Animal Spirits Podcast - We Have to Talk About Sports Betting (EP. 417)

Episode Date: June 18, 2025

On episode 417 of Animal Spirits, ⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠ discuss valuations not mattering, volatility is the new normal, all-time highs in rich people, bubble behavior in AI, gambling is off and running, limit orders on crypto trades, the housing market is not fair, the downside of illiquidity, Michael's email pet peeves and more. This episode is sponsored by Nuveen and Fabric by Gerber Life. Invest like the future is watching. Visit https://www.nuveen.com/future to learn more. ⁠⁠ Join the thousands of parents who trust Fabric to help protect their family. Apply today in just minutes at: https://meetfabric.com/SPIRITS Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

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invest like the future is watching. Visit nubene.com slash future to learn more. Investing involves risk, principal loss is possible. Today's show is also brought to you by Fabric Life. Fabric by Gerber Life is the term life insurance you can get done right from your couch all online and on your schedule. You can be covered under 10 minutes with no health exam required. Ben, have you spoken to your kids yet about life insurance? We haven't had that talk yet. I'm working on the personal finance stuff. I tried to talk to my daughter the other day about saving, but insurance is probably next in line. Kobe's been asking me a lot about allowance. He hasn't used the word allowance.

He doesn't know what that means yet, but he's writing a list of chores that he should be doing, like taking rid of the bathroom. Now, Logan is getting involved. This has nothing to do with life insurance. But actually, it does. I have kids. I want them to be protected.

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Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Redhol's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Let's rewind maybe five years in the life of Ridholt's wealth management. My partner, Chris, was saying that we need to be doing taxes for people. This was a bit outside my lane, and I wasn't totally against it, but I was.

nervous. A lot of liability. Didn't really see the upside. Chris was 100% right. I was 100% wrong with my reservations. It's been an incredible asset for our company, our clients. They love the service. We have the right people led by Billards who discovered us or came to us through this podcast. So now here we are. Five years later, we've got a team of, is it six or seven people on the tax side? We need more CPAs, especially in the Philly area. But we will talk to anyone. And if you are licensed to file taxes, please reach out, either to us directly, animal spirits at the compound news.com or hiring at writholtswalth.com. Okay, one more plug.

Actually, two more plugs. Excuse me. This year at Futureproof, can you believe it's already? Can you believe it, Ben? We're going to talk about FuturePro? Can you believe it? You know, let's do the weather talk. Let's do the, we'll combine that.

Could you believe it's that time in the year slash weather? So it's been a shit week here in New York, a lot of gray, a lot of rain. Apparently, it's going to be 99 a week from today. Okay. 80s in Michigan. So it's been lovely. Oh, it's been, okay. Because I was wondering, you know, I know we're in different parts of the country,

but your Hawaiian shirt does not fit the mood around me. It's Hawaiian shirt season. It's going to be 80-something day. Okay. It's nice and hot. Credit to you. Anyway, I don't know what I'm talking about the weather. But, oh, no, yeah, I do.

Futureproof. Because you're a middle-aged guy. So we're doing something new this year at the festival. Here to four, that he's, is that right? Prior to, we had been doing a fintech demo drop, which was mostly, not mostly, which was reserved for newish companies, not the incumbents. We're doing something different this year. We want to talk about AI. We want to see what you're cooking up. This is the future of our industry. This is the future of the world. And if you are working on AI within the wealth tech area,

we want to see it. And not just for the nobs, not just for the noob whales. If you're in a company, you're cooking something up. We want to see it. So we're doing a AI. demo drop, not just a wealth tech demo drop. So link in show notes, time is running out. My bad for not plugging this sooner, but the deadline is this week. So please hit the link to the show notes, sign up there. Similarly, in that vein, I have a new channel on YouTube, a new show on our Unlocked channel called Talking Wealth.

Ben, you, me, Josh, we do a lot of podcasts. It's all about markets and the economy. when we are off mic, all I think about and all I talk about is our industry, the wealth management industry. And we did the first episode with Wealth.com. Tomorrow, I will be with Phil Huber talking about the alternative asset management industry. The week after that, I'm very excited speaking of AI to talk to Dave Notting about the intersection of AI and financial advice. And I have a scorching, hot, spicy take, not just for the sake of being provocative. I've been thinking about this. And I think there might be, you don't even want to say what there might be.

Let's just tune in, away from today. After that, I'm doing with Jason Wank with Ad Altruis talking about the future custodian. So I'm very excited about this channel about what we're doing. Please subscribe. And if you're an advisor, you're not going to want to miss it. Yeah, I have more stuff coming there a lot. And yeah, you're turning up the dial. One more.

We got new compound merch at I don't shop.com. We have a great animal spirits t-shirt. It's a bull and a bear drinking cocktails. I'm just going to assume I'm the bull and you're the bear. Is that fair? Really? Do I have to remind you about your stance on tariff, sir? Hey, that was like the fastest bear market in history.

You know what? How about this? I got bullish at the bottom. Each of us are bullish on bearish at certain times when appropriate. Speaking of merch. Yeah, but the bull has no shirt and then the bear has no pants on. I think that's fitting. Oh, okay.

Well, then in that case, I'm the bear and you're certainly in the bull. I got new merch. And wait, wait. And very good compound towels. I'm going to get some for the beach. Excellent. I got new merch, Ben, as you mentioned before we started the show. For those of you who are listening, I'm wearing a shirt.

Robin took this out of the bag and she said, what the hell is this? And I said, what do you mean? What the hell is this? And she goes, I don't get it. And I said, are you kidding me? You've never seen my cousin Vinny? And she said, no. I don't know what to do with that.

How's my wife never seen my cousin Vinnie? My wife is secretly movie person. I would have assumed anyone who has even a slight New York accent would be forced-fed that movie at birth. I mean, it was on USA. on TNT on, you know, forever and ever always. It's still on HBO and those channels all the time. And it still slaps. Nostalgia movie T-shirts and Nick's gear has to be 9% of your wardrobe.

How much? 90. Yeah. I think I said not yet. 90, yeah. We got, so these shirts are getting expensive. Definitely, I'm noticing it's pinching the pocketbook button. We got a retail print this morning, retail sales.

What was the number? It was not good. Uh, down 0.9% in May. The worst reading since February 2023. The t-shirts are getting too expensive. People can't, people can't afford to buy things anymore. Is that tariff related? Uh, maybe tariff jitters.

I don't know. I'm sure it's, it's baked into the pie. Okay. All right. I'll believe it when I'm still, I'll, I don't wait and see approach and I'll believe it when I see it kind of thing. Whoa, whoa, whoa. You'll believe and see what?

I just told you. We just got it in the data. Yeah, but that's one. that's one reading. I need a trend. Fair, but it corroborates a lot of what we're seeing and feeling. Fair. All right. I have a question for you. Okay. Hit me. I feel like for my entire adult life, there has been conflict in the Middle East. This whole century, it seems like there's been an ongoing conflict somewhere in the Middle East. Not just your entire adult life, my friend. Everybody's adult life who has ever lived, walk this planet. It sure seems that way. And

this may seem glib and not epithetic to what's going on over there, but Does the Middle East even matter to markets anymore? So the U.S. is the biggest oil producer in the world. It seemed like that was the thing that always royal markets is just, I mean, energy is such a tiny piece of the S&P now. What is it? Two or three percent of the S&P. Oil prices, they spike when they see a headline of something going on, but then seem to

just come right back down. Does it even matter anymore? For, okay, again, this is purely through the lens of the stock market. We are not overlooking the human tragedy. Okay? So just want to say that. Yeah. When you're investing, sometimes you have to be unemotional about these things, unfortunately. Doesn't matter for the stock market. That's a good question. I mean, the VIX, I don't even want to say it had a baby spike.

