawks won't win the Super Bowl. So you're trying to arbitrage here. You're trying to like...

There's no arbitrage. It's just, I feel very confident that's going to happen. Okay. That's 14% free money. So speaking of the gambling stuff, Kyla Scanlan has a piece of the Wall Street Journal, why my generation is turning to financial nihilism. And she talks about how people in Gen Z, I guess I didn't realize this turned by a podcaster, the financial nihilism. And it's like, she says, to many people, this lack of trust

doesn't make any sense. Doesn't every generation of a financial struggle. Of course, each one adapts to the pressures of the moment. Post-war America responded to the instability of the war by building a world that promised stability, suburbia, deindustrialization, de-industrializing America answered the collapse of union jobs by elevating college degree. Every era produces its own response shaped by the opportunities and constraints of its own time. But the post-war idea of upper mobility was always contingent on certain fundamental strong institutions, affordable education, accessible housing, and stable work. Now those conditions are buckling. And she talks about how people are just gambling their faces off on everything.

And I tend to think that this is not, there is some financial nihilism to this. I tend to think it's just the barriers have been broken down. Because if you gave me at age 18 the ability to gamble, I would have done it. The first time I ever played Blackjack, I may have told this story before. We were on a cruise and you could go in international waters. You could gamble at age 18. So guess what we did? My best friend Chris and I in high school, the first thing we did our senior year of high school,

we went on a cruise ship. everyone else went to go check out the pools and the we went straight to the casino it was like 10 in the morning there was no one in there in a deal we sat down and a dealer literally taught us how to play blackjack i was hooked we were in the casino every night after that okay my first taste of actual gambling and i loved it you know what the minimum bet was on this cruise ship when i was 18 $2 and 50 cents uh simpler times so ben if i would have had access to this all the time at age 18, I would have, in sports, like, I never got the ability to bet on sports. I didn't have a bookie or something.

You couldn't bet. When I went to Vegas, you'd put like a one bet on a sports thing as like a novelty thing. The ability to do it now in your hands, I think that's it. I think it's just easier. And young people are going to gamble because of that's, young people like to take risks. You know the, you know, in Dumb and Dumber when Lloyd says to Harry, you are one pathetic loser. All right, that was, that was me in my 21st birthday. On my 21st birthday, I was home by myself, kicked out of college.

Robin just stared at me. Yes, it's true. You were there. And I had nobody to celebrate with. So what did I do? I drove. She's laughing. I drove to Atlantic City.

I had maybe $400. I lost it all in under an hour. I turned around that I drove home. no one no one took you to the bar like in swingers oh wow that's how i celebrate my 21st birthday so i think how i didn't take a drive to atlantic city from around it's not it's not it's not it's not a short drive it's it's three hours plus it's not a short drive i was there for 20 minutes wow okay okay so back to kind of this piece

listen she obviously spends a lot more time with young people than i do so i don't want this out-of-touch 40-year-olds saying, whatever, yelling. This is her generation. She knows it more than we do. Because the unemployment rate for 20 to 24-year-olds is rising pretty dramatically. I do think that there is a sense of hopelessness might be too strong of a word, but confusion, fears about AI and their job careers. That fear always exists.

Now, AI is a different level of fear, so I'm not discounting it. However, if we're putting this into a pie, I would say that those fears, you know, those fears are, I don't know, making this up, 30% of it. But the other 70% is, as you mentioned, Ben, it's just easier. We had to jump through hoops to gamble to bet on to bet. Like, it's fun. And is there a nihilistic portion of it? Yeah, sure. Is that the whole story? No, it's on your phone. Come on. It's so easy. It's easy. Yeah. So there's pros and cons. It's easier to invest in the stock market now. Good thing. It's easier to gamble. Probably. probably bad thing. There was this, we missed this last month. There was a story in the New York Times

and a bunch of people pulled the headline. It says for Gen Ziers, work is now more depressing than unemployment. And it talks about how hard it is to find jobs and how people hate the nine to five. And what is the, this young group has literally never lived through a recession before. And the fact that they, they really hate life now in a booming economy, I don't know what's going to happen in a recession. Can I also say one more thing? I think that everybody has tapped into the fact that populism is really popular. Yes. Tell people that things are so bad

and you're going to build an audience. Yes. And people like, people love to complain. It's unpopular to say that things are generally okay, even if there's a lot of people suffering. Like, nobody wants to hear that message. Yes. And cue the comments, Ben and Michael are out of touch. Okay. Yeah. Where else?

