Animal Spirits Podcast - The Next Subprime (EP.52)

Episode Date: October 24, 2018

The housing market, homebuilder stocks, how much mortgage rates matter to the economy, what if there is no next subprime, how to think about inflation and your portfolio, the difficulty of owning bonds when inflation is rising, the Fed's thoughts on inverted yield curves, where chocolate milk comes from, asset location and much more.  Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, the podcast that takes a completely different look at markets and investing, hosted by Michael Batnick and Ben Carlson, two guys who studied the markets as a passion, and invest for all the right reasons. Michael Battenick and Ben Carlson work for Ritt Holt's wealth management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. clients of Ritthold's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. It's pretty wild that the Dow, and yes, I'm a Dow quarter, the Dow made a new high, an all-time high, early October. It feels like a long time ago. It's only 13 sessions ago. Do you also talk about the Dow in terms of point moves as well instead of percentage changes? Depends who I'm talking to. That's a new will move. That is. Well, today we're going to start off the show talking about a New York Times article.

Wall Street loves these risky loans. The rest of us should be wary. And so they show a chart of the market for collateralized debt obligations versus collateralized loan obligations. And maybe not surprisingly, the market for CDOs have, the market for CDOs has shrank since the GFC, while the market for CLOs has skyrocketed. Why is that not surprising? Why is it surprising? Oh, it is surprising. Okay. So basically people have just changed what they're using. Is that it? So this is the what? These CLOs are made up of loans to between 100 and 300 already indebted corporate borrowers. Sears, which filed for bankruptcy this week, was among the companies that took what are called leverage loans. Such loans to companies with junk level credit ratings hit a record of more than $550 billion last year, eclipsing levels in the last years before the financial panic. So the point of this chart is to say, dot, dot, dot, done, this is the next subprime, correct? Well, the problem is that, and quoting the piece, is that nowadays, the vast majority of

leverage loans contain much weaker protections. So-called covenant light loans now account for roughly 80% of the new leverage loans on the market. So not only are these structured products exploding, but they are doing so with weaker lending standards, which is, I guess, ipso facto, how we got here the last time. That makes sense in some ways. In other ways, doesn't it make sense that companies would borrow more at lower interest rate levels? Like, it's almost like they're taking, it's like a capital structure arbitrage where they're taking advantage of what the market is giving them. It certainly does. And that is one, however, here's another, however, maybe a hedge that they put

into the article. And I'm sure this is towards the bottom. The size of the CLO market is only about one-tenth the size of the American mortgage market during the years before the crisis a decade ago. Yeah, there you go. But it is interesting. Like, how many people are now debt experts after having but read the big short by Michael Lewis? Like, it seems like, you're looking at one. Right. I'm looking at a guy with a mic cover over his face. Anyway, sorry. That was bad radio. But, I mean, it seems like ever since then, people are looking for the next subprime. And isn't it possible that the next subprime is there isn't another subprime for a long time? I mean, is it almost too easy to just find an area of the market that is over-indebted

and has terrible lending standards and that's going to bring down the entire economy again? I mean, that sort of thing is always possible, obviously, but maybe the next black swan is there is no black swan. Counter, I put my head into a pretzel the other day thinking about this. Okay. Maybe. So obviously, everybody's looking for the next subprime or forget subprime. The next thing that's going to cause a recession, not even a recession, a panic.

And then it's easy to dismiss that because everybody's looking for it. We're not going to see it coming. But maybe what if this is it? What if we're staring it right in the face? And we're just dismissing it because of what you just said. Okay. So I'm using reverse psychology. You're using reverse reverse psychology.

And now can I go one more? No, it's possible. I think that's what is such a hard thing for people to deal with these days because everything seems like it's been a head fake since the crisis ended. And people just want to pick up on the next one. And I think maybe the other thing people need to pump their brakes on is the fact that the next recession doesn't have to be quite as deep and long-lasting and hard-hitting as the last one. Why couldn't it be more like the 2001 variety where it's just kind of your run-of-the-mill recession? Right.

I think that's kind of where I think people trick themselves into trying to figure out the economy is that every time we have a downturn, they think it's going to be the end of the world. And that's always a possibility. So S&P Global has a site leveragedloan.com, and in one of their recent pieces, they wrote, for a third consecutive month, there were no new defaults among constituents of the S&P Leveraged Loan Index. Consequently, the default rate fell to a 10-month low of 1.81% in September for 1.99 in August. And then they go on to say, this marks the first three-month default free streak in the index since August 2014. So the thing to worry about here is everything is too good, and we're having a Minsky moment where stability will lead to instability, potentially.

