Animal Spirits Podcast - The Perfect Price of Oil (EP. 456)

Episode Date: March 18, 2026

On episode 456 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss: why oil prices aren't higher, complacency in the markets, energy stocks, oil as the new meme stock, geopolitical events vs. the stock market, why AI isn't a bubble, bitcoin isn't dead yet, housing affordability is improving, private credit redemptions, the case for PE stocks, who orders DoorDash, there is no retirement crisis and more. This episode is sponsored by Franklin Templeton and ClearBridge Investments. Learn more at https://www.franklintempleton.com/activeETFs A healthy economic backdrop should continue to support broadening equity leadership going forward. Learn more at https://www.clearbridge.com/  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.   Franklin Templeton Disclosure: Before investing, carefully consider a fund's investment objectives, risks, charges and expenses. You can find this and other information in each prospectus, or summary prospectus, if available, at https://www.franklintempleton.com/. Please read it carefully. All investments involve risk, including possible loss of principal. © 2026 Franklin Distributors, LLC. Member FINRA/SIPC. 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

On last week's talk your book, Chris Gallipo from Franklin Templeton talked about the market broadening beyond the Mag 7, with nearly two-thirds of S&P 500 stocks beating the index at the time. When leadership widens, opportunity opens up, but it only helps if your position for it. That's where Franklin Templeton's active ETFs come in, with more than 50 strategies across equity, fixed income, multi-asset, and municipal solutions. The lineup is built to adapt as markets evolve, backed by over 75 years of active experience, Franklin Templeton is your trusted partner for what's ahead. Learn more at Franklin Templeton.com

slash active ETFs. Before investing, carefully consider a funds investment objectives, risks, charges, and expenses. You can find this and other information in each prospectus or summary prospectus, if available, at franklin templeton.com. All investments involve risk, including possible loss of principle, Franklin Distributors, LLC, member FINRA, SIPC. This episode is sponsored by Clearbridge Investments, a manufacturing comeback. combined with resilient consumer spending and the tailwinds of monetary and physical stimulus, confirm a healthy economic backdrop that should continue to support broadening equity leadership going forward.

Position your investment portfolio for wider equity participation with fundamentally driven Clearbridge active equity strategies. Clearbridge, a Franklin Templeton company, go to clearbridge.com to learn more. 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 Riddholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Riddholt's wealth management may maintain positions in the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. Michael, one of the things that annoyed me the most in the post-GFC years was that everyone was fighting the last war. And so you constantly had a barrage of people predicting the next great financial prices. This feels like the subprime lending crisis. This feels like AIG. This feels like labor. So you had, it was constant. It wouldn't go away.

And I feel like we finally reached escape velocity. Because now today's stuff that's going on, it's COVID and Liberation Day. I feel like it's been replaced. It's replaced the GFC. Because the way that people are thinking now is there's two lines of thinking about the current market. right? One is, this is February 2020. People have no idea what's coming. The oil markets are going to explode higher, $200 a barrel, and it's going to wreck the global economy. And this is, people are just way too complacent. Complacent about this. Right. But then the other people say, no, no, no, no,

this is Liberation Day. Any sort of little blip, we're going to taco this, and you've got to buy the dip, whatever it is, and it's going to be fine. We're going to move on. And so I think those are the two analogies now that have kind of come into the lexicon and replaced the great financial crisis. So I'm just saying I'm happy about this. Okay. All right. No more annoyance. I'm happy that you're happy. Did you have fun in Miami? Oh, I had a great time in Miami. So I had a conversation with someone the first year in Miami. So it was half the size as the second year, right? And I feel like at the first conference like that, you figuring stuff out. And it didn't quite feel,

Huntington Beach one still felt miles ahead of it, right? Because it was the first time we did it. Now I talked to a lot of people who said, hey, listen, I've been to both conferences. I like the Miami one better. And I was like, wow. But it was leaps and bounds better. Like, you figure out the little things that are wrong

and the team at Future Proof really fixes them. And it did feel like, man, this was 10 times better than the year before. Everything is great. It was awesome. Yeah, that's a great time. 4,4,500 people there. I have some AI thoughts for later about because the focus of the conference was AI.

But it was just, I mean, just everyone in a good mood. Everyone's smiling. And I had, I talked to Ryan Dietrich for a minute from Facts and Feelings in Carson. And he said, it's so funny to me that everyone here, it's just people talking about AI. Everyone's worried about the technological problems AI is going to solve, but it's all people talking about how to implement and use it. And he's like, I think we're still going to need the people. I said, I can agree with that. We're about to play a clip from Taylor Sheridan's Landman.

This has been a great month for me personally through the lens of the rewatchables podcast, my favorite. It's Chris Ryan Month. And Chris Ryan and I are spirit animals. See what I did there? Animal spirit? Okay. In terms of our movie taste. So I think the first movie that he chose was Sicario.

Hard to believe that Sicario, my boy, Dennis Villanueva, remember that? There was a time on this podcast, probably in 2022, when I genuinely thought his name was Dennis Villanueva. This is like before he became Denet. He wasn't as well known, yeah. You had to figure it out. I remember when I watched the second Sicario, which he didn't direct, and I said, I think the second one's better than the first.

And then I rewatch the first one again. and I said, oh, what a terrible recency by his take. That was that was off. All right. So anyhow, it's hard to believe that Taylor Sheridan wrote the screenplay for Sicario. I thought the same thing. When you look at the TV

shows he's making now versus that movie, it seems like two different worlds. Yeah, seriously. This is Mr. William, Robert Thornton, aka Billy Bob and Landman. You want all to live above

60, but below 90. And don't get me wrong, we're still printing money at 90, but gas gets up over 350 a gallon, it starts to pinch. It hits 100. Every product in America has to readjust its price. $78 a barrel, that's about perfect. It brings enough profit to keep exploring, but it don't sting as much to pump. Unless, of course, you're in California.

I mean, they tax the shit out of it out there. You know, Billy Bob, he doesn't get enough credit for being one of the best on-screen smokers of all time. I love that move when they're talking after the puff of the cigarette and they're just talking naturally with the smoke coming out. Yeah, that's hard to pull off. I couldn't do that. So this is, I thought this was one of the great economic explanations in television history. When he said it, when I watched the show for the first time, I thought, oh, my gosh, that's amazing.

And he talks about, you want oil to be 60 to 90. And it's funny, you think, well, no, you want oil prices to be as high as possible for if you're in the energy industry because you make more money. But no, he nails it. It's perfect because it impacts demand eventually. Can I tell you why I'm thinking that this is more Liberation Day in less February 2020? Mm-hmm. Because, Ben, I picked up a book that I started reading, I don't know. I'm going to guess I started reading this book pre-COVID.

And I put it down because it was just too long. And it's one of the Alzheimer's, okay? So the reason why I am a little bit less, catastrophic about the situation, feeling less catastrophic, is because I'm now listening to this 26-hour book called The Prize. Okay. All right? It's a new one to me.

This can't be a new one to you. Come on. The prize, but Daniel Juergen, the epic quest for oil, money, and power. It's like one of those 700-peach books that you just, you walk right past. Okay. The fact that I decided to revisit this book and go deep into energy and fill in a giant gap in my knowledge. Probably means that there's something to worry about.

So the market obviously agrees with your take. The markets are completely, like you said, complacent. I don't know. But I paid $3.99 a gallon yesterday at the pump. And I guess the reason to think that this is liberation day is because it seemingly can't go on, right? So the question is, like, why isn't it much higher? So Matt Klein at the overshoot had this thing. And he says, the striking thing about oil prices, given what is going on in the world,

is how low they are. He's saying, listen, like the crude exports from that region are 20% of global supply. And he's saying that if you take that supply and decrease it by that much, prices should be way higher than they actually are. And so it's like markets are in the waiting period. And it's kind of, I mean, it's kind of nuts if you think about it. They had this Roy Johnson guy on, like you said, I started following energy analysts on Twitter. So I know that's how it probably is.

But he's just saying, listen, if the current. situation continues, oil will be $200 a barrel. It just has to for the supply demand dynamics. And so his point was, this war has to end soon because otherwise oil is literally going to $200 a barrel. It has to. Now, the other thing is like the Ukraine-Russia war, remember there was all these people saying, hey, listen, if you live in Europe, you're going to be burning your clothes in the winter to heat yourself because it's going to be so expensive. Remember all that stuff? But the Ukraine war, the oil spiked immediately, then immediately came back down. Can I say two things?

