Animal Spirits Podcast - The Wobbly House of Cards (EP. 483)

Episode Date: September 23, 2026

On episode 483, ⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠ and ⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠ discuss: the interconnected hyperscalers, AI's risk to the economy, the chart of the year, Nvidia's valuation, Meta's personal assistant, $186 trillion in household wealth, 10 year return projections, the case for owning bonds, why the Fed raised rates, Bitcoin's comeback, fixing the housing crisis is harder than it sounds, the best movie of the 1980s and more. This episode is sponsored by Nuveen. Visit https://www.nuveen.com/positioning to learn more and to sign up for a custom portfolio analysis. Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Us On Social Media: Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 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.   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/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Nuveen Disclosure: Investing involves risk. Principal loss is possible. Private market investments may not be suitable for all investors. Nuveen does not provide tax advice. Diversification does not ensure profit or protect against loss. Learn more about your ad choices. Visit megaphone.fm/adchoices

This podcast is sponsored by New Veen. As year-end approaches, investors are assessing their portfolios and considering how to move forward in 2027. New Veen offers custom portfolio insights and guidance, helping investors deconcentrate exposure, offset capital gains distributions to taxless harvesting, and explore municipal strategies that can offer tax-advantaged income. From helping to manage risk, improving tax efficiency, and finding new opportunities in key asset classes, Newveen's expertise across public and private markets helps build portfolios that seek resilience for what's ahead.

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Luckily, we've got a huge doctor this week. You are looking very GQ today. Well, it's a great time of year. It's bomber jacket season. Oh, I do love the bomber jacket. I have one. I get like two months of the year in Michigan where I can wear a bomber jacket. It's September and April, essentially.

Well, you look great. Thank you. Taking advantage. All right. I want to offer, you know, I like to do both sides of things, right? So I think the one AI related, there's a lot of AI in the doc this week. It has to. Sorry. It's like the biggest story of our lifetime right now. We have to talk about it. So the FT has this huge new tool that allows you to see how interconnected the whole hyperscalor thing is.

So it's kind of cool. You can click on one company and see who are they tied to. And they're all tied together. And they look at Anthropic, OpenAI, Alphabet, Amazon, Meta, Microsoft, Oracle, SpaceX, and Nvidia. And they threw core even there too. So they talk about how interconnected all of these big companies are. And the idea is, okay, this is all a house of cards. Because I looked at, I think the combined market cap for these companies that they list is like $20 some trillion, $22, $25 trillion, something like that. So a lot of people think, okay, if everyone's in the pool, when this house of cars falls, this is going to be really, really bad.

Well, because it's like you invest in us, we'll loan money to you. We'll co-invest in this together. Yes. Yes, the fact that your level is rising helps our earning. and our cash-free cash flow is going to your profits and it's all interconnected. So the flywheel is spinning, but once it slows down or potentially reverses, we're all going to die. But my other side of this is these are the biggest companies in the world.

Why isn't this actually a good thing? That they are all doing this at the same time. Why couldn't this essentially be they are big enough and strong enough as companies to keep pushing through all of the worries people have and go, You guys seriously think we're going to slow down? We're worth like $20-some trillion. What do we care? It sure does seem to be the consensus view, what you're describing.

Bloomberg ran an article over the weekend with the headline, AI's wobbly House of Cards puts markets and U.S. economy at risk. They quoted Jim Morrow, the CEO of a Boston investment firm, Caledine Capital Management. He said people may not fully grasp just how wound up the market of the economy isn't all of this. There are just so many things to unravel if it starts. Actually, with all due respect, Jimorrow, I think people are extremely, they do fully grasp. This is all we're talking about. I think everyone gets it, right? Everybody gets it so much that the AI trade,

tell me if this is fair. The AI trade is trading at 16 times forward earnings. I'm talking about invidia. Invigia is the AI trade. Now, I know there's core weave and neoclods and whatever, whatever. I understand that it's not, there's semiconductors, there's other things. But if you just want to zoom in, first principles, is that, is that even right? I hate that term. You know what? I said it. I hate it. I hate people who say it. It is stupid. It is filler. I said it to be ironic. It makes you sound smart when you say it, though. It's nonsense. It's a jackoff term. That's what it has been. The AI trade is trading at 16 times forward earnings. It is wild that Nvidia now has a lower forward P.E.

than at any time this entire decade. The market, the stock market is trading at a higher forward multiple than Nvidia. There is so much doubt. Maybe warranted it. I don't know. But there is so much concern that this House of Cards is going to fall upon us. I'm not saying I necessarily believe this, but in the people always, talk about how this is like the railroad buildout in the dot-com bubble. Okay, those are the two biggest

analogies people use. The railway build-out, which I did some pretty extensive research for one of my books, it was all funded by the public. They were the ones who were putting- Was it extensive? Did you go to primary sources? Yes. You revisited newspapers from 1873? I read like four books. They, this was, it was funded purely by the public, essentially. The public put all the money in. It wasn't even the government that did the buildout of the railroads. It was the public who funded it, and they lost their shirts when all the railroad stocks went under. And that was just a lot of fraud as well. The dot-com bubble, that was also kind of the public. All those IPOs were being funded by individual investors.

Today, this is being funded by free cash flow, first of all, and now potentially debt from these companies. These companies are the ones that are funding this. It's not like the public is holding the bag. Well, you could say, well, index funds and, but still, that's the big difference now. is that these companies, they're not relying on the public for funding. But maybe chart of the year, also from that Bloomberg article. And we've seen this before,

but it's just, I'm staring at it and my face is melting. It's unbelievable. Yeah, but this one has a purple line on it. The other one's on a purple line. That's true. So we're looking at the CAPX

of Amazon, meta, Microsoft, and Alphabet, estimated to be a trillion dollars next year, overlaid with their trailing 12-month free cash flow. And this, was supposed to be the thing that put the emergency break on the stock market. Holy shit. The reason why all of these companies were such amazing stocks is because they're

incredible businesses. Just free cash flow out the ass. Asset light, now they're asset heavy. A total re-rating, 40% of the index. This is going to slow the stock market down. And then it's sort of, I mean, I guess the max seven sort of. to stall down in the first half of the year. They did. As investors were digesting what this means. Okay, but we got past that narrative. And then, I think a couple of weeks ago, we were

like, dude, there's nothing else to talk about. Either slow down, keep going, but like, I feel like we're sort of in this in-between world where we're just having the same conversation every week. And then we got the slowdown, potentially, or at least the whispers of it, with the guy that said, the guy that left Open AI and said, we're all going to die, 10% chance. And now it's supposed to crash the stock market. The slowdown. That was supposed to do it. And what is the stock market done since? Look at the semi-trade. It's ramping back up. What is it going to take? The stock market is not going to come down until and unless, I don't even know what, until everyone discovers that it's a bubble. Like, I don't know, Ben. So I guess the Fed would be

one thing that you could prick this bubble. The Fed keeps raising rates. Maybe that'll, that's pretty much every bubble in history. That's what finally got Japan. But getting back to the free cash flow, if you look at just that chart, you go, well, okay, they're going negative forever, right? They're not, where is their free cash flow coming from? Torson-Slock says, consensus for these hyperscalers is they're going to grow operating cash flow from 600 billion in 2025 to $2 trillion in 2030. Like, the return is going to start coming. That'll work. Right? It is, getting back to the size of this stuff, Steve Ratner did this chart, he showed the projected IPOs for OpenAI, Anthropic, and SpaceX. SpaceX already happened, obviously, at $5.2 trillion

to those three companies. Now, this is not inflation adjusted, but is bigger than all tech IPOs from 1980 to 2025, which is almost 4,000 companies. This could do it. But again, I keep coming back to the size of this stuff. I don't think people really have wrapped their heads around how big and powerful these companies are. You don't? Because I get there was a handful of big companies in the dot com. But it was all these IPOs of these companies who had no power to do anything. They didn't make money. They didn't have profits, basically. Well, I mean, that's not true because the biggest Cisco, one of the biggest stocks back then was certainly a legitimate company. But not as powerful as the companies are today. Correct. Cisco back in the

late 90s does not compare to the impact that all of these companies have on our daily lives. It just doesn't. So I'm still having trouble getting used to having conversations with AI, right? I'm talking to Claude, and I'm running all these numbers through Claude and saying like, all right, what's the best, what's like the base case scenario for Wall Street? And what do you think the base case is? So they gave me three scenarios for how this plays out. Number one is you get like a trillion dollars in revenue. The ROI is huge and the bull market is justified.