It didn't have a spike at all. It barely got over 20. Crude oil, to your point, did have an 8% rally on that night, gave a lot of it back because we are not just dependent on the Middle East for oil anymore. So I don't know that it doesn't matter, but it certainly, certainly matters a hell of a lot less for the markets than it did previously. It feels to me like investors are wising up to the idea that most headlines just don't matter anymore. Well, certainly this. I can't imagine an average U.S. investor making any portfolio changes based on what's happening in the Middle East. Yes, exactly. And there's not even any really questions coming in anymore. Like, anytime there's a geopolitical event, it used to be like, oh, my gosh, what is this going to mean? And people don't even really question it anymore.

This is sort of circular. But if the market were down 6%, they would be. Yeah, true. The market price forces narrative. All right, I can't remember where I stole this chart from. I get, I don't know, I'm subscribed to like three or four of those, you know, daily chart. Daily chart book is a campus. That was probably it.

And I can't remember what the actual source was, so I apologize. But this shows the aggregate allocation by households. And it shows equity, fixed income, and cash. and equity keeps rising to higher highs. So it was as low as 30% at the bottom of the GFC, and now it's at 53%. And if you look at a lot of the historical studies will say, well, listen, anytime equity allocations peak,

that's like a bad sign. It's a warning sign for the market. People are too far over their skis. And I just continue to think this is another sign of investor behavior improving. that the fact that investors held so few equities back in the day was that was the mistake, not this. Yeah, I think this is a permanent shift.

Yes. It's not to say that there won't be ups and downs, of course. And by definition, in bare markets, the percentage allocation to equities falls as bonds offset that ostensibly and more cash. But the average, if you do like an average by decade, allocation to equities, this is the new normal. We're not going back to 30%. Yeah. And I've done a lot of work on this over time. The historical allocation to equities

by households before the 1990s was very low. And so the fact that more and more people are involved in the stock market, it would make sense that this goes up. You know, you know, there's a lot of talk about democratizing all sorts of different investments, particularly alts. We really democratize a stock market. Big time. With auto enrollment, with ETFs. Zero commission trades. Yeah. The barriers to entry have been completely wiped out. Much more accessible than it happened in the past.

All right. So I keep making the case that valuations don't really matter anymore. And I say this kind of tongue-in-cheek. Hold on. Are you talking about the overall market or individual stocks? What are we talking about here? I'm going to say individual stocks. So Sherwood News had this story about the most highly valued companies according to

price to sales. And I use the price to sales as the end of Q1, 2025. And Parenthooders are like 70. It's not at 70. Okay. So he gets way higher than that. No, look at the number. Sorry.

What does the number say? I round it up. I don't know why you would round up. It's right there on the screen. We did bingo this past weekend with the family. And like a bingo night thing. And B-69 got called literally every time. And I just made me think of you for some reason.

So they show all these companies that are trading at 15, 18, 20, 40 times sales. And as a point of reference, the S&P trades at something like 2.8 times sales. So obviously, way, way higher. I just think investors are more accepting of these unbelievably high valuations than they ever were in the past. And I guess it kind of makes sense when you see these stories of companies with ridiculously high valuations continuing to charge higher. Okay. What is... Okay, here we go.

Wait, is this a post that I wrote? This is a post that I wrote. This is a post that I wrote. I was looking for something and I got myself. How about that? So I wrote this back in 2016. We've been doing this long time, Ben. Very long time.

We've got plenty for an LLM to take all of our content now and just recreate us. Okay. So when you are talking about valuations and in this case, we're talking about the price of sales ratio. We are, and I'm not saying that you're doing this, but you have to talk about the fundamentals of why valuations arising. So, the post that I wrote was Christ on value. Stephen Christ, he wrote about the parallels between horses and securities. Do you remember this? No. Okay. So Mobison wrote a piece, quoting this piece, and Mobison said, Michael Movison said, fundamentals are how fast the horse runs and expectations are the odds.

In this case, expectations, we're talking about valuations. Okay, I have heard you make this do this spiel before. Okay. So the horse is running very fast. We're talking about margins, and we actually have this later on the dock for the show, we're talking about margins for growth companies as high as we've ever seen and accelerating. you're talking about companies getting to revenue milestones faster than you've ever seen, and you're talking about in some cases pretty damn wide moats.

So I reject the notion that valuations don't matter. I'm not saying that valuations aren't potentially silly in certain areas. I don't know enough about Palantir to say whether or not that's the case, although 69 times sales seem pretty rich. But we have to talk about the why. How about this? In the past, it was way more clear if you saw numbers really high. that, okay, this is, this is a crazy bubble. Yes.

And it's harder to say that now because Gina Martin Adams on LinkedIn has a great chart showing the operating margin since 2000 of the S&P 500 and the S&P X information technology. And those have basically tracked each other. Okay. In fact, X information technology is a little bit lower because information technology, all of the giants that we discuss all the time have been up until, the right and have made new all-time highs. We're talking about their margins alongside their growth. Actually, their growth is slow, but whatever. Not whatever. Their operating margins have

continued to make new all-time highs rewriting what we thought was possible for the stock market and for individual companies. I heard Dan Erasmuson on a podcast recently. I think he's on a long view. And he said, you know when you're in a crisis. Everyone knows when they're in a crisis. It's really hard to know when you're actually in a bubble because it can just, things can go on for so much longer than you think. Like, I don't know. I'd say like the meme stock bubble. That was like a mini bubble, I suppose.

That was pretty obvious at the time. But just think about all the graveyard of tech predictions over the past 15 years about how crazy this stuff is. And now it's just become the new baseline, these growth rates and all that stuff. So you know that quote, I won't read it right here, but that quote from the money game by Adam Smith talking about what time is it and everybody's looking at the clock. but there's no hands to talk about where you are in the market cycle.

Everybody knows it's getting close to midnight, but we don't know what time it is exactly. We've been talking about that environment for so long now. And there are obviously, by the way, there's pockets of the market right now that are acting insane. For example, Consensus Media, who is a great follow, tweeted, quantum beverage,

ticker QUBT. I don't know what that company does, do you? A.I. Soft drinks? Sure. Quantum, quantum soda? I don't know. By the way, hang on. I think a couple weeks ago, we said we didn't know what Poundier was. And I got a few emails from people being like, I can't believe that you guys talk about the markets all the time and don't know exactly what an individual company does. It's defense tech. Do we need to know like what exactly that means? I don't know. No, but this is the thing. You literally don't need to know what every company in the market does and you can still be a good investor. How's that? Sure. It's okay. It's okay if you don't know

everything. Yeah. Honestly. There's a lot of stuff I don't know. So quantum beverage is a $3 billion company that trades more daily dollar volume than Intel. But with less revenue in forward projections than a single Chick-fil-A location. That's insane. Wait, why is this called Quantum Beverage when the company is showing Tamir is quantum computing? Q-U-B-T? Yeah.

