Animal Spirits Podcast - The Great Depression of 2073 (EP.89)

Episode Date: June 26, 2019

On this week's show we discuss why Michael is getting back into trading, Facebook's new cryptocurrency, is it a good thing more professional investors are buying up starter homes, should Vanguard get into private equity, why Harry Dent says there will be a depression in the year 2073, can you really use demographics to predict the markets, how many people cry after selling their home, why it's better to peak late in your career, why the 1990s had much better movies than we do now and much more. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by MarketSmith by Investors Business Daily. If you go to Investors.com backslash Animal, you get your first three weeks of the service for just 1995. Marketsmith is a research platform designed to pick winning stocks, and they have something called a growth 250 list, which runs 30 different screens on stocks to find stocks with growth potential. They have stock charts. You can use any even pattern recognition to analyze charts like the pro that Michael is or Michael's trying to be. Correct? Well, since you mentioned it, I do have a confession to make. Okay.

I'm trading again. I knew it. I fell off the wagon. L.A. L.A. did it. I could see the twinkle in your eye. I knew it was going to happen. All right, but here's the deal. I start with $1,000. What can possibly go wrong? Okay. So, disclaimer, I'm being a responsible investor contributing to my 401K every two weeks. I have a taxable account. Good, clean, healthy asset allocation. No shenanigans.

I'm going for it. This is your fun account, right? I am going to turn this $1,050 into $1,050. Yes, let's do it. I'm totally here for this. I'm here for fun. I have no delusions of grandeur. And I am using the IBD 50.

I will say this. Okay. Because I don't want to put too much time into this. These are the best stocks, biggest winners. It would be very poetic, as you mentioned a few weeks ago, if this marks the top. in growth versus value. Because these are all growth stocks. Right. We got to know this market smith a little bit from talking with them and now you're using the service. All right. So I'm excited to hear about this going forward. That's all I can say.

I think it's going to be great content. I'll keep you posted. All right. So let's jump into what we got. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holtz Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritthold's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben.

You know, hold on, before we get started, I made my first bad purchase on Instagram. I bought a shirt from a company, just a T-shirt. I forget what in the name of the company is. But I think it's for people like you. And what I mean by that is people that actually have some muscle on their arms and stuff. Is it a little too loose? No, the opposite. Oh, it's too tight. It doesn't fit well. Maybe I'll take a picture. Okay. Listen, they're still working out the kinks. Instagram doesn't quite know my body yet. Okay. And in the future, as a good segue here, maybe you'll be able to use Facebook currency to buy those crappy fitting t-shirts in the future. Right. See what you did there. All right. So Facebook is

going to launch a digital cryptocurrency. I guess digital, is it really a cryptocurrency? I don't know what the difference is. Is digital crypto redundant? Yeah, maybe it is. And they're going to call Libra. I think the biggest red flag about this thing is the fact that I kept seeing the word consortium used in these because they're using a consortium of other funds. I'm a consortium. What does that mean? Like, you say consortium? Yes. Is that the proper way to say? Because in my head, I think I've always said consortium. Not that I've ever said it, but I feel like if I were to say, It's not a word you use frequently. Okay.

Maybe that's one of those that you can't make fun of the person for mispronouncing it because they learned it by reading it. Is that the deal? I feel like every time that word is used, however you pronounce it, it's in like a James Bond movie of villains who are going to take down the plot to take down the earth. But I don't know. What was your initial thought when you heard about this? Do you care?

Do you think it's a big deal? I am so uninformed. I didn't even read the article. So I have zero thoughts. Do you have any? Well, my, the, one of the guys who's head of the product for this said, your financial data will never be used to target ads on Facebook, which I say, I'll take the over on that one, because there's no way Facebook wouldn't use this to try to make more money somehow. And I guess they're trying to go about it the right way, but can we really trust someone like Facebook to do this? It sounds like a really, actually sounds like a good idea on the face of it, because it sounds like they want to make it easier for people to move money around the world. And in the, in the U.S., it doesn't probably matter as much as it does. to people in other countries or people sending money back from the U.S. to other countries. So I actually think one of the best use cases of crypto or digital currency is emerging

markets that have really faulty banking systems. But the other side of that is, will those emerging markets one day step in and just say, sorry, Facebook, you can't do that here, or your consortium, consortium, however you say it. But is Facebook like the most trustworthy organization to run this stuff? I would much rather have an Amazon coin than a Facebook coin. That's kind of my line of thinking. I wonder if Amazon is working on something like this. I would much rather trust Jeff Bezos and Mark Zuckerberg for something like this because

I think I just don't think you can trust Facebook on this sort of thing. When is it going live? Is it a 2020 project? I thought it was still just kind of in the works and they're figuring it out. And they've got a bunch of big partners with them. And again, at the face, it sounds like an interesting idea. And Facebook obviously has the network for it because they have billions of users that could potentially make this thing happen.