Oh, so Nate Silver had a piece on Vegas And he has an annual visitor volume And it's rolling over And I don't think this says anything about the economy I really don't I think that foreign tourism is a big Contributor to this It's still relatively high

It came back a lot from COVID I mean, it's not like Subways in New York or something No, no, it's off the highs Gaming revenues drop 1% year over year by the way But I don't think, and I also don't think that, oh, you could just bet on your phone. Like, that's why people don't go to Vegas. It's not the same thing, okay? There's just nothing like sitting down at the table.

That is an awesome experience. And doing that and betting on your phone is apples to submarines, not the same thing. So I don't think that's the reason either. I think that the big reason is, yeah, it is super expensive. I think that's part of it. Uh, travel tours, travel has exploded. There's way more cool places to go now. Travel has exploded post-pandemic.

There are so many more options to visit than just Vegas. Yeah, I blame Instagram for this. Instagram makes it easier than ever to look at the great, cool places to travel. And there's like, Las Vegas is not that cool anymore compared to other places you can go. There's a lot more option. So I don't think that, I don't think looking at this line chart says anything about the economy. I really don't. Also, my one complaint about Vegas.

getting around that city is impossible walking from one like trying to walk one street and get around those loopy things and up the stairs and down the stairs and over here it's impossible to navigate you're like half a mile from something it takes you four hours to get there that was annoying so all right getting back to the calchie stuff and and the prediction markets which i i told us to vlad i do think that it's going to grow dramatically because it's a small market and i do then there's applications to it but i think that i think that the the everybody is way too enthusiastic about the size of the opportunity and what sort of business ramifications is this going to happen. I think it's a niche thing. Yeah, it's going to, it's going to grow because

it's tiny right now, but I don't, I think everybody's, well, I could be wrong. Anyway, the point is this, right now it's all sports. Look at this chart from Bloomberg. It's all sports betting. See this bar chart? Yep. All right. Nobody cares about now. The election was huge, obviously, but, but economics, crypto, other, like, so for a couple months. For example, to bet on the pro football champion. I told you, I said no for Seattle, right? There's $61 million in volume there. That's a lot of money, $61 million.

Now, the Warner Brothers, who will successfully take over, I bet on Paramount, by the way. And I'm going to cash out. I don't think that they're ultimately going to win the deal. Maybe they do, maybe they don't. But like, I bought it at 25 cents and yesterday on the new deal at spike to 50 cents. But Ben, look at the volume. So I looked on this.

The volume was $196,000 before. and even like an hour into it, $4,000 came into the market. Let's see what this is doing it. I'm guessing when you try to get it in one of these trades, the spreads are huge because there's not a lot liquidity. Now it's $260,000. So a decent amount more came in. But it depends how much you bet.

If you want to bet like 500 bucks on an illiquid thing, yeah, you move the entire market. You're trying to be like a quant with these betting markets, it feels like. You're trying to find undervalued. You're not trying to find a winner or a loser. You're trying to find something that's undervalued. No, no, no, I think that things that you think are like a sure thing. Well, there's two things. Like, me, the Paramount thing to me seemed at 25 cents seem way undervalued.

But if I'm going to start using this and it's probably a waste of my time, in fact, let me take probably out is definitely not a good use of my time. I want to, I think the strategy that I'm going to have is things that I think are like sure things that have like an 85% chance on where you can make a 15% return. Like the Seahawks not winning the championship. Now, sure, it's possible. But like, I'm pretty comfortable with the risk that they're not going to win the Super Bowl. I really have a hard time seeing that happening.

