Animal Spirits Podcast - The YOLO Economy (EP.201)

Episode Date: April 28, 2021

On this week's show we discuss the crypto crash, setting return expectations, make life changes because of the pandemic, cynical thinking because of the internet, taxes vs. the stock market and more. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Before we begin the show today, I have an exciting announcement to make. Ridholt's wealth management is hiring. We prefer somebody who can come to the New York City Home Office, but we are open to a remote worker as well. Here's the role. We're looking for a trader. To be clear, I do not mean a chartered market technician or somebody who's going to have their own P&L or trading breakouts or anything like that.

We're looking for somebody to help our trading group. This person will help execute trades, rebound. accounts, raised cash, things of this nature. We're looking for somebody who has experience in this role. So if you know how to navigate, I Rebound from TD Ameritrade and Charles Schwab's portfolio rebalancer, shoot us an email. You can submit your resume to us at Hiring at Ritholtzwealth.com. Now, I'm asking you, with peace and love, peace and love, do not email animal spirits. Please use hiring at ridholt's wealth.com. We are looking forward to hearing from you. Today's animal spirits is brought to you by our friends at Y-Charts. Every quarter,

Y-charts releases an economic update. And I just got the newest version and wanted to pull one slide here that I thought was interesting. So on a price basis, the S&P 500, going from 1,000 to 2000 took 16 and a half years. To go from 2000 to 4,000, six and a half years. Perfectly encapsulate the lumpiness. Obviously, that first 16 and a half years included two huge crashes and recessions and all this stuff. Just shows the lumpy nature of investing and why the last years is a lot easier than it appears. Anyway, cool chart book. They got a bunch of good stuff in there on economics and markets and all this stuff. We have a new landing page, actually. Did you see this? I did. It's nice. It's a picture of me and you. So we have a new animal spirit.

referral page. So it's, you go to ycharts.com backslash animal spirits referral. That's it, right? We'll link to the show notes. We'll have a link in the show notes. Go there. And if you sign up for the first time, you get 20% off your initial subscription. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holtz wealth management. All opinions expressed by Michael and Ben or any podcast. guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon

for investment decisions. Clients of Ritt Holt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Guy on Left. People watch us on YouTube. Yes. And some people don't really know what we are and they called me the guy on the left and you're the guy in the right. I think it was a bald guy. Okay. We get some absolutely savage comments on the YouTube channel. And the hierarchy of worst comments in terms of like how savage they are. YouTube is number one by far.

Oh, my God, it's not even close. So we got an email. I don't know if you saw this one where because we were like, who the hell is watching us? It doesn't make any sense. Like isn't the joy of podcasts is that you can do them on the go. It doesn't actually take life out of your day. But somebody said to us that he's got like five screens or whatever and he listens to us in the background while he's working. So, I don't know.

And we have more, Duncan, our video producer does more charts on there, some funny stuff. Last week he put you in hair. That was good. That was kind of funny. Trevor Lauren's hair? Yeah. All right, that was good. So, yeah, those are on the compound every week if you want to check them out.

All right, so we are now a week removed from the Coinbase IPO. I'm losing track of time, Ben. How many days is this thing been trading for? Almost two weeks. Almost two weeks. I haven't been paying attention. How is it trading? Strong to quite strong?

No, it's not. It's $300. So, okay, and it was up to 400 at one point. So down 25% from the highs pretty much. So it was kind of fitting that crypto basically peaked with the Coinbase IPO. I don't know if there's a lot of front running going on there, but last week it fell on that Saturday night. It fell like 17% in like a matter of minutes. And it went from, I think it hit 60, Bitcoin hit 64,000, went down to 48-ish, 47. Pretty good little wash out there. This blew my mind. Binance is, I think, the biggest crypto exchange in the world, and they offer, according to the Wall Street Journal,

125 to one leverage for some futures contracts. And meaning that for 80 cents, you can get exposure of $100 worth of Bitcoin. Again, I have no idea what the average leverage is. But leverage on Bitcoin, I mean, what are we doing here? They had a story about how there was a guy in Kuwait who woke up at like 5 a.m. local time, and he looked at Binance was liquidating his trade. So a lot of this was when the price went down, a lot of these over-leveraged people got knocked out immediately. To the tune of $10 billion worth of liquidations.

I guess I didn't realize, I would have assumed you wouldn't need as much leverage in this space. I'm a noob on that. I guess I just assumed that this was a volatile enough asset as it is. It moves up and down on its own. It's very much that you wouldn't really need to leverage it up. But obviously people decided, let's do this and take it to the moon or whatever and really go for it. It's funny because... If you're using leverage on Bitcoin, you can't.