And I think that's part of what you need to do to compete in the financial service. is just scale. But, yeah, I don't know. Maybe this is like one of those things where they ripped the bandit off and all these other firms will jump in and make something like this that works. But yeah, that's about the extent of my knowledge on it too. So there were two stories this week about competition for starter homes. I don't know if it must have been a data release or something.

There was data released from Core Logic. I wonder if the editors at these, it was so the journal in the New York Times published it on the exact same day. I wonder if the editors were like, oh. Yeah. That's kind of like me and you publishing the blog post together last week. Like, we did it. Yeah, same thing. So they're talking about the fact that starter home, people who are trying to purchase starter homes are now running into competition from big time investors that are buying up these houses. And it's especially big in the bigger metro areas that are, that is happening.

But they showed places, I guess in the U.S., it went from 6% of what they call starter homes to 11% now from the year 2000. In places like Atlanta, it's doubled. Oklahoma City. It's almost doubled. Long Island, it went from 6% to 19%. Even Detroit went from like 8% to 27%. And so a lot of people on that lower end of the housing price scale are complaining saying that these investors are coming in and private equity places are snatching up all the houses they wanted to buy. This is going to sound call, but I do have a question. One of the things that I was thinking was people that are being crowded out of these lower end homes. Maybe that's not such a terrible thing because home ownership is so expensive and maybe they really ought to be renting. True. That's, yeah, that's possible.

And then the other potential benefit is that these investors are sprucing up the houses. So, you're moving into a home that ostensibly doesn't really need so much work because it's being done for you. So you're paying up for that. So I don't want to sound like totally cold and heartless. I don't know. What do you think? I mean, obviously, it's very sad for people that dreamed of buying a house, it saved up for it, and now find themselves in a situation where, holy cow, what is going on? All these houses are out of my budget. It's hard to figure out exactly how to feel because each of these stories gives like an example

of a couple who was bought by their first home, and then they were outbid by one of these places. But I agree with you that, like the flipping thing, I would actually wouldn't mind seeing that because I feel like there is a lot of like older housing inventory in the country that could be, could use some work. And if people actually waited a little bit and saved and bought one of those houses where that stuff was already done for them, I feel like it's going to save them money in the end because they're not going to try to do it themselves. And they have someone who's more experienced. You can probably do it for a lower cost, do it for them. You think this is a net positive that affects individual people in really negative way? Yeah. And it's still, it's 11% in the U.S.

So it's not like it's, it's still a minority. So I think it's. Yeah, but 11% of how much, you know, it's a giant number. So maybe this reverse denominator blindness that, like, it's still, you know, 11% of single family homes and law are still thousands and thousands of homes. What I haven't seen on this is how do you think these companies, obviously it's a little too early to tell, how are they going to do on these from a return perspective? Like, what is the return going to be? Because this is, this seems like it's asking a lot for them to do to come in and it's got

to be pretty capital intensive to do this. So not only they have to understand the dynamics of the local market, they have to spend some money to fix them up, they may have to pay. for management in those local markets, it can't be cheap to do this. So I can't imagine that the returns are going to be amazing on these deals. Low to mid-single digits. That'd probably be the hope. I think that when you see headlines like this with a house flipping, a lot of people's alarm bells start going off. But will we see the other side of this in 10 years saying there's now a greater number of

houses for sale by these places because they want an exit? And they're not just happy to sit there and receive their low cap rate or whatever. So maybe that's the other side of it. maybe these private equity firms will start selling more of these houses in future years if they're buying them now. But aren't they? Isn't that, I mean, they're trying to sell them pretty much immediately, right? I guess I don't know that if they're trying to sell them or use them actually for rentals. No, I think that they're selling them. Okay. Then, yeah, I guess I'm kind of torn then because it's kind of tough now for people can't get into those houses. But again, I think what's so bad about fixing up some of the housing inventory?