Okay, that's the Goldilocks scenario. Two is the technology works, but it's commoditized. economy wins, but they don't get as big of an ROI in the spend because it just turns into a commodity immediately. And the three would be, okay, the growth falls short and then things get written down. That's the bad. So kind of, right? I promise we're not going to make this a habit of assing claw what it thinks about the stock

market. True. You promise, Ben? You will never do that again? Everyone's doing this. But don't you think that those are the three main scenarios people are thinking through right now? And it's like the easy muddle through one is, okay, this is just every single. thing becomes a commodity.

In that situation, in that situation, doesn't the rest of the stock market win and the mag seven kind of underperforms? I don't know. Too many variables to make that prediction. But I do think that that is where consensus landed on the conversation that the whole world was having last week about we need to slow down. It was like, this is such obviously, such obviously nonsense that the frontier models are afraid of the open source ones catching up.

and look what meta just did as an example with their muse agent. So this was my next topic. Yesterday, meta was up almost 12%. And it's kind of crazy that for as long as we've been in this AI boom, that AI news can still impact a two trillion dollar company this much. Look at the stock price of meta in the last, I don't know, two weeks.

It doesn't this demonstrate how much, Not confusion, but just how early we are. There's no, there's no, the range of outcomes is 10 miles wide. So this guy in Twitter posted that he had a flight delayed seven hours. He asked Mews to file for compensation. Five minutes later, he had $250 credit in his Delta account, found and booked him a new flight. It just figured everything out, even responded to support email itself. This shit feels like magic.

To me, this feels a little bit like, remember how nervous people were to pay with a credit card on the internet? when it first came out. To me, this is what working with an agent feels like. So I played with Muse a little bit today. It says like, here, with your approval, I can update your calendar, I can make purchases, I can connect the apps. I have my own computer to the web browser so I can keep doing things when you're away. And I asked it, what can you do me for travel and all these things? And it does sound kind of magical. But it's like, hey, I can manage your inbox for you. I can add or schedule events for you. I can go find something you need to buy. all this stuff.

It feels like there's going to be certain people who would, the tech people are going to adopt it immediately. So there's going to be other people who are going to be very worried about, really I'm going to let you into everything? This morning, I got a text from Instinct, which is, uh,

the other AI assistant. And it said, heads up from the inbox. Your son's second tryout today is at 6 p.m. at the blah, blah, and he needs to wear the reversible jersey from first tryout. It's not on your calendar.

Want me to edit. So I walked downstairs and I showed, I said, hey, you probably should download one of these. It's super helpful. She's on the phone with her friend. Her friend said, I'm not doing that. And I made the point, like, the credit card. This is just the way the world is. And there's going to be a lot of people that resist it. Probably in five, 10 years, everybody will be using it. I feel like the AI stuff is quickly becoming my personal fantasy football. Meaning, so Chris gets very excited about these things, as do I, but he has to share every detail of his journey. And as a dude,

Guess what I did today? I said, I promise you, I will not share the things that I'm doing with AI that are very exciting if you stop sharing with me. Right? It's like, I don't care about your gambling. I don't care about your fantasy football. I'm glad that you're having fun. I'm having fun too, but it's your own fun. There is going to, you're right, there is going to be so much of that.

Can you believe what AI did this today? Let me just stop you right there. Yes. We're all doing the same thing. So Ben Thompson wrote about it for stratetri today, strategic. Why do we say stratetri? I think in my defense, I say it because you say it. But it's obviously,

Tetch is obviously tech, right? Because I'm holding on to Will Farrell as George W. Bush from S&L, staying strategi. So I'm putting strategyry and sterectary together. Okay. So he says he thinks AI or meta's launch of muse is a bare signal for their frontier labs. Essentially saying this is a very approachable personal agent product. and the LOMs, you're not really wedded to them in any way.

But if you have your own personal agent who's in your inbox and knows your stuff and knows everything about you, that's how you get. So he's saying this is kind of bearish for Open AI and Anthropic. And his sort of conclusion was they need to start having creating products with moats. Like, okay, you've done this. Now where are the agents that give you the moat to keep people there? Yeah, I feel like I, I feel like the switching costs to this are like, like nothing.

Going between, if you go from instinct, which by the way, is instinct one of these companies that raised a couple hundred million dollars that might be out of business overnight? I know nothing, so this is pure conjecture. But just, again, the thing about how fast things are moving, how narrow the moats are, because I don't see why I can't switch from one to the other

or back to Anthropic if they do something for me. Well, but his point was once you get your own agent and it starts knowing you and you have it locked into your inbox and your accounts and your apps and all this. stuff, it creates it more of a moat. I don't know if that's true. I don't know how he's part as it is to switch. It's hooked into your Delta account and it knows all of your preferences for Delta. You're right. He's saying that does create some sort of moat maybe. Maybe you're right that it's easy to switch from one to the other. I would imagine once you have your own agent,

it's going to be hard to switch. It's like having a dentist. Like who wants to switch their dentist? That's a strange analogy. Dentist. Have you ever tried to switch a dentist before? It's not easy. Confession. They got to send your x-rays to the other one and. So my father is a periodontist, or he was, he's retired, a periodontist. Which is, sorry, someone said when I said braces are a racket and you defended him. I don't know. That's an ortho. I have no allegiance to orthos. It's all in the same mouth area.

So I am a terrible dental patient. I have very sensitive gums, which is probably not a great thing. So I read, I don't get my teeth clean nearly as often as I should. And when I say nearly as often as I should, it's probably been two years. I do floss. Michael. multiple times a day. But I hate, I hate going to the dentist. Well, no one likes going to the dentist. No, I hate it. I'm sweating right now thinking about it, just talking about it.

I didn't, the first three years of my job, I had no health insurance, no retirement plan, and no dental insurance. I was like on my own. It was a very small company. And I didn't get my teeth clean for like three years. And the first teeth cleaning afterwards when I got a new job was horrendous. All right. Let's move. Different topic. I can't take it. Although Ben, you saw me squeamish, at FutureProf. That's true. There was a booth at FutureProof that gave IVs for energy boost or pain. And someone said, you guys have to get an IV. It's magical. And you were doing this, looking away because you couldn't see the needle go in. And I got to tell you, I'm someone who, this is going to sound very odd to say. I feel like medicine doesn't have an effect on me.

Like minor medicine. Like if I would take ibuprofen or Tylenol, I feel it doesn't, I never feel better or worse. I feel the same. You know, that's an interesting take. So I wouldn't go as far to say as medicine doesn't impact me because that's, that's a bold claim, cotton. But I always feel the same too. Like, I, so I was, I was a pothead for a long time.