Well, that's, I mean, that is possible. So I guess it does make sense that the lending, you know, requirements have weakened as these companies are maybe performing a little bit better and maybe are more worthy of getting credit. Now, of course, there is a fine point where this becomes not good. Right. And I guess the other problem would be interest rates rising. That could mean eventually rolling this debt over is going to become, make things more challenging for them. So Eden Vance gave a presentation on this, and of course they're biased because it was during a, I'm guessing a presentation of a product that they sell, but that's fine. So they showed the weighted average interest coverage of outstanding loans. In other words, how capable are these companies of paying off their interest? And at 4.4 times, this is about as good as it's been since this goes back to, is that 2002? So they are able to service as debt. They also showed a chart showing the fundamental conditions, default rates and distress ratio. Also, default rates. as I just mentioned at a very low level, less than 2%. And the distress ratio also very, very, very low.

Ben, are you with me? I'm following along. We've got a lot of charts here. We'll put them in the show notes. So the other side of this, like how does this impact investments? When you look at all this stuff, the housing stocks, people are trying to figure out, you know, does this stuff all matter in terms of the stock market or the economy? Housing stocks seem to be telling people something.

and housing stocks are getting crushed. So the ETF, U.S. Home Builder, ETF, was it, ITB, is down 35 to 40% from its highs. The top five stocks, which we looked at, Pulte Group, NVR, Lenar, Toll Brothers, and D.R. Horton are all down 35 to 40% since the beginning of the year. These stocks are getting crushed. A lot of people are wondering, is this sort of the canary and the coal mine, things are going down, mortgage rates are going up? our home builders trying to tell us something. So the CLOs is not something that I'm super worried about. Now, I guess I have no idea.

I mean, I'm like the farthest from an expert on this market. But I guess the pivot is that maybe the housing stocks are something to worry about. And if you look at them going back, so we ran some numbers through Y charts. And Pulte homes and Toll Brothers are the only ones that have a really long history. They go back to Pulte Brothers is in the 90s or Pulte Group and Toll Brothers is in the 80s. These stocks have three or four times where they've fallen 80 or 90 percent, which is pretty wild. So home builders are extremely volatile and extremely cyclical. And so it happened in the late 70s, in the mid-80s, and then in the 1990s as well with the savings and loan stuff.

The home-building stocks didn't go back that far in terms of the ETF. So I looked at actually the Fama French data, and they have it broken out into like 49 different industry subgroups. And they have one that is just real estate. And that goes back to like the 1920s. But I looked at it going back to 1990. and found times where the real estate sector got hammered and it didn't really spill over to the other market. So in 1990, real estate industry, again, as defined by Fomain French, felt like 40% when the S&P was only down roughly 3%. But didn't that precede the savings and loans crisis?

Well, that was actually, the savings loan crisis was in the 80s, I believe. But this was more, there was a minor recession in the 90s. So this one actually did tell you something. In 94, they were down 16% and the S&P was up. that was more of kind of a Fed problem raising rates early. In 98 and 99, they were down 31 and 19 percent where the S&P was up 20 percent in both cases. And then in 2007, it actually did sort of precede an issue where the real estate industry was down 23 percent. The S&P was still up that year, but that was right before the crash, obviously.

So it's one of those things where there have been cases where the real estate industry has preceded some economic trouble. And there's been times where it's been a head fake and it's just been extremely, volatile sector and it's extremely cyclical. So it's kind of hard to say. I guess a lot of what goes on from here in terms of where rates and inflation go will have a lot to say about how it all shakes out. Well, housing is 12 to 13 percent of GDP. So it's a big component. So I went and looked at some of these stocks. And according to the website, Mohawk is the world's largest flooring company delivering style and performance for residential and commercial spaces around the globe. So I went to do some poking around and seeing what's going on. Do we get any ad dollars for

that read. That sounded like a good Mohawk commercial there. So Mohawk is in a 47% drawdown since its highs in December. So its market cap at its peak in December was $22 billion and now it's $11 billion. So I looked at the financials to see what's going on and margins have not deteriorated at all, if anything that, I mean, well, maybe slightly, but nothing to speak of. Net income and revenue pretty much at an all-time high. And then same thing for Lanar. revenue net income at an all-time high. So what's going on? I mean, housing starts look fine. New home sales look fine. Existing home sales maybe are not great. And we'll put this in the show notes. So they fell recently. Existing home sales year over year fell 3.4%. And in every price range,