I think that's actually probably a net positive for the area you live in. and then for people buying those nicer houses. But maybe just, again, pushes out a demographic that couldn't get there, which, yeah, I guess that's kind of tough. But as we said, like, buying a house is, it's a very personal part of the financial equation. And people who get in over their head are really stuck in a lot of ways when that happens. So maybe this is a blessing of disguise for people that can't get in. You know, who knows? I'm sure every situation is different.

All right. So here's a very topy headline. Okay. Vanguard is examining a push into private equity. Now, this is from the Wall Street Journal, and they didn't say that Vanguard is doing this yet. They're just having talks, and it's possible they don't do it. But even the fact that Vanguard is commenting on this, this is a terrible idea. I mean, this article is something of a nothing burger.

It says they're in the early stage. The final decision hasn't been made, but they're in talks with private equity firms. Here's the thing. If Vanguard was going to do this, why wouldn't they just offer an S&P 500 leveraged fund that could give you what the private equity companies can get? you anyway, or like a small cap value fund that's levered. Why wouldn't they do it more of an evidence-based approach like Vanguard does? And I know if they did this, they'd probably figure out a way to offer it at a lower cost than private equity investors get anyway. So maybe

they'd make up for it on that basis. But when something like private equity gets to retail investors, you're not going to get good returns in that space. And the whole point of private equity in the past has been that those investors assume they could get some sort of illiquidity premium. Like, when it goes to Vanguard and they have scale, obviously not all their investors are going to get into private equity, but you immediately lose that, that idea probably of the illiquity premium. And it just seems like when you get down to that point, there's no way the returns can be any good, I'd say. Well, but are they necessarily trying to do this for retail investors? I don't think that's necessarily what they're going for. One of the things in the

article that was actually surprising was said that Vanguard currently advises institutions with the combined 50 billion of assets and high net worth and other retail clients with a collective $130 billion. 50 billion in institutional assets, doesn't that sound like a very, very small number? It is pretty small for them. And I'm guessing this would probably be for their people who maybe even the people who pay for their robo service. But I'm saying I don't necessarily think that's what this article was saying. I think that it's potentially for their institutional clients and super high net worth clients. Either way, to your point, this is a, a topy article threfer was one.

This is the kind of thing where Vanguard makes this sort of push. I think that's not a good thing for their brand. I say, if I'm running Vanguard, I run away from this as fast as possible. Yes, I agree. So kind of sticking with this theme, financial planning.com had an article about that the SEC is considering expanding hedge funds and private equity of people who are not accredited investors. So I think the rule right now is you have to either earn over $200,000

dollars annually or have a net worth above $1 million. So thinking about taking those thresholds down to blow that so people could invest in hedge funds of private equity. And maybe this is part of the reason Vanguard is looking into this because if these rules are changing, they want to be there to get some sort of first mover advantage. But do you think this is the kind of thing matters? Like should people have more choice than this or is that just a terrible idea? I don't think it's a terrible idea.

I think that the knee-jerk reaction is to say that there's a terrible idea. I don't think it is because are hedge funds, and again, that can mean so many different things. Are they any more dangerous to a retail investor than a lot of the shit that's already available, like triple inverse ETFs and stuff that blows up when the VIX goes crazy? I don't think so. Well, in a lot of ways, those structures are harder for people to understand. That would be my contention. Do I think that retail investors need access to hedge funds?

No, but I don't know. I don't think it's that big of a deal. Like I think, again, like I just said, I think there's a lot out there already that they shouldn't be doing. So why is this so different? I'm guessing a lot of it would come from financial advisors as well. It wouldn't be DIY investors that are pushing into get into this stuff themselves. It would be, you know, financial advisors giving their lower end, their clients with fewer assets. Do you think that there were, do you think that we're going to see like Zillow for hedge funds?

How would that work? I don't know. All right. But like, yeah. Give me your shark tank pitch. It's, I mean, well, that's the thing. It would have to be like a Vanguard for hedge funds. And maybe that's why what Vanguard's trying to do here by kicking the tires on private equity,

where they can be the ones to do. And I guess I would trust them more than anyone else. I just, I don't know if that's what clients need and how much that works for their brand. Well, I think that hedge funds would really help for the coming depression of 2072. yes or 2073 it's it's so i don't know where i found this but i think it might have been a someone sent it to me or it was in a ad and it's by harry dent and he wrote this last week and it's talking about your kids great depression in the making and i sent this to you and i said you you've got to read this because it is it's a doozy so harry dent has written books over

the years i think maybe one of his books he got it right and he's been living off of that ever since. The guy probably sold millions of books, and they're all wrong because he writes him at the wrong end of the cycle. And I think he writes a book about every three years about the coming depression or the coming boom or. So this, he's looking at, I can't even read this with his trade page. The generation cycle is collapsing in the U.S. and our next four-season economic cycle will be shorter, more like 50 years, taking us back towards the Condre-T-F wave average of a 60-year rhythm. I actually believe it's pronounced Kondra-Chef. consortium, the consortium wave. That means we'll get the next spring spending wave peak around