And I no longer am. And it's, it's been several years. But it was just part of my life, self-medicine, I suppose, not a great thing. But I was talking about what Louis, somebody reason. I said, do you feel different? And I said, I don't know. I don't think so. I think I feel same. That can't possibly be true because marijuana is terrible for your overall everything. But I kind of feel like I always feel the same. But my point is, not to steal your thunder, but I'm a same, same guy. Yeah. If it's like big medicine, then yes. But

cold flu medicine, none of that. I feel like none of it touches me. But the guy at the IV, because people said, hey, get an IV. We're in the sun all day. We're drinking at night. You know, we're eating, like, we're kind of tired. We're doing a lot on our feet. Yeah, it was a very, it was a very busy time for us. And someone said, get an IV, it'll make a few betterness. We did the B12 one. And the guy said, give it an hour and it'll kick in. And honestly, an hour later, I felt invigorated.

It actually worked. I couldn't believe it. We hopped in the OSHA. Yeah. Maybe that was part of it too, nature. All right, can we move off this AI topic for now? I think 15 minutes is plenty. I'm full. Do you anything else? No, not for now. Okay.

I just, my, sorry, my conclusion is just what if, what if these companies are so big that all of the worries about being a house of cards are just not going to come to fruition? Most of the worries don't come to fruition. It's a beautiful thing. Not William Bernstein. Who is Legg Mason, my brain? Bill Miller.

Bill Miller, thank you. So Bill Miller had such a great quote one time when he was asked what worries you about the stock market. And he said, nothing. he said the market does plenty of worrying for me. I think that's such a great way to look at it. Whatever you, we, all of us are concerned about, that's why Nvidia is 16 times forward earnings. All of the worries and the price.

It doesn't mean it's, and it doesn't mean that the worry is always the appropriate amount of worry. It could be under worry or over worry. But whatever you're worried about, just assume that the market's worried too. That's a great way of looking at things. Okay. If anyone should be worried,

it should be your son who's having a second tryout. I can't believe we put kids through this. Two tryouts for one sport? It's, dude, it's crazy town. It really is, right? Yeah. All right. One of the things that we've been discussing on this show a lot lately is just how

perhaps the most important variable in all of this discussion around the stock market and the economy is just how much money there is in the system and how difficult it is to quantify. that impact. So, for example, the Wall Street Journal reported that household net worth hit $186 trillion in the second quarter of this year, which is up 26 trillion from just the fourth quarter of $2024, $186 trillion. What does it even mean? Ben, how many times do we go back and forth to the moon with dollar stacking? So I had chart kid look at this from you last. week. At the end of 2019, so I'm looking at just the 2020s alone. We were at $109 trillion for total

U.S. household net worth. Today it's $186 trillion. It's effectively almost doubled this decade. Household net worth. And we broke it down by all these. The Fed has all these different cohorts, the top 1%, the remaining top 1%, the next 9, the next 40 and the bottom 50. And every single group has seen at least a 60% rise in net worth. It's kind of funny. The biggest gain on a relative basis is the bottom 50% who's seen their net worth more than double, off of a low base, obviously. But this is not just a kind of thing where the rich are getting richer. Everyone has seen their net worth increase this decade, every group, the low end to the high end. And you're right. This is the simple, why is the economy powering through another rate hike? Because

everyone has more money. That's why. This next chart shows one of my favorite formats of charting. It shows the cumulative flows by year. So January through December, going back to 2021, which was a bubble-licious year. And that looks like Barry Bond's pre-steroids compared to 2026. Right? It's just a completely different slope of line. There's so much freaking money in the system.

Now, every time I talk about the assets, I always do mention that it's not permanent. We have not reached a permanently high plateau. These numbers can fall 30% in a bare market or more. But it's powering so much. It's unbelievable. The one thing I noticed from this chart, look at how every year for tax time, when people get the refunds, how it increases. There's a spike every year on tax time.

Well, a dip in a spike. Yeah. Right. The payment and then that. But you're right. 2021 was way higher than 2022 or 2023 because that was a speculative year. And this year has, it just puts 2021 to shame and last year. So I'm really proud of investors.

There is a record pace of money flows into bonds through August, $600 plus billion into fixed income. And the worst thing an investor can do in general in the stock market, is add to losers, right? That is a very, very bad strategy. If that is your strategy, trust me, you will eventually stop. Wait, why is that a bad strategy? This is the Warren Buffett strategy. No, it's not. Adding to losers? No, that is not a Warren Buffett strategy. What? No. Buying stocks that are down? No, that's different. Okay. Buying stocks that might be down versus adding to losers is not the same thing. If you

you have a negative return on a stock and you consistently average down, you will lose a lot of money. That is a fact. That is not an opinion. Stop stealing Duncan's investment strategy. He's a big time average down guy. The bond market is not exactly the reverse because there are, there are variables involved, but we are now staring at a 5% 10 year. That is, in my opinion, an attractive investment. And I think that investors are rightly taking advantage of it. I bought bonds last week. I bought bonds two weeks ago.

This is literally the first time in my entire... By the way, they felt like a real weird one-up. I just meant to say, like, I'm with you. I'm not right as I bought bonds before you did. I'm with you. And I don't care if bonds go to 5.5% more. Because guess what? I will add to my loser.

So I guess other than maybe a target date fund for my kids, kids 529 plan. This is the first time I've ever bought, personally bought bonds in my entire career. Yeah. 5% yield. Because I, we haven't seen 5% yields since before the great financial crisis. It just seems prudent. It does. Okay, you put this one in here from Golden Sacks. Equities relative to bonds. So this is equities have enjoyed a near record period of outperformance relative to bond. So this is both the U.S. and world portfolio. It shows the spread between stocks and

bonds. And it was the highest in the 1950s, 1960s, which just makes sense because that was also coming off of very low. And this is what, 10-year rolling returns. So as a result of this, people are severely underweight bonds. Just for natural drift. Yes. Complacency. Stocks have given you 14% a year. Bonds have given you a flat real return. Why would you own bonds? 2020 PTSD. I get all of it. But if you are even a little bit worried about the stock. market or you don't think that the 14% will persist. You have 5%. Yeah. Finally. Finally, for our entire career, it was like, well, I can't own bonds. Two percent. One and a half percent. What's left? So in the early part of this decade, we showed a chart to our clients where we looked at different

yield levels. And we said, this is what your stock portfolio needs to do to hit like a six, seven, an 8% bogie, right? If you have a 60-40 portfolio, but bonds are only yielding one or two percent, you need a, you made much more lifting from the stock market. So you might need to go from a 60-40 portfolio to an 80-20. And everyone did. And in fact, a lot of people did that. Our advisors were telling people, you either lower your expectations or you increase your equity allocation. And lo and behold, the stock market actually came through. Really did. It really did it. It was kind of like the stock market needs to return like 11 or 12 percent per year to hit this return boge for a 60-40 portfolio. And God damn it did. Can you believe it?

No. So now I had Sean, our research analyst, create this for us showing with a 5% yield, you need, so before, in the early 2020s, you probably needed, you needed like 11% in stocks to get a 7% return in a 60-40 portfolio. Now, you only need 8% from stocks with your 5% with bonds. It's much better. So this is much more in alignment. And the people who did take more risk, now can hopefully think, oh, I went from, I should have been 6040, I went 70, 30, or 80, 20, 20, now I can maybe get back to 70, 30, or 60, 40, because these things are more in alignment. The world is healing or has healed. Even if yields keep going up to your point.

One more thing from Mike Sicardi. I feel like, I like this. This is another one from Goldman. They look at all these different scenarios for the next 10 years. I like this because I feel like every return scenario. that we've looked at for the past 15 years has been awful. Here's why the returns are going to be lower going forward. Goldman looked at all these different scenarios.