Okay. I don't know why they're calling it. quantum beverage. Is that a joke? If you type in the ticker, it's quantum computing. If you type in quantum beverage company. Okay. See, this is showing how much we really don't know. Yeah, who cares? I don't know. That's what the tweet says. It's been around for a long time. Either way, it looks a little bit, a little bit confusing. It is confusing. Either way, again, I will reiterate, it's a $3 billion company that trades more daily dollar volume than Intel. but with less revenue and forward projections than a single Chick-fil-A location.

Chick-fil-A is very profitable, though. And they always say, my pleasure when you say thank you for something. Okay. I'm going to start picking that up. I should teach that to my kids. I feel like when you say thank you to someone, you're welcome or no problem or any of that stuff. I feel like my pleasure. That's the boss answer.

You know one of my weaknesses? I'll say it. I'll admit it right here, right now. When people say something to me, I'm very bad at saying something back. Like when, not mid-conversation, but just a, hey. What? Have a good flight? You too?

Yeah, I did that the other day for something ridiculous. It might have been, it was something like have a good flight. I can't remember what it was. But like a dad in passing that I've ever spoken to at a baseball game said, like, hey, and I, I said you too. No, I didn't say you too. I said good morning, but I did get a little bit flustered. I will admit. Okay.

This is us. We're not good at small talk sometimes, right? I should have just given one of these. No shame, yeah. All right. Schwab has this thing. No, you're right, but there are certain dads who that's their thing. They'll go up and glad hand to every person along, like at the soccer field.

They'll say hi to every person on their way to their spot. Yeah, that's impressive. I'm a head down kind of guy or a wave or a nod kind of guy. Same. I think I probably come off as very rude. Not my intention. I have a friend who every time we go out who you'll introduce himself to the waiter or the bartender

and for no other reason that he's just that friendly. Okay, yeah. Hi, I'm Danny, nice media, what's your name? I'm like, who cares? What? Okay, Schwab has this thing. It's not brand new, but we don't discuss it much on the podcast.

The Schwab Trading Activity Index or the S-Tax. It's a proprietary behavior basis. I would call that Stax. Stacks. You know what? You should call it stacks. You're right. I'm wrong.

Stacks. Although something's screaming S tax in me. I don't know why. All right. You always do this. A proprietary behavior-based index designed to indicate the sentiment of retail investors. So this tracked the market very closely sentiment in price in the 2020 period, particularly COVID-dump and the bubble in 2021.

And then it's been sort of in the doldrum since. There's a wide disconnect between stacks and the market. Do you get how they're doing this? It's excuse, sir, proprietary. Okay. Behavioral-based index designed to indicate the sentiment of retail investors. Okay. Now, listen, it's quantitative.

They've got all the data, right? Like, they see it. It makes sense that the behavior of investors was way crazier in 2021 that it is today. That makes sense. It's surprising that it's going down, though. Well, this surprised me. Get a load of this. By the way, good line.

Get a load of. You don't hear people say that anymore. Sure. Invidia shares, which gained nearly 24% during the May Stax reporting period on strong earnings and hopes for improved U.S. trade relations with China, went from being the most heavily net bought stock in April to most net sold in May. So people took profits really quickly on that dip buy. Infotech was the biggest net seller sector on a dollar basis for the fourth month.

in a row. How do you like them apples? Isn't that wild? Considering how strong tech stocks have been, it was the biggest net sell sector on a dollar basis for the fourth month in a row. It's interesting, though, because those stocks haven't rolled over at all. Not really. If they're selling, it's not, Microsoft did an all-time high yesterday. That's what I mean. Invidia's still going up. So it's not like this has impacted the stocks at all. So they're selling. Exactly. I thought this was very noteworthy. Unvideo was the number one sell in May, Mazzola said. Clients bought into the earnings the week of May 23rd, when shares jumped above the

200-day moving average, and then they sold out after earnings at the weekend in May 30th. That's just a classic sell in May and go away. That's all that is. Isn't that wild? That's surprising. That Schwab clients sold Infotech for the fourth month in a row, the biggest seller? Do you think part of that is I was in a 40% drawdown or whatever it is, and I came all the way back and broke even, and now I'm going to take some prop.

I'm going to sell some. No, because if you rewind, I could do this backwards in my head. Watch this. May, April, March, February. Did I do that right? Yeah. Pretty good. Those were down months.

So people sold into the decline. Like, those stocks got hammered in the first quarter. We spoke about that last week. Yeah. Okay. So do you think that there's a difference between retail traders at Schwab and a place like Robin Hood? Yes. Right.

Bingo. That was about to be my next comment. So you, there's so much data out there. you could really, you could really credibly make any case with data without, and get it wrong because there's just so much data. Like Schwab. Maybe that's, maybe that's why the sentiment readings are so much harder. Back in the day, when there wasn't as many investors, it was easier to compartmentalize

and talk about investing as one big group of people. Yes. Now it's, there's so many different groups of investors and types of investors. Bingo. Bingo. All right, on the other side of the spectrum, this is, this is very interesting. we had mentioned that Jeffrey Patak, $1.7 trillion number in the total stock market index at Vanguard a few times.

Right. So I finally got around to reading it. But that's ETFs and mutual funds altogether? I think he said he excluded the ETF, but I can't remember. I check the link in the doc, but you're curious. But there's a chart that shows the monthly flows as a percentage of assets. Now, because this is such a gigantic fund, there's not a ton as a percentage coming in and going out, right?

On a regular basis, except in April. They bought the shit out of this. Wow. So Vanguard investors, for example, aggressively, aggressively bought the dip. 2% of the fund came in in April. Or this is the, yeah, is that right? Yeah. Wild, right?

that's a big spike huge spike so billions tens of billions of dollars bought the dip and and they are not leaving no so it's funny because people always say like don't time the market but at times like this when it works that makes sense to me time the market on the way in on the way down right yeah how's that i'm saying like when your money's coming in yeah um all right I saw a great chart from Grant Hockridge, who does fantastic charting work, top 10 for me. The chart was so good that I said to Matt... You and I have a completely different experience on who we follow on Twitter, because every time you're like, this is a great follow, I've never heard of this person.

Well, that's why I love plugging people. I want to put people on the radar. Sorry. That was like the clip of Shaq and Chuck. Yes. I love plugging you. I love plugging people. I do.

That's my thing. So Grant Hawkewich treated a chart that showed the number of 1% up and down days by decade. Okay? And he says... Which is a pretty good indicator of volatility because you get more of those, yeah. 4371% days up and down and counting. Grant says the 2020s are on track to be the most volatile decade in market history. But here's the twist.

The SEP 500 is up over 80% since 2020. Big moves, big gains. Not the combo we're used to. So this chart was so good that I had Chart Kid recreated credit to Grant. It's our chart of the week over at Exhibit A, if you're an advisor, you can grab this. That's a really good chart. I've never seen that before. Me either.