dollar amount fell. My only guess here is the fact that this is people in the market freaking out before something happens, and it's kind of the look ahead where mortgage rates are rising and people think that's going to lead to a slowdown in real estate. I mean, that'd be the only thing I could offer. My other one I found, bedbath and beyond since 2014 is down 82%. Yeah, but that's an Amazon thing? Yeah, that's a retail story. So you don't think that is a housing thing where people are spending less. No, that would be Home Depot and Lowe's, which also, I don't think you're doing that great. Okay. So also, if you look at like delinquency rate on single family residential mortgages. That's also heading in the right direction. So there was an article in the

Wall Street Journal and they said a combination of rising mortgage rates and high home prices, a dearth of inventory, and a new tax law that reduces incentives for homeownership have a weight on housing sector this year. The monthly payment to buy the average priced home has risen 16% since the beginning of the year. Based on rising rates. That makes sense. And I think I talk about this a little bit and a Twitter discussion I was having a few weeks ago. It's kind of interesting, like when mortgage rates start to rise from such a low level, I think there's two mindsets you can have. One would be, this is going to slow housing down. The other would be, what if you've been sitting on the sidelines waiting to buy a house for a while and now

mortgage rates are rising? Wouldn't that almost help you jump in a little bit and want to get in before rates rise even further if you think that's the way things are going? Yeah, that's a good point. So maybe people are like, I got to get in now before they get away from May. That's fine. And again, eventually the affordability thing probably wins out, assuming rates rise. But what do you think about this. So mortgage rates are still 5%, I believe. You know, back when our parents were buying houses, they were probably 10 or 12%. Well, we look back in like 20 years and think that those three to four percent mortgage rates that were seen a few years ago, which I took advantage of. I think I refinanced my house like three or four times. Humble brag. Yeah. I nailed it. Nailed

the bottom mortgage rates. But we'll look back in like 20 years and think those were obscenely low interest rates or will that be kind of the norm that mortgage rates are just going to be lower going forward? What would you say would be that look in 20 to 30 years on that? I have no opinion. No opinion? Okay. It is kind of wild that things were just so low back then. People thought they could still go lower and obviously that that hasn't happened. But I do feel that the rising mortgage rate thing is going to have an impact eventually and whether it's just psychological or not. I think that's going to have an impact. So one more thing before we move off of this, And this is a similar story, but maybe, or similar topic, maybe a different story.

So I think this article was from CNBC, and it was talking about how Bank of America downgrades home builder stocks as Wall Street grows increasingly bearish on housing. And then Credit Suisse downgraded the home builders earlier in the week. So it said that the analyst lowered his price target on Toll Brothers. And I think this was from Credit Suisse, but I'm not 100% positive. Lowered his price target on Toll Brothers to $38 a share from 47, okay? The stock is currently at $30. So he was at $47 a share. The stock is now 35% below $47 a share, and he lowered it to $38 a share. And this is not to poke fun of the analysts. This is just to point out the fact that what a ridiculously, literally impossible job they have.

Right. Trying to come up with targets for their stocks, it is, I agree. That's not easy. And it would probably be better if they just shared their research and stopped putting price targets and buy sell recommendations on things. But that's not what people want. No, people want the targets. Okay, so I wrote a piece, a couple pieces in the last few weeks. A few weeks ago here, I made my case for bonds that, and I think I'm not to pat myself with the back by any means, but pretty sure I called the top in the market by saying that, that I said if stocks fall, maybe there's a case for bonds here. So pretty pressing on me. Just want to say, get that out there. Wait, hold on. I don't even get it. What am I missing? Remember, I made my case for bonds on the podcast a few weeks ago and I said if stocks fall. But bonds haven't even done that great. I know. I was just, I was, that was, that was, that was a A joke. Never mind. Anyway, so I made a case for bonds. And then last week, I wrote a piece about how terrible bonds have done in a high inflationary environment. This is something you and I have written about a lot over the years where from the 50s to the 80s roughly, we had the sky high inflation. And inflation was higher than bond rates, which means on a real basis, bonds look horrible. And I wrote this piece saying that, you know, on a real basis from like 1940 to