2036 or 2037, an inflation summer peak around 2039 or 2040, a fall bubble boom peak around 255 or 2056. And here's the kicker, a longer depression into around 2072 or 2073. This is psychotic. There's nothing else to say. So he's using demographics to try to predict the next depression in 2017. which I guess honestly at face value, like using demographics to predict this stuff and spending patterns and it almost sounds intelligent until you start putting exact dates on it. And then like realizing like, okay, if it's that easy, do you don't think everyone would be

using demographics to predict what's going to happen with the economy? Wait, what are you using? Not that I'm going to start using this chondria tiff wave soon, whatever that word is. It's just amazing to be that someone could actually type this and think like, I'm I'm going to give a one or two year window for every peak in every valley and every depression in the future. And maybe he's right. So there was this our world and data actually had something, a graph that I sent you. And it said that the total fertility rate, which is a number of children per women in reproductive age bracket, has halved in 50 years.

So in 1950, and even through like early 1960s, the average woman in reproductive age had five children. And today it's down to like two and a half. So maybe he's on to something. Maybe he's got this wave figured out. I think just trying to use demographics to predict what's going to happen in the economy. I mean, in some ways it makes sense because economic growth is kind of, you can drill it down to population growth plus productivity growth, but that productivity growth is the thing that is impossible to figure out

because you're trying to guess what innovation is going to look like in technology and how people will use stuff. Yeah, I don't know. I'm going to go ahead and say Harry Dent is probably a little, off in the 2073 Great Depression, but we're going to follow up with that one in our 10,000th show then, I don't know. Bluegrass Capital tweeted a very interesting chart, which shows consumer retail segments versus the largest player in each vertical.

So we're talking about things like automobile dealers, general merchandise, grocery stores, clothing stores, furniture stores, etc. And one thing that stands out immediately to me, and I think this is probably a comment that somebody made, is Amazon is only on this chart in one place. They're leading the charge in the electronic shopping and mail order houses. Mail order houses, huh. Now, I guess the part that you don't see is you don't see number two, three, and four, which they're probably dominate this list. Does this mean Amazon is going to solve the starter home problem with these mail order houses. Is that really a thing? I just thought that this is kind of interesting. What do you

anything jump out to you? So maybe Amazon is like the the CFA of retailers where it's not like the depth of knowledge in the CFA that works to like to learn the stuff. It's like the breadth. So maybe Amazon like you said is just doing good in all these categories, but not the best. Another thing that stands out is so out of all of these segments, automobile dealers did by far the most. So it looks like a trillion dollars in 2017. And the largest market share is car max with only 2%. So that is totally fragmented. So pun intended here, I'm actually kicking the tires on doing a piece about car ownership. That was a very strong pun intended. Yes. And someone actually emailed me this, a reader and said that. So here's some stats for you. The number of outstanding car loans up about 50%

since 2003, 85% of new car purchases are financed, but only 54% of used ones are. Wait, say that one more time. So 85% of people buying a new car are borrowing to buy them, but only 54% of used car ones are. Okay. Is that inconsistent with history? So it's kind of right. I'm kind of looking into this more, but maybe the idea is it's smarter to pay for a used car in cash than to finance a new one. And actually the average... But who could pay for a new car with cash? That's what I'm saying.

If you're going to pay with cash, that's buy a used one and don't waste your money on a new car. I'm saying maybe it's fiscally more responsible to do that. Well, let me ask you a question. Do people buy new cars? Because I was always under the impression that they buy cars that are like, I don't know, a year or two old and they lease new ones. But is that wrong? That's probably wrong, yeah. I think a lot of people would rather buy it than least.