And to your point, this is my whole idea of markets getting faster. Yes. It's more booms and more busts and things are going quicker and the moves are just more violent. And this makes sense to me that this would be elevated going forward. Yeah. So I immediately thought of you and you're 100% right and this is, this evidence supports what you've been saying. Great chart. I love it

So we got a little AI pushback And it is worth noting that the stuff that we're talking about AI especially last week We went really heavy on AI No one knows how it's going to end I'm using an NBA analogy here After the Denver Nuggets won their title It was like whoa there's a window here for a dynasty

Right And the Celtics won last year And it's like whoa there's a window here for a dynasty And now the thunder looked like they're going to win And it's like whoa there's a window here for a dynasty And it seems like we're really quick to So I just want to say, like, it seems like this is we were going with AI. We don't know.

Here's a good pushback. I'm very jealous of your night owl abilities. I fell asleep in the third quarter last night. I woke up very upset. I'm having trouble. Like on Friday night, I had to do this. I've realized that sleep is a very personal thing. There's people who say, like, you have to get eight hours of sleep a night.

Otherwise, you can't function as a human being. I realize, and this year especially, I just for some of, reason have gotten less and less sleep and I stay up later and later and it hasn't impacted me at all. It's a superpower. I mean, you've got lots of hours on me. Remember, you know the video of the guy who says he does three days in one? That's you. After a month? By the way, you have no chance. I would have to look back and see, but from memory, this has been one of the best finals. I've, one of the best finals in a long time. Very competitive. Yeah. Like, is it the best one since, uh, since Dallas? I mean, that's 2011. I mean, that's 2011.

I think since Dallas beat Miami, that's a long time ago. And no one's watching. But the games have been so, so good. Yeah, I agree. And no one's watching. Let's see. Allow me to make a counterpoint on your AI take. If many of the jobs disappear in labor markets start to show massive amounts of unemployment,

where will the relentless bid come from? Who will spend money on all of the things that power earnings for the companies? Why would small businesses advertise on Mag 7 platforms if there's no return on their ads because no one is spending money? You just told me 60% in change of Americans on the stock market, unemployment will cause that number to fall as people dip into their savings, the consumer power the consumer powers earnings, employment powers the consumer. Just a thought. If employment gets weak, earnings will suffer too. AI can't replace a spending power by the consumer. Very good point.

Fair enough. Here would be my counterpoint. I think it's possible. And I think this person is generally right. Okay. So like, yes, right. The pushback or the zag that I would have is this spend is being powered by the mag seven stocks. We said they're spending, half a trillion on R&D and KAPX. Now, this person would say, yeah, okay, fine. But if the consumer stop spending, then they're going to slow down. And I would say probably true. But you could also see a weird dynamic where some of the jobs that get displaced have

no impact on the ultimate spending on these tech giants. But yeah, it's who the hell knows where this is going to go? The counterpoint for me would be, well, the wealthy people are going to spend the money. And they're going to be ones who benefit the most and they're going to power everything. Well, you're right. So we mentioned this a few times. The people that are most likely to get laid off, I would guess, are probably not the wealthy, although maybe not. Maybe AI displaces white collar jobs, too. Anyway, we're all just guessing. Like, who knows, right? I don't know what this goes. But I also think we are so dynamic that we will, like, literally make up jobs for people. People need a reason to get out of bed in the morning. And so if Waymoes are getting lit on fire, guess what? Eventually, they're probably going to pay a guy less than they would pay a driver to sit in a car. and make sure no one messes with it. So here's evidence supporting.

There's going to be a way more greeter in your car or something. Here's evidence to support what we're talking about from Schroeder. This is a great chart. U.S. companies have been generating near record profits per employee. So real profits per employee, if you were to draw a trend line, it is straight up and to the right. Okay. So you're just saying that, like, they don't need as many employees as they used to. Correct.

Okay. Not great. You don't would be the growth industry for me, probably just leisure and hospitality and other things if AI is going to make you more efficient, I still think, regardless of how efficient technology has made us over time, does anyone work fewer hours than they did in the past? I always think of my dad working in the 1990s, pre-internet, pre-cell phone, pre-bring your work home. It's different work. But it's more work. We've given ourselves more work. You're right, it's different. But we've got all these tools to make us more

productive, but we still work just as much or more. But I do a lot of work. And I don't know why I'm like, I guess you could air quote this because some people would say, how is that work? But I do a lot, especially when the weather gets nice, I do a lot of walking calls. That is so much different. Like, my dad was a dentist. He didn't have that luxury, right?

He was over the table in people's mouths. I think about that often when I'm at the dentist that, you know, you and I sit in front of the computer all day. And we can get sidetracked on something else for. 10 or 15 minutes or however long, watch a video or do something on our banking or whatever it is. But if you're at one of those jobs that we're constantly doing and you can't have computer time, that's real work.

What we do sometimes is not real work. Knowledge workers. Yeah. Right? Yeah. And so I think that like people that are doing different work than us where they don't have the luxury of being able to take a phone call and walk in the sun or to be able to stand and look at their screen,

I would hate people like us. I would do. Oh, yes. No, I totally, no, my, my wife was a radiation therapist, and she would be, she would be there at the machine all day long, like, and get, like, a half-hour break for lunch, and that's it. I want to talk about how much money there is in the economy, which is something we've talked a lot about, but I have a story to start this off with. So you have your beach club in the summer you talk about, right? we have a pool slash boat club on our lake that we go to. And this is, it's, it's not like anything super fancy.

This place has been around for like 100 years. So it's really, really old. And the dues for this thing are comically small. Like less than a thousand dollars a summer. And we get to go there. They have a little window you can order food for the kids and get ice cream. And there's a pool. And they have events.

They have these social events. That's really fun place. And this place has been around for a long, long time. The building is over 100 years old. So we had to have a meeting this. past weekend because this building needs to be totally renovated. They've been done studies on it and they say like there's so much that is not to code here that like this place is literally like it's 118 years old. So like we have to either completely renovate it and bring it up the code or

tear it down and build again. It's a huge, huge, this is like an 8,000 square foot building. And what's inside of it? Is it like a hall? So they have a hall upstairs where they do events. It's really fun. It's a very, you know, they have big part. They have like theme parties and it's it's like At the end of the year, the big party every year is a pirate's costume ball. Everyone dresses up as a pirate. Remember I sent you pictures last year of me dressed up as a pirate? And so the community loves this place, but this is a big undertaking. And they're saying like the foundation is like so all the stuff that was done 100 years ago,

they didn't expect it to last this long and it did. They need to redo it. So they're probably going to like graze this place and restart over. So I'm at this meeting and trying to understand what this means and stuff. And there's only like a handful of like a few hundred people who belong to this club. So obviously the dues don't cover anywhere close to the cost. So it's going to be $5 or $6 million to either renovate or redo this place, right? A lot of money.

Halfway through the meeting, finally someone raises their hand. How are we going to pay for this? Private equity infrastructure. Done. Yeah, I'm going to start a private credit fund. But they weren't really worried about it because, like, eh, we have a few affluent members who are probably going to pick up the cost. And I feel like that's the U.S. economy.

Like, rich people power the U.S. economy. and they are in such a better place than the rest of... I'm talking to, like, the top 1% here. Are, like, they have the ability... They don't have to worry about the economy, really, unless their company or business goes under or something, right? So, Mike Zikardi had this tweet.