in 1981, long-term bonds lost almost 70% of their value. Even five-year were down 40 to 50% on a real basis. Nominally, they still did pretty well. They both did close to 5% of year nominally, which people would probably kill for these days. And the amount of email, this is the most email I've ever gotten probably for a piece on bonds, which people usually find extremely boring. And everyone kind of was saying, so you're telling me not to own bonds anymore because they can see this huge loss in terms of if there's an inflationary space. And that wasn't my point at all. The point was just to show over very long time periods,

inflation can really erode your purchasing power even when you're in high quality bonds. So I show drawdowns in terms of inflation, which I don't think is the right way to look at it because in the moment, no one's going to care how their returns look after inflation when they're losing money. So what do you think about the idea of bonds losing so much money in purchasing power to inflation over a four decades stretch? Should people really care about that? Of course they should. However, I don't think that's showing a drawdown chart, a real drawdown chart versus, say, a nominal drawdown chart in the S&P is apples to apples. In other words, you're showing, what, a 40% drawdown, real drawdown in five-year treasuries? Correct.

Right. So that is slow and not fun, but there's a giant difference between a 40% real drawdown that you don't see on your statements versus a 40% drawdown that appears on your statements. Right. And the funny thing is a lot of people said to me, well, Why wouldn't I just have all my bond allocation in cash? That's even worse. That is, right. That's the thing. If you had just had your money in cash, you'd do even worse after inflation. So the point is, the only thing that really does well over inflation over the long term is stocks.

Excuse me. What? Gold. Commodities. Gold. So here's my counter to that. Let's say in the 70s, you were very prescient and you bought gold to account for inflation. And you did really well in the 70s because we had this huge bout of inflation and gold was playing catch up in price.

Since 1980, you've lost money to inflation in gold. So was that hedge for that one 10-year period worth it to then lose out to inflation over the next 40 years? It depends who you ask, because a lot of people have told us that the 70s were like the absolute worst market ever. True. And I guess a lot of it comes down to just knowing and understanding your time frame. And I think people take for granted when you look at, look back at these charts and you pick a start and end date and you show data that doesn't really, that doesn't really have a lot to do with a person's actual experience in the markets and whether they're spending down some of that portfolio or adding to it. So picking a start and end date,

you can make a lot of any, pretty much any argument you want in the markets. Yeah. And my other point to the bond piece was the majority of that real loss was because the 70s inflation was so, so high. So that's part of it. And then the other point that you probably didn't bring into this discussion was that ostensibly you were not in a 100% bond portfolio. You probably own stocks, which did quite well in that period. Well, actually, that's not true, but they did different. I showed a follow-up one where I showed the real and nominal drawdowns of a 60-40 portfolio. And especially nominally, it looked way better. And on a real basis, it was only that, really that 70s and 80s period that made things look worse. So I think inflation is a much

bigger risk to someone's personal finances or has a much bigger impact on that than it does their portfolio in a lot of ways. There are levels at which this matters, and I don't know what they are, But I think that somebody would much prefer to have 7% nominal rates with 4% inflation than 3% interest rates with 0% inflation. Yes, I totally agree. People have a hard time thinking relatively and they think only in absolute terms. All right. So let's move off this. And somebody sent us an article in CNBC where I forget which company said this, but market sell-off is about 80% over and will be reversed by share buybacks.

I mean, some things cannot be quantified like the percent chance of a recession, and I would certainly say that this falls into that bucket. So, okay, that's funny because a lot of people think that stock market has been manipulated by share buybacks. And so this article is playing off of that point to say share bybacks will manipulate the market higher. So 401K purchases won't set a floor to the market, but buybacks will. is that where we're going here? Yeah, that's kind of, that's kind of tough point, too.

I think if you're hoping for that type of savior, good luck. So they put out the Fed minutes last week, and this was kind of interesting because it's something that we've chatted about a little bit and written about the inverted yield curve. And they did the economist thing where they did on the one hand and then on the other hand, and they talked about what does an inverted yield curve look like? And they said, on the one hand, an inverted yield curve could indicate an increased risk of recession. on the other hand, low levels of term premiums in recent years, reflecting in part central bank asset purchases could temper the reliability of the slope of the yield curve as an indicator of future

economic activity. And I think this just gets to the whole heart of the why investing in the economy is so confusing, because there almost could always be a caveat to these things. And it's like, does the yield curve have to become completely inverted to signal recession or could it just get close in a recession happens? Do you still count that as a signal? but it doesn't go all the way. It just makes this stuff very confusing. A lot of hands on this one. So somebody tweeted this earlier on the week. My apologies, I don't remember who did it, but it's showing interest expense fiscal year 2018 for the government. And in September, that figure was about $29 billion or $966 million a day.