Okay, Michael is shorting Seattle. You're at your first. Shorting Seattle. I'm a believer after watching them last week, maybe. All right. So you always say, like, don't do your content to the comment section, right? But I can't believe the overwhelming number of people. Every time I post something on inflation who just literally don't believe the inflation numbers,

and they say because of my personal things and food at the grocery store, and we've had these conversations. But this is the reason why inflation is, this is the reason why inflation is, is obviously in the ballpark. So Matt Klein has... Wait, can I just say one more thing? On that, I think that maybe it's... Maybe it's an element of people not believing,

like literally thinking it's fake. Like, obviously that there is a big intention of that. Yeah, well, there's a big distrust in institutions. Yeah. But there's also a cohort in there that says, listen, that might be the national numbers. Right, but my personal. That's the thing.

But stop telling me that CPI is 3% when my costs of living are up literally 13% over year. Yeah, of course. And also, people don't... actually calculate their inflation rate. Let's be honest. How many people know what their budget is? Anyway, the thing that you tie it to to know inflation is in the ballpark is wages. If you look over the decades, when you have high inflation, wages are high. We have low inflation, wage growth is low. They track almost one to one. The wages are a little higher, but it's pretty

close. So Matt Klein has this piece, and he says, wage growth for the typical worker has been remarkably stable since April 2023, averaging about 4.1% at a yearly rate versus 2.9% before the pandemic consistent with inflation. Inflation was lower prepatement. pandemic, so is wage growth. Inflation is higher now, so is wage growth. Well, he's saying, listen, inflation has been stable at about 3%, but wage has been growing steadily at 4% per year. That's a pretty decent bump above the inflation rate. Wages are still high. He's saying, like, this is a pretty good situation, and this is one of the reasons if wages keep growing such higher, inflation's not going to be 2% is going to be 3%.

How about this, though? This is Mark Dow. I kind of believe this. Mark and Cullen were having back and forth on Twitter about inflation. Mark says, I think the whole structure of the modern economy has a disinflationary bias coming from productivity searches. Yes, many things, COVID, tariffs, whatever, can push it around, but productive disinflation seems to be a gravitational force. I'm thinking he's saying technology. So do you think in 10 years, people are going to go, wow, we were really worried about 1970s-style inflation when the most deflationary force in the history of the world was coming on board? Like, I think people are going to look back at these 1970s predictions and go, you were really predicting

1970s-time inflation when AI was coming? Really? I think the 1970s predictions were like, that wasn't like the consensus at all. There was a few numskoles that were saying that. It wasn't like. I think there was a lot of people who said, like this is it. Like government debt out of control.

Deficit is out of control. Inflation is going to be out of control. There were people saying that, but I don't think that like, I don't think that that was like the overwhelming amount at all. It definitely wasn't. Okay. I still see those charts that show, like, 1970s, inflation came down. Well, you know what? Because, yeah, Larry Summers said it.

True. All right. And then the media wrote about it. I just think in 10 years we're going to go, like, really? You thought inflation was going to say high when the most deflationary technology in history was being adopted? Anyway, that's my idea. All right, let's talk about AI. Why don't look at the Benedict Evans presentation? It's like 300 slides every year, right?

Yeah. What am I trying to show here? I pulled the chart earlier, and I forgot what it is. Basically, he's saying that only 5% of people are paying for the chatbots. Which is not surprising to me. So you said that, like, paying $200 a month is magical, right? And I know it's a difference going from $0 to $20, mostly because I was using it more, so I had to pay because otherwise it limits how much you can do it.

But the point is not a lot of people are paying yet. This is why I can't believe OpenA has not done ads yet. And maybe they will eventually. but it seems like such a layup for them to do ads and make more money. No one is going to complain if Open AI adds ads to their... Oh, they definitely... I mean, that's inevitable. Of course they will. Okay. So I did this thing. I wrote about some of... I wrote about the benefits of reading, something we talked about. And I posted a picture of my

bookshelf behind me and all these books. And this guy, a reader, sent me this observation. Sometimes AI is just magical. So he said, I took the picture of your bookshelf. I put it into chat GPT. It took every book on your bookshelf and categorized them by type. These are market books. These are psychology books. These are economic books. These are business leader books. And then it gave observations. It says you have a deep tilt towards markets macro defense against mistakes and quant thinking. There's a strong Jack Bogle, David Swenson, Peter Bernstein lineage. True. Behavioral science shows up often suggesting an interest in why investors fail or succeed. And it just pulled all this stuff by looking at a picture. It's really is.

magical. When you think about the stuff they can do like this. Yes. The guy's like, I wish you would have listed all the books, but guess what? I just put the picture in it did it for me. And it categorized the books. Unbelievable. Yeah. All right. Speaking of financial nihilism and gambling, I should have put this up there. This is the New York Times. States are raking in billions from slot machines on your phone. This is financial nihilism. Last year, Pennsylvania was collecting $1.05 billion in taxes from digital casinos compared to $188 million from sports book apps. and this is people playing online slot machines. Look at this chart.