I feel like I'm going to pull a Ben Carlson here. Okay. Markets don't whistle past the graveyard. Right? Anytime you hear people say that, Insta mute. Insta ignore. Yes, it is true that sometimes they do, and by definition, almost, they do at key market tops. Right?

In 2006, there were signs, and the market, in fact, was whistling past the graveyard. But guess what? Most of the time people, most of the time people overreact. Most of the times markets overreact. They don't underreact. So if you think that markets are underreacting or they're complacent, the burden of proof is on you, not the market. Yeah. It's, yeah, the thing people keep thinking again is back to the Minsky thing.

Like, is everyone just getting too complacent and markets are like, people are too trusting of the markets? Yeah, possible. Of course, possible. I'm not saying that it can happen, but I'm just saying, probabilistically, that's probably, probably not the case. And also, let me pull Ben Carlson. Why are we not, and I'm serious here, why are we not inflation-adjusting oil?

That's a great question. Because if you look at the price, so I put this chart in here from Matt Klein, it goes back to 2010. And, I mean, oil has been all over the map, but it hasn't really gone anywhere. But you're right. An inflation-adjusted basis,

and if you wage-adjusted it, too, that's why people are saying, like, hey, listen, we can handle this. If you adjust for inflation and you adjust for wages, $399 gas is not like it was 10 years ago. It's a different ballgame. Community-based EBITDA for oil is basically free. Yeah, I guess so. But so the S&P is 4% off the highs right now.

It's just crazy to think that, hey, there's a war in the Middle East, and we can't get oil out of there. And oil shot up 60% this year. And the market says, eh, I'm having a hard time wrapping a head around it. But I think, again, you're right. Like, do we just trust the markets? It feels like the stock market should be down a lot more. The Vicks got as high as 35, you know, sort of a baby spike when you consider everything that's happening. There are things that concern me, though, inside the stock market.

I don't love the leadership. There's basically no stocks, not no. If you look at, like, the sectors that are making 52-week highs, there's a lot of zeros out there. And what is making 52-week highs are energy, material. industrials have fallen off a bit. But I don't like that financials are breaking down. And I'm not just talking about the private credit stuff. Like, so I, if I'm going to call balls and strikes myself, if I and I do lean on companies like ally and capital one to gauge the health of the.

Yeah, you've been talking about those ones for a while. At least the lower shape of the K, right? Don't tell me how you feel. Just show me the stocks. Well, guess what? those stocks are acting terribly. Capital One is in a almost, is it almost 30% drawdown? Like these names are acting bad. Now I guess the counterpoint would be, well, yeah, they're already washed out. Okay. Allies down 25% of all. You're right. These stocks are getting crushed.

Yeah, so I don't like that. Okay. I don't know what to do about oil because people seem to say, listen, if we're just basing this on supply and demand, the price of oil should be way higher than it is already. and that should scare you, but it shouldn't scare you because if we keep going through with this, there's no way they can do it. And that's like the catch-22 of this. They can't keep...

It's also hard to get too bearish, given that there has been a washout under the surface. This is, and I'm not the biggest seasonal guy, but seasonally, midterm election years, this is not great for stocks. They tend to muddle along.

And you can't get too bearish when there's been a washout under the surface and literally one tweet can change everything. If he just says, all right, we won, we did what we had to do, stocks can be back off to the races in a hurry. I know AI is the biggest story of the decade and maybe the biggest story of the century,

according to some people, but I feel like we've been reminded over and over again this decade, just hammering us over the head, the importance of the physical world. And this one little section of water, this straight, is so important that it could, that it muck up the, like, it impacts so many different areas of life. And I think that we have to remember this as we try to map out what AI is going to do to the world,

how important the physical world still is. There's a lot of problems AI will never be able to solve, ever. And the physical world is one of them. Real quick, we're still talking about oil. Andrew wrote us in, said, I'm a geologist. Remember, we didn't really have a show last week. I feel like it's been forever since we've talked like this. Crude oil comes in different grades.

Brent Crude is a benchmark for light sweet oil. requiring minimal refinement, the name comes from the Brent Oilfield in the North Sea, which serves as a benchmark. Okay? The more you know. Thank you, Andrew. That makes sense. So exhibit A chart of the week, Matt and team did this,

S&P 500 after major geopolitical events. And it shows the forward returns from the Korean War and the Cuban Missile Crisis. What's a six-day war? Not going to lie. Don't know what that is. That's one of those history things I should know. I think it's the Middle East thing. Gulf War, 9-11, and all these different geopolitical

attacks or events, and it shows that the majority of the time a year later, I think in an average, it's over 14% a year later stocks are up. And this, is this knowledge? Everyone knows this now. Hey, you don't overreact to geopolitical events. Is this part of it too that just, listen, the market's knowledge, we've updated this. Yeah. We're not going to overreact to this stuff anymore because we know historically the probability is things are going to be fine a year from now. So why overreacted now in the short term? Is that part of it? I don't know. Am I giving the market, are we giving the market too much credit here?

I think so. Because nobody's thinking about one year later. I mean, literally. Nobody who's who's calculating whether it's like literally calculating or mental calculus is thinking. I don't agree that. We did that in COVID. We looked over the valley for COVID. The average holding period for stocks is like seven minutes.

Nobody is thinking about a year later except for that. But that's Algos. We, for this whole decade. we've looked over the valley for a lot of different things. In COVID, the market bottomed way before the vaccine ever got here. We looked over the valley of like a huge economic crash in a month and stocks move forward. I think, I'm just saying. I don't know. Maybe. All right. So it's interesting. So energy stocks you said are going crazy. I looked at this from the bottom in COVID, which was March 23rd. Was it March 23rd? Yeah, my birthday. Okay. Energy stocks are destroying the S&P.

they're up over 500% versus a 300, oh sorry, destroying tech stocks, my bad. I put this in by over 200% from the bottom in COVID. Hard to believe. So energy makes up 3.7% of the S&P. I think it got down to as low as 2% in 2020. Now, this is a little bit playing game.

Like if you went one year earlier, or if you went to like 2019, then it flips because energy actually got completely smoked. But it's obviously one of the best performing sectors this decade. and it's a very tiny allocation. And so my question to you is, we're seeing all this broadening out. What does this do for career risk for portfolio managers?

Do they have to go chasing this other stuff now? Even though it's a tiny percentage of the, it's making a huge bet if you're going all in on these stocks versus just staying in the Mag 7. The 493. Well, the Mag 7 have been super laggy. Yeah, what are they at now? What's the day?

The Mag 7, what are they at for the year? I'm guessing they're down. Let's see. I don't have to guess. I think every Meg 7 stock was down. Yeah. I don't know. I think your question is like two.

It's one of those questions that I reject from you from time to time. It's just too broad. Do portfolio managers go chasing other stocks? So I'm just, I'm thinking about this through a career risk lens. So portfolio managers had no choice but to invest in the Meg 7. If you didn't invest in them, you got left behind and you had to make excuses for why you're lagging the benchmark. And now let's say you did that and you're all in.

Now what do you do? Well, I guess, but there's mandates. It's not like, right? Like, if your mandate is Russell 1000 or the S&P 500. I've got to know these portfolio managers over the years from like all the active manager searches I used to do. And I know how they think. And they can only for so long avoid the hot stocks that everyone's talking about.

Don't you think that? All right. So I'll play ball, Ben. Don't you think that these people are doing backflips that finally there's things that are working that aren't the biggest stocks in the index? They should be. Yeah. That's fair. So the Mag 7 is in a 12% drawdown.

That's it? Yeah. Meg 7, ETF. All right. What's John Bevis up to? Oh, okay. I love this stuff. So the Wall Street Journal had a piece.

How oil trade rippled across Wall Street in a category. week. And of course they found a guy who trades this stuff. John Bevis, a 33-year-old day trader, spent long hours at his desk in his living room in Clemson, South Carolina. His morning routine is to check the markets from the phone on his bed. Do you do that? First thing you wake up, do you check the futures? What do you think? Of course you do. Then he had straight to his computer at 730, scans the news. He's got a 49-inch monitor. Okay? I'm surprised this guy doesn't have multiple monitors, actually. He's buying the dip in energy stocks when oil prices drop. He says, listen, it's been a good year. And it's funny because oil is now becoming a meme stock. So this guy,

he's just decided like, all right, I'm an energy trader now. Okay? I don't know. Maybe he's doing good. Personally, he says, personally, I love the volatility. See, this is the complacent stuff. Like, any time there's a little bit of, there hasn't even been much volatility this year, just a little bit. People are like puffing their chest out, you know, and like, I rush into the volatility. Look at me. How is this complacent? Just because a 4% decline in the market, it's like, I'm taking advantage of blood in the streets.