So was this a scary chart that someone was trying to show or just saying here it is? Well, of course. I'm sure it was scary. But that is a, that is a huge number, $966 million a day. I guess the implication, the obvious implication is that if interest rates keep going up, how the hell are we going to service all of this debt? All right. I'm going to take the other side of this one and say, that's also $900 billion a day. Wait, how much was it, $900 million? Yes. Being paid out in interest income to investors. How does that sound? I feel like you haven't been listening to Animal Spirits and talking about the asset side of the equation as well. But yeah, it's a lot of money.

We got big numbers here. That's why, what did I say? After a trillion comes a quadrillion or something. I feel like in the future, these numbers are just going to continue to get higher. Okay, I got a good survey for the week. Someone tweeted this out. And it says, according to a recent survey, 7% of Americans believe chocolate milk comes from brown cows. The survey was conducted by the Innovation Center of U.S. dairy, which, how innovative do they need to get with dairy products, really?

Wait, can I interrupt us for a second? Yes. Because I feel like we didn't put a ball in that housing conversation. Okay. So what do we think? Is this much to do about nothing? Or is this the canary in the proverbial coal mine? Have you been thinking about this one for a while?

You're coming back to it, four segments later. All right. I don't know. I think, let's say mortgage rates get to 6%. This is a canary in the coal mine, possibly. Well, they're already at five. Yeah, I think another 100 basis points would be a pretty good move up, maybe. Well, I mean, I guess it's hard.

The funny thing is when I bought my first home in late 2007, early 2008, I think my mortgage rate was 6.5%. So I think maybe there is some anchoring going on, but my take would be sure we could have a minor slowdown, a 2001 in 1990, whatever, but is this the next subprime? I would lean towards no. That's where I stand. Well, I don't think anybody's saying that. It's just like, the economy is doing so well and these housing stocks are doing so poorly

and existing home sales are not doing so great. I don't know. All right. Anyway, back to the chocolate cows. Right. The question is, is the stock market forward looking or not? What is it? Nine times out of the last five.

They predicted the recession. So who knows? Hopefully it's in the other four. Okay. Anyway, so this survey was conducted by the Innovation Center of U.S. dairy in April, 1,000 adults and 8,000 adults, 18 and over, were asked the questions. about what role milk plays in their daily lives. The study found 48% of respondents weren't sure where chocolate milk came from

and 7% thought that they only came from brown cows. Which, I mean, this sounds like this was a survey given to people who were the ages of five and under, but. What do you mean they weren't sure where a chocolate milk came from? I don't know. A stork? Yeah, I guess, moving along. By the way, I think one of the things.

things you learn from social media, one of the things that I've learned is the fact that there are way more intelligent people out there than I ever imagined, but there are multiple times more dumb people out there than I imagine too, right? Isn't that kind of like the flavor you get like because you hear so many more people's opinions these days? It's way more common to be like, wow, that person's an idiot than wow, that person's really smart. Exactly. Yes. Okay. Right. Because I guess you're, hold on. You're never that surprised how smart somebody is.

You're like, wow, a person's really smart. But it's like, wow, that person's so dumb. That's true. It's easy to become blown away by a person's stupidity. Okay, if you had to switch careers tomorrow and were banished from the world of finance, what would you do? Your new path can't be financed adjacent, i.e. CPA is out. What are the technical or soft skills you've built over the years that would be most fungible in another field?

Enough said. I'd be an actor. Really? No. What I would really love to do. Theater commercials? No. No, I would like to have been either maybe a historian or maybe I would get bored by that, but I guess maybe not.

But my true passion, Ben, hit me with it. Paleontology. Really? I love dinosaurs. So do you want to be in the field like dusting off the bones and finding them everywhere? By the way, that was one of my favorite stats or anecdotes, dinner party conversation started from this year from our new colleague, Nick, who writes that dollars and data that people didn't discover that dinosaurs were around until after George Washington

was dead. Yes, good one. That just blows me away, that people for that long had no clue that dinosaurs even existed. Okay. I thought long and hard about this. I have no idea. I think maybe I would go the office space route and do like something more manual labor. I think there's something really cathartic about like seeing the,

fruits of your labor like I painted houses in college and I think I would office space manual labor you know how at the end of office space the guy ends up being construction worker something like that where he just completely goes in a different direction I'd like to think I would I would go that route but I probably would moan and complain about it too much so maybe something maybe I would just be like an unemployed author or something and be a writer on the side but I honestly don't know okay Another question. Can you speak to your thoughts on trading volumes versus up days and down days? Market quote unquote experts like Dennis Gartman like to point out that a market with large volumes on the downside and high volumes on the upside is weak or a bare market.