But in the average loan period for these is like six and a half years creeping up towards seven years. and so cars are more expensive because people are buying bigger trucks and SUVs and not as many sedans and so this just seems like one of those big fixed purchase items that is really hurting people's finances and I've talked about this a little before when I'm looking into it a little more so I'll stay tuned okay so don't write about this because I'm writing about it I got dips I got shotgun on this so we're at new all-time highs go figure which new all-time high has been the most impressive because it doesn't it seem like every time it happens you're kind of like, yeah, I should have known.

But every time stocks go down, you're like, ah, that's going to be forever until we get an all-time high again. This was like a 6% drop. I think the last one was it, right? When we made, we had that quick bear market. Yeah, that had to be it. But every time we hit 5%, people are like, oh, we're in correction mode.

Here's the next bear market. Well, all right, wise guy. Are you not people? Do you not feel? I am definitely people. But I'm just saying this is like the Teflon bull market. It's, I just think it's so impressive that it comes back every time. And maybe this is what it felt like in the 80s and the 90s, like even, I mean, it was more extreme then I guess. Maybe this is kind of what it felt like. I am definitely in the camp that every time we have a 5% drop, I think that's it. Yeah, I maybe I'm just preconditioned now to think like, I don't think we're going to get the big one for a long time. Maybe. Maybe you're just a new whale. I think I am. Maybe that's the, it just, it's crazy. All the stuff people start worrying about when stocks drop and then they rise and all that stuff.

stuff goes away until the next one. It is pretty comical. So this chart is showing actually not the only one who's worried because looking at equity fund flows over a 12-month period, largest outflow in a long time. Now, however, this is not necessarily a chart crime, but what do you think that accesses? Billions of dollars. Yeah, it doesn't exactly say, does it? It doesn't say like this should probably be normalized because there's just way more dollars in the market in 2019 than we're in 2011. You know what I mean? Yeah, but it's still lower. Okay. So on the top, you see the SP500, that scale looks correct. On the bottom, I'm guessing that's billions of dollars, right, as opposed to like percent. Yeah, it's got to be billions of dollars. All right, not a chart

crime, but interesting nonetheless. The idea of this chart is that people are selling more dollars worth of stocks and they haven't a long time from this little correction. You could say, well, not just this correction, because actually, there was a big one. in, this would encompass the period in December, January. So maybe this is somewhat misleading. Anywho, people have, have missed a lot of this rally, not surprisingly, because it's been difficult. But you could say that this market continues to climb a wall of worry. That's fair. All right. The Luthold Group, they have a really interesting chart. They stack the NYSE Composite on top of the New York Stock Exchange daily advanced decline line.

And the AD line is something that we've spoken about in the past. Ben, you look like you're going to laugh. Nope. I'm just, I'm taking in your technical analysis, genius. Put your hat on because we're going to school. So this advanced decline line is often used primarily, I would think, to look for divergences, meaning indices or indexes, whichever you prefer, are hitting highs, but the majority of the components. You can only say indices with a British accent. For anyone in the U.S., it's indexes. Okay. All right, continue. But the majority of the soldiers are not keeping up with the generals, so to speak.

But they say something interesting. If the final bull market end is deflationary in nature, the NYSE bond-like securities will be stronger for longer, negating some or all of the AD lines predictive value. So if interest rates are falling, then all those security should be going up, so it falls positive. Exactly. Well, it could be a not a false positive, but the opposite. Are there really that many of those securities, though? Yes. I looked into this, I feel like, sometime in the last two years. And there's more, so what we're talking about is the NYSC composite is not just stocks. It's a lot of bonds and closing funds that have fixed income securities. And there's more than I think you would think. So it's

not just totally stocks. So maybe this is another newbill technical analysis question here. Why wouldn't you just look at something like the Russell 3,000 that doesn't have those in that? You can. Okay. So maybe that's the idea. San anyhow, again, the point is that because bonds are falling, because interest rates are falling, bonds are prices arising, the NYSE-A-D line might be different this time. Stick around. We'll find that. Okay. According to a new Zillow survey, 36% of home sellers say the process left them in tears, with millennials and parents far more likely to cry at some point during the sale. Is this a real, wait, is this a real survey? This is dead ass. A real survey. those who cried 20% shed tears five times or more. Okay, that part, that was, that was the cherry on top. This just, wow, I, I don't even know what to say here. So the funny part is not that people cry because selling your home is emotional, but the fact that somebody's like, wait, no, no, no,

oh no, I only cried four times. Yeah. Who remember, like? And do you think people are crying because it's a painful process or because they're so sad that they're leaving their home that they lived in? What's the difference? It's emotional. I don't, well, yeah, okay. I didn't. I don't. That's okay. It's not physically painful. True. Okay. It's, uh, yeah, I just can't imagine being like, did we cry? Remember we cried that one Tuesday and then we cried the day we closed. Did you cry when you sold your house? No, it was not emotional for me. I was only there for three years.