I love it. Come on. This is nothing. Okay. At online brokerage, Webowl, trading volume for U.S. crude futures surged more than 1100% month over month, why volume for gasoline futures exploded 1,200% higher. All right. So you think people like this, and retail trading is now 25% of the market.

You think that they're thinking about what happens in 300%? 65 days. Okay, that's fair. Good point. Look at the options bets on USO, which is an ETF that supposedly tracks the price of oil, but actually doesn't. It's crazy.

It is crazy to me that this keeps happening. It will never not happen. This is the new market. Forever. You know, I heard someone, I heard someone on a, I can't remember who said this on a podcast that said,

crypto is for boomers now. It's almost like the people just want more of a hit, that dopamine rush, serotonin blast, whatever it is in your brain that makes you find something else. It is pretty crazy. I, um, so crypto is actually doing all right. You've been using that as a reason not to worry. Yeah, Bitcoin's back above 75,000. Ethan is up 13% of the last week, 12% of the last month.

If, uh, if Bitcoin is for boomers, then my God, Ben World. My only thesis continues to be for crypto that every time it doesn't die, that's the best thing that happens to it. Bitcoin is up 5, 6% of the last month. All right. Where's my duck? I keep losing my duck. Here we go. This is interesting, though.

So I've said it a million times just a second ago, and I maintain that these retail traders are never leaving. Right? Like their enthusiasm will ebb and wane, obviously. But there will always be something that's working. Eben Wayne. EbenWlo? Evan Flo? What's Evan Wayne?

Bruce Wayne? Speaking of which, we watched, I finally showed George. You ever see Thumb Wars? I have no idea what that is. I think Thub Wars was made by a dude on acid. And when did I watch it? Was that in Camper in college? And there was, Roos Bade was, I think, bat thumb.

It was hilarious. At least at the time it was. So I showed George the Dark Night and the Dark Night Rises. And it still kind of boggles my mind that Christopher Nolan made Batman movies. It's kind of hard to believe. He's like, I don't want to watch, he hates superhero movies. He won't do them, which is great.

He doesn't like Marvel. He won't watch him. Which, I'm like, yes, you're, I appreciate that. But he's like, I don't want to watch Batman. It's a superhero movie. He said, no, this is a Christopher Nolan movie. He's not a superhero movie. Boy, did he like it.

The Dark Night Rises was very silly. The ending made literally no sense. Was it a dream? Did he die? What do you mean? No, he jumped out of the plane. He jumped out of the plane. Yeah, when he dropped the nuke, everyone thought he died, he made it out of the plane.

Where'd he go? He was on autopilot. And then he took off and he's living his life. And Joseph Gordon Levitt is going to take over as Batman. Come on. Keep up. All right. What's the retail trader stuff?

All right. So ebbing and waning. This is from JPM Morgan via Sherwin News. For the first time this year, retail investors are showing persistent signs of weakness with weekly purchases. is decelerating by 30%. Monday. So I guess this is a week ago. Monday marked the largest net selling day

in single stocks in a month. Okay. Short term. Pretty noisy chart. Noisy stuff. I sold all my stocks that I bought a couple weeks ago. So how you like that? Peter in the chat.

Made 11% of my account. Not bad. Tax adjusted basis? I've got the long short offset. Come on, I've got plenty of losses. Taxes. By the way, actually, can I just say one thing on that? This is important.

I think it's important anyway. You care zero about this, Ben, but I think some of the listeners might anyway. I was talking to J.C. and Strazy yesterday on Stock Trader TV. And one of the things that I did wrong a million times, I think this is very common. for market participants who were not, and not talking about like your 401K, like buying and selling stocks, okay? Not knowing you what you're doing,

not knowing your time horizon. So I bought, I bought those stocks because I felt it was capitulation and I was buying for a mean reversion balance, right? I wasn't buying service now because I think they're going to be around in a year, getting back to the, what could be a year thing now.

I have no idea. How the hell would I know? I don't even know what that company does. But I knew, I know capitulation when I say it. And so what I do, did was I sold it last week when the bounce started to stall because I'm not looking out a month or two months or three months.

That to me was a short-term trade. And I think that's where traders get into trouble. That's fair. The difference between an investment and a trade. Happens all the time. I've done it a million times. But the funny thing is that usually it's the percentage decline or increase after you buy it that changes it from an investment to a trade.

All the time. And I don't care. By the way, I guess I didn't sell the bottom in Blackstone. Or maybe I did. I don't care if Salesforce doubles from here. Like, genuinely, that's, I don't have a fundamental, long-term view on Salesforce. I was buying Nvidia during the Liberation Day stuff.

When it was down, the market was down 5% one day and 5% the next day, I was buying Nvidia and going, listen, if there's going to be an AI bubble, I want to own Nvidia down 40%. And then the stock doubled off the lows and I sold it. We said that here on the show. Right? Yeah.

We bought because we were scared. Liberation DeLos. Yes, I was, yes. It was a nerve-wracking time. And I said, what, whatever. All right. Let's talk about AI. So there was some good productivity data from the economy.

And everyone says, oh, look, AI is working already. And Darryl Perkins says, no, not yet. Because I said, listen, show me the data. And then I'll believe that AI is having a huge impact on the economy. And he says, which bid is AI for productivity? He said, clue, none of it. And it's basically still on trendline from where we were before. I don't believe any, I don't believe any of this stuff.

I think productivity metrics are messy as hell. You're true, because it's a filler, it's a filler number, right? Yeah, I just. It's going to be, it's going to, you're not going to know for like 10 years probably. I don't believe any of the stuff. Sorry. Okay. All right.

That's, that's fair. It is, it is one of those numbers that it's like, well, what is, how do you calculate productivity? Well, you do calculate all those other stuff, then whatever's left over, that's productivity. Yeah. I put this in Dr. weeks ago, this is a real faceblower, Ben. Did you know

soft data is ahead of hard data? Again, this is a bit stale. I'm sure this has since dropped, but... You know, the people that they reach out to for these surveys, it's business owners, right? They're more volatile with their emotions than retail traders

are. I don't know. I don't know who's answering these questions, but isn't that really surprising? That is. It just keeps fluctuating back and forth. That's why you got to trust what they do, not what they say. I don't think this sentiment data is worth anything. Soft data is useless now.

Yeah, mostly agree. All right. So remember, I think this is good to circle back on because remember, I don't know, six months ago, we were pulling up GDP now and going, holy cow, GDP now is showing 4%, 5% growth. The economy is just rocking. This is nuts. Like nothing can stop this.

And then the updated data for GDP came in. At first, it was 1.4%. Remember, it was a 5% estimate. Now it says after they updated it, it's 0.7% for the fourth quarter. So that 5% estimate, I guess the point is just figuring out what the economy is doing in real time is very hard to do. It's really impossible. Drove the gap? That's wild, right?

That's a huge difference, right? Yeah. That's a good question. Maybe we should ask AI. Speaking of which, Brad Gersner, AI is deeply unpopular. According to Pew,

sadly, only 17% of Americans think AI will have a positive impact. In China, 83% believe AI will be positive. A token tax and political backlash is coming and less than narrative changes. So I pull up with Pew research, and they said, 50% of Americans are more concerned

than excited about the increased use of AI in daily life. Is this the worst technological innovation rollout in history. Yes. It has to be, right? No one is excited about this. And I still don't blame people because of the way that the AI,

I've said, there's just no self-awareness in the tech industry, I guess, for rolling this out. There's a 20% chance this thing is going to turn into Skynet and blow up the world. Or we're going to put a bunch of white-collar jobs out. Which one do you want? Is there option C? The thing is, if you were a politician, because politicians are good at doing narratives and getting people fired up, if you came out as, listen, I'm the anti-AI politician. I want to save white-collar jobs.