What do you think about volume? Do you pay attention to all? I don't. I'm not dismissing it. I'm sure some people think it's very important, but I don't trade stock. So it's not meaningful to me. I think market pundits can sound intelligent by saying, well, this market is rallying on low volume so it doesn't really count. That's the kind of thing people say, I don't think it matters. I mean, you and I read a lot of market history. And I'm always amazed when I'm reading one of these old books like the go-go years or once upon a time in Golconda. And they talk about the highest volume ever. And it was like 10 million shares, which is like what Apple trades in five minutes these days. By the way, I like your noise that

you made before you started that. That was very pundit of you. Which was what? Maybe I should be an actor too. That was very Chris Collinsworth. I can play the market pundit. Okay, one more. If you have an asset allocation goal, should you, A, try to achieve the desired asset allocation across your entire portfolio using different accounts like taxable and non-taxable, or B, try to achieve the asset allocation target within each portfolio? Okay.

So I think that this depends certainly on your taxable situation and the size of the account. So I think it's hard to give blanket advice on this. I think it would just be case specific. I think what they're getting at is, should you look at it as an overall or should each different account be its own portfolio? And I think this comes down to, like, things like asset load. Okay. Well, I think it comes down to things like, I don't think you did hear me.

I think it comes down to things like asset location. But I think you definitely want to look at your portfolio from an overall perspective and try to make decisions based on that. So maybe choosing where to locate some of your assets in terms of the type of taxes you'd be paying. I think that definitely makes sense. But I think when you make decisions, I wouldn't be making them. on an account level basis from an asset allocation perspective. I'd be looking at things from an overall basis. All right. Recommendations for the week. What do you got? All right. Here's what I got.

So this is not a book, but Patrick O'Shaughnessy wrote a new thing on looking within factors, and they do a lot with shareholder yield. And he wrote financing sources, likely a robust way to generate alpha within the buyback factor. And it is definitely worth reading some really good stuff in there that I've never seen before. Did you get to look at that yet? Yeah, it was very good. by the way, can you really call yourself a quant if you don't use the word robust at least one time in a white paper? That was your best joke of 2018. I'm out of here.

Thanks. See you next week. All right. Did you listen to Bill Simmons and Jonah Hill? Yeah. It was very good. I liked it. So I thought it was interesting that Jonah Hill almost got the Justin Timberlake part

in social network. Yeah. I love those movie what ifs like roles that they've turned down. He was much more sensitive guys. than I would have given him credit for. Yeah, so I've heard him on Stern. He'll be on actually this week. This is probably his third time coming on.

He's a huge Howard fan. So we have that bond. But I'm a big fan of his. I agree. He's a very sensitive dude. Plus, you really like that picture of him wearing jeans and a Phoenix son's jersey tucked into his jeans. That was a lot.

I think you sent that to me. Okay. Wait. So I've got a new pot. Excuse me. Got more. Hold your horses. It wouldn't be a week if you didn't have a book.

So I finished the city of the monkey god. or the lost city of the monkey god and this is a perfect book for audio because i'm not sure that i would have finished it if it was if i was reading it so how long is the an average audio like what was it four hours this one last week was five hours and this was this one was closer to eight so it was long but there was a lot of really good stuff that i got out of it that i would have never have thought of so i'm glad that i was able to see it through audio definitely helped me on that one okay and do you have an audible account now is that what you did i don't i use my two freebies but readers and listeners have said that we can get some from the public library.

So I'm going to look into that because it's quite, I think for all of all, it's like 15 bucks a month and you only get one book. Yeah, which doesn't seem like that great of a deal to me. Yeah, no. We've talked a lot about audiobooks and we've gotten a lot of good recommendations. So we should have to try some of those out eventually. Okay. And then lastly, on Friday night, I saw Halloween.

Oh, the new one? Yes. With Jamie Lee Curtis in it again? Yes. Okay. And? It was quite good. I love seeing horror movies in the theater.