You can't sleep? No, right, especially when it trades. And that was a, the crash happened at like midnight Eastern on a Saturday night. Well, so maybe being a night owl is actually a source of alpha for you, because you bought the dip, did you not? I did a little, yeah, at the time, which I don't know if that's good or bad about the 24-7 trading. But I think this year is a good example of sometimes stuff going up too fast is a huge risk. So this was the Arkego sky, right? Like, the whole problem was things went up way too fast and it got away from it. And that's the kind of thing that happens with this leverage stuff. It goes up too fast. And then when it falls, it falls really fast. In the case of Arkegos, it almost seems like

his leverage was causing the stuff that he was buying to rise. Maybe you could say if there's a bunch of leverage in the crypto system, and I don't know that there is. I don't know what the percentages or how that shakes out, but that could be causing some of the rising too, obviously. It works both ways. So the news in Cryptoland this week was that J.P. Morgan, I mean, there's so much news, but one of the pieces of news is that J.P. Morgan is preparing to offer an actively managed Bitcoin fund to private wealthy clients. This is some hell of a turnaround from Japen Morgan. I know Diamond has been not a fan of the crypto space, but it seems inevitable. People are asking, we're hearing from clients on this. There's no way that these people,

that the clients at these private wealth management firms aren't hearing about this, how much money is being made and saying, I want in right now. What are you doing for me? At the risk of sounding Uber bullish on Bitcoin, it just seems pretty easy right now, that supply is obviously fairly finite. They mine what they mind. They can't flood the market with Bitcoin. Well, they can't fill the market with Bitcoin. They can flood it with a million other shit coins, which they have. Okay, fine. But institutional demand is not there for shitcoins, not yet. By the way, there's something called cummies and scam coin. That's what stage we're out of the market, that there's fraud everywhere. But my point is, and Bitcoin, I'm talking

about Bitcoin. Supply is what it is. Demand's not drying up. I mean, I don't know. Are we overthinking it? Like, this seems pretty easy. I'm not saying that it can't drop. Obviously, it has dropped. Actually, this is its third 20% drop in 2021 alone. This is just what it is. And it's potentially big money coming in, although, I mean, it's going to be, what, one to five percent of a portfolio, I'm guessing. I mean, I'm guessing these private bank places will do a 2% position, something like that. Still, if they do it across hundreds or thousands of accounts, that adds up to real money eventually, these places that are these size. FinTech Frank tweeted this. We always talk about how the rich Bitcoin people. By the way, FinTech Frank, great name. Great name.

That's perfect. 14,000 Ethereum addresses with $1 million. Oh, man. Yeah. 14,000. And so they don't care if they light their money on fire with NFTs and such, right? Why wouldn't you go long comies? What's the difference? All right. Here's a good survey of the week. This is from Bloomberg. 60% of crypto investors say their belief or investments in this space have had a negative impact on their personal relationships according to SurveyMonkey survey. What's more, there's a direct correlation between the percentage of someone's net worth that's invested in cryptocurrencies and the likelihood they say their personal relationships have been negatively impacted. This just makes perfect sense to me. I honestly can't imagine what it would be like. to have $75 million in Bitcoin or something even close to that, even a million dollars in Bitcoin,

I feel like I already have it on my screen way too often. I would become so hyper-focused and obsessed that I could see this interfering with relationships. It doesn't surprise me. I don't think this is an indictment on crypto people. This is human nature. And it went higher the more you have of your net worth in it. But I mean, the thing that this survey misses is that all of these early adopters of crypto obviously have girlfriends in Canada. I mean, that's the only explanation. It's a long distance. That's the problem. Not bad, Ben. All right. So this is my getting back to Active is going to be good for passive eventually. This is Eric Beltunis, good friend of the show. Wait, Active is going to be good for passive. What do you mean? Like all the active traders is

eventually still going to be good for passive. I think people are overlooking the fact that like Active is going to take over again and passive is dead. Vanguard took in $121 billion in Q1, which was $2 billion a day. That's the pace. Put them on track to beat their record set in 2017. He's just saying cheap beta is still the king. We keep talking about GameStop and Dogecoin and all these little things that people are putting small amounts of money into. Vanguard and I shares still rule the world as far as money goes. I don't think that's going to change. That's my point. Agreed. All right. I think it's time for GMO to create a new model. So they put out there March 31st, 2021 projections for stocks. U.S. large caps over the next

seven years, negative 7.3% real. U.S. small caps, negative 8.1% real. The only positive return they show is emerging value. Why don't they just take their computers and throw them out of window if this is the models that they're producing? What is the point of this? Because their clients are expecting them to be consistent. Okay. I ran the number. There's a difference between being consistent and hitting your head against the wall, though. But Ben, imagine they said, ah, it's broken. We were wrong. I mean, every single one of their clients would leave. They can't do that. I think their clients would appreciate the flexibility of being intellectually honest. Okay. It's too late. They're past flexibility. It's been a decade or more. It's just, it's a useless model if that's what it's

producing. Okay, I look back. The rolling seven year annual real returns for the SB 500, going back to the 1920s, the worst seven year real return ever. Let me guess. Negative three. Negative eight ending in 1974 bottom, but that's because. Oh, right, all right. Inflation were so bad. These are real returns. They're using inflation adjusted returns. So 15% of all rolling seven year real returns have been negative. So they're predicting basically the worst seven year return in history from here. Here's a thing. To get negative seven real for seven years, I mean, inflation has to go bananas. That would be so bad for everybody. I guess my point is, think about how bad things have to be for negative seven percent real. Inflation,

recession, job loss, just misery. This, if they're right, were about, I mean, things would be so, so, so bad. Anything can happen, but they're not. Right. And the thing is, I'm all about like setting expectations and markets and the fact that markets have been going crazy and it's been a good idea to say lower your expectations in recent years, even though lowering those expectations has not been right. I feel like I wrote that blog post first in 2015 to lower your expectations. And it sounded intelligent, but there's a difference between lowering your expectations in predicting the end of the world every single year. It just, like, I think expectations are about baselines and saying there's a range of results here, but our baseline is still like, okay, lower than average returns. the world is coming to an end, and Armageddon is here. Well, at least they're also expecting negative 2% real returns for bonds.