I'd like to tax the crap out of these companies. I want to tax them back to wherever they came from. You'd get a lot of votes right now. I don't want to destroy jobs. I would imagine that's coming. That's got to be coming. Okay, I have a thing to bring up with you because the one thing that everyone kind of agrees on now is, listen, AI is never going to be worse than it is today. It's only going to get better, right?

That's the thing people say. True. Of course. Of course. And there's Morris Law and all this stuff and the scaling, and of course, it is getting better. AI is getting better. What if it just does plateau, though? No.

With no knowledge of this. Okay. When is the last time the iPhone got better? Five years ago? Six years ago. Siri and Alexa have been out for, I don't know, 10 years. Have they ever gotten better? I mean, literally, what does one have to do with the other?

I'm just saying there are technologies that plateau. People think that AI is just going to keep scaling and scaling and scaling until it's the sentient being. That's like God. $600 billion is not being spent annually on the iPhone. All right. I'm just questioning that AI is eventually. going to be this perfect thing that's like a sentient being

and it's always going to only get better. And I'm just saying, what if it doesn't? We could leave a thing. What if AI makes... Bad take. What if AI makes us all so much dumber collectively because we're not thinking anymore? No. It's the opposite. It's the opposite.

AI is making me so much smarter. I'm sorry, but I think AI is going to make more people dumber than smarter. I think if you pull, like, why people hate AI, I don't know, five to 10% of the population right now is using it to really expand themselves and broaden their horizons, and the rest of the population, most of them are going to use it to answer questions and not think anymore. I disagree.

I think finding the answers to things that you didn't know about before, it's like, huh, I had no idea. I don't think it's going to be like, oh, my brain is shut off. Listen, it's great. It is a great tool for education. I don't think many people are going to use it for that. I think people are going to use it as a shortcut. What, like Google, but better?

Yeah. I reject everything you just said. I don't think you do too deep down So it's your soul, Ben. I don't. I know people love looking for shortcuts. It's just the way, it's human nature. Shortcuts to learning faster and more efficiently.

Okay. How many people do you know that like to learn and read and, no, people that use AI for slop? People love to learn when they're interested in the topic that they're learning about. Yeah.

How many people are going to do that? That's what I'm asking. I think a lot of people. I really do. I'm optimistic about this. All right. I'm not. I think it's going to make

us dumber as a society potentially. I think, uh, I think it's a lazy take. Sorry to call you out, but I do. All right.

I'm usually glasses as fow full. I'm becoming more glasses as empty on AI for, for society. Okay. Well, all right. Austin Reeve tweeted,

we are in the golden age of AI. Go thank a VC near you. A $200 monthly subscription to Claude can consume 5,000. thousand dollars in compute. This reminds me of when I was in college and ubers were three dollars. So Ben Thompson had a take on this and I think I said this at future proof in one of my introductions, which I didn't use as many jokes as you did. You were better with the jokes than me, I think, doing the MC gigs and introducing people under the stage. But agentic

is the word of 26. When, when Miriam Webster does the dictionary word of the year, agentic is going to be that in 2026 or 27. Because honestly, if you say agentic AI, it makes you sound smart. Of course. Right? If you say that word, boy, this person knows what they're talking about. Can I hand out? I've never said the word of Gentic AI. I'm not saying I never will, but I've never said it. So Ben, because of... I already said Anywho wants on this show. I caught myself saying... For those that skipped the live show, listen, Ben and I roasted each other. And the idea came from a listener who sent us an email saying, Michael says Anywho a lot. So I appreciate the email. Ben, I just got a text. from my Uber driver. So a week before Futureproof,

I lost my AirPods case. Got these little thingies, but I've got no case, hoping the case shows up. So I took Robbins AirPods to Miami. And before I got to the airport, like, oh, shit. I packed my fanny pack. in my suitcase and Robin's AirPods were in the fanny pack.

So I go into the store. I got to the airport several hours early because I was worried about TSA stuff. So I got to the airport three hours before my flight, bought another pair of AirPods. Three hours? I don't know. Two and a half hours. Maybe not three hours. You just wanted to go into the lounge.

I'm exaggerating, I think. I bought a pair of AirPods in the store. I get home, doing whatever I'm doing. looking around, I'm like, you gotta be kidding me. Did I just lose another AirPods case? I did. We're looking at the ring. Robin says, yeah, you walk into the house

with your AirPods on. I left the AirPods in an Uber. I left the case in an Uber that I had just bought five hours prior. So Robert says, how many pairs of AirPods have you bought? I'm like, 15? She goes, all right, that's it. No more AirPods for you.

That's it. You have to buy the knockoff brands. Wear your Bose headphones. You're not going to lose those. My Uber driver just texted me. I sent him a package, an envelope, and an envelope, so that he could send the AirPod case back.

My AirPard case is in the mail. No harm, not foul. I think you just need to start buying the knockoffs if you're losing them that. It's like expensive sunglasses. If you sit on two expensive sunglasses, stop buying expensive sunglasses. The reality is I probably,

it, it, uh, it ebbs and flows. Ebs and wins. I'll have a pair for 18 months and I'll lose two in six weeks. All right. So back to the golden age of AI. AI is not going to help you find your AirPods cases.

So Austin Reeves talk about this how much Claude can consume. So Ben Thompson had a piece yesterday saying, listen, I've changed my mind. AI is not a bubble anymore and it's because of the cost of this compute. So he's saying, listen, we don't need mass adoption. If only a small number of people

use all these agents, it's going to cost so much to use them. And that's the thing that I think people forget. At our talk with Michael Kitsis last week, he said, listen, Orion now costs more than the lady we used to have working in the room opening envelopes, right? So that's going to be the thing with AI, I think, that people don't realize is that if you want to have all these agents running all the time, the cost is going to be enormous. And companies are going to have to figure out, are we willing to pay that cost to have these agents running 24-7? Or are we just going to hire three people to do that work. Can I give you an example of this?

When we were in Miami, I met a friend of mine who, um, whose personality is that of a hater, okay? And he was, he's like, you're not to believe this. I'm super bullish on AI and what it's going to do for us. I'm all ears. Please, this does not sound like you. He said, I've been talking to a lot of people and hear a lot of different real world use cases. And then I got home and he sent me this, this tweet from Compound 248, who's a good follow

on Twitter. Bear with me for a sec. He said, yesterday I called a local upholstery cleaning business to get a quote on having some furniture and a rug cleaned. Given it was a Sunday, I assumed I'd leave a voicemail. Instead, an AI agent answered the phone. I would soon discover, quote, she had access to CRM appointment scheduling, price quoting, and contact tools. She perfectly and fully handled my call. After answering her, hello with a natural voice, she asked me my name and why I was calling. She didn't say she was AI and took me a beat to figure it out. I explained I needed five chairs in a rug clean. She asked guided follow-ups and sizes about sizes and stains. Once I answered, she said it back

to me and instantly quoted me a price. I then said I wanted a change updating the rock size. She quickly accommodated and confirmed the new request and gave me a new quote asking me if I wanted to book the service. I agreed and she went right to booking asking my zip code. The first available appointment was too soon, who's today. So I asked if she had any time Thursday. she offered me the first available salon on Thursday, which worked. She took my home address and email. She read back the email address. I corrected one mistake.

She fixed it reading that back. My appointment was confirmed, and as soon as I hung up, I received both a text and an email outlining everything we talked about. It was a perfect interaction that only took a few minutes, and I left with an appointment booked. In the past, maybe I'd leave a message. Maybe they'd call me back. Maybe I'd call it competitor in the meantime.

And set a patient and easy to interact with AI, listen to my issue, quote me a price, made it justice in my request, booked an appointment, and set the follow up email and text. confirm the details. Anyway, amazing. Do what this means, though? That's more work for the upholstery company, not less.

It's more work for them because they can outsource us. More business. Yes, it's more business. That's the thing people don't understand is that in a lot of businesses it's going to lead to more stuff for people to do. So the conclusion was,

I'm not sure what this AI agent is worth to the SMB, upholtery cleaning franchisee, but it's meaningful. Huge personnel savings, and she's revenue generating. These people don't have to waste time going on the phone and scheduling.

Now they can work. They can do the actual upholstery work and plan other stuff. So that is the giga-optimistic take. Yeah. And it's not to say that, like, yes, displacement, a thing. But what it's going to do for the pie, it's going to grow it.