I'm pretty sure Goldman stole this for me, because I did a piece about this a lot of month ago. So they say the top 1% owns 51% of the stocks, the bottom 50% owns 1%. Right? And this has... Um, been pretty stable over time, too. I pulled this one from J.P. Morgan.

It's total assets in the economy versus total liabilities. It's 190 trillion assets, and it's 21 trillion liabilities. But when you dig down, Jeremy Herbert, I'll put this out. The median network... I'm sorry. You think Goldman stole this chart from you? They've been charting this for years. I think they intercepted into your brain and you stole from them.

How are you like that? No. The way that they're showing this, the 50 and the 1 and the 1 in the 50, that was me. trust me I was on this well before them so he shows the median net worth by households and this is it looks back to 2022 so it's a little higher now but not much

it's like $140,000 so you look at all these assets that sounds pretty good so it's the highest in history again that's the median number but that just but that also shows how

how much is concentrated at the top though right he broke this down too by married not married, single, children, no children. And if you are, you know, you're married, you're and you have no children, your net worth is a lot higher. If you have married with children, it's a little lower. But that's much higher than people who are married and such. But my whole point here is that there are just a lot of rich people, and I think that they are kind of the savior for the economy at times. And I think they're probably part of the reason that this has just been

powered for so, so long. Because they're almost immune to the ups and downs of the economy, save a bad business deal or a business sector going under. Fair enough? That's mostly right. It just makes me realize that like, oh, rich people will just, they'll come in and save the day. It's like that, oh, okay. Okay, a good segue to this.

There's lots of rich people. That's my point. How's that? Yes. And they have lots of money. New cycle high for continuing jobless themes. Kevin Gordon tweeted this. Does this matter?

Does a slowing economy matter for the stock? market? I mean, I can't believe I'm saying this out loud, but I'm kind of serious. It would be weird if it didn't, right? Now, it matters for certain areas of the stock market, obviously, like areas that would be impacted by, you know, people, whatever, we spoke about McDonald's as an example of things that people would cut back on. But how does this impact the hypers? Do they care? I do think, could this be the time where the unemployment rate, I've said this a few times, like, where the stock market doesn't care if the unemployment rate rises a little bit because it'll think, well, that's AI working, right?

AI is crowding out jobs and making it so we don't, we're more productive. I don't know that you could prove that, but I don't know. Strange times we live in Ben. It would be a weird statement to make that the stock market doesn't care about a slowing economy. That would seem to be a stretch. I would agree. All right. Nick Tamorayos tweeted Fed call as of 610 in terms of,

of where banks are looking for rate cuts and really nobody except for MUFG, who I'm not quite sure who that is, expects a July cut. We've got a Fed meeting tomorrow. It looks like there's a bunch of Septembers, a couple of October, Decembers. Tomorrow's had a piece out this morning talking about why the Fed is not cutting. And it seems like they are just for better or worse, in my estimation worse, they are much less focused on the slowing economy. arguably, well, yeah, deteriorating economy, as they are the potential for inflation to come back. They're not cutting in July. If the economy is slowing, the Fed's going to be late.

That should be your baseline assumption. Yeah. And they're basically saying that. So this is a wild chart. Wait, hang on. Duncan says that I'm going to get punched in the face by someone think I'm sarcastic by saying my pleasure. So maybe I should rethink that strategy. What's wrong with my pleasure?

How many people do you know besides Chick-Flech? that actually say that, it could sound kind of sarcastic. Depends on how you say it. I don't think it would sound sarcastic coming from you. Okay. All right. We talk a lot about consumer confidence, the UMISC survey. Toys and Slok did a chart book on China.

And look at this. Chinese consumer confidence index. Holy mackerel. Crash down no recover. I thought the way that it worked in China is the president tells you what your consumer confidence is, and that's what you say. Isn't that all surveys work there? I guess not. Look at this. Isn't that wild?

Not great. I mean, compared to them, we are downright giddy. Okay. They don't enjoy spending money as much as us, though, right? I know very little about the Chinese culture, but I would assume that's fair. All right. So, I have read a lot of books about bubbles over the years. I find it fascinating. From the South Sea bubble to the Mississippi bubble and the The roaring 20s and all these different, the nifty 50 stocks. And every one of those books that I've read about bubbles,

I think the devil take the hindmost is my favorite just short chapters all on. And it has great stats on every one of them. And every one of those has stats that you read and you go, oh my gosh. Like in the South Sea bubble, like there was a hunchback people were using to sign away their equity papers on his back or something. Like crazy stories, like that, right? this is the one from Stratory about the AI bubble.

This is going to be used in future books about the AI bubble. Okay, I don't know if you read this. So this is Ben Thompson quoting Casey Newton's substack. They're talking about meta trying to hire away AI researchers. All will be making pro-athlete money or better.

I heard one credible story of a researcher being offered $75 million to join meta. The Times reports some offer stretch into nine figures that may sound like a lot for one person, and it is, but in some sense, meta's future depends on hiring and retaining these people and meta has already committed $65 billion to AI infrastructure this year. What's a few hundred million more? Now, this may seem like, oh my gosh, these AI researchers are making

NBA money, but when you think about the amount of wealth that's at stake here, it actually makes sense. It doesn't make sense, but it does actually. But that's a bubble anecdote right there. That's a good one. Right? That is a good one. All right, here's a good one from the Wall Street Journal. New sites are getting crushed by Google's new AI tools. Business Insider cut about 21% of its staff last month. A move CEO Barbara Pang said was aimed at helping the publication, quote, endure extreme traffic drops outside of our control. Organic search traffic to its website declined by 55% between April 2022 and April 2025. At a company-wide meeting earlier this year,

Nick Thompson, chief executive of the Atlantic, said the publication should assume traffic from Google would drop towards zero and the company needed to evolve its business model. Quote, Google is shifting from being a search engine to an answer engine. Thompson said in an interview with the Washington, quote, we have to develop new strategies.

So, wow. This is a crazy chart. So this is why I keep coming back to the whole creativity thing and like the ability to build your own audience. And I think having like an email list is so important now because you go straight to the consumer as opposed to relying on. I know why these big news sites have to rely on these platforms. But that's why as an individual practitioner or whatever, having your own audience is going to be more important than ever. So these stories, stories like this are going to keep coming. oh yeah for sure all right ben i've been thinking a lot about this and i'm glad that i waited on

the matter because there was an article that kiler wrote on her substack talking about a new book called losing big america's reckless bet on sports gambling by jonathan cohen and i've been thinking about this because there are people many people some that i know that are being greatly impacted by sports betting. Now, I want to preface... There have to be some tales of woe for this stuff. It just has to. By saying, I love gambling.

And I enjoy the shit out of sports betting. Yes, I lost more money than I should have last season. Oops. Happens. I'm not mad. I will continue to gamble because I love it. I will put better guard rails on this time. But, okay, with that said, this is...

This is not great. So the founder of Polymarket tweeted how popular Polymarket is getting visits in May, 15.9 million, Coinbase 34.7 million. Robin and 37 million. Also right on this list right behind number four and five spotter draft kings and Fandul. Now, I think betting markets like Polymarket are generally like more fun, less addictive type betting, right? I would suspect. I bet there are people who are addicted to just trying to guess every outcome of

everything, though. Yeah, but I feel like I got ruined on Polly Market. It's like, come on. Like how, I mean, that's true. More likely on Fandler draft case, yes. But the betting on sports, now, it's not going backwards. I think that there are probably some things that can be done. They alluded to in this article about how to better regulate it and prevent people.