So, good Lord. Everything here is negative on a real basis. All right, enough bad news. How about some good news? Gallup's Economic Confidence Index, Ben, went positive in April for the first time since March. Okay, and it was negative 33 was the low. Still got some room to run here, it looks like, though. Blue skies, my friend.

Okay. All right. Back to the negative stuff. And then we're going to get to the positive, I think. Listen, you're wearing a pink shirt. There's no room for negativity here. Your shirt screams sunshine and optimism. You love commenting on my clothing.

Only when it's pink. I never talk about... I'm consistent. I never mention your printed t-shirt, your logo t-shirts that you wear. It's a great take. All right, that's fine. No, I'll take it. That's fine.

I mean... All right. This is from... This is like some congressional research report. They look at the U.S. income distribution trends. We talked about this one before, but this is just showing the percentage of children with income greater than their parents at age 30. So by the time you're 30, they showed children's born in 1940, 1950, all the way through 1984. Bottom? I think in 1940, 92 percent had greater incomes

than their children at age 30, 1950 was 79, by 1970 was 61, by 1980 and 1984. So that's basically you and me. It's 50-50. Now, I think there's a good explanation for this. Go ahead. So death, longevity? That's part of it. Someone born in 1940, their parents lived through World War I, The Great Depression, and then right when they were born, World War II, I mean, it kind of makes sense that in those instances in 1940s, 50s and 60s, a 30-year-old was making more than their parents who were probably one of them was off to war. Okay, so again, 92% of people born in 1940 made more than their parents. Think about somebody born in 1940.

It's possible that their parents lived through the panic of 1907, World War I. Spanish flu? Spanish flu, yeah. Great Depression and World War II. Yes. So take that with a grain of salt. But now this is from the FT and they wrote a piece that was all about basically millennials are not happy and they're all insecure. And they show this chart that we talked about before about boomers have so much more. In the 1990s, boomers were in the 30s. They had 21% of household wealth. Millennials are 3%. Oh, this chart again? Yeah, it's similar. Now boomers have 57. Millennials not much higher. And they go through all these examples of people say that they're like paddling hard just to stand. and still, and it's exhausting being a millennial, and everything is so much more expensive. And to millennials credit, everything for our generation has been expensive. We had higher price college.

We came out. And then it was harder to find a job for many people because of the great recession. Can't buy stocks on the cheap anymore. Stocks are expensive. House is expensive. So I think that that's the whole point of this. The interview people from all around the world, this person from the UK said, I haven't what other generations would be considered a well-paying job, but I can barely afford a two-bedroom flat within commuting distance to raise a family. So I certainly feel for millennials here, like, in some ways, we've gotten a bad rap. Here's the other side of this. Here's, like, potentially, I think a good potential sign.

So Kevin Roost at the New York Times wrote a piece called Welcome to the Yolo Economy. He's talking about how now a lot of young people are like completely burnt out because of the pandemic and their jobs. And now they finally have some savings. They've gotten some money or they haven't been doing stuff. And people are like abandoning their jobs and abandoning cities and moving elsewhere and trying to follow their dreams a little bit. and maybe that is starting a business, maybe that is moving somewhere else where it's not so expensive. I think this is, and a lot of the people said the same things about how like the pandemic has completely changed their viewpoint on life. And I think this is potentially a net positive

where people use the pandemic as a springboard for something, whether it's looking for a new, even if it's a new remote job or starting a new business. I think this could be looked back as a turning point for the millennial generation. What are your thoughts? I agree. Have you heard friends or family members or people just say like, hey, I never would have done this before, but because of the pandemic, I'm going to give this a try. I've got a very small circle of friends, if you even want to call them that. Okay, but I'm trying to look at this and say, I think this could be a positive where people say, you know what, whatever I was doing, I wasn't happy doing it anyway. I might as well

try to do something I'm happy with and maybe that leads to better outcomes. I'm looking for the positive spin here for millennials, because obviously it sounds like a lot of millennials are unhappy. But I just think in general, if you grew up on the internet, you're going to be unhappy. Most people who have spent their entire lives in the internet are probably unhappier than the alternative. That's a big brush. I just think it's easier to be subjected to negativity when you're on the internet at all times. That's true. That is definitely, definitely true. So I think that younger generations and people who grow up with the internet now are going to be more cynical in their disposition because of that. Yeah. So to your point about unhappiness on the

internet. Scott Galloway did this thing last week, and he's got a dunked on for his comments about sex and young men not having sex, but I do think there's something here. So, 28% of men, men between 18 and 30, reported no sex in the past year. This is by far, by far, the highest that it's been going back to 1989. And here's what he says about it. This isn't about sex, but a wide range of attachments. As a species, we need physical and social contact, and we crave deep, meaningful bonds. Men who fail to attach to partners, careers, or communities grow bitter and seek volatility and unrest. They are more susceptible to French theories and over-indexed on online forums filled with misogynist, content and misinformation. Economic inequality and elasticity

are correlated with violence and instability, and studies of gun violence in the U.S. find a strong association with decreased social mobility. Marriage, on the other hand, correlates with reductions in crime and may even have a causal effect on reducing it. So this is where it gets really dark and dangerous. And the number of mass shootings that we're seeing on a daily basis is absolutely alarming. Yeah. I think that it's easier for people to find that stuff if they're inclined that way anyway. They're pushed even further.