I mean, I got, the only thing I got was a hand cramp from signing all the papers, but I didn't, no, I didn't come close to shedding a tier. And I think that'd be a little weird. Like, I don't know if the mortgage guy would have been able to like lend a helping hand there in the room. It would have been kind of weird. Okay, so I sent you this piece from the Atlantic, and I feel like I've gotten changing theories on what this is. So it's called your professional decline is coming much sooner than you think. It seems like everyone on Twitter read this. It's from the July issue of the Atlantic. Arthur Brooks wrote this piece. I mean, part of it of this story seems to me like it's almost obvious, and his whole point is that you reach your peak sometime before your

career ends. And then you're going to decline and it's not going to be as good and you won't be as successful. Isn't that kind of obvious? I mean, I really like this piece, but isn't it kind of yeah, you're not going to be as successful at the end of your career as you are in the middle or some sort of peak year? That's harsh. I feel like you're picking nets. Am I? Okay. I don't know. Let me ask the question. Did you not enjoy, I mean, I thought this was excellent. I thought it was really good, but after I read it, it was kind of like, is this kind of like one of those hustle porn pieces where it's like, this is written for by successful people, for successful people? Maybe, but I think it's one of the points that he made was he said whole sections of

bookstores are dedicated to becoming successful. There is no section marked managing your professional decline. This is good. And I, as I was reading this, I was thinking, by the way, can't wait for the book. I mean, this one kind of felt like a book for sure, didn't it? Is it a book actually? Because this seems like the kind of article that could lead to a book. I didn't, I guess I didn't get that. I felt like the article was enough. This is like one season. But my thoughts on reading, as I was reading this were like, I'm already dreading that point in my career when it's going to tail off and it's like, now what? I can see how people who retire go through like those stages where they don't know what to do with themselves. I obviously have a long time to get there. But I was thinking that already like, man, that is going to be, that is going to be, that is. going to be a tough transition to deal with. Well, lucky for us, we won't need to deal with this because I think this article was getting at people that are like Uber successful. Ah, okay.

So we're good. Yeah, he's like gold medalists that like, like, yeah. So he said, you're a gold medal when you're 20 years old and then now what? Exactly. So he called it the principle of psycho professional gravitation, which is the idea that the agony of professional oblivion is directly related to the height of professional prestige. So again, we should be good. Okay. And honestly, part of this also kind of reminded me, I was reading, we talked last week about how I read gentlemen's quarterly, aka GQ. And I was kind of finishing up the Seth Rogen piece of that. He was on the cover and they had a big cover story on him. And he talked about how he did. Did you ever see the movie, The Green Hornet with him?

No. It was okay, not great. And it was his foray into like a big budget movie. And it was, I think it got panned by the critics. It spent a lot of money. You know, he spent like 150. million dollars, it didn't work. And so he said after that, like, I got to figure out to stay in my lane. And so I just went back to doing 20, 30 million dollars movies with my writing partner that we had full control over as producers. And we didn't really have to deal as much with the movie studio people. And so maybe that's the idea is like, he was talking about being like the guy behind the guy. And I think maybe in some ways, that's kind of a better place to be instead of getting exactly what you want at a really young age and then being like,

now what? So maybe knowing your lane and being okay with not being the person in the spotlight is not the worst thing in the world. Yes. Anyway, I thought it was one of the better articles I read in a long time. It was good. I'm the one who sent it to you. So obviously I gave it my seal approval. I was thinking about it afterwards. You came out swinging. I don't know. I thought about it some more and I thought like, I don't know. Is there a little bit of, and maybe that's the point where it's like everyone read it and it's like, oh, duh, of course. Yeah. There's going to be this kind of thing could happen and it's got to be tough to deal with. All right. So Vox wrote a piece, basically showing the media landscape who owns everything. What stands out

in here to you? I mean, I don't know. You put this chart. It's kind of a hard chart to understand. So I'm going to let you walk me through this because I don't really get it. Well, what don't you get? It's pretty straightforward. Okay. It's just, it's kind of a weird looking chart. We'll put it, we'll put this in the show notes and you can be the judge. But, okay, I guess what stands out is that there's probably been a lot of consolidation in the entertainment industry, but maybe there needs to be a lot more. That was my thoughts, exactly. Okay. So it didn't take me long to get there.