So here's here's something from from kind of substack. A study on NFL betters from the 2023, 2024 season found that 87% of betters accounted for a total of 1% of sportsbook revenue, which means that the vast majority of betters are able to play safely. Okay? It's a big number. 87% accounted for 1%. Then there's that other percent of players, like 3% of players, that account

for like 80% of the revenue. Some of them are really rich and good for them. They can spend their money however they want. Some of them are not really rich and their dopamine pathways are rewired and they're addicted. So, Kyla asked him, how do you exercise personal responsibility against a system designed by teams of behavioral psychologists and data scientists specifically to defeat your capacity for rational decision making? I genuinely don't know. And I've used as an analogy, alcohol, but it's probably not. a good one because John said, it's unlike drugs or alcohol in that way. There's no reason that

you'd expect, oh, if I have another shot of vodka, it will cure all the negative effects of my alcohol addiction. Theoretically, like if you hit the Milwaukee Bucks over tomorrow night, it could wipe out all of your debt. So you just keep chasing and keep chasing. So it's more like the lottery mentality. So there's been a lot of studies out of the UK about suicide among young men because they're way ahead of us in terms of their adoption of this. And again, I know this is like wildly complicated, and I get personal responsibility, you know, people, but like, oof, I just don't know. So we had, before casinos were everywhere, we had a handful of them in Northern Michigan where I grew up on the Indian reservations. That used to be the only place you could have casinos in a lot of areas, right, when I was younger.

And they made the switch when I was in high school, it was perfectly timed when I was a senior in high school. They made the switch from the gambling age being 21 to 18, right? So a senior year of high school, my friends and I would go out to the casino, drink a few beers in the parking lot, go gamble. The greatest thing was the first weekend they made the change, all the waiters and waitresses in their head, it was like, you don't have to ID anyone. So they were serving a beer at 18 at the table. Great time. Well, I would witness these people on a Friday night, take their paycheck, sign it over to the casino, and get it all on chips, and go literally gamble their paycheck. And now it's on your, now it's on your phone.

And we talked earlier about the benefits of breaking down the barriers to help people invest in the stock market. That's amazing. Breaking down the barriers to help people gamble, obviously is the opposite effect. And it's one of those you can't put the genie back in the bottle things, unfortunately. People want everything to be easier because we have the technology for it. And I don't know how do you stop that? One of the, one of the suggestions that was made, which seems reasonable, is I don't know how

this would be work or enforced, but maybe like some income verification on if you get past $10,000 on losses, whatever it is. Like, now, are they going to enforce that? Why would they? But lives are being ruined, and that is just a fact. Yeah. And I think we are in the era of, I don't need other people that tell me what to do. I can do what I want.

Like, good and bad. Put it all out there. Let me make my own choices. And unfortunately, that's going to hurt a lot of people. Yeah. I think that's just the way it is. That is just the way it is. You're right. All right. Let's talk about Bitcoin again.

Last week I talked about how crypto is tradfai. I think crypto needs tradfi. So Eric Belchunis quote tweeted this one from a crypto person. What percentage of crypto people do you think have like a cartoon or AI-generated picture for their social media? It's got to be like 90%. It's very high. So this person tweeted, Bitcoin is currently trading at over $105,000. If you want to buy on Coinbase, they charge a hundred and close to $107,000.

If you want to sell, it's more like $104,000. WTF. So Eric Belchunis says, like, this is why ETFs are growing like wildfire. They don't have these wide spreads like this. And I do wonder how much of the money going into this. Obviously, a lot of it is a new adoption, is just people who are like sick of paying these ridiculous spreads. And also, how is this still happening? Bitcoin is way more, it has to be far more liquid now than it was.

understand this happening in 2014 and 2017 at the beginning when it was still this new thing, how are, because I saw this when I was on trying to sell some Bitcoin earlier this year on Robin Hood, which was a great timing at the time, round-tripped and not so much anymore. I did buy back in some, but the, I looked at this and the spreads were really, really wide still. And I guess the whole point is, um, use limit orders, but how many people actually use limit orders? Yeah. Yeah, that's the solution, but this is why the ETF make, even if you're paying a fee on the ETF, it probably makes sense because you're going to pay higher fees to jump in and out on these brokerage platforms.

No doubt. Why are these spreads so high still? Just because they can and no one pays attention? It seems ridiculous to me. Yeah, because they can. I don't know. That's it. Okay.

I think the potential gains that people are looking at on Bitcoin and the speed with which people are transacting, they just, they don't care. Because if they did, it would change. I do think that's part of it. But that's one of the biggest bull cases for the ETF, though. It's just people finally wising up to it. So here's a headline. Crypto tycoon Justin Sun's Tron group to go public in USVIA of a first merger, aka

spec. Here's the lead. Winter Park, Florida, based SRM. currently designs and manufactures toys, souvenirs, and plush items for theme parks and entertainment ventures. Its products include smirfs, water bottles, and stuffed animals such as Hannah Hedgehog and Gideon Gator. SRM shares surged on the disclosure, rising more than 500% in midday trading. The toy company said it was acquiring TRX to establish a Tron Treasury strategy, referring to the growing ranks of publicly traded companies that have announced plans to add cryptocurrencies for

their balance sheet. Okay. Seems legit. I don't know. So I guess we're doing this again. This is where we are. We're at this part of the cycle. It's going to get stupider. Just wait. We're not even close. All right. Here's another one. Thomas Braziel tweeted, at this rate, chart a circle. At this rate, the company is going to be worth more than the assets under admin. Ha ha. I mean, come on people. So split capital, quote, tweeted it and said, Circle made about $200 million after paying out incentives in 2024. It's trading at 162 times those figures now. Market can't get enough stable coin exposure. Now, I think the last part is the interesting part. Market can't get enough stable coin exposure. Now, you may say this

is madness. This is stupid. This makes no sense. And I would agree. But I also am a market person, and the market has spoken. It's not to say that the market can't change its mind, but it's really interesting. Market can't get enough stable coin exposure. Did you read the Michael Semple's piece on stable coins? He's, um, okay, take a look at that. Maybe we can discuss it. He's not sold on stable.

He's not sold on stable coins. He does some adjustments about the actual transaction count, right? Yeah, he's not as sold on stable coins as the BL end all like a lot of other people are. Okay. And I don't really have an opinion on the long-term adoption of stable coins. I would probably think I'm a little bit more bullish than him. But I'm just think it's interesting that public markets are eating this shit up. And I generally am of the mind that even though stuff is stupid, markets aren't that stupid.

Yeah, I just do find it kind of hilarious that the whole idea of crypto was like, we're going to end the dollar. And the whole idea of stable coins is it's a way to put your money in the dollar. I don't know that, yeah, but I don't think it's like a good gotcha. What? Are you kidding me? It's not like every Bitcoin person is saying it's going to replace a dollar, and every Bitcoin person is saying stable coins are the dollar. Like, I get the paradox, but...