Yeah. So anyway, the Ben Thompson take that this isn't a bubble. And I feel like a lot more people are coming around to the idea that this is not a bubble, is that, listen, he says, in this context, is it any wonder that every single hyperscaler says that demand for compute exceeds supply and that every single hyperscaler is in the face of stock market skepticism announcing CAPEX plans that blow away expectations? He's saying it's not going to take many people using this, these agents, many businesses,

that there's so much demand for compute and that compute is so expensive that it doesn't have to be everyone right away for this to not have to be a bubble. So given this mega mega theme getting back to how we open the show like how bearish are you going to possibly get? And maybe that's the point too that the market says, no, no, no, no. AI is still the only thing that matters, even if oil is uncomfortable for six months or 12 months or however long it is. Is that the case? Yeah. Okay. But the question is, all right, why are these stocks selling off then?

Are people coming to realize, I know this is a minor sell off in Meg 7. Are people coming to realize, listen, the beneficiary is this upholstery company? And it's these small cap stocks. And it's these mid-cap stocks. And it's these value stocks. Like, is that going to be the leap someday that, like, listen, these tech companies are spending so much money. Maybe they don't get as much in the returns.

You know what? I'll tell you in six months. Because this could very easily be a blip. Good. It's very possible that the second half of the year, Mag 7 resumes leadership. So they're out of favor right now. And it's not hard to paint the stories to watch.

it's too much spending. Free cash flow is going to decline. Like, we all know the story. So Anthropic is a public company. Let's say it is. How much is that up this year? 140%. Probably right. All right. Aura from Ramp, the economist we've had on the show, said, I've seen enough. Anthropic is the new default for businesses. His newsletter is fantastic, by the way. Okay. So, yes, it is. There's a chart from the information showing Anthropic, and OpenAI's revenue. And Anthropic went from like a billion to 14 to 19 in... Their revenue growth is staggering.

So I didn't have a time to read it this morning, but there was a headline in the journal that Open AI is refocusing. They're going to prioritize coding and enterprise and business. They're toast. I mean, it's very early. That, I just feel like admitting that is admitting defeat. You're right, it's really. It feels like they're toast to me.

If they're saying they're already pivoting their business, like, okay, we screwed up. It's a natural obvious pivot. This is, of course, what they should be doing. Yes. Is it already too late? No. No way. Okay.

All right. This is crazy. From Joey Politoano at Apricetus Economics. He looked at what AI is doing in the Taiwan economy. And this is crazy. Taiwanese GDP rose at a mammoth 23.6% annualized rate in the last quarter of 2025. Overall, the economy has grown more than 12% in the last year. The fastest annual growth in 50 years, GDP has increased almost 23% since the launch of Chad GPT in late 2022.

Look at this graph of their GDP growth. It's absolutely insane. For one country, and this is all AI, obviously, from Taiwanese Semiconductor. I listened to a book called Chip Wars, because this is an area, speak of like Learning Moore. The Chip Wars, who wrote this book? Chris Miller. Wait a minute.

Don't you think audiobooks are almost like a life hack in terms of learning? Yes. Enormous life hack. But is that a bad thing? Is it a shortcut to use your words? Yeah. In a good way. Okay, fine.

So I knew nothing about semiconductors because I was curious. Why is, so it was the week that, I guess, Taiwanese stocks and South Korean stocks were getting killed. I said, like, why are they, why is that, I don't know that's like an energy story, but how did they become the hub for chip manufacturing? And I knew nothing about it. And now I know a little bit more than zero because I don't think this is unique to me. I am really bad at retaining information. No, there's too much information now. You're bringing to only process.

There's too much. So I asked chat, like, hey, remind me, like, which are the companies that do? like the Fablis and the Foundry and the lithography, that's a tough word you'll say. But then I hear a song from like 1992 and I remember every single word. Why is that? It's funny you should say that.

So I used to have that experience where I was listening to when I listened to Howard. There was a segment that I would hear on the radio and I remember exactly like what streetlight I was at when I heard this in 2011. So shit like that sticks in your brain and the information. I don't know. So I want to talk a little bit about future proof since it was all AI-based.

And you and I, like, we emce like 10 stages and we, hey, this person is building this tool. They're going to talk about it. This person's building that tool. And this is not going to be an easy transition. Understanding which tools you actually need and trying them out and maybe letting other people try them out first. And understanding what agents are going to be helpful and what processes to automate it. It's going to be a very, there's so many companies trying to do this right now. It is not going to be an easy transition.

Agree. And understanding, like, I'm going to implement this new tool from this place, but wait a minute, someone else does it way better or way easier. Now I have to integrate it in all my different tech stack and it's going to be messy. Yeah. I know, people are going to go, do I need this? Is someone else already using it? I feel like there's going to be a lot of companies that are going to be just dipping their

toe in the water, waiting until someone else bigger than them does it first to show actual results. Wasn't this favor the incumbents? Probably, yeah. Because they have the resources, they have the human capital to help train your staff. You have the relationship with these companies. But I completely agree with you, knowing what to adopt and it's going to be messy, for sure. I heard so many pitches of this company is going to take all your different tech providers

and they're going to make them communicate together and make your processes easier. and it sounds amazing. We've been hearing this for how many years that someone is going to come in and do this and no one has been able to do it. And it's going to be very enticing, but I also think it's going to be messy. This is interesting.

The one thing people thought a few years ago was, listen, housing has to crash to make it more affordable. That's the only way. Like, prices have to come down. And of course, they didn't. They've more or less, they've gone up a little bit.

They've stagnated. And I guess if we did an inflation adjustment on this and housing prices, they probably are lower. or gone nowhere. Julian Hebron. Is it Hebron or Hebron? I don't know.

Okay. I'm going to guess, have. Okay. Julian Hebron, at the basis point, writes on real estate. This is interesting. He says, February home affordability hit its best level in four years, with median earners spending 27.4% of their incomes on median price homes. And that's way down because wages have continued to increase while prices have more or less stagnated.

So that's what you have. had to happen to make housing more affordable. And if you, if you, you know, beat you gun to my head, what happens from here over the next like five years, that, I don't know how long that period takes. Like, that's probably what's going to have to happen to make it more affordable from here, too, if we want more affordability. It's just going to have to be prices not going up very much, and incomes going up more. The housing market is deader than dead. Why do you say that? Because there's no homes that are selling. But I feel like that's anecdotal. Because every time someone says that, Logan Motishami dunks on them and says, look, there's still 4 million

homes that were sold. It's like there's a million less homes being sold than usual, but look at, look at the stock chart of Lenar. Okay, but look at US existing home sales. That's actual sales. Look at Home Depot. You're right. The graph is way lower. So over the last 12 months, 4.1 Williams. 4.1 million homes existing homes have been sold. Homes are not, lower. Homes are not selling. That's way lower than the average. You know, it's kind of crazy. This year alone, there have been two houses for sale in my block. You know, my block has like 20 houses on it. And they both sold the very first day. There was one house that never even got listed and it had a sale pending sign in front of the house already. I just feel like using anecdotes

is a little too easy here. I'm using data. Put that chart in there. Existing home sales are fucking zero, dude. They're like at the floor. Okay. So going back to 1999, the average, Over 12 months the average US homes sales for existing homes is 5.2 million. We are at 4.1 million. So it's way lower. I agree. It's 20% lower. What does the line of the chart look like? Does it look like it's on the average or does it look like it's on the floor? It looks like it's on the floor. It's lower. There's no bud. There's no bud. Dude, it's on the floor. It's 20% lower. I'm not using attic data. You can't say no one is buying house. It's on the floor. It's low over the past 30 years it is. Yeah. It is about as low as it's ever been. Well, the past 30 years. I bet it was lower. I bet it was way lower in the 80s. All right. Do you remember when all the robo advisors came out and when rates were really low and said, hey, we're going to pay a higher rate? Rates are like 2% on cash or 1%. We're going to pay 3% or 4%. And it was a way to get customers. Listen, we're going to eat that and we're going to give that higher. And I think that's, to me, as a business, that's a red flag.

So a bunch of people are really excited because Open Door CEO said, hey, listen, we're offering 4.99% mortgages. And he said because we're taking out all these costs. And to me, this is just a way to try to get cut. This is the same thing. Is it not? Is Open Door still an eye buying business? I don't follow them.

Well, I think they're trying to expand into doing other things. But so the stock, it's kind of, it fell. I would say, yeah, generally subsidies don't work, but sometimes they do. Right? Like Uber was a great example of a company that worked really well. Yeah. So I'm just saying, usually to me, in the finance, this is a red flag. We're going to finance it.