They looked at stagflation, stagnation, goldilocks, which I think is just a strong economy. And then they looked at the best case, like Goldilocks plus a continued AI boom. And they say if we get a Goldilocks plus an AI boom that doesn't falter, we could be seeing 14% annual returns in the S&P for the next 10 years. So that the economy still powers higher and the AI boom continues, 14% percent per year. year, which would give us literally the greatest bull market of all time. What probability, if you're a betting man, you're a fan bill guy or whatever, or draft kings, what probability would you put that?

Like, what odds would you have to have to say, okay, we're going to do this Goldilocks and AI boom for 10 years, 10 more years of double-digit returns? But talk about switching costs. Theoretically, and I don't think this is necessarily unique to me, theoretically, it is super duper, not theoretically. It is incredibly easy for me to use draft kings or fanatics or one of the prediction market sites to do my sports betting. But Fandul, which I've been on since the beginning, has all of my data. So I actually, I'm not going to switch because that's my scorecard. Just like your dentist. It's inertia. I don't go to the dentist. We've been through this.

All right. So what percentage probably, I don't know. How I even know where to begin. 11%. I was going to say 10% probability of that. But I honestly think that it's kind of funny because there's a 10% chance robots will wipe us out and a 10% chance we could just see the greatest bull market of all time. Continue. So I'm talking about this with Josh and I know.

What are your thoughts? The reason why I said so emphatically, sometimes I hedge or not a hedge, sometimes I give, I say I think, when in fact I know. So earlier in the conversation, I said emphatically that adding to losers is a terrible strategy. And that is not an opinion. That is an empirical, quantifiable, backed by data, fact. So Josh and I are going to be talking about a piece that Adam Parker at Trivariate Research

wrote. The title of the piece is buy and hold doesn't work. And Adam showed the percentage of stocks beating the S&P 500 over the last three years and over the last 10 years. And it is just down into the right. The number of stocks that are outperforming over a three year and a 10 year period and not just in the S&P in the Western 2002. And then he breaks it down into one year, three year, five year, 10 year periods.

And the best chance you have at picking a stock that's going to beat the market is over a one year period. Because in the short term, there is a lot of potential dislocation where a stock can get oversold and it can bounce for a year and it could still be a terrible stock of for 10-year period of time, but over a 10-year period of time, which is what the Goldman analysis is doing, you have literally zero clarity, absolutely zero. Nobody knows anything in any field about what the world will look like in 10 years. Nobody.

So my reading of that would be that it probably used to be easier to be an individual stock buy and hold investor. And a lot of people in the past did it in like the 30s, 40s, and 50s did it for dividends. but I think things change so much faster now that it is harder to be an individual stock buying, hold investment. It's impossible. So Adam says only 23% of the top 500 U.S. stocks held for 10 years beat the index in the latest observation.

Wow. 23%. That's a wild sad. The thing is for three year holdings, the hit rate is 27.7%. But everyone would look at Nvidia and Apple and all the tech stocks and go, no, no, no, you guys are wrong. But those are the outliers. Those are the outliers.

Hello. But it's, again, I repeat because people, I could say, I could hear people say, concentration is just a max seven, you idiots. It's the same exact thing in the top 2,000 stocks. That's a wild stat. So 10 years, 23% of stocks. Wow. Which is another reason why the, it's so hard to beat the index for active managers.

You have to be more actively traded. Interesting. So, uh, all right. Ben, this is really random. I don't know exactly why I threw this in here or why this popped into my brain. But it did. And I was thinking about taxi cab confessions. Taxi cap confessions was a show in the, I guess, mid to late 90s.

It was a show that I watched when my parents went to sleep that I shouldn't have been watching. I guess only in my dad's house because my mom didn't have HBO. So I watch this in my dad's house. and taxi cab confessions was exactly what it says. It was basically like a confession in a taxi cab. People were going to church in a taxi cab. It was in, I think it was in New York and Las Vegas, late night riders, drunk in epitions to the wind, and they would just share crazy stories with the taxi cab driver.

Why was I thinking about the show? I have no freaking idea. But if you showed this to somebody today, there would be a lot of questions that this was such a provocative show back in the day. Right. If you did this show today, people are so much more used to cameras

and talking and you would get, people would be way more performative about it. It wouldn't be as real. Correct. But and also, if an Uber driver started talking to you, although I suppose maybe at 2 a.m. anybody talks. But for the most part, people don't want to talk to their drivers.

It's kind of like how reality TV was actually kind of real when it first started. And then people realized, like, oh, if I am more performative, I can become a star. And then became fake. Totally. Interesting. All right. Let's talk about the Fed.

Can I both give the Fed credit for raising rates last week and also question why we had to raise rates? Go ahead. Okay. So, first of all, this chart from Deutsche Bank shows the average 10-year yield versus the average nominal GDP growth. And it tracks it pretty darn closely. And it's saying, so rates where they are make sense, given nominal GDP growth. But also,

Raul Sharma tweeted this. We've used all this. So he talks about Wells Fargo and Capital One saying, listen, the consumer is strong. There's all these quotes. We see similar spending strength across all our credit spectrum, including some of our lowest income customers. Overall, the consumer continues to show a lot of strength, even in the face of a lot of uncertainty out there. These are the same quotes we've been reading for four years. Years. Right? So everyone's thing strong. So my question is, why does the Fed feel like they need to slow the economy if we have a 4% unemployment rate and yeah, inflation is 3.5%. They want to get it. Why? The economy is doing fine. Why do they

feel the need to have to slow it down? That's a good question. My knee-jerk reaction is that they are worried, and I could be way, way, way off, that they are worried about the AI build out fueling more inflation. And the hyperscalers are borrowing a lot of money. And maybe if you increase the cost of capital, it will slow them down a little bit. Because to your point, I don't know that they think that this is going to do anything

to energy prices. Because, for example, CPI without energy is up 2.5% you over year, which is pretty damn close to their target. CPI with energy is 3.4%. So all of the increase we've seen is coming from the Iran war, essentially. Well, a lot of it, but, but the other side of that is the Washington Journal ran a piece. Weeks before the midterms, almost everything is getting more expensive.

So consumer prices in the aggregate are up 27% since January 2021, but there's a lot of things that we pay for on a daily basis that are up 40%, 60%. My question is why are we harming consumers because tech companies are spending a lot of money and because we went to war with Iran. Why do we have to harm households because of that? How is this harming households? It's making it much harder to borrow and we're trying to slow the economy. So we're harming households potentially because we went to war with Iran and we have an AI billback going on.

The Fed can't stop those things. Do you really think the hyperscale, if the Fed raised rates even, another 50 basis points. Is that really going to slow down the AI build out? You think those Mark Zuckerberg is going to say, yeah, okay, now we'll slow down.

No way. Maybe not the hypers, but... It's a drop in the bucket. I don't know. I'm not the Fed. What do you want from me? But this is a fact.

But here's the thing, I do get... Because everyone said, Warsh is a puppet. He's doing whatever Trump wants him to. So I give the guy credit because everyone said he's just, he actually raised rates

because that's what the committee wanted to do. So not... This is not weighted, but this is just like if you look at the individual items within the basket, all right? Some items are obviously more important than others. Energy, for example, more important than others. But a third of the consumer basket is still rising at more than 4% year over year.

There are still a lot of things that are going up way faster than is comfortable. I'm surprised that's not higher because the average is 3.5% of almost. this is interesting because lower income households need this. So Mike So Cicardy showing that the K, I think the K-shaped economy was always kind of bunk. Like we've talked about how it's always been, rich people have always just spent more in August. Hold on, be careful because people get really annoyed about this.