So that is just depressing. It's bad enough when you're walking the casino floor and you see people just pulling the slot machines. When you're doing it on your phone, that's sad. Like, nobody is happy doing that, right? They interviewed this 57-year-old home care worker. She said she'd never gambled until she downloaded casino apps during the pandemic. In the last few years, she's lost 50s.

$15,000. Yeah, can we just, can we ban this? Mostly playing bingo and slot machines. Nobody needs a slot machine on their phone. So listen to this, though. She says her car was repossessed and she's facing eviction after missing rent payments. She says, if they were to close down the site tomorrow, I would be mad because I couldn't do it. But it would be helping me in the long run.

This is a person who's being evicted from her apartment for gambling and is losing her, lost her car. And still said, if they closed this site down tomorrow, I'd be mad because I couldn't gamble anymore. this is financial nihilism playing you're right playing slots on your phone that is depressing at least when you're in the casino you know you're around people the noises and remember we saw the online stuff at the casino at mgm and we're like who plays this stuff obviously a lot of people they show all these charts of pennsylvania in michigan and jersey and connecticut and how much money they're making from online casinos versus sports betting and it the casino's dwarf it that surprise i would have thought it would be the opposite for sure yeah all right i got a little thing

on crypto here you mentioned hey moving i moved crypto off of robin hood but it took me it they put a limit on it right a ceiling five thousand dollars a day yeah so i did that too and it took me i had a reminder and do it and there was a limit so it's interesting because tradfi i hate that word but that's what they call it tradfi is necessary for crypto to succeed but it also takes away a lot of the that crypto was created for, right? The seamless transition of money, right? You're supposed to be able to move it immediately. But the reason Robin Hood put those whatever hurdles in place,

those speed bumps, is because you don't want to accidentally send all of your money and it's gone. So you do it in little dribs and drabs or small pieces, and there's a reason for that, but it also makes it, like, not as easy. Yeah, I mean, what's the point? Speaking of that, I'm going to lighten up on crypto

on January 1st, if I can remember. Okay. I feel like I've taken enough gains this year. not to brag um yeah it just i don't know what's happening with the price action i don't know why i can't get off the mat i feel like all of all of the catalysts that investors were looking for happened like i don't know what the next catalyst is it's just like more institutional adoption more people buying it like i guess so and by the way i'm the deregulation you got the president who wanted it you got all this stuff i am still going to hold uh a decent amount but i

I feel like I'm still, I still have way too much. So I'm not like, you know, bearish. I'm selling all of it. But, yeah, I'm going to light it up. And if it goes to 150, great. I don't care. I still can't believe that I sold at 100,000, and it was over a year ago. And it's, it's what it's done since then.

It's surprising. But the thing that people keep pointing to is, hey, it goes in these four-year cycles. Fine. Good. I can't, I just can't, I can't feel like you can find a pattern in an asset that's like 15 years old. I'm not ready to make that claim yet. Yeah. All right. Let's talk private markets. There's a lot to cover here.

Okay. I want to give a plug. So we do a show for financial advisors called Talking Wealth. It is on its own feed. It has its own YouTube. And last week, I interviewed Laila Kunimoto, who has a substack called Accredited Insights that I subscribe to, where she does an amazing job breaking down. Like, what is actually happening under the hood? So there was a gnarly story that's been playing. out over the course of the last couple of months with a private real estate fund called Blue Rock, what is it called? Blue Rock Private Real Estate Plus, like, what's total something or the other? Anyway, here's the name as Blue Rock. Sounds like an S&L script.