Okay, yeah, yeah. All right. That's just, maybe I'm wrong. Private credit talk? Oh, boy. You know what? All right. Cliffwater, $33 billion private credit funds, redemptions reached 14%.

14%. And let's just say that of that 14% 80% came in over the last three years. Probably a lot. So they got 14% redemption request. Release the list.

If you put your clients into a private vehicle, a semi-liquid vehicle, and are redeeming in under eight quarters, you go on the naughty list publicly. your clients should not be happy with you. If you said, I'm going to put you in this illiquid long-term investment 18 months ago and now we're pulling it because I'm worried about it,

that you're right. It's not the industry that gets blamed here. It should be the advisor. The advisor. Now, I do empathize a little bit with the advisor here because they are stuck between a rock and a hard place. If the client says to them, now there is so much smoke out there, and I'm not saying that there's not reason for the redemptions,

but I genuinely believe that the media is, and I'm not like a media pointing finger sort of guy, I don't think I am. I don't think they're helping at all. Okay. So if you're an advisor and a client says to you, hey, I'm seeing headlines in the Wall Street Journal. Like every day, it seems like another company is gating or whatever.

Should we take our money out? if you say, yeah, we probably should, then the client is probably thinking, well, but if only, you put me in this like a year and a half ago, why'd you do that? Counterpoint. If you say to the client, listen, there are legitimate reasons for why the asset class is under pressure. Let's give a time. Let's let this cycle play out. We saw something similar with B, right?

Like we've seen this before in a different asset class. let's let the paper hands leave, the loans are fine, blah, blah, blah, blah, blah, let's just stay the course. And then things continue to get worse because they're probably not going to get better on the headline front, right?

We haven't even gone through a credit cycle yet. Right, right. So, and then, and then, so the headlines get worse, and the client's like, well, I asked you if we should leave and you said no. So I think the advisors sort of stuck between a rock and a hard place here. Aren't we learning that private markets

are just not a great fit for this space, for most of this space? I know some advisors use private markets responsibly, but if we're talking everyone in Larry Fink's 50, 30, 20 portfolio, most advisors and clients cannot understand the difference between the liquidity and the time horizon for these things. These things are obviously way, way, way oversold from the advisor to the client. And have we learned that this is the worst idea you could possibly come up with

to put this stuff in 401Ks? They'll be 10 times worse jumping in and out. that's a whole lot of can of worms. But I'm glad that some of these warts are out in the open before legislation. I think we're learning. But isn't this a something's got to give scenario? So high yield spreads are still very low, right? Haven't blown out at all.

So if high yield spreads are still so tight and private credit is seemingly in trouble or people are predicting they're in trouble, like one of these two things has to be wrong. Fair? Wait, say that one more time? High yield spreads have not blown out at all. People are very worried about private credit. One of those two things has to be wrong. One of them has to play catch up.

Either private credit fears are overblown or high yield spreads need to blow out more to catch up with private credit. Is that fair or not? Can they be two separate things? I don't think they can't. So my knee-jerk reaction is that these are different. The composition of the portfolios are very different. And I think one of the big reasons, not I think, one of the primary reasons why people are rightly, I want to say rightly panicking, why people are panicking, is because 25% of the loans in private credit are to SaaS names. That makes sense.

So, HyG, for example, is technology is 9%. So it's it's fair. Yeah, no, that's fair. And so you have this charting here from Torson Slok saying that 2028 maturity wall is approaching for these software loans. And here's the thing. My general rule of thumb, anytime in my career I've heard about a maturity wall, it hasn't mattered at all. I heard about this every single year coming out of the great financial crisis and it never mattered once. Guess what?

People roll their debt over or they paid off and things and life moves on. There's never been a moment where I've seen, you know what caused this financial crisis? Maturity Wall, that did it. I don't want to be too flippant here. But maturity wall has never, ever mattered once in my career. That is a good take. Let me ask you this. So the ultimate bullshit, and we called this out when Lipschultz at Blue Al was saying

we don't see red flags, we see green flags. Yeah. Yeah, dude, there's no distress yet. Everybody knows that AI will cause disruption. Nobody knows the extent of it. Okay? That's what the market is trying to sort through. But everybody knows that there will be disruption.

And if Salesforce, a company with $7.5 billion in net income, if Salesforce equity is down 50 plus percent, what do you think the equity of a company that's doing $200 million in EBITA is down? 90%. So do you think that the loans might be impaired at some point in the next couple of years? Obviously. Obviously. But don't you think that having liquidity in these fund structures, if clients and investors are

constantly trying to get ahead of the next credit event and always blowing out every time that happens, that's not a good business model for the long term. If people are constantly blowing out of these funds because they're worried. Yeah. Yeah. Well, what's interesting is that... Maybe some of these funds should be gated, even though investors would hate it. Maybe they should be. You know what?

We're not giving your money back. So how long do we see the 5% withdrawal limit hit? Is it six quarters? Because guess what? I think very little money is coming into the... There's no more retail money coming in for the next quarter or two, at least. What I think is possible is you see maybe some of the giant pensions. Like Calpers, actually, I think CalPERS did a deal with Bweed.

I don't want to speak at a turn. But I think they got to... That's preferential treatment or a sweetheart deal back in the day when B-Wit needed some additional liquidity in their coffers. So you tried to buy Blackstone a couple weeks ago, didn't work out. I mean... Credit to me. Morningstar has this graph.

Morningstar has this graph and they show the different types of funds that all these private equity, private market companies have. And it's private equity and venture capital and private debt and real assets and real estate and secondary funds and fund of funds and co-investment. It's all these different. It's a diversified. It's not just one fund structure. Some have more than others, obviously.

Isn't this graph the reason that eventually these PE stocks are a buy? Screaming by, Ben. Eventually, the business model and the fact that they're so diversified is, and they're still going to be making fees on all this stuff, even if private credit is hurt. I know maybe one of the reasons these stocks are selling off is because there's no way to bet against private credit. Like these stocks are the way that they're betting against it. But eventually, you're right, these stocks are a screaming buy down 50% or something. So I think it also depends on the stock.

Like, I don't think that you can group the wall together. Apollo, for example, that's like all private credit. But yeah, so again, getting back to like what I said earlier about, trading, not investing. Yeah, I think these things are probably screaming by. But I'm not investing in these stocks right now. I was trading it. It didn't work. That's it.

All right. So I said advisors are stuck between a rock and the heart place. So are these companies. This is from Pitchbook. Fund managers essentially face a dilemma. They can relax liquidity caps to satisfy individual investors, which may compromise the longer term value of their portfolio. Or they can hold the line and gate redemptions.

which may alienate investors and send a worrying signal about the fund's underlying strength. I agree. Here's what I know. These headlines are going to persist. It's not going to get better. If they keep having 5% redemptions every single quarter, doesn't that eventually mess with the asset class as a whole? Scott, at some point, the liquidity facilities that these companies have get tapped. Right.

Where the big banks are like, dude, sell some of your loans. I don't care. Well, they're only traded 60. Sell your loans. Yeah. All right, this is interesting. Rex Salisbury. But this is the whole asset liability mismatch.

That's the problem. These are long-term loans you're supposed to hold for the long-term until they're mature. Correct. That's the point of it. Correct. Rex Salisbury tweeted VC IOR decay for 2017 and 2018 has been bad. And this is before the SaaSpocalypse. IR is driven by big positions held at last round valuations.

What would they look like a true fair market value? Dude. And there's, and these are probably actually still on the high side because of There's just been no exits. Way high, dude. I'm telling you. I think in aggregate, these portfolios are just nuked. Yeah, just because SpaceX and Open AI and go public, that's not going to help this space either.

Yeah. All right, I got some good news. Bloomberg chart. Ernie's calls flagged broad-based economic recovery. So they show ISM manufacturing new orders alongside transcript-based economic recovery. And they move directionally together, and they're turning higher. Love to see it. Yeah, but this was way lower in 2023 and 2024 and the economy was doing fine.