I don't think that we've said that the K-shaped economy is real. There was never anything that was, there was never anything in the shape of a K. Like people say K-shaped economy because it's a good narrative, but no chart ever actually looked like a K. Yeah, I think we, I think we agree with the, premise that there are always winners and losers and that the upper, the upper class of the economy has always done better than the lower class. Right. So here's the thing that stinks because

right now it says in August, after tax wage growth for lower income households continue to outpace that of higher income households. So lower income households are seeing higher wage growth than middle income and higher income right now. This is flipped. And it's flipped a couple times. In the early 2020s it was lower than it flipped. Now it's back. The thing that stinks though is that there's a way bigger consumption of energy prices in a budget for lower income households. So they need this raise, but this raise for them effectively is going to pay higher gas prices. That's what stinks. Right? It's a great thing that the lower income households now have higher wage growth, but most of those gains are being eaten up right now. All right. One of the interesting things

about the economy right now is the continued, is strength the right word in the labor market? It's picking up again. Yes. There's, There is increased strength in the labor market. I would characterize that. How about this? How about this? A lack of weakness. Maybe not the same thing as strength. But initial unemployment claims are down 10% in the past year.

And continuing claims, meaning people that have been uninsured for a while. It's falling. Yeah. How do you reconcile this with AI is going to take all the jobs? The labor market is getting stronger. Well, I feel like we keep having this conversation. I don't think anybody thinks the AI jobs are all going to come overnight. Okay.

That sounds like you're moving the goalposts. I'm not moving the goalpost. I think that's a ridiculous... You're spiking the football? I'm not spiking the football. I'm saying it's a good thing that we're reassessing this. Because there were some... People were giving forecasts for six months from now.

No, but that's not true. That's not true. Nobody said in six months all the jobs are going away. You're literally making that up. Who said that? Dario from Anthropics said in six months, half of all entry-level white-collar jobs will be gone. I don't believe you said that.

That was an actual quote. All right, well, he was actually wrong. Either way, do you think that AI is not going to impact the economy? I mean, is that what you're saying? Here's, so I have a, this is a good lead in. So John Arrell posted, West Coast, we're approaching an economic transformation unlike anything in modern history. East Coast, we're looking at three more years of 2.1% GDP growth.

I'm just throwing it out there. What if AI gives us a little bit of boost in productivity? It makes our lives demonstrably easier and more efficient. But it does, like the Internet, there's no huge, change to GDP. I think that's a very reasonable outcome we could see. Because I think the tech people think we're going to have like 4% growth, 6% growth. It's going to be this magical utopia of growth. And I really think that there's a much higher likelihood that growth is just two, two and a half percent. Perhaps. But is GDP the right measure? That's what the tech person would say.

But it's true. What does that really capture? The total output of our country? Yeah, it's kind of a big deal. I don't think it's the right metric. What is the right metric? Vibes. Okay. I don't know what the right metric is. Well, AI is not helping with vibes right now either.

Everyone hates it. Well, that's definitely true. But I'm just saying, I really do think that this is a more likely outcome, that GDP could increase a little bit. And that would be a huge thing over the long term because the economy is so big. But the tech people go, wait, what? So if GDP does increase a little bit, and the same, stock market doesn't crash, then Buffett's indicator, which is something that he doesn't

really care about anymore, is going to get extremely even more lopsided. The size of the stock market versus GDP is going to continue to make bears insane. I think it's, and Munger even said, like, Buffett doesn't believe this anymore. Get out of here. I think why wouldn't the stock market be a bigger percentage of the GDP over time? I think the claim that it has to be a certain level because it was in the past. Why? No, corporate America is more powerful than everything else.

And more people invest in the stock market. Of course it's bigger. There's more money in the stock market than it was in the past. But one piece of our output, but it's the biggest piece. I don't want to let this, this, I don't know why. Just things pop up to my brain all the time. Popping guy. You know what just popped in?

You singing your karaoke song. So every year, is it every year at this point? Is it a tradition? Can we call it that? For what? For your karaoke? The last two years I've done it. Okay, so, so it's a thing now.

So, Ben's go-to song is Ben's a big T-C guy. It's, is it lost that loving feeling or that loving feeling? You've lost that loving feeling. It's funny. My kids, we were talking last night, what's your favorite movie? And I said, it's probably top gun. Did you show them the video? No, I didn't.

Would you? No. You did very well. I mean, you are, you're an introvert, but on the mic, my God, you're like Britney Spears out there. I gave it my, I gave it my best. Obviously, I had some liquid courage going, so that helped. It was very impressive. Yes.

Vibes were very high. Everyone was doing karaoke. There were some friends in low places and all the small things. Good times. So it's funny. Everyone always says that Twitter is like the biggest test pool on the world of social media. And obviously, in a lot of, ways it's true. But have you ever weighted into LinkedIn before? No. So I was on, I, I, I, I, I, I,

I mean, not, not, no, but what do you mean by weighted in? Just like done a scroll of the posts on LinkedIn. Not really. Okay, everyone says the biggest psychopaths in the world are on Twitter. I think they're on LinkedIn. Um, but I saw a hashtag, like a big, long post and it said hashtag written without AI. Buh. I think that's, I don't know how long that's going to last. for because no one's I feel like people are going to stop caring about that. Like people have really strong feelings about that. Now I think it's going to go away. Hashtags were always for deweeps. Yes, that's true. Okay, let's talk about Bitcoin a little bit. Bitcoin's had a massive, massive comeback. So at one point in the end of July,

Bitcoin was down 33% of the year. This is I bet. And now it is essentially flat on a year after a massive massive comeback in the last couple of weeks because of regulation and I don't know. No, no, no. Not because of regulation. The Clarity Act failed. Hopes for regulation. No, the Clarity Act failed. I know. I guess the hope is that it's going to pass. I don't know. So explain this to me. I will try. A couple months ago, we did a show with Grayscale and we were saying, asking is Bitcoin dead? I mean, what is the catalyst? And we weren't asked that rhetorically. We're like, literally, what can it possibly be? And sentiment was very, very low. And I, I believe I said, I don't know, I think price is a catalyst. I don't know that there has to be

one. People can get back in the boat really quickly. Is it just software? I don't know. Software is bouncing. Bitcoin's bouncing. Is that, is that simple? Why overcomplicated? Remember, Bitcoin really flew on risks of the end of human extinction, or human extinction fears? I don't know. It really is the, it's an asset that has always sort of defied logic. But it's moving with software. Still. I still think this is the best long-term, full case that every time it feels like it's just deader than dead it comes back it is it's always the undertaker meme yeah and it's back at what 86,000 yep all right speaking of inflation counter sends got a new substack called the housing frame which is very good and he's talking i i feel

like i'm probably guilty of this like we talk about the housing crisis the supply crisis and we're obviously the solution dummies is build more housing The question is, what would that actually look like if we did build more housing? And so he pulled some quotes from home builders. So the guy from Lanar said, labor availability has started to become more of an issue. Immigration enforcement and enthusiastic data center construction continue to create tightness in certain geographies. We've been able to offset labor increases with the efficiencies of scale, but the pressure on cost is certainly building. Another guy from apartment rates said the same thing.