I mean, it's not BlackRock. It's Blue Rock. All right. So Blue Rock launched in 2012 as a private fund and had redemptions for the last X number of quarters, a lot of quarters in a row. People wanted their money back. The problem is there is a limit on how much money can be taken out of the fund. I think 5% a quarter. Okay. So if more than 5% of the net asset value wants its money, they can all have their money. So there was a vote. They said, all right, well, here's another option. You can have the option to convert to a

closed-end fund listed on a stock exchange, and boom, you will have liquidity. And when they did that, the shareholders voted overwhelmingly. Now, you say to yourself, well, why did the they, why did they do this? Two reasons. I mean, one reason. They wanted the money. They wanted the money. Now, they didn't know if you said, hey, you can have your money, but it's going to, it's going to be below, it's going to be 40% below net asset value. Do you still want your money? Who knows? But that's what happened. So the net asset value was X. It traded 40% below X as a flood of sellers came in and give me my money back. And so I spoke to Layla about the ins and the outs of this. And yeah, not great. Not, not great. So my thinking on this is that, and Jason Zawag was all over

this. He wrote a piece on that this summer talking about how this vote is coming and what if NAV is not like, I don't think he predicted it was going to do with me this, but he was all over this. So with bigger pools of capital in these alternatives and way more money here, you're going to hear more and more of this stuff happening, right? I don't think it should be shocking. should paint the whole industry with a wider brush. But if they want the wealth channel in this stuff, I think the evergreen structure is probably going to see some alterations over time. And I think it's probably not good for investors. I think people are going to say, listen, the longer our money is in, the more money we should be able to get out or something.

There should be some sort of. It should be first and first out. There should be like a reward for being an early. Yes, because if you've invested in it for 10 years, but you're still locked on how much you can get out, like that doesn't make any sense, right? There should be some So they're going to have to change the structure a little bit. Or some of these companies have a lending facility where they'll borrow money to pay investors back or something. So they don't have to sell the assets at a fire sale price. Right? So they're going to have to say, hey, instead of 5% of your quarter, it's going to be 10%.

But what does that mean? You're probably going to have to hold more cash. And that means lower return. So I think the wealth channel is going to push back against these structures when it happens. I told you they should have gotten flu shots. Robin just came in and said somebody that we were with just has a flu. Well, I'm good. we'll see how long this last.

You're going to be sick at Disney next week. You guys better all get healthy before Disney. So I think you're going to hear more and more of this stuff. It doesn't mean that everything's bad, but I think the wealth channel is going to get very annoyed by this stuff if and when they want their money. Like, hey, we want to rebalance. Give us her money back.

We can't have it. What? So I think even though this is all laid out ahead of everyone knows this as a structure. Advisors definitely should know better. I mean, come on. Yes, I agree. So. Well, but I also think that this is probably specific.

to a certain type of asset, like private credit is in all the headlines. Listen, these are loans that are marked at a discount to par for the most part, right? Like, I don't think that there is going to be, I think that this is going to be less common in private credit where it's like, holy cow, this book of loans is worth 40% less. Like, that seems unlikely. Yeah, this is a second story with real estate. We've had this. For something like real estate?

Yeah, I could see that. Absolutely. So the Wall Street Journal had a piece about how the BDCs is starting to turn ugly. and they talk about the discount, like the discount in a closed-end fund is nothing new. But they look at these BDCs and look at the discount to NIV

and you're getting some big ones in these KKR funds and Blue Owl and what are you thinking here, man? Because I feel like you were kind of bullish on these companies before. I think you turned around and gave up a little bit, but are you stepping in

to buy some of these things? I bought more Blackstone a couple weeks ago. Like when it was getting pummeled. So I think the Blue Owl story is, and I said, I did say a couple weeks. I'd be very scared of them. A couple of weeks ago when there was talk about the conversion, by the way, this is a very

important point. I'm glad you mentioned this. The shareholders rejected this. You know why? Because I think that the intermediaries here, not I think, it's financial advisors that said, we're not doing this. I don't know who Blue Rocks investors are, right? Like, I don't know if that's more of a retail oriented group, but I think the Blue Owl is in the

epicenter of this because not only was it the BDC conversion. booted investors. It's the, they're the biggest lenders, the hyperscalers that are turning south. I am not part. So Apollo is pulling in the reins. They're saying like we're turning a little bit cautious. I am not. And I'm making this up because I don't know, like I'm not like a loan expert, obviously. I do not think that 2026 is going to be the year of all of these loans go sour. I just think that the, everyone keeps saying this is coming to the wealth channel. this is coming to 401ks, I think there's going to be way more pushback. I think this is, if private markets want to be involved in these things,