Okay, let's talk about housing. A lot of people keep saying housing is broken. Maybe I've even said that before. I think I've come around to the fact that housing is just not fair. It's not broken, but it's not fair. Okay, go on. Joe and Tracy and Adlots this week had the guy from Morgan Stanley. housing expert. And did you see this chart here? The evolution of mortgage payments to household

incomes. It's kind of a weird chart. So, but go. And so it looks at the percentage of your income you're spending on your mortgage payment. There's an excellent chart. And this went from 12, 13, 15 percent pre-pandemic to now in 2022, 23 and 24, more like 24, 25, 25, 26 percent of your income. That's a huge, huge jump, obviously. Now, here's the, here's the not fair part. So I'm making these numbers up, but I think they're directionally right. So 60 to 65% homeowners are right in this country, right? We know that number. I would say 25 to 30% of the country is probably always going to rent because they live in a big city

or they just can't afford to buy a house or don't want to buy a house. And then that leaves anywhere from 5 to 15% or so of people who want to buy and are in a difficult situation. My point is, and obviously there's people who own a home already who want to buy, and they don't want to because of mortgage rates, but they have equity. and they could if they wanted, probably. My point is that it's a minority of people who are really impacted in a bad way by this. It stinks, it's not fair.

Yeah. But I think that's probably why there's not more like ground swell support for like pitchforks and torches, right? We need to fix this. That's probably why it doesn't happen because the people who already own a home are the majority. They're the ones who benefited the most from this.

Think about... New homeowners are getting absolutely, absolutely plugged. If you bought a house in 2018, and it was 16% of your income. Wages are up 30% since then. So your mortgage payment has stayed exactly the same. And now it's a smaller percentage of your income because your income has grown. Think about how much of a better position you are as a consumer to spend money now because of that.

Yeah. It almost doesn't seem fair. It's not fair. All right. Let's talk private markets because we've been talking about them a lot lately. And this is one of those that it's not a flash in the pan. right private markets like this is going to be a big story for a long time to come i feel like i am super bullish on the idea that private equity private assets are going to continue to infiltrate and grow in

size that is no comment on whether or not these are going to be good investments but they're going to win yeah we've talked to a number of managers that they've made these evergreen slash interval funds that make it easier than ever to invest in this stuff. And yeah, I agree. And I assume, do you think that some of them, I don't know what the rules are. Why do you think it is that every quarter you can only take 5% out? Is that a rule? Or is that just the industry standard? Okay. I'm going to talk with Phil about this on talking wealth. And there are certain funds, there are certain interval funds where it is contractual that you have to redeem up to 5% of NAV. there are other structures like Starwood

that have the ability to say, can't do it. Yeah, we can't do. We're going to gate it at 2%. Wouldn't we get in the future one of the companies saying, all right, these funds are all doing 5%, we're going to let 10% out.

We're going to be more liquid. It depends on the underlying investments. If you're a real estate, how do you do that? You can't. True. All right, so this is from New York Times. Yale is rushing to sell billions in private equity investments.

Here's from the story. Yale's university's famed to down has been trying to offload one of the largest portfolios of private equity investments ever in a single sale, a movie that reflects both pressures on Wall Street and higher education under the Trump administration. The Ivy League School has sought buyers up to $6 billion in stakes of private equity and venture funds. And it sounds like the secondary discounts aren't as much as they were, but this is the downside of illiquidity. They realize their liquidity profile might have to change if they're going to have to pay higher taxes or they're going to have to spend more money because they're not going to get as much government funding.

This is when illiquity hurts you. Now, people say, well, who cares? For 40 years, Yale has benefited from private equity. They're way bigger than they would have otherwise. I read all the David Swenson books. Like, they were the first ones there. But this is the downside of it. When you need the money, sometimes it's going to be painful to get it.

Did you hear Mobeson with Patrick? I don't think so. So, I'm sorry, not Mubeson. Bill Garley, my bad. Yes, I did listen to that. So Bill Gurley said, and by the way, shout to Patrick for including videos. I love seeing videos on podcasts. I kind of didn't think I was going to five years ago.

It is something I would never would have thought of either. And it's not that I'm glued to it, but like I like looking down and seeing people laugh and seeing the body language and seeing who's speaking, right? These are generally faceless people. Not all Patrick's guests are people that I've heard of. Graham Weaver, for example. Like, I enjoyed watching that guy. We have a lot of YouTube-only viewers of this podcast, obviously.

Part of it is they get to see some of the visuals and they get to see your t-shirts my Hawaiian shirts and my Hawaiian shirts. And so Bill Gurley said, does the Yale model work when everybody's doing it? Now, there's a lot of nuance in the story because Yale's been doing secondaries forever. And I think the impetus for this is potentially new regulation.

So in a statement provided to the New York Times, a representative for the Yale endowment acknowledged the sale, but called private equity, quote, a core element of our investment strategy. The statement added, we are not reducing our long-term target to private equity. So there is so much, to talk about with private markets, and there's so much nuance and, damn, I lost my train

of thought. How about that? How about this? One of the reasons they're harder to understand is because this is a good one from Morningstar. IRs are not the same thing as returns. You can't eat IRAs. I wrote a story on this a long time ago. There was a story that Yale's venture portfolio has an IRA of like 70 because they invested in LinkedIn early on or something and it was like 70% IRA and that would be like an annual return but if you plugged 70% per year

on Yale's endowment or just their piece of venture their portfolio would have been worth like a trillion dollars or something so the way IRAs work it's not it depends on the timing of the cash flows matters a lot in that calculation and so it's not the same thing as a compound return Now, I do think that the interval funds make changes a little, but make it easier. But those old school private equity funds are not as good as they look from their IRA numbers.

So the example that they gave was they gave an example. And again, we'll link to this if you want to read it more closely. But they show an ETF with a 15% annualized return. That's actual dollars annualizing versus a private fund that is able to say that they have a 15% IRA. And the growth of the growth of a dollar, it's, it's not in day. Not even close. Because you don't just give all your money one day to the private equity fund, and it's invested up front.

It takes a long time to invest. So that's the point. It's a different body. I lost my train of thought. It felt like I was rolling. Oh, well. Okay. Well, more to talk about with this.

More to come, for sure. All right. Survey of the week from Gallup, American satisfaction with the way things are going in the U.S. This is just trash, just garbage. I mean... In the 80s and 90s and even the 2000s, it was regularly 70%. It's now at below 40%. And really since the great financial crisis, it never recovered.

Do you think you could accurately track happiness? No, impossible. Impossible. There was that one happiness study. I can't remember what the name of the book was. It was a happiness study by Harvard that they did over the course of people's lifetimes. And they constantly sent them surveys and like that to me, but that's not how these other surveys work. It's a snapshot in the point of time, right?

Yeah. All right. What did you call last week the people who are, are really rich, but then they don't, it's a reverse, what did you call it? Reverse flex. So, I don't even know what to say his name. Ingvar Camper, this is from dividend growth investor on Twitter. Founder of IKEA was worth close to $60 billion at the time of his death. He drove in 1993 Volvo for two decades, purchased clothes from flea markets, got his haircut in foreign countries. Can you get cheaper haircuts in forest countries? And he flew coach. This is not something

to aspire to. But the problem is, and I don't think so personally. he probably doesn't become as successful as he is if he doesn't do these things right he doesn't create ikea if he doesn't have that maniacal whatever about him sure so that's the that's the hard part about it as a regular person you look at this and you go this is insane behavior but if he wasn't a little insane he doesn't create this type of company right all right our very own kelly cox had a great piece this week called my money story and she talked about how childhood financial insecurity developed, like, defined her life.