Right. Anyway, but by the way, this is a hard turn. But when I first saw that, so it said young men having sex, what are the 28% now and in 2008, it was like under 10%. So it's got a huge, it skyrocketed. Skyrocketed. Sky right. My first thought was men were better at lying about having sex before than they are now as far as surveys go. Anyway, that's probably, I'm just kidding.

Okay. It's not a terrible tape, but all right. This is me being an anti-survey person trying to punch holes in this. All right, so we had like a- On the other hand, a house in the Hamptons just rented for $2 million. Okay. That's fair. Maybe that's why people are negative because they see that.

Okay. All right. So we've got this weird bifurcation going where inflation is affecting different areas of the income spectrum and the economy. So again, a house just rented for $2 million in the Hamptons for the summer. Again, a rental, a rental. Unbelievable. Derek Thompson tweeted that Manhattan rents have fallen to their lowest levels since 2010. Brooklyn is at the lowest level since 2011. So you've got ridiculous, ridiculous unaffordability at the ultra high end. Or maybe I

guess you can afford it. If you've got $100 million in Ethereum, what's a $2 million rental? You've got unaffordability at the mid to high end, like the $1.3 million small homes in Seattle that people are emailing us about. And then on the low end, or for renters, you got some nice affordability. It's the lowest, cheapest Manhattan rental rate since 2010. Can you imagine a period where telling us, this is, you can do this for everything that's having a pandemic. But imagine going back 18 months ago and saying, hey, by the way, the housing market is going to take off like a rocket ship. And real estate in Manhattan and rents and real estate in Manhattan are going to drop like a rock. Like what situation would make

sense for that to happen. So again, for young people, this is a good thing. I fell for it. I fell for a chart crime. Okay. This from Bloomberg. For the first time in more than 15 years, it's cheaper to buy a new house than a previously owned dwelling. And I saw that, Ben, and without doing any critical thinking, I ran with it. I feel like you sent like three tweets on this one. This one. One. Okay. Why is it a chart crime? So here it is. So the median sales price of a previously owned single family home rose to $33,000. New properties sold for a median of $330,000. So here's why it's a chart crime. Do you know what the hottest housing market?

I haven't had a chance for this article. It just came out. I just saw a tweet. The hottest housing market in America is Lakeside, Idaho. And I'm just going to guess that these are new houses. I'm just going to guess. When I was in Fort Lauderdale, I was on Zillow. Isn't House searching on Zillow like the most fun thing?

Yeah. I think Zillow as a brand has cemented itself as like the real estate brand. They had the S&L skit a few weeks ago. This is where you say Disclosure. long. Yes. Disclosure, I'm long like 12 shares or something. And not to brag, but let me, I also have a position.

Position. Ooh, I own 10.4 shares of Zillow. This is us putting our money where our mouth is for the real estate. There we go. We're eating our own cooking. Anyway, I think as far as that, like Zillow could own the real estate industry if they wanted, I think, because they have that brand cachet. So I've been getting alerts on my phone for home sales in Fort Lauderdale,

homes that are hitting the market. And it's $3 million. It's $4 million. These are all existing homes. Houses that are being built in Phoenix, they're not building $9 million homes. The average is skewed. So this is a location story more than anything else. Here's the joke that I tweeted yesterday.

Used cars are now more expensive than new cars. But the used cars is a 69 Corvette and the new car is a Kia's Sorrento or whatever. That's basically what's going on here. Here's something I don't get, and we're going to get this to an email from a listener for this. when you hear about these people keep saying like oh all cash offer someone took me from who the hell has enough cash to make it all cash offer where is this cash coming from the sidelines but does someone save up for a house or are these just like it has to be the sale of the business or parents helping out but here's the thing yeah i'm guessing that's part of it is parents giving a loan or

just giving money but how about this when i sold my apartment in brooklyn it was an all cash offer it was a young person whose parents bought her the apartment but the thing is like people in our age group should not be competing with all cash offers. That's correct. So here's someone sentence this. I've now heard from three different couples here in Austin. By the way, we get a ton of real estate stuff from Austin. It sounds like it's just going nuts there. Who uses a service like this. It's called Homeward, Buy with Cash, to make all cash offers and win. I know you've talked about companies helping people put down 20 payments for the upside of the sell, but this sounded new and maybe looking into. So this is a company where you put down like a good faith deposit. They buy all

cash for you. And then after it goes through, then you set up a mortgage with them. which seems like a really convoluted way of doing this. By the way, those services didn't really pick up that much. Who did we, I'm drawing a blank. Who did we have? Unison. Unison. I haven't seen much from them or competitors.

I'm guessing it is a really cool idea. Part of it is because it helps you come up with a, you give up some of your equity and they help you with a down payment. I think part of it is the fact that you have to wait so long to potentially get a payout on that. But in this market, maybe you shouldn't have to wait so long because things are selling and people are selling way quicker. I don't know.