Yeah, forget everything I just said. All right. All right. Good story in the Wall Street Journal about Dix. This is one of those Peter Lynch stocks that you go, oh, come on, why didn't I buy this thing? Families are now shelling out more than $40 billion every year on children's sports activities. And they show this for baseball, soccer, basketball, like the average spending from 2019 to 2024. for. And it's, I don't know, 50% higher for each sport. And they show Dick's revenue is just up

into the right. And it's since 2020, it's been crushing the S&P. I don't know if you have this that you're through the school or through whoever, but it's like a week before sports started, two weeks before, you go to Dix, you prove that your kids go to the school and you get 20% off of your whole purchase there. And they are the place to go. We had to buy all my son, all his shoulder pads and helmet and stuff for football. The girls need soccer stuff. anything you need, you go to Dix. And Dix has become the place for that. And so this is a way to play on parents being psychotic

of other kids in sports, in travel sports and such. Dix is underperforming the S&P by 20% over the last year. Is it? Yeah. Okay. But look at longer term. This thing is going nuts. Zoom out.

How long are you going to zoom out? Go to three years. Five years. Three years. Dix is up 30. S&P's up 70. Go five. All right. Go five.

Okay. All right. Five years. Five years looks better. All right. But they showed that the top downloaded apps, and this was kind of flying around social media, it was Claude, Chad GPD, Dick's Sporting Goods, Google Gemini. And I guess they found out that if you connect a fitness tracker to the app, you get like $10 off at Dix. Which is hilarious that that many people would download it for $10 off.

Okay. All right. Real quick. So you don't buy the thesis that Dix is like a. play on new sports. Now, when I grew up, listen, when I first played tackle football in seventh grade, we got the equipment from like the 1980s. Right. Like these old pads, like we had the square shoulder pads and the helmets barely fit and I'm sure they were not safe at all. We didn't have to buy our own stuff. We just use hand-me-downs. That's not a thing anymore. No one does

hand-me-downs anymore. So I buy new stuff. I buy the thesis. The story that you're saying is accurate. I'm just saying stock picking is hard. Fair. Yeah. All right. I think this is an interesting way. So there was an article, not an article. Yeah, there was an article in Bloomberg. Matt Levine wrote about shares in SpaceX. All of these, there's so much demand in all these SPVs, that's like, could you imagine if you thought you invested in a company? And it turns out that it was a fraud. Meaning not the company was a fraud, your investment that you don't even own the shares. It was a Russian doll of SPVs, special purpose vehicles that you don't even own the shares.

So you imagine you were expecting a liquidity event and like, sorry, dude, you've been ripped off. Okay. So that's a thing? Oh, that's a thing. Here's another way that prediction markets can add value to the real world. You can't buy Anthropic. You can't buy SpaceX. But what if you can predict what the valuation would be at the IPO or whatever?

Or what the valuation will be in 2026. It is 2026 or 2027. That's a neat concept. No? Okay, not bad. It's just the upside. It probably is less cap because it says, will it be $500 billion plus?

Well, yeah, six, yes or no. Okay. But if you're dying to get exposure, you could do it. That's not a probably market. All right. Guess what? I want to bet. Not as much fun as Dunking on Michael for losing the Seahawks bet.

But... Did you win an Oscars bet? I bet on one battle. Okay. And what was your payout? Unfortunately, I bet... eight times more in the Super Bowl. But hey,

and wins a win. No one is ever watching that movie more than once. That's my thesis. It's going to be a movie that comes and goes. So I enjoyed the Oscars. I thought it was nice that Sinners and one battle, like nobody got trounced. Even though I thought,

I thought Sinners was wildly overrated. I said it when I saw it in theaters. I enjoyed it, and I'm happy that it exists, okay? But like, best picture, all right. And one battle just kind of wilder. That was PTA's first Oscar win. Even though I'm... There'll be blood.

On the record, not a PTA guy. All right. The argument had a post about who orders door... Who orders all that door dash? And this is obviously... This chart was meant to go viral, but it's interesting. The biggest delivery consumers are broke millennials. And they break this out by demographics, so it's age range and income.

And they show the most transactions happen people age 30 to 44. who make less than 50K. I can't prove this. Is this broke millennials whose parents are paying their door-dash bill? Oh, that's a good thing. Otherwise, come on. If you are truly broke with no backstop,

you're going downstairs and you're picking up your food. You'd think. That's the point. People are saying, like, but isn't it also just people in the 30 to 44 age range probably use their phones more

and their technology more? Like, I cannot picture my parents ever completing a DoorDash order. No offense, mom and dad. I can't picture them doing that and figuring it out. Right. Great. So that, I think that's part of it. Is it also true? And I don't want to like, is it true that people who who do this more just don't have good financial habits? And they do it more because they don't realize like this is not good for you financially. I just, it's so expensive. How do you not realize? That's a good question. You know, someone pointed out, I think I said something

along the lines of financial education could help get more people invested in the stock market. And someone said that I was poverty shaming. So I don't. That there's some people who just can't afford to invest in the stock market, which is obviously true. And there are some people who just, but listen, if this is a thing, you're right, if you're spending this much of your income on DoorDash, it's a bad financial decision if you don't make that much money and you're hurting financially.

It really is. No poverty shaming. Cancel this, man. Yes. That's what happened. All right, Alison Schrager, I love this because for years we heard there was a retirement crisis, and she says, no, there is no retirement crisis. Americans are saving enough for retirement. The 401 going from defined contribution to define benefit, or sorry, defined benefit to define contribution, it worked.

She looks at an inflation-adjusted basis. Older Americans are doing better than ever. The median net worth of Americans 16 over is far higher than it was three decades ago. Adjusted for inflation, it's more than doubled. people are she's like people are doing just fine love it she says american 60 and older and this is in 2020 so it's even higher now had a median net worth of like 450 grand

that may not sound like a lot to retire with but it was 210 grand in 1989 right now some people look at this and go that's not enough money to retire of course it doesn't some people have to supplement with social security maybe they work longer whatever it is the point is older americans are in a much better shape There was many, many words written about the coming retirement crisis.

Yes. My point has always been, do we see like retirees and breadlines and stuff? Like people figured out, and most of them, if they have to just rely on Social Security, obviously that's not a grand lifestyle. But that's what happens to most people, is they supplement some financial assets with home equity, with Social Security. And that's how they manage retirement. All right.

Oh, one thing we didn't mention about, now we're up to travel. One thing we didn't mention about future proof. One of the greatest mergers, I think more 90s bands should merge together. Totally. So we had Sugar Ray, Better Than Ezra, and Tonic all came together. The three lead singers from those bands came together and formed their own band. What they call it, Better Ray Hart. Okay.

And each of those bands have three to four bangers. And all they did was play the hits. And, man, was that a great way for your show? If you could merge some bands, what would it be? I thought about this. Okay, so we got like, so first I would do Toadde's and Toad Wet Sprocket. Gin Blossoms. I don't know the first band's.

Bougardals. Toadles? Toadies? Look them up. Actually, it's like a hard rock band. You'd like Toadies. They had a great one-hit wonder album. But I thought about this, though. How much of a head, and this is like a musician thing, how much of a head game does it play with you?

If you had a one-hit wonder or even like a three-hit wonder album 20 years ago, whatever, how much does that mess with you? Yeah. Josh and I saw it, and I think we were with Nick, we saw Jim Blossoms at like a tiny little place, I don't know, five years ago. So I saw one a few years ago. It was Counting Crows, Collective Soul, and Live. Ooh.

That's a good 90s matchup, right? Yeah, that's really good. Yeah. So anyway, just I, and they were saying, like, they were having, Mark McGrath was, I thought he was hilarious. You know, they were gadding in between songs and telling 90s, it was great.

All right, Ben, I can't let this go. Okay. Today, Ben, stay, there's an email. Today, Ben stated that people could file free with TurboTax or file online with the IRS, but the IRS free file was shut down this year by Elon. So please correct this. Boom. I didn't realize that.

Correct. It's a lot of doge. Yeah. All right. I got an email. Congrats, Michael. You've been selected for a pre-approval offer of up to $60,000 toward a new Subaru. And I thought, how much do Subaru's cost?

How much are they? I don't know. I didn't up to $60,000. What in the hell? Now, lest anyone try and poverty shame me like they do to Ben, I'm not car shaming. I drove a Subaru and I loved my Subaru. Like an outback?

I drove, um, oh my God, I thought that was the only kind again. No, no, no, no, no. I drove the, uh, the impreza. Oh, geez. So it says an outback runs 35 to 49. No, I did not try to the imprison.