We're at the point, we're probably at the point where construction costs are the lowest they're going to go. So it's hard to find people who work in construction right now because we're immigration enforcement, we're locking down on immigration, and there's all the construction people are going towards data centers. So if we said, if we did this moratorium on housing and the federal government waived a magic wand and said, we're going to make it,

we're taking away all the red tape, build as many houses as you want, we're going to incentivize it. If that was the thing, people would think that would solve a lot of problems. But what that would also do is it would cause a really huge increase in inflation because you have to pay for more people to come to construction work,

and housing would be way more expensive because of this. My point is we're probably not going to solve the housing crisis without creating another add-on something. If we really were to fill in the hole with those 3 to 4 million houses we're missing, if we could somehow do it, it would just cause another crisis. What literally happens to people that are growing up, and having babies and need more space, need to move out of the apartment into a house,

and they just cannot afford it, which has got to be, at this point, most people. No, it's not most people. It's got to be most people. It's got to be. How can it be? Houses are so expensive. You tap the bank of mom and dad.

That's how you do it. Okay. Not everybody can do that. True. I don't know. I really do think it's a crisis. I think it's a national emergency. And my point is, no one, it doesn't seem like anyone wants to fix this national emergency.

And even if we could, what would it lead to? And how would it happen? That's the hard part. Well, out of my depth, I have no idea. Tense for all Gen Z. That's my platform. What is it? Tense. Yerts. Tense. Yeah. Tent cities. I got not. No, I, it's, it sounds like a simple problem. Just build more houses. I think it's way more complicated than it sounds at face value. unfortunately. Well, also, where to build them? I mean, are we talking about making new towns? I don't even know what that means, but just build more houses. Right. Let's talk about fraud a little bit. Travis Kelsey was in a Ponzi scheme. I saw this in the Detroit News. Also, Tim Hardway Jr., Gary Harris, Mason Plumley. There was this Swift Arc LLC. The guy took in tens of millions of dollars. I think he

promised to do some sort of venture capital something. It's kind of funny. It says he put all the money in Philip Morris, Pakistan, which I did not know as a thing, and basically took the rest of the money, spent it on himself, and then started paying back new investors, or old investors with new investors. Huge Ponzi scheme. It's obviously not all private investments, but it's so much easier to commit fraud and private investments. You can have the whole aura of black box and anything illiquid. It's so much easier to, do. The Wall Street Journal had a story about... Also, what people say, hey, I want my money back. I can't. It's illiquid.

Right. Yes. The Wall Street Journal had a story about Mark Walter, the guy who had to sell the Lakers. And it was showing the huge increase in money going into annuities and saying how kind of easy it was for him to use this. And they interviewed a few people, this guy saying, I bought annuities from this company for decades. And then I realized that this guy is investing it and other stuff. And you'd think that insurance would be one of the most regulated industries that there is, and I think it is.

It was still easy for this guy to do this. I just think that the sheer size of private markets and illiquid markets not, liquid investments, means that there's probably so much more fraud going on than we even know. True. And you probably don't hear,

what I researched don't fall for it. What I found was a lot of fraud you never hear about unless it goes to court because people don't want to admit that they got taken advantage of. Yeah, it's humiliating. Yes. Okay, this is interesting.

Pilots, rich. Do you know this? Good. The Wall Street Journal had a stuff. It makes, yeah, this is one of the things. I don't want my pilot making $60,000 a year. So it's interesting. They interviewed this pilot, and he says he's got a brokerage account in a $3.5 million

$4.1K. Once he starts taking his required minimum distributions, his income will be well over $300,000 a year, including Social Security, which is more than he earned. most years while working. This is crazy. United Delta and American and Southwest now make 18% non-elective retirement contributions to pilot 401Ks.

Love that. Holy smokes. So that non-elected means like they put that in your 401K whether you put anything in or not. Pretty crazy, right? It said pilots with seniority can make as much as $100,000 in a month that they live near a hub, fly the biggest planes, and can pick up overtime rates due to weather-related events.

Wow. I've heard of this before. of there's, I think that there's an advisor in Atlanta who the, his only clients are Delta airline pilots. Now I know why. Shout out to Delta. You know what? I meant to wear my, so they set this a care package, which was very nice.

Yes. I am a hardcore Delta Stan loyalist. Me too. At Futureproof, we had to fly to, we had to fly United. Because we flew to John Wayne Airport in Orange County, which is near where. our event is. And what did I watch on United? Garbage.

Garbage, garbage, garbage. You're right, Delta does have the best movies, too. What the hell did I watch? Man, I watched some pieces of shit. I genuinely don't even remember. And matter of fact, didn't we get an email from the person at Delta that runs their movie selection? Yes.

If you're still listening and you still in that role, salute to you, sir. Because not only is Delta just the best for a million different reasons, by far the best movie selection. By far, by far. Delta, I miss you. Thank you. You're right. They send us a really nice care package.

My son loves, it's like a little model airplane. He put it on his nightstand right next to his desk. Very cool. All right. We got to talk about this tech person who put out her non-negotiables for finding a mate. You saw this? No. Okay.

She's 29. She works for Corgi. she's in Silicon Valley and she said non-negotiable. Wait, was she work for? Forgie the investment company? Yes. Huh, okay.

And the one, so if you read through these, a lot of people said, oh, gosh, she's got way too high of standards, but the best one here. Wait, wait, read it. I didn't see this. Okay, 35 to 32. Healthy math. No, 35 to 42. Smart, funny, lighthearted.

Provider protector mentality. This is the greatest one here. Post-economic. Parentheses, still hardworking. What the fuck does that mean? post-economic means you have you have more than enough money

for financial freedom but you still like to work so you sold a startup or you got a stock options and so this is the one that people latched on to and I love it post-economic

can you imagine is there anything else in the list fit and sober shit and sober because you care about yeah it's a lot of people on a healing path history of serious commitment

ex-therapist books retreats so anyway a lot of people this thing went wildly viral. I'm sorry. I love that phrase because can you imagine how hard it would be

to be a young person in San Francisco? I cannot even imagine how difficult it would be with the sheer amount of money that some young people make and how expensive it is to live there. Her saying this sounds absolutely insane

to 99.9% of the country. But if you live in San Francisco, you probably know so many people who are post-economic. I don't know. For some reason, I love that term. Can meet anywhere, but will not date unless living in this,

okay? On the healing path, this is weird. History of serious commitment, ex-therapist books retreats. I'm sorry. I hate the healing path. I cannot stand that whole genre

of life, of grinders, of, ooh, I just, I hate it. The thing is, Can we just be a normal human being?

But do you know how many weirdos in San Francisco probably fit this description she's putting out here? No kids yet decidedly want kids. But why did you bring this to my life? I don't need to know about this. I just, I love the phrase post-economic. I love it. I hate it. All right.

Let's talk about what's going on in the world of sports entertainment and finance. The Wall Street Journal was writing about Thrive and Igerest purchase of the. Lakers, and they say that they are telling prospective investors they expect to nearly triple the basketball team's valuation within 10 years to $30 billion at least. Wow. And what they might for 12? Yeah, and more favorable assumptions would be at $62 billion. So they said that the Lakers are on track to generate $681 million in revenue in 2006.

Under their plans, they said revenue would hit at least $1.6 billion by the end of 2037. And they show the cost, the revenue and the cost. And this is a nice little, nice little visual. But am I taking drugs? $30 billion on $1.6 billion in revenue? That's what we're doing now. This is one of those, you can't value it like on a spreadsheet, though. This is one of those assets that it's your, it's what are rich guys willing to pay for it.

$30 billion on $1.5 billion in revenue? So do you know what? If the Lakers sell for $30 billion, or if the Lakers are worth $30 billion in a decade, then we're all going to be very rich. So, hey, going from... That means that everything went right. All of our fears were misplaced. The Lakers were worth $30 billion.

Your 401k is $2.9 million. We're good. What do you think a reasonable... We're all post-economic, Ben. What do you think a reasonable annual rate of return is for a professional sports team? How much should it go up on... Should it fall inflation? Should it go up more? Okay. So in real life, in real life, I would say 6 to 8%.