But again, the all cash offers, who are these people? Yeah. Okay, here's one. So we've been talking about this listener in Seattle who is having a hard time buying a house and I said, well, why don't you move? That's the alternative. It's not the easy move. So here's an email. I feel for the listener who's struggling in Seattle to buy a house. My wife and I were chasing the exploding Seattle area housing market from 2014 to 2019, the family solely but surely outgrow a little rental. We watch prices in our neighborhood roughly double in those five years and eventually admitted we couldn't compete. We moved 250 miles inland to a small town where we could afford whatever house we wanted. Now I found me own my own house with room for everyone and plenty of cash left over. Success. Right? Not entirely. Job opportunities in our new town are very limited. The schools aren't as good. There's a lot less to do. And we left a lot of relatives and good friends behind. We made a big tradeoff between home ownership and other aspects of life and still wonder if we did the right thing. That's rough. That's tough. Yeah. Because you always second guess yourself with these things. You just don't know when you make this type of decision. What am I doing here? I'm uprooting and is it worth it if I'm paying 50% of my gross income for housing or whatever? And we, don't have as much money to save or private schools potential if you want it or whatever it is that you think you want to do if housing is eating up that much of your budget, this is a tough one. And to plug us, our podcast from last week with Fundrise and Ben Miller, he said he thinks the answer is to rent and invest in real estate. A lot of people wrote in and said, I don't know

how realistic that is depending, because in some places it's very hard to find rentals. Like renting a house, for instance, is a lot harder than running an apartment in most areas. In my neighborhood, you can't rent a house. They don't really have that much in Michigan either. it's harder. I'm guessing, yeah, I don't know if you'd have to do Airbnb's or what. Maybe that's a thing Airbnb can do is long-term rentals, where it's someone rents her house out for 12 months at a time or something. I don't know. But this is not stopping. We're going to get more and more of these emails from people saying, I can't afford a house. Yes. And one of the reasons why is,

I mean, there's a million reasons why, but you listen to the odd lots episode with Tracy Alouye, Joe Wosenthal, and I forget his name, the lumber guy. That was excellent. Talking about lumber prices, what's going on? I think that was my favorite podcast of the year so far because it encapsulated so much to do with the housing market right now, the macroeconomy, and here's a thing. Not once in that podcast, when they're talking about rising demand for housing and rising lumber prices, not once did he say, this is all the Fed's fault. The Fed didn't even come up in that. Nothing from government policy. It was all, he basically said the reason lumber is at such a shortage right now is because people went way overboard in 2006 and seven and

eight, and then you had the crash, and then they pulled way back, and now they're still so defensive because of that experience and they have the scars from 2008. He's saying new homebuilders should be building as many homes as they can and buying up land and going crazy and the sawmills should be producing more lumber and they should be expanding and they're all not doing that because they're still so scarred from 2008, which is such a microcosm of the way so many people's brains got just destroyed from 2008 because they couldn't get out of that bunker mentality. I was surprised to hear him blame title insurance. I didn't see that one coming. That's your favorite pet project.

If we could have a talker book about title insurance, you would sign up for that immediately. I would just sit back and let you ask questions about title insurance the whole time. So, all right, this is an interesting data point. Apparently this podcast wars now. Apple is like getting into it. Podcasters are going to pay Apple 20 bucks a year to enable subscriptions, set their own prices, yada, yada. Apple will take a handsome 30% of that for the first year and 15% after. Spotify is rumored to offer one soon.

They're not going to charge. They're not going to take a rake. They're just going to just set it up for you. A few things. Podcasts in the United States now are generating over a billion dollars in revenue, which simultaneously feels like a ton of money and also very, very little money. I still think it feels small for what it could be. You and I were talking about this.

I can't remember where, like what do you listen to your podcast on? I can't remember if we did this for our spaces thing or we're sucking offline. I'm overcast. I've always stayed with Apple. And so someone actually asked this morning, hey, where do you guys get most of your downloads from? So I looked at it on our Libston thing, our podcasting hosts, and we still get 70% of our listeners from Apple.

Apple still dominates this. Spotify was like 5% way lower than I would have thought. Overcast is bigger than Spotify. I wonder if we have a boomer audience. What's going on here? I think people use the Apple because it's easier. They started with that. That's the one they used, like that's when they're used to.

That's why I haven't changed. I tried some of the other ones. and I just, I was used to the Apple one, so I stuck with it. So there's two million podcasts on the platform, on Spotify's platform. I guess I don't see room for every creator. I just think that it's like any other market where it's winner-tick most. Probably. That money, that billion dollars is probably going to 2% of all podcasts.

I also, like, even if money flooded the podcast ecosystem to deliver a better experience, I mean, I don't know that this is like, that money helps here. I don't know that you need to invest in podcasts. I feel like it's, like you and I, we've got a microphone, we've got a guy, got another guy. I mean, oh, you're saying if they put a bunch of money capital into this, try to make it better, the better experience, there's not really much you can do. Maybe I'm wrong. I mean, I'm not a podcast visionary, but I don't say it.

Here's where you could potentially make it a little better. So someone sent us an app that they created. There was this guy from Sweden. What's the name of the app? Oh, okay. Great plug, Ben. The app is called quarter investor or quarter invest. it's Q-U-A-R-T-R.