I'm not going to lie, I get kind of scared at home, and I have been known to press mute from time to time and cover my eyes from my fingers. But at a public theater, you can't do that because you look silly. And the theater is packed. So being around people when they're screaming is pretty fun. I think the only one I've seen of those is like Halloween 2.0 that probably had like ludicrous or some rapper in it. But I haven't watched many of those Halloween movies. But it was good. Yes, it was very good. Okay. I've got a new podcast. I tried out. Andrew Jenks, who was a guy who had a documentary show on MTV. I used to like a long time ago.

It's called What Really Happened. And he had one last week called the anatomy of a box office flop, which I thought was great. And it was about, do you remember the movie John Carter? Kiana? No, John Wick. Yeah, it was with the guy from Friday Night Lights who played Tim Riggins. Like, you never watch Friday Night Lights. I'm still thinking, I'm still laughing about your quad joke.

All right. I'm going to go on top of that. But it was really, like, the more actors you hear talk about movies that they are part of on podcasts and stuff these days, the more you realize that a lot of times they really have no idea what's going to be successful and what's not. And he went through, like, this was like one of the bigger money losing movies in the history. It's kind of like a Star Wars. It's kind of like a Star Wars-esque movie. Disney put it out a few years ago, and it was a huge flop. They had planned when it started to do two sequels, and then they didn't do any.

I mean, it was, I watched it. It was an okay movie, but the crazy thing about this podcast, they talk about the fact that like Superman and Star Wars and so many of these other movies were based off of the original John Carter stories, which were written like 1912. And so the backstory about like all the things that went wrong from a management perspective that brought this movie down like marketing and advertising and how they, it's a really good, interesting story about how things become unsuccessful in some ways. So Matt Damon told Bill Simmons, you don't see the movie before you make it.

Yes, right. And so this is a really cool case study on how something goes wrong and how something goes right. And I'll see, I have a new TV show I watched last week. It's called Forever on Amazon Prime with Maya Rudolph and Fred Armisen. And I can't really even tell you what it's about without giving away. It's probably one of the most unique shows I've seen in a long time. And I ended up, I didn't think I'd like it. And it kind of blew my mind in some ways. So I think it's the kind of show where you either love it or you hate it. It was written in, started by the co-creator of Master of None, which was the Aziz Ansari show. And it's a half-hour show. So I would say, give it three episodes because the first two episodes have nothing to do with what it ends up being about. And there's like the huge, huge turn the end of the second episode. Give it a try. You've got a deal.

Very good. You've got a deal. It's a kind of, it's eight episodes long. It's one of the more uniquely satisfying shows I've seen in a long time. And finally, I continue my reading on comedians. I read that Steve Martin book a few weeks ago I talked about. That led me to read, I must say, my life as a humble comedian, as a humble comedy legend by Martin Short.

And this book was so good. He is, he's a great writer. I was kind of surprised. He's got like a crazy backstory from his family. Life growing up was not that great. And it's just the right amount of name dropping you'd want from a celebrity. He talks about Tom Hanks and John Candy and Belushi and Dan Aykroyd. How come he wasn't like more successful?

Because I feel like anytime he does anything, he's insanely talented, but was never like Steve Martin in terms of his... He talked for that a little bit. Yeah. And the funny thing is, him and Martin were like best friends. And he talks a little bit about some of the things that conspired against him. Was it like a personal choice that he didn't want to get that huge? It seemed like he was he, they wanted him to be a lead role, but he was always more of a character like second banana person. And it took him a while to realize that.

But he seems like he was very happy with where he ended up. And it's a really, and he talks a lot about like. Like, from a philosophical standpoint, how he, like, sets expectations for his life and how he figures out whether he's being successful, you know, in his life or not. And he kind of outlines these nine checkpoints that he goes through to, like, bring him back down to Earth a little bit. It's, it's really good. Yeah, I really enjoyed it. So both that one and the one with Martin, I think, are worth reading. And so, sorry, one more thing I wanted to mention before we go.

I'm going to be in cheesehead territory in December 4th. So I'm going to be speaking at the CFA FPA Society in Madison, Wisconsin for lunch that day and then heading over to Milwaukee that night for the same group, CFA and FPA, again, both December 4th, Slyfina, Wisconsin area. Come check me out. That's all I got. What was that look for? I was just kidding.

All right. We'll talk to you next week.