I think it's going to take way longer than they assume. I think advisors are going to be pushing back against the stuff and so are their clients. The adoption is the curve is going to be very slow. That's my, anytime one of these stories happens, I think it's going to be a little. Like, yeah, frankly, I've never heard of Blue Rock until this story. Blackstone is reporting. It's surprising that they've been around for 12 years and I've never heard of it either.

Blackstone is reporting record flows. All right. So I do, I do think that investors, advisors need to be super careful and subscribe to Layla Substack. Like, she goes through like the distribution yields and the leverage and all of these red flags that you need to be aware of. And really understanding your time rising, too. Like these are long-term investments.

These are not short-term investments. Yeah. Okay. I asked you this before and he said, no, no, no, save it for the show, but you say to me all the time. So we are going to Arizona to get out of the cold. We're going with a friend, a group of friends. my daughter's friends and we're friends

with the parents. We're going to be one house, so we'll see how that goes with six kids running around. But it's a VRBO, it's a nice house. It's got a pool and everything, and five days before we're going. They say, hey, if you want the pool heated, it's going to cost extra. And I've never knew this up front. That seemed kind of excessive.

That's crazy. How much do you think per day they charge you to heat a pool? Now, just so you know, I was blown away by the amount. Per day to heat the pool, $200. $100 a day. Yeah, nuts. Isn't that crazy? Yes.

Anyway, that seems a little bit of nickel and diming. All right, permission to get sentimental real quick? Sure. Okay. I love it. You know I love tears. Big tear guy. So I just wanted to share this story.

It's been a few months. So when my brother passed away, I must receive thousands of messages, DMs, emails from people. And I feel like I never really probably shared my appreciation. enough. But I think one of the times on the show I said, like, I'm getting these emails sharing people pouring their heart out from strangers. And a couple of people email us and said, hey, we've been listening to you guys forever. You don't feel like strangers to us. Which was cool. Anyway, so I got a bunch of good stuff. And then, I don't know. The whole, the way I explain the whole grief process is that it's like my personal VIX was at an all time high this year.

And that meant higher highs and lower lows. Like there was times when I was like my, I couldn't, my emotions where I'm, you know, I'm a pretty contained guy. There was times when I was just, I was way higher or lower than I usually am, and I could feel it. And I'm thinking, like, this is not, but it was, you know, that stuff. But anyway, so probably, like, I think the way I explained grief is, like, it felt like a black cloud hanging over you, you know? It was, like, this dull. And then you had told me, like, listen, the hardest part is going to be when people,

everyone else moves on, and you still feel it, right? But, like, six months afterwards, like, I felt like I was in a good place. And, like, for some reason, I had a really bad week. Six months afterwards. I just had a bad, all this stuff flooded back. And I got, like, a DM and an email from the listeners, like, the same day, the same week. I was at just a, I was on just an off week. I just, I just, the feelings were back. And someone just emailed said, hey, I'm thinking of you, like two people. And it was like, whoa,

just like, out of nowhere when I needed it. And it was, uh, anyway, I never, I think I never like just shared enough appreciation for that, but it was, that was like, I got a DM and an email the same day from two different people. When did that happen? This is like, so this is probably July or August, like, again, six months after, it's just like, hey, I'm sure you're still going through it. And this is probably people who had lost someone. So, like, you know, like you said, people move on. Like, yeah. And, like, for whatever reason, I just had a really bad week.

And someone sent me like, like, hey, I'm thinking about you. I'm sure you're still going through it. And why are you bringing that up now? I'm just saying thanks. I never said thanks. And I don't think I shared enough appreciation. I was just thinking about, like, going, thinking about the year. And it was obviously a very hard year for me.

But, like, that kind of stuff, like, was, it really, you know, the whole, like, humanity and people like the i just it was really anyway just wanted to say thanks to those people yes yes the world moves on much quicker than you do yes but that that kind of stuff helps so anyway love it all right well thank you for sharing that uh that's awesome um okay uh all right so i saw this tweet uh from deadline matthew how do you say this guy's last name is it rise or Reeves? Right. Okay.