Top top end. 35,000 is MSRP for a super route back. So what are they trying to sell me? I drove the super sedan. Oh, the legacy. You take the difference and you invested in stocks. Yeah, I guess. Bizarre.

All right. I got a lot of recommendations. It's been a couple of weeks. I don't have many. Okay. I watched Sisu 2 on the airplane. Sounds like a kid's movie. Sisu.

Cizu. I don't know how you pronounce it. Is it finish? The second one was hilarious. It's just a over-the-top action movie. This old guy, the Nazis take his land or something like that, and he just, he's just a badass. Okay, I guess I did see the people for that.

Yeah, it can't be killed type of guy. And the first one's awesome. And the second one is even more awesome. Just way. Finish Liam Neeson? Yeah, but yeah, just totally over the top. Like, hilarious. Laugh out loud, gore in action.

and, you know. All right, I mentioned Chris Ryan's rewatchables month earlier on the show, and they finally did Fargo, and I rewatched Fargo for the first time in 15 years at least. It's funny. I rewatched it like a month ago, not knowing they're going to do it on rewatchables. I rewatch it probably once over two years.

That's a lot. So Fargo is literally my favorite movie of all time. Like, actually, it is my number one Michael's favorite movie of all time. The accents just make me smile when it was the actual. sense. And that's not, that's not a new thing. That's been my number one for a long time. It is. You have said that before. It really is the perfect movie. It's like a, it's like a, it's like a, it's like an hour of 35 or something like that. I must, I must just be getting older because I find myself watching way more old movies now than new movies. I just, I can't, I don't know what it is. Like I watched, I rewatched Sunshine and eternal sunshine of the spotless mind recently. And, uh, I showed George Armageddon as well. And I just find myself being attracted more to older movies. Yeah, instead of new movies. Man, Armageddon was good.

Huh? Oh, my, I just, so he did a double. He did a deep impact followed by Armageddon. That was the same year, both 98, right? Yeah, they both come out in the same year. It's so funny how, but Armageddon just pulls at the heartstrings way more than deep impact gave me nothing. Did George cry? No, no, he doesn't get emotional about the movies.

But it's so funny, he has action movies figured out. My daughter will be like, oh, no, is he going to make it? And he always goes, that's the main character. He's not going to die. But then he goes, no spoilers here, but he goes, Harry's going to die at the end, isn't he? Bruce Bullis. He called it.

So he's got these movies figured out. Keep going. I caught a matinee. It's been a long time since that happened. I was able to drop Logan off at a thing, and it just worked out pristine. I said to Rob, and I said, you know what?

You told me to go to the movies tonight. I want to hang out tonight with you guys. I don't want to go to the movies. I want to be home. So let me just do a matinee real quick. This movie's an hour and a half. I saw Undertone. And Undertone is one of those indie horror movies.

Great concept. Podcaster. they do, it's like a supernatural, evil, whatever podcast. There's literally a new horror movie every week for you. It's like, how do you not get sick of these? This was scary. This was genuinely scary. But there was only one other weirdo in the theater, which took the experience way down.

Because had I seen this at night in a crowded theater, like, I was scared. And this is, you know what I say you have to go to the movies for some, you have to go to the theater for some movies? Ben, this is the type of thing where there's not. noises in the theater behind you, when the speaker's behind you, and the whole point of the movie was like the sound and where the noise is coming from. And it was super effective, but I was so scared that I was like looking down on my phone, which I wouldn't have been able to do if I saw the movie at night, like a normal person with people around me. Scary movie. Good movie. Okay. All right. Any else you got? Lastly, lastly, TV shows are ramping. We are ramping up.

And I'm going to tell you right now, Paradise. Love Season 1. That is a, That is an analyst hold for me on season two. I saw one episode. Not thrilled. I'm going to wait for reviews. I don't mind it. My wife is really into that show. She's more into it with a meme.

We're worth three episodes in. And it's actually, it's better than I thought it would be. I thought it was a one season show. I'm still going to wait. Same thing with Monarch, the Godzilla show. That's a wait for me. There's just too much on right now. So I dove into two new shows.

DTF St. Louis, that is with Jason Bateman, an actress who is a very familiar face. And the guy from Stranger Things. And Dr. Doback. Now that show is, that show is flames. Three episodes in, are you watching it? I haven't yet. Okay.

It's on my list. Quite good. It's a love triangle, a murder, very good. And I watched, and Rooster is a new show on HBO with Steve Carell. So it's a little, it's like. That's coming of age, right? That's right up your alley, Ben. Okay.

I'm definitely into that. All right. A couple weeks ago, I complained about history books and said, I need something that grabs my attention. And two separate people said, Ben, you have to listen to the Gales of November by John Bacon. So this is a book, and it's one of those audio books that immediately sucks you in. Okay. It plays a hits for me because this guy is based in Detroit, and he writes a book about the Edmund Fitzgerald. Now, the only knowledge I had of the Edmund Fitzgerald was the Gordon Lightfoot song. Have you heard this before? No. There's a song called the, and I had a friend in high school who was like his

favorite song. So we listened to it all the time. There's a song. So the Edmund Fitzgerald is the biggest ship that's ever sunk on the Great Lakes. Okay? And this book is not only about this ship, but it's a history of the business of the Great Lakes. And so, like, how much business has been, yeah. Oh, of course. Yeah. Are you kidding me? At the, uh, yeah. Classic. Okay. So I never knew much about the story. I'm surprised he didn't teach it to us. So it's a history of the Great Lakes. And it talks about, like, being a captain on the ocean, versus being a captain in the Great Lakes. And all the people, the guys who are in the ocean, like,

ah, you like Great Lakes guys. And then they ride on the Great Lakes and like, oh, this is serious. But so it also talks about the guy who created the Edmund Fitzgerald was the president of Northwestern Mutual Insurance Company. And at first, he didn't want his name on there because it's like, what if it sinks? And of course it did sink. But it also talks about like the growth of Detroit and the growth of like,

they found these copper mines in Michigan. And that made the Great Lakes, you know, this big business thing. And to talk about how, like, more efficient the ship. So it's a business book, too, but the most interesting thing to me, from a risk investing standpoint, was, you know what the two locks are? No. So you have one piece, you have one body of water, Lake Superior, is like 20 feet higher than the river, right? And they used to have to, back in the day, they had to, like, carry stuff down and, like,

doing a ship. So they built these locks that would even out the water. You remember, like, people go to them to watch. It's like, it's this crazy. Actually, Da Vinci was the one who created these. Sorry, I'm just, it's been. concept, but that's interesting. It literally evens out the water that they move it over, and the water goes back out

this. Huh. It's an insane thing that it was ever created. But what they did is because the ship captains were, they got their profits from how much stuff they moved. They built the ship to be exactly as big as the locks. So it had like six inches on each side. And guess what that meant?

It wasn't very good during a storm, because they just built it for the locks to haul as much crap as they could and not the storm. And that's why I'd say. Fantastic book. Whoever recommended that to me. Those two dudes. Way to go. I love that. And I have more of a Great Lakes love than you do, but I think you'd like it. It's really, really good. Okay. Sounds great. What's it called? The Gales of November. The Gales of November. Good title. All right. We went long. We had to. We missed a week. Yeah, good to be back in our home turf. Wait, two plugs. I talked with Big Joe, Joseph Wang, from SyntheticFite file last week, about box spread loans. On what show?

On Talking Wealth. So go on Talking Wealth. Check that out. It's a concept that Bill and I brought up an asset compound, and everyone was so flummoxed. Our audience. They were like, wait, what? It was way over people's heads. So I wanted to do a deeper dive. It's a way to borrow against your portfolio, and it'll kind of blow your mind how low you can borrow.

It's like you're the U.S. government, essentially. Also, we mentioned it last week, but new exhibit A feature. I'm doing a monthly summary of all the favorite charts from Chart Kid. So it's going to be like white labeled four advisors. Ben is going to be a ghostwriter. Yes. For advisors. I've had people reach out to me before.

Hey, can you ghostwriter for us? Like, no, write your own stuff. But I'm going to do it now. Now you can. Yeah. So go to Exhibit A for advice.com. Yeah. Anything else?

Except for me. All right. Animal spirits. The compound news.com. Personal emails, personal responses. Anywho, someone just emailed us and said, hey, the roast was, because we had a lot of people said, you guys, a roast stunk. This guy said, I was laughing out a lot of the roast. You guys nailed it.

So, all right, see you next time.