We're going to link to this in the show notes. This is a hell of an app, Ben. Why don't you set it up? So the reason I thought about this from podcast is because this is quarterly earnings calls, and you can click immediately on it to go right to the Q&A. So he has a button to go Q&A. So you skip all the stuff, all the fluff they say at the beginning, go to the Q&A with the analyst to listen to any companies that you're following.

There's also a button for a PDF on there. You can immediately pull the PDF of the presentation that they're doing a little numbers. I think stuff like that where you could make the functionality of hopping around the podcast, easier to different places. So someone could immediately, when they come on animal spirits, click on Michael's terrible movie recommendations, boom, right to the end. Right. Michael talks about Ben's clothes.

Boom, five minutes in. Okay, but that's all marginal stuff. Yes, I agree. That's for the hardcore users, but that's probably where the money comes from as the hardcore users. Okay. Let's talk about the Oscars. Holy moly.

What a train wreck. 9.8 million viewers. This thing is in secular decline. Maybe this is at the bottom. I mean, did you watch it? I actually watched it. I didn't. I mean, but this is the worst movie year for Oscars ever, maybe, because of the pandemic, pretty much. Yes, but I don't buy that. We were talking about a horrible slate of movies for 2021, or maybe it was 2020. I can't remember. But what movies didn't come out that would have been Oscar worthy? I don't blame the pandemic.

Okay. Well, the other part is I just think people have other entertainment options these days and TV is just better. So, Kate Winslet has a new show on HBO Max. I haven't watched it yet. The Mayor of East Town is called it. I watched the first episode. It's great. And she, in the past, would have probably made it to a detective one at a small town. Kind of, it feels like something she's never done before.

But it kind of feels like, kind of like Mystic River a little, one of those kind of ones. Probably would have been a movie in the past. Now it's a seven-episode HBO Max thing. I think that all the good stuff and all the good actors. So you think movies are in secular decline? Oh, they have been. And yeah. Yeah, I mean, this is what happens when everyone just wants to watch Star Wars and Avengers.

Oh, by the way. You get way better stuff on TV and better actors and actresses. So I said that movies aren't as good as they used to be. A few people said survivorship bias. And I'm not saying that the average movie in the 1970s is better than the average movie today. I'm just saying if you Google movies, pick any year and go by decade, 1976, 1986, 1996, 2006, 2006, 2006, 2016, again, 1988, 1998, just do that and look at the movies from the 70s, 80s, 90s, 2000s. Yeah, this is not recency bias.

It's a real thing. And again, I think. You're going to look back at Netflix as the pivotal moment of that and see movies started in secular decline when movies went global and they wanted to appease like a Chinese audience and a more global audience. That's why you get all the superhero stuff. And then Netflix came on and all the good stuff is on TV. I love this stuff.

But there's one more thing coming, Ben. I haven't told you about this. So I told you that I've been cataloging all the movies that I watched during the pandemic. I've also been, I have my own rating system. Now, I like crappy movies, but it turns out, get this, I'm a tough critic. Okay. I'm a tough critic. I give score 0 to 10.

So from now on, on a go forward basis, when I give my movie recommendations, I'm going to give scores. Okay, like IMDB. Exactly. So I could really like a bad movie, but I'm not going to give it like a high score. You understand? Okay. So here's the thing. If you're going to watch a movie and you don't know much about it and you look at the score, so I look at IMDB, and if anything below a seven, usually I'm out.

Oh, man. You're kind of at the good stuff. Maybe sixes. No, but I know. I live in the sixes. But I'll be able to tell if it's a stupid movie, funny one that I'll still watch, stupid plot. funny movie. I can tell the difference, but mostly, this is especially the show. It's below seven I'm out. Oh, for a show. Yeah. I've no patience for that. By the way, last week I said about the

Jake Paul pay-per-view fight, it just hit me. There's two Pauls. There's a Jake and a Logan. We obviously missed the whole YouTube generation. All right, real quick, we got some time. I want to talk about the people freaked out last week. There was like a one-day sell-off. For the tax hike? Because of the tax stuff. And so the White House is proposing a doubling the capital gains tax for people earning $1 million or more to $39.6, what percentage of Americans is that? Do you know? They make a million dollars or more a year. Yeah, 0.3%. Yeah, that's what it is. Oh, really? Yeah. Is that a guess? Yes. Yeah, 0.32% of people make that much. The wealthiest 1% of Americans reported 75% of all long-term capital gains in 2019. The wealthiest 0.1% people with annual incomes

above 3.8 million took in half of all capital gains. So you're talking about taxing the tiniest. little majority of the country who has the most money in people and social media flip out like it's going to happen to them making $50,000 a year or something. And by the way, this number is never happening. It's funny that we sit there and debate and get angry at this stuff. This is like a negotiating play. It's never going to be that high. You start high and then you negotiate low. And by the way, after that selloff, the market was up huge the next day. Yeah. So Dave Nodig posted this really cool chart about capital gains rates over time and the annual SP 500 return. It goes up. It goes down. I mean, I think.

we spend so much of our time debating economic policy and tax policy. And if you look historically, most of the time, it just doesn't matter. That's something to do. I think it is. Whatever happens is going to happen. Okay, real more, real quick, before we get into a couple good listeners questions. Ben, Ben, Ben, take your time. Take your time. There's a worker shortage piece in Wall Street Journal about especially fast food places. I go to grab a chicken and egg at Chick-fil-A right by my office. Hold on, explain. I have questions. What's a chicken and egg? So Chick-fil-A, they have their good chicken. Great chicken. A little breakfast filet with egg and cheese on a bagel. Chicken egg and cheese. It's very good. It's surprisingly good, yes. I'm a big Chick-fil-A fan.