Okay. Like an economic reality. In reality, reality, is it 12 to 14? I don't know. So going from 12 billion to 30 billion in 10 years sounds like an insane increase in price. I think it's actually like a return of 10% per year. Isn't that about right? No. No?

No. Am I way off? A triple in 10 years? That's not, no, that's way higher. Because a double in 10 years is 7%. No, do your math again. A double in 10 years, the rule of 72. Going from 12 to 30 is going from 12.

No, I'm saying a double in 10 years. I know we're not supposed to be doing math on the show, but a double in 10 years is 7.2%. Yeah. Didn't you read rich dad, poor dad? Have you learned nothing from Robert Kiyosaki? Do the math right now. I'm not doing the math. That's the only math I'm doing.

Going from 12 to 30 is a 10% annual return over 10 years. All right. Well, you obviously just use a calculator. So I'm not going to look at me. Of course I did. I wanted to make sure. But it's not as high as you think. All right, fine.

Maybe it's not. Listen, rich guys are going to compound their wealth at the stock market. If the stock market is up 100% per year. So it kind of makes sense, actually. So this is kind of... Josh Kushner in this picture looks like Adam Brody. Very handsome man. They said that part of their increase in revenue productions is taking 6,000 broker-held season ticket sales for single game sales, which would raise average ticket prices from 217 to 360.

That is freaking crazy. An average ticket sale, now I know Los Angeles is a place with a lot of money. An average ticket sale of 360? What do you think the average is for the Knicks? You know what or not? The average for the Nix is, I'm going to guess, 145. Think about just a scenario where AI doesn't rule, like, destroy the world. How much money is AI going to create in the next 10 years?

And how much, how much wider is wealthy inequality going to be? 30 billion. Mark it down. These guys are right. Okay. Finally, after an hour, you're taking a stand. That's right. Okay.

In the same vein. And I don't get this. So Apollo is buying 60% of the Yankees. Okay. Are they putting it into a private credit fund? Here's probably. Well, yeah, because there's debt involved. Here's the part that I don't understand.

So the debt piece, okay, I'm sure they're getting a nice return for lending money to the Yankees. That's money good. But the equity. $12 billion, significantly more than $12 billion. This is reported from Charles Gasparino at the New York Post. How do equity investors in the Yankees make an attractive return? From the point of view of a rich person, if you're Eiger and Kushner, I get it. I totally get it.

The Lakers are the prize of all prizes. There are no bigger bragging rights. But if you are merely- It's an ego purchase. If you are a passive equity investor in the Yankees, is that attractive? Like, I'd rather buy Facebook. I don't know. That's true.

I'd like to see the spreadsheet on this. This also made me laugh. Gasparino said, P.E. firms are currently barred from owning more than 15% of any team according to MLB rules, though the league is expected to waive the cap. Okay. All right, so here are the rules.

Who cares? It's the purge for one day. All right, there was a story in the cut. My husband has no friends. And it says, for some wives, first comes love, then comes marriage, then comes managing their spouse's social life. I have a question for you. For your social life, how much is planned by you and how much is planned by Robin?

In terms of stuff you guys do together with other people. I'm pretty sure you know the answer to this. Okay. I think this is the way it is for almost everyone I know, that the wife is in charge of the social calendar when it comes to people. And this woman, she was like kind of poking fun at her husband, but also like writing about it and how like you go to school events and the husband is kind of over in the corner,

but the wives are all talking to it because they know each other. Like, I think this is just the natural way of life. Correct. This is not, this is a problem. This is not a reflection of modern society. This is the way it's always been for men. I think men find their friends at a certain age, and they rarely find new friends.

So here's what happens. And I like my dad friends. I happen to enjoy their company for the most part. But when we get together in somebody's backyard, for example, the women are all talking about, God knows what, forever and ever. And after five minutes, we sort of want out of things to talk about. And it's mostly like, oh, you know, sports, whatever.

And then we're done. That's how it is for every guy. Yes. Then we just watch the wives and say, what are they talking about? What are they even talking about? They look so happy. My wife has so many new friends from the moms at school and the working the playground and stuff. Like, she has this whole group of new friends.

And she's always like, go talk to more with the dads at the games and stuff. I'm like, I don't want new friends. But guess what? They don't want to be friends with me either. No. It's a, it's mutually, we're, we're all happy here. So here's my, here's been my routine thus far. I've been very tired lately.

I don't know if this is like a new thing or for the, I'm just a tired sort of person. But at the end of the day, I'm very tired. We do a lot, right? Our brains are very active. Then the kids come home like, I'm just at nine o'clock, I'm done. I know you're a night owl, which is very nice for you. So I put the kids down, whatever, 9.15. And then I go straight up to bed, straight to bed.

And Robin is a night hour like you. But it's annoying because I get a little bit, I get sort of like, anxious is the wrong word, but like I can't really fall asleep until she comes in. So I'm like sort of half sleeping. And the other night, she comes in and then I'm just kind of annoyed because I was tired and not able to fall asleep the next morning. I said, what the hell were you talking about for an hour and a half? And she says, Kobe's tryouts.

And I said, you got to be kidding me. How could you, how was there 90 minutes of conversation? He goes, she goes, well, you don't want to talk about it. I don't, I'll talk about, let's talk about. Tell me the conversation that you just had. So she's breaking it down from me. She's like, I'm like, and you got to be kidding me. That you, you, you, you, you, you and I could have had this conversation in four minutes

we would have been over. I'm happy to have this conversation. Four minutes, done. But they talk. They like to talk. That's why they need each other, right? I think it works. My point is that this is not a problem that needs to be solved.

No. Everyone is happy in this arrangement. This just is. The arrangement works. I mentioned this a few weeks ago, but because my, you know, my, I think, my kid's bed times is now creeping up a little bit higher, converging with my bedtime. I am really struggling to get through TV shows. It took me eight months to get through friends and neighbors.

So I want to watch Mob Land is back and The Gentleman is back, which are basically the same show. I can't even, I don't know which is which. John Hamm has another new show as well. Guys everywhere. There's too many good, there's too much, I feel like TV is having a moment. There's a lot of shows that I want to watch that I just will not get to. It's taking me a long time to get through shows as well.

These damn kids, am I right? Let's talk some futureproof thoughts. I got a few thoughts on future proof. Go ahead. And we've recorded live from there last week. It was really fun. Great to see a bunch of people. We had an animal spirits happy hour.

A bunch of people came. We had a live animal spirits. We saw a million people at the conference. It was so much fun. This is not a novel observation, but I think this is just something that has been more deeply ingrained at us since the pandemic,

that people just want to be around other people. Like the whole point of this conference, there's a lot of really good content and a lot of like stuff, but it's more just being around other people that had made this conference grow to like 5,600 people or whatever it was. I can't believe the amount of people that were there

and just wanted to be around other people and socialize and get that one-on-one that you can't get over Zoom and you can't get digitally. You're right. So I'm not, I don't like small talk in almost any form. But I do love being in the mix.

Yes. I just love being around so many people. It was, yes. It's like it's very energizing. Sure. I continue to think we have a very young audience at Futureproof. I don't know what the average age is, probably mid-30s-ish, 40 at the highest probably. I'm sure the future-proof people have these numbers.

It's a young crowd. I just, I continue to think as much angst as there is about young people. I think young people are going to be fine. It's older than that, but there are a lot of young people there. And I had a bunch of, we have this thing where we allow college students to come. I don't think, I don't think, free tickets or cheaper, but I had all these college kids coming up to me talking about how they're into this stuff and they're asking questions. And can you imagine when you were in college going to an industry event and being excited about

it and asking people questions about your career path? I didn't even did that. From our purview, which is a narrow one, obviously, there does seem to be a big disconnect between young people are miserable versus the young people that we interact with. And the young people at our firm, we have a whole Gen Z cohort now that works with us. They're happy, go lucky. They all really want to have a good time. They have a good time with each other.