The guy from the Americans and the Beast in May is in talks with Netflix over adaptation of Robert Caro's The Power Broker. And now look at this next one. Presumed Innocent Season 2 begins filming. Look who's in the background of that picture. This is going to be your worst take. It's Matthew Rise.

He's going to be in Presumed Innocent Season 2. What was Presumed Innocent Season 1? That was Jake Gyllenhaal. It was pretty good. Oh, I love that show. Yeah. He's going to be in, I don't know, it's a new cast maybe. Okay.

But this guy's ever. And that, I think that's your worst take of 2025 that this guy was overrated. No, I didn't say it was overrated. Well, if he was rated high, then I guess, yes. I would say that. I just didn't care for him. Okay. I think he's awesome.

I thought he was good enough. Do you remember one of the audio books I'm listening to, I can't remember if it was, which doesn't matter. TV guide. Do you remember TV guide, the physical TV guide in like grocery stores? Oh, yeah. So for people like, look through those to see what was on. So there was a daily magazine that, that,

showed you what was going to be on TNT and USA later, and you were like, awesome, I watched Shawshank for the 90th time. Yeah. And then it moved to Channel 14. Yeah. Where in order to find out what was on TV, you just...

But you'd have to wait for it to scroll. It would just scroll. Yeah, you're like, I just missed it. You had no control over it. Give it another three minutes. Ben, I saw Avatar last night. Oh, okay. I'm surprised.

So, okay, what do you think? So, um... Have you seen the other two in theaters? actually the first one no I saw it in 3D and actually my wife came away with a headache but that was the only movie I ever saw in 3D is the first one

okay there was like a 6 to 8 minute trailer for the Odyssey and you know I like to raw dog and I'm not a trailer guy I don't feel like I need to see a trailer for the Odyssey Are you all in?

Dude they showed like the Trojan horse scene I was like hello like save it for the movie too much okay but it oh my God it looks unbelievable It was like, it was a big scene. Wait, can I just give you my, without seeing Avatar yet? Here's my concern.

I really enjoyed the first one. I saw them both in theater. I really like them. People keep saying like, Avatar has no pop culture reference because no one talks about it ever, but they're like two of the biggest movies ever. And I really like both of them. I'm concerned that the third one is going to be overkill because how much more war stuff can you do?

Is it the same story? That's my concern. Okay. Yes, there are lots of similarities between two and three. and I loved it. Okay. Oh my God. Speaking of like you said AI is magic.

Like I don't, obviously, I don't know. Like, did this movie cost like $16 billion? Like, how does, how does he make these? So I saw it on an IMAX 3D, of course. And it was, it was, it was, I saw it on at 7 because it's like three, it's three hours plus. It is long. And yes, there are obviously there's fat. It doesn't need to be three hours plus.

I wish it weren't. I would have been very happy if it was two and a half hours. But it feels like an event. though to see that kind of movie. But I will go to the theater to see it. It is an event. It is spectacular. There's nothing like it.

If he stops making them, I'd be perfectly thrilled. I definitely don't need to see another one. Obviously, James Cameron is the man. But, oh my God, it's so good. Okay. It is. I'm just kind of surprised here you say that. Okay, that's good.

I feel better about going to see it now. It is so good. And I love the second one and I love the third one. And yeah, it was very similar, but I don't care. I loved it. I really did. Okay, good. So wait, so you saw an IMX-R-D,

so you have to wear the glasses still? Yeah. Okay. It's unbelievable. All right. Any other recommendations? Is that it? That's it.

Okay. I got in, my new Audible, I got into the Cameron Crow memoir called The Uncool. Oh, that's on my list. Good. So he was on the rewatchable, so I listened to it. I mean,

he's obviously one of the most interesting, he's one of the most interesting people ever, and it kind of feels like it kind of feels like you're, It's a prequel or like an addition to almost famous. Because, and I mean, this is a guy who created two of the best movies of the past 30 years, right? Jeremy McGuire and almost famous. And he also was writing for Rolling Stone at age like 15 and went undercover and wrote Fast Times at Ridgemont High. This guy, he's one of the most interesting people ever.