I go Sands bagel, though, because you've got to keep that dad-bought off for the summer. But breakfast is closed yesterday because they don't have enough people to work. Ooh. Now what? I think this is going to happen everywhere. A lot of these places, they're going to have to pay more. All these places, I think we're going to, like, whether we want it or not, $15 minimum wage is basically coming based on demand. And Chipotle said that Chipotle's average wage is $13 and in their quarterly call, if they were to pay $15, it would hit their margins by like 100 to 200 basis points. So if they were to pass it onto the customer, it would raise prices by what? Two percent? It's nothing. Not a big deal. So what's very good for the low wage worker is going to have a negligible impact on prices. Honestly, I'm fine paying a little higher prices for that stuff for these people who have been on the front lines working and giving us food this whole entire pandemic. Like, those people should be making more money. All right, this is a good one. My financial advisor has half of my portfolio in cash bonds and hedge funds that haven't moved in years, waiting for the dip.

I know you two can speak of this. Any thoughts? Go ahead. So I don't want to like speak ill of any other financial advisor. We don't know what the plan is, but here's a question I would have if you're in this situation. Did you put me in this portfolio understanding my risk profile and time horizon and my needs? Or are you just trying to make me a lot of money in buy the dip when stocks fall or whatever. Because there's a totally different set of circumstances between we put you in this portfolio because it matches your willingness, need, and ability to take risk versus I'm trying to time the market. And I was worried that things got too hot. So I put you in hedge funds and cash and bonds. And we're going to wait

and see what happens. That's two totally different ways of managing money. And so that's the question I would ask if my advisor was doing this is, why was I in this portfolio in the first place? And does it suit my needs and goals. Yeah, well said. I'm nothing to add. Ben posted a tweet today about purchasing a new car. You're a leaser. You're leasing a new car.

I would love to hear your take on purchasing a used car versus leasing. I'm a leased guy. It's just, it's more fun. Part of it is more fun. I never thought it'll be a lease guy. Tell me why you lease. Well, because I like getting a new car for three years. That's it.

That's part of it. I don't enjoy the process of going into the dealership. I spoke about using a car broker last year. But I think that buying a car might be more. economical. And actually, we got... Well, buying more cars more economical if you pay it off and then drive it for a few years afterwards where you don't have a payment. That's where buying a new car and holding it forever. So it's like, here's... It pays off big time. Eight through 11 or whatever? Yes, or five through eight. Yeah. That's where

you make up all the money is when you don't have a car payment and you can save. If you want a thorough analysis, Jesse Kramer emailed us a really long and detailed analysis of the true cost of owning a car, it's way higher than I thought, way, way, way, way higher. But owning versus leasing, it's all there. So I recommend you check that out. Here's my other thing why I lease. So I like the thing about having a new car everyone's model too, but I have young kids. They destroy our vehicles. I would much rather have the dealership take on that destruction than me personally owning it. And you can always buy a car after the lease. I'm sure people would, we'll get in our emails and tell us how we're dumb for

doing that. I don't mind it. The payments lower. And here's the thing. I had a lease that was running up in February. So I still have close to a year, 10 months left, and it was called last week and said, hey, your used car lease is worth way more than we thought will give you a new model and it's the same exact payment. So I get two years of a new model, same payment, done. The downside is you have to move to Idaho to get the car. Yeah, sorry. All right, recommendations. What do you got, Ben? Okay. By the way, Packy caused a star on Twitter yesterday with his anti-IPA talk. You don't know an IPA guy. Actually, you might agree with that take. I'm anti-IPA too. I think IPAs are gross. The only good IPA is called All Day IPA from founders. That's like a lighter one. But I think

the hops are too much. And I think people just drink those just to look cool. Well, do you think I'm drinking my Sierra Nevada hazy IPA at home room temperature to look cool? Sorry, but the flavors they have are out of control. So it's like this one's got watermelon barrel aged with a hint of sage and it's gluten free. I don't know. It's too much. Just give me a simple beer. All right. Search party. Still good. Three seasons in. I'm on that one on HBO. I already mentioned Mary of East My rewatch this weekend was burnt where Bradley Cooper plays the jerk chef Never heard of it

In a three-star Michelin French restaurant It's Brad the Cooper Sienna Miller He plays a, you know all like the chef being a jerk And yelling at everyone in the kitchen That's Brad the Cooper He's trying to go for his like three-star Michelin restaurant I think you'd like that one Oh, okay

I was a waiter for three years full time I could see that Full time I know all about that Okay podcast wreck of the week Raja Bell has a podcast at The Ringer And I think it's just called like the NBA show I can't remember and he interviewed Boris Diao, who was the French player.