Yeah, I'm happy to be the guy behind the guy in this case. But it seems like as we have more of these streaming things come out and everyone wants to have their own streaming brand, it's just going to have to be. So I noticed one on the other day on my TV. I am DB TV. So they have like their own streaming network now. Like, does everyone really need their streaming network? Can't we just all consolidate and bundle these? I know that joke's been made at nausea at this point, but it really, we really do need it.

I don't know. So my cable, you know the thing every 12 or 24 months when your cable bill goes up because your promotions fall off? What do you do when that happens? I said, I'm lying. I don't know what you're talking about because I don't really look at my bills too closely. Well, you don't have the time when your 18 or 12 or 24 month promotional period goes up and your bill goes up like 70 or 80 bucks a month?

I'm embarrassed. I don't know. Okay. Okay. You don't pay attention that much. So I do every time and I notice. And so every time I do, I call them and I just had this happen where I say, I'd like to cancel my service. Can you give me a better deal? And they say, all right, can I guess I'm going to cancel? Can I talk to the retention department? And then the retention person gets on the phone and says, all right, I can actually give you a better deal. You don't go through that process every. All right. You need to help with your negotiating skills. So I just went through that process. And I would love it if there was one. that would just say, here's your price. It's never going to change. Or it's going to go up by 5% every three years, whatever it is. I don't like to go through that process every time and threaten that I'm going to leave and then I don't because we both know, I'm not going to leave. Have you heard of something called the I word? What's that? Inflation? Yes, but I don't need it to be $80 a month. That's a little too rough. Here's another thing in this chart. Netflix, 139 million subscribers, big number. Hulu, 25 million.

Not bad, okay. All right, I apologize. I feel like we dropped the ball in this one. Where are you going with that? I don't know, I'm not going anywhere. Let's just stick with this for a second. Last week, you were talking about how you had a theory about one season disrupting movies or something. It just made me realize that there aren't any good movies anymore because there are so many good TV shows now.

Okay. So let's pick a year. It could be any year in the 90s, but let's pick 1995. Toy Story, Apollo 13, Heat, 7, Braveheart, usual suspects, outbreak, clueless, casino, Batman Forever, Bad Boys, Golden Eye, Billy Madison. The list goes on. Did you say Braveheart? I did say Braveheart. Desperato.

I mean, there's so many more. Die hard with a vengeance. I'll stop here, but believe you me, there are more. We'll never get another year like this. And again, check out 94, 96, 97. It's all... Primarily, the entire 90s and maybe early 2000s. And that's the point.

You couldn't come up with a list over the last 10 years that that's this good. Correct. Because a lot of the good dramas and stuff have just gone to television. That was my point that we just don't have a lot of great movies anymore. So your boy, Derek Thompson showed a chart. Film tickets sold per person per year, showing the... the U.S. and Canada. And it's 32% off its highs. And it peaked in 2002. Oh, wow. That's pretty good. That makes sense. And it's just gone straight down pretty much

since. So, did you watch the Sandler movie on Netflix? I did. I mean, it was okay. I turned it off. It was fine. I turned it off after 20 minutes. Okay. I mean, put it this way. It's probably the best movie. So I was looking at Sandler's movies. And, man, they've, just been so, so amazingly bad. I think the last movie of his that I enjoyed, Funny People was 2009. I put a tight stop loss on movies these days. And it wasn't that was bad. It just, it wasn't, it wasn't good. That was my problem. So I just, I saw, over the weekend, I saw Black Klansman finally. It got like 96 of Rotta Tomatoes. It was Denzel's son was in it, right? Yeah. He was good. Did you see it? I did not see that one yet. It was not 96 good. I'm going to

say like good but like I don't know looks felt to me more like a 73 I feel like someone on this podcast one of us said that nothing is properly rated anymore you're coming around I said a few months ago that I was going to do March for the Fall and I want to give myself a little bit of an out here just a little bit of a hedge here's your dad cat bounce uh no my wife is due we're having another second child at the end of August so assuming that everything is going okay This is only four weeks later. So I'm just giving myself a potential out. Yeah.