Well, credit to us, we have a great work environment, and we select great people. So that's not an accident. True. One other thing. I feel like the AI shift, like the future proof in Miami six months ago was all about AI. I feel like there's already been a massive shift from that six months ago to now. You're right. Six months ago is a lot of like just conjecture as to what is the world going to look like in six months.

And six months later, we have Claude making the announcement that they're integrating with financial advisors. Not replacing, integrating. But that was the thing. It was like, what are the AI tools you're going to be using? There's a million of these smaller AI companies that, hey, we can do this for you. We can do this for you. And now it's like, no, we have Claude and we have Hazel. And these are the big ones.

And it felt like there's a huge change. All right. One more story for you. For years, we talked about the line on your TV. Right? You had this line on your TV. and you kept it for how long? Ever.

Forever? And you finally got a new TV. I was taking a stand. That was a new TV, damn it. Oh, it was, it turned a year and a week old. And I tried to bring it back to Best Buy. There was a pretty thick green line. And they said, sorry, your warranty expired.

And I said, you got to be kidding me. So I spite kept it. I got a new TV last year. I don't know. It's like a big 80 inch, whatever. I finally got a really big TV in our basement. And we just have like a big, long wall on our basement. And so I have nothing in front of the TV.

It's just a TV on a wall. There's no TV stand. There's no nothing in front of it. So it's not that tall. And for some reason, my son, because little boys are psychotic in many ways, and they just get something in their head, he decided in the last month,

he really wants to perfect a handstand. So all day, every day, this kid is doing handstands. Hold on. Against the wall or naked? Both. Wow, that's impressive. He goes against the wall, and he tries to do straight up push-ups,

like upside down push-ups. All right, he's been watching way too much Rocky. I don't know what we actually did watch Rocky for. And it really, you're right, that's probably the best movie, the 80s. So he's been doing a million of these, and he's got bruises all over on his legs because he keeps doing it,

and then he falls over on stuff. So he does one in front of my TV, my brand new TV on the wall. And his heel goes into the TV. And immediately, scroll to the picture. I see it, I see it. There's 25 lines like a rainbow in my TV because his heel hit the TV so hard.

And I just get a George, oh! And I couldn't be mad at him, but I'm like, what are you? But to your point, I'm like, well, we can't watch TV in this room anymore. It's ruined. That's way worse than mine was. I mean, I was going to ask if it's worse. But last night my daughter and I were in the basement and I'm like, let's watch a movie. And I'm like, oh, shoot, the stupid lines in the TV.

And you know what we did? We powered through me and watched it with lines on the TV. but I have to get, I already ordered a new TV. But yeah, because little boys have so much energy, I have lines on my TV. Can I show you something? Speaking of Rocky 4. So we got a new office that I'm going to be spending time in,

so I needed to get some things to the back of my wall. Wow. A lot of glare, but. Stallone. And Drago? And, well, Rocky and Drago. Wow. So I, I showed my,

kids last week, the movie. I think I sent you a picture of it as we were watching it. Why didn't Duff Longgren have a bigger career? He's not a good actor. Was he he man? I think so. They tried. But I still got chills at the end. My kids were so, so into it. But I got chills at the end. All right. Recommendation time. So you, I think you told me, you said, George is going to love the end of Oak Street. And it came out on, you watched it in the theater. And it came out on on demand. So we watched it this weekend. and my kids watched it three times in two days. So it's a dinosaur movie. The other great thing, I think it was 97 minutes.

So it was a, it just, the movie got into it and it went. And that's just an entertaining movie, just quality entertainment. A lot of fun. It was like a Spielberg 80s movie. Yes, it did, the fact that they really went in all in the 80s. The other thing, at some point in the movie, they played the song Valerie by Steve Winwood. I don't think I know that. Singing for me.

Callerby. Oh, of course. Same good. Good job. So for the last week now, my kids have been listening to Valerie and singing it, and it's stuck in my head on a loop. They keep, every time I walk in the room, the kids are going, Valerie, and they're singing. Next, I want to do Burning Heart, please. But who's more 80s than Steve Winwood with a synthesizer?

Right. And just nailed it. All right. What do you got? Pretty dry. Pretty dry. I'm trying to see, uh,

trying to get to Resident Evil, but I have not made it yet. I'm taking my kids to see, uh, end game is being re-released for one night. So I'm, we're going on Friday. excited about that.

What's end game? Avengers. Uh, everyone dies, but then magically, they're all alive again. Exactly. You know how it works.

Um, all right, this is the, this is, you know, father time is undefeated, Ben. I was watching.

So you know, I'm a big. big fan of animal attack movies, right? Yes. Crocodiles eating people or a shark? Have you seen the, have you seen the for the guy who gets eaten by a whale? Yeah, I can't wait.

But that's a legit film. So there's a movie on Netflix called Deepwater starring Ben Freaking Kingsley, Academy Award winner, Ben Kingsley, and Aaron Eckert. Sounds like a straight to streaming movie to me. Ben Kaisley played a pilot. He was in the movie for 11 minutes.

Isn't it unbelievable? And I thought Aaron Eckers was a fine actor. I thought he was great in Thank You for Smoking. But I guess his career just completely unraveled. Anyway, deeply bad movie. More just a commentary on... I would read a book about how actor and actresses go from being in very good movies to, oh, now you're doing these now.

Mark Wahlberg. Mark Wahlberg now. Guy used to do good movies. There's a lot of people like that. No matter how much money people make, you always need money, is one of the takeaways. And lastly, I've been returning to some of the elder horror films that I haven't seen in a long time, like a long, long time.

For example, Texas Transom Massacre. Have you ever seen the original? What year are we talking here? 77? I don't even know. You're saying the one that came on the 1990s is not the original. No, I don't think I've seen it.

I did like the one with Jessica Biel. Let's see. Texas Chainsaw. Original 1974. Wow. Wow. That is...

It's just the only thing I think of it's a very sweaty movie. Right? Everyone's hot. That's deer hunter old. So anyway, the original Texas Chainsaw. Listen, it's 50 years old. Obviously, it feels like an old movie. Quality movie.

On the other hand, Friday the 13th, 1980, big piece of shit. Horrible movie. Did you know, and this is, I suppose I'm spoiling a 45-year-old movie if it's possible. Jason Vores is not even in the movie. Now, I remember from Scream that it was his mom,

and I did see it when I was a child, but I just totally forget. Jason's not even in the movie. I gotta be honest. I've never seen any of the Friday the 13th movies. Not surprising. I know who Jason is. Yeah, of course.

Yeah, terrible movie. I'm watching the second one. He's in the second one. And apparently he doesn't take out the hockey mask until the third one. That might be the end of the majority. But I've seen all the recent ones. Jason goes to hell, which, by the way,

we're old Ben. That's not even recent. But to me, that's recent because I was in the 90s. Unbelievable. Your dad took when you were six. Probably at 12. All right. All right. We said it all. We're, uh, maybe we'll not talk as much about AI next week. Of course we will. We don't, we have to keep prefacing this. We don't have to apologize for it.

Yeah. It's the biggest story of the decade. Fine. It's the global pandemic. I just, I would like for the news flow to slow down for a second. It can't. Can't stop, won't stop. Probably right, Ben. All right. Animal spirits pod. No. Animal spirits at the compound news.com. personal emails, personal responses. Thank you for listening and we'll see you next week.