Yeah, did you listen to the podcast? I did. It was great. I thought it was awesome. So many of, like, the young athletes today seem unhappy, even though they have millions of dollars and they want to change teams all the time. And they just seem genuinely unhappy, which I guess in one light is good because they're being honest about the fact that all this stuff hasn't brought them happiness, but he

seemed like a generally happy guy. He retired from the NBA, probably made tens of millions of dollars, and sales around the world for six months a year in a sailboat, and then lives in France for the other part. and then Salt Lake City, just like total positive attitude. I loved it. Speaking of the NBA, Ben, somebody tweeted to me last night that sent me into a tailspin. I don't know if I've ever been more mad at a tweet in my entire life. Okay.

So I tweeted about the Knicks, which I rarely do for a few reasons. One, I think like sports Twitter is boring. Like nobody wants to hear your sports takes, especially for a team that sucks. What am I going to say about the Knicks? Nobody wants to hear me complain. I just, I don't tweet about the Knicks. So I tweeted about the Knicks last night And somebody wrote to me

I'm like getting mad even reading this tweet Interesting Since I've rarely if ever seen you tweet about the Knicks I guess you're a loyal fan now Now that they might make the playoffs Someone called you a fair weather fan Oh my God I'm so angry at this Vince

You own season tickets last year I have wasted literally years of my life I watched this team Every single year since I was like seven years old that I never stopped. And this asshole is calling me a Fairweather fan. Oh, that's pretty good. All right.

One more. I went down some movie trailer YouTube rabbit hole somehow. Don't ask me how I got on there. I'll ask. I'll ask. Please. I think I was looking for a picture from my blog. I wrote a piece on like, I always attach a picture to my blog.

And I used a picture from this movie. Which movie? I got to hear your answer first. So when I saw this trailer, I immediately said this movie is going to be awesome. And the trailer looked so good because obviously they put the best stuff in the trailer usually. So this movie was even better than the trailer. So what's the best trailer to movie combo in history? I have my answer. What do you think? Okay. So you asked me this question and I thought about it. My initial reaction was, oh man, this is impot. I don't know. How am I

get it? And then it hit me in two seconds and I haven't thought about it since. Okay. My answer is Gladiator. Oh, okay. I remember Ball with the Ball. Remember the Kid Rock song was in the trailer? Oh, really? What year was that? 2000? 2000. I saw that trailer. Let's see. 2000. Yeah. I saw that trailer and I said, holy shitballs. I cannot wait to see that movie. To me, that is my absolute best trailer, best movie. Beck. Okay, that's a good one. Here's mine. I remember watching this with my friends on the laptop and all of us dying. We watched the trailer for the hangover. And I saw the trailer and go, oh my gosh, this movie is going to be amazing. And it lived up to the hype and I probably never laughed harder in the theater than I did for

that movie. That was one for me. What's your biggest belly laugh in that movie? I don't know. everything Alan does, probably, like Galfinacus. The best one for me was at the very beginning of the movie where they're driving to Vegas. And he says, I'm like, good over there, and Galfinacus says, yeah, and they almost hit a truck. He's like, ah, gotcha. Just gets me every time. All right, that's all I got. What do you have?

Okay, so I've been looking forward to this day, grew up on Mortal Kombat, was not expecting much. The first movie sucked. I actually, surprisingly, played that game as a child. Why is that surprising? That was one of my game. I don't know, because I'm not much of a video game back. There's never been a good movie video game ever. It's like a law. Josh and I have talked about this. Never ever. Has there been a good movie video game? Yeah, I think you're right.

My expectations were pretty low going into this. Man, it made no sense. And again, I'm not expecting Goodwill hunting. It made no sense. None. It was so convoluted. There wasn't even a tournament. Now, I appreciate some of the CGI, like, graphic scenes. Like, there were some cool fatalities. but I'm going to give that a 5.1. That doesn't surprise me. I'm definitely not watching that. This is like one of those rare things where I thought it was going to suck and it sucked even worse. All right, the Adjustment Bureau.

You ever see this one? Matt Damon and... Emily Blunt? I like that movie. Here's my rating system. I thought it was okay. It was pretty good. 6.7.

Okay. That's probably like a 7 for me. Okay. So we're not too far off. Lord of War. Nicholas Cage. Been a while. That's probably one of his last good movies.

Yeah. Nicholas Caves, Jared L. Bridget Moynihan and Ethan Hawk. Great cast. Nicholas Cage plays an arms dealer. So, like, everything's set up here for this to be, like, a pretty good movie. Not great. I remember it being just okay.

Six-five. Fair? I think that's pretty fair. All right. Last one. A good movie, finally. Layer cake. Very underrated.

Sienna-Millard. And Daniel Craig Pre-Bond. Daniel Craig Pre-Bond. So is it kind of like Snatch? It's a British gangster film? Yeah, I'd say so. Something like that. 7-7.

That'd be a little high. I'd say like 7-1, but yeah, it's good. Maybe I got over my skis because the other three that I saw were so mediocre to bad. True. It's relative. You're keeping this reading system. You're like keeping a spreadsheet somewhere? I do have a spreadsheet.

Yep. That's impressive. Layer cake. Good movie. All right. On Friday, we speak to the CEO of Collectible. That was a good one. This is a good one.

Yeah, this is all about sports memorabilia and buying into shares of sports cards and sports memorabilia and how this market has just taken off like a rocket. Very good one. All right, left guy. Good job. Animal Spiritspod at gmail.com. Thank you.