You should definitely not do it then. With two children, no, don't do it. Four weeks after your second child was born, no way. Your wife will hate you. Okay, but so I got, I returned my Apple Watch to get one with cellular service because I thought that I was just going to leave with my watch and my AirPods. This weekend, I went for two walks, and I filled my backpack with books. because I feel like going for a walk

because it's not really an exercise. So I put my phone on my backpack, meaning I don't know if I necessarily needed to buy this watch. But the point is this. I finally started listening to the rewatchables with Bill Simmons. And I listened to two.

They were excellent. Okay. It's pretty good. I listened to old school. And what was the other one? The hangover. And at one point in time, they were talking about like all the remake movies.

And they said that, I think Simmons said that Starzky and Hutch, Like, why do they make that? I love that movie. It was decent. I wouldn't say I loved it. I liked it. But he, like, flamed it.

Oh, okay. No, it wasn't that bad. It was pretty funny in terms of, like, the Stiller Vince Vaughn. Like, I haven't seen him probably more than 10 years, but I feel like there were some, like, amazing one-liners and scenes of that movie. It was not bad.

Are we moving on to recommendations? I want to do some questions first. All right, we do have one listener email I wanted to get to. Okay. We talked about scooters a lot on this podcast, and this reader says, I was in Austin a few weeks ago. One of our friends works at the university

You have Texas and maintenance. They noticed that the electricity usage was crazy in some rooms. It turns out that students in the dorms were getting outlet extension cords and filling the rooms with those bikes for recharging so they could make money on it. And the school had to step it and stop it. That's actually pretty enterprising by those students. I give them credit for trying that because you said, as you said, you get paid for charging the bikes. And that's how they keep their network going. Okay.

Some recommendations. So last week we talked about fitness versus financing, which one's harder? and there was actually a couple podcasts people sent me. One of them was Planet Money, and they talked about some of these gyms, but I actually wrote about Planet Fitness. And they said, the Planet Fitness in New York has 6,000 members

in a 300-person capacity, and it's pretty much never been at capacity before. And they interviewed a guy, and they asked them, how often do you think you work out? And he said, well, I work out five days a week, and I'm like, are you sure? Let's check your record.

And it was really two days a week on average. I think you nailed this one because I think that the $10 a month thing, is actually genius because they get so many people to sign up. And nobody cares if they pay $10 a month, even if they don't go. Yeah, and they made the point that they're now making gyms so they're more friendly to people who don't go to gyms. They want to make it more of an atmosphere that invites people to come in and not actually

go and then be okay with not coming. And there was another one in the Freakonomics podcast. They talked to a bunch of behavioral experts and they said they tested 53 behavioral hacks for getting people to work out more over 28-day period, like giving them money and then offering them some like a pat on the back. And they said they asked the experts who came up with these behavioral hacks, what do you think your success rate will be? And they said 40%. And after 28 days, they saw a minor short term boost and then the success rate was zero percent. None of the 53 hacks worked. Confirming my theory. And I think you're probably with me in this, that life hacks are

bullshit. Fair. But I saw an amazing, like hacks that are going to change your life never work. But there are some great shortcuts. Did you see the video that somebody tweeted about like peeling shrimp and all that sort of stuff where you see it and you're like oh my god yeah i get those all the time peeling the pineapple that's cool we'll link to this in the show notes what else all right so the only other recommendation i have i i was talking about free solo and realized that it was on hulu i think and made my parents rewatch it with me i think the last 10 or the last 20 to 30 minutes of that movie might be like the most incredible 20 to 30 minute like ending of a movie of the last couple decades it's on par with the meg all right so i feel like i'm going

I'm going to that Megwell way too often. Yeah. Yeah, that was a, your dice move is too much. Okay, that's all I got. Well, I finally finished range.

It took me three weeks. And I think here's why. It was just so dense, not in a bad way, but I felt like it was almost like reading, thinking fast and slow, where each chapter was its own silo.

So there wasn't really a thread to the story necessarily. I mean, I guess there was, but so I took, I took, I took, uh, this week to take it easy. And I read some,

I read a fiction book. the dog stars. I can't remember who recommended it, but I feel like it's been on my shelf for a year or two. And it was good, pretty light reading. Okay. Never heard of that one. What's about? It was sort of, not sort of. It was an end of the world story where a massive flu breaks out and kills everyone except for 99.7% of the population dies, except for these few people. Very uplifting. Okay. All right. Send us an email, Animal Spiritspod at gmail.com, and we'll talk to you next week. Thank you.

Thank you.