And he reads the book. So it feels like he's telling you his life story. And you can get a sense of him reading the book. I mean, he puts so much feeling and emotion into it. you go, oh, I can see why this is one of the great movie filmmakers of this century because the way he tells stories, he's such a great storyteller. Even like the most mundane, but his whole family background, it almost feels like his life was a movie, and you can see how he made almost famous because it's like, God, this guy's

life sounds and feels like a movie, growing up in the 60s and the 70s and growing to all these concerts, and it's very, very good. I'm really enjoying it. I'm happy to it. I went into a little John Cusack moment the last couple weeks because they did high fidelity on the watchables. I don't like that movie. Okay, one of my all time,

one of my favorites of this song. I've rewatched that movie dozens of times. I still remember the... You know, because maybe I only saw it once. I think it's probably rewatchable. It's very, very watchable.

And the first time I saw it, I had no idea who Jack Back was. When he sang at the end of the movie, I was blown away. When he sings, Let's Get It On or whatever. But then they did the sure thing because Rob Reiner passed away,

and that was another one of his. So I watched that. And then I got into Gross Point Blank again, which is a great Michigan movie because it takes place in Gross Pointe, Michigan. And I don't know if you've ever seen this. And maybe not a Mike, but it's, it's John Cusack and Joan Cusack and Dan Aykroids in it and Jeremy Piven. And it's just such a 90,

mini-driver. It's such a 90s movie. Gross point-blank. It's about a guy who goes back to his high school reunion, but he's a contract killer. So he kills people for hire, but he goes back to his high school reunion. And it's the kind of movie where you see the tone of it and you go, oh, that's a 90s movie. For some reason, the tone of the 90s movies, they were just there's something they were just so like light and airy and free and easy and even though it's a movie about a guy who kills people it was still kind of tongue and cheek and it's just it's a total 90s movie a movie that they that only gets made in the 90s and not today we uh we forgot to talk about rob bryner last week obviously you know horrifically tragic and just

worst thing ever um that run of i can remember the order was it a princess bride whatever the what it was. Princess Bride, How I Met Sally, a few good men, Spinal Tap, and Misery. Yep. Are you kidding me? Stand by me. Stand by me. That's right. Yes. I haven't seen Spinal Tap for some reason. That's for some reason. And I like those mockumentaries. That's not my genre, but whatever. The other ones are just, I mean, I think Princess Bride, so I haven't showed that to Kobe yet, but I've shown that to my kids multiple times. That's one of my favorite movies of all time. It's, I think that's like unanimous, right? Like, if you don't like that movie, you just stop. Just, what are you doing with your life? Yes.

That is one of my all-time favorites. I love it. Okay. We'll be back next week. I'll be reporting this now. Somehow some way. We'll see if you can manage. You know, I saw Balchunis and Economic Talk tweeting about somebody shared a picture of the magic kingdom at night with all the fireworks.

And I remember that when I went the first time. I was like, oh, boy, I'm not looking forward to that. There's just so many people. But I was thinking, what are they're not? When are there not a lot of people at Disney? Yes, exactly. And there is a capacity, right? Yes.

And obviously during the holidays, they're at 100%. They sell it every ticket. And I'm guessing that it's always above 90%. Maybe, I don't know, maybe it dips. Are you doing one of the holiday party things at night or not? Like, there's a holiday. I don't think so. When we were there, we did, it was an extra ticket that you go in at like 7 o'clock

and there's an extra holiday thing at night and everything is lights and, I don't know. But yeah, yeah, Disney's always packed. It's never like not full. Here's what we're not doing, not spending $150 ahead on the buffet, the character buffet. Okay, we didn't do any character dinners or lunches this time either, and the kids didn't seem to care. Yeah. It'll be fun. I've always been a Disney hater and everything, and I think I can't wait.

I love it. It's the happiest place in the world. Come on. And then Epcot's great because just grab a beer every stop. That's wonderful. All right. Merry Christmas for everyone. holidays, and thank you for a great year.

We'll still be it one more time. Yeah, it's not over yet. Animal Spouts at thecompanet News.com. We'll see you next time.