And she told her whole story about growing up in a family with a lot of kids and not having a lot of money and how the great financial crisis sort of devastated her family. Her parents lost their jobs. And it's really good, it's a really, really good reminder

of how much your experiences can shape your views of the world and your views of money and risk and all these things because I think a lot of times in finance, We look at the spreadsheet stuff and go, here's your measurables. You should do this. And so many times that those measurables do not tell the whole story, obviously.

No doubt. Excellent piece. It's really great. I mean, I remember talking to a client once who worked at Lehman Brothers and had, I can't remember the number, 70% of their net worth in the company that went to zero. Totally completely changed their view of risk forever. Of course. How could it not?

Right? Right. These are the things that I think you can't pick up in just the measurables. Totally. All right, Ben, we are living in the age of nostalgia in movies in particular. So, we've got a new naked gun coming out. We've got... It looks decently funny. I was forced. I said I was out, but I was forced to watch a trailer in a movie I saw lately. And you're right. Looks good.

Okay. Lewis Pullman is set to star in Space Balls 2 next to his father, Bill Pullman. Wait, that guy's, the guy from Top Gun Maverick, that's Bill Pullen's son? News to me. Can I make it, can I give a, uh, an admission here? I have seen space balls more than I have seen Star Wars. Like, I enjoyed spaceballs more than Star Wars growing up. I mean, that's fair. I certainly enjoy hot shots more than Top Gun.

Hot shots was pretty good. I have some, I still have Star Wars hot takes. I'll save them for another time because we're going along. Okay. One of these times. Another one. Masters of the Universe. Holy shit. He-Man? You kidding me? By the way, I haven't said the word he-man in 30 years, and that's a hilarious name for a superhero. He-man. Yeah, that was kind of a weird one. Skeletor, great villain, though. Who is He-Man? Do you know who that is?

No idea. Looks pretty jacked, though. All right. Let's just skip. Oh, one thing. I just want to Talk about this real quick. So, there's a chart in the FTA. Gold is now the second most important reserve assets for central banks. Gold is overtaking the euro as the world's second most important reserve asset for central banks driven by record purchases and sorting prices. So we had Steve Eisman from Big Short on TCAF last week, and he spoke about all of this deficit talk is virtue signaling. He's like, where else are you going to go? I loved. I loved that. That's always been my take. I was like the lady in church with her hand in the air with a preacher, like, yes, preach. I have for years have said, I'm not worried about this.

And I totally agree with them. All these hedge fund managers, they have to try to one up each other and say, like, I'm more worried. No, I'm more worried. And then if you're not worried, it's like you don't care about America. You don't care about starving our children, leaving them the burden. Like, it is very interesting. Screw the grandkids. Yeah.

When has the bill ever come due for the grandkids? When? I don't know. Now you're being selfish because just wait. Yeah. Did the grandkids pay off the bill from World War II? Like, I don't know. It seemed to work out okay.

I don't. I totally agree with them. What is the alternative? Show me an alternative first, and then I'll start worrying. Yeah. So I thought it was well said. All right. Ben, I said what you did here, by the way.

We could talk about this in a sec. Okay. I'm going to out my beloved partner, Chris Venn, who is the ire of one of my pet peeves, don't tell me you're five minutes away when you're really 45 minutes away. Why do that? Why do that? Why do that? He does this repeatedly.

I, I phacimed him. He was in the shower. He said, I'll call you back in five minutes. He called him back in an hour. All right, I get that. Like, I'll call you back. I get it. But, but that's an expression.

I'll call you back in five minutes. But I was meeting him at the dock to go ride in on the jet skis. And he said, I'm at Belmore Avenue. I'll be there in a minute. No, you won't. You're 14 minutes away. Why say that? Okay.

I do that sometimes where I'm still at my desk cleaning stuff up and getting ready to leave for the day and I'll text my wife, hey, on the road, see you soon. That's fine. Well, on the road, but here's credit to me, I am, if I'm like 17 to 20 minutes away, that's what I say.

I don't say five minutes away. Why would you? Waze makes it easier to know those times now, too, right? Yeah. Just tell me exactly how far away you are. Don't, okay. Here's an email etiquette tip. Not to sound too...

I haven't had one of those in a while. The funny thing is, is that a handful of our emailers now will say, P.S., I hope I didn't break any of Michael's rules here. And guess what? People are walking an eggshells around you for emails now. None of them do. None of them do. A little pro tip here.

Although this is such a weird thing to do. This is not even like a pet... It's not even like nitpicking. It's just, you know, come on, don't do this. Somebody sent me a text message. What's your email number? What's your email address? An acquaintance, right?

This is not a friend of mine, an acquaintance, barely. Although I do like a nice guy. So no heads up. And this part I could forgive, although I don't like this either. Actually, you know what? This bothers me more than the pepiv, the nitpac. So he connected me with somebody who can offer me nothing. And I'll take the meeting because he asked me to.

But hey, give a heads up. Like, hey, you mind if I connect you with this guy? Because I would have said, like, actually, I kind of do mine. I have no use for that guy. I can't help him. I'm done with this guy. I can't help him. All right, but that wasn't even the part that I led with or that came to mind.

It's this part. So this person clearly asked for an intro to me, which I, that makes me feel good. Thank you. But he, this person who made the intro copied and pasted into a new email and then signed off in clearly separate text. So it's now obvious to me that he just copied and pasted what the guy told him to send. Don't be so lazy. Right.

Right. It was like, the texts weren't even remotely close. It might as well have been 14 point purple versus like 11 point black. See, this is why you need to just train AI in the future to like look out for these email etiquette things. That's going to be. It's the little things. That's all I'm saying.

Okay. I have probably a mild case of OCD. So sometimes I just have a pen in my hand when I'm doing stuff. And you comment on it a couple weeks ago. Like, why do you have a pen in your hand? I don't, it's just, it's something to do. I, again, mild OCD. And yesterday we were doing a podcast.

You know, I saw you smiling, and I was about to say, what are you laughing about? And when I saw this picture in the dock, I knew what you were laughing about. That was it. So I snapped a picture of you. You did the pen in the mouth the whole podcast, and I didn't know if you were trying to, like, make fun of me, or you actually just... Because sometimes it just, it's nice to have a pen in your hand. So the pen is on my desk. I almost never have a pen on my desk, because why would I have a pen on my desk?

I don't write. Do you write? Occasionally, I write a note to myself, but it's very... Yeah, it's not as much as I. I have a whole, like, cup full of pens that just never... get you. Okay. So I had to sign the documents the other day, and now I've got a pen up here, and I kind of get it. It's useful. Yeah. Okay. I get it. I got a story. Taking your dog for a walk. When you take your dog for walk and you pass someone else taking their dog for a walk,

there's this constant, because my dog's still a puppy. She's like 11 months old. You worry that your dog's going to be a little spaz or freak out or like bark and make you look like an idiot, right? So the other day we're walking by, and usually my dog, she's fine. She's a little, she's like 10 pounds, tiny. more bark than bite. Usually she's fine. Unless the other dog makes a noise, then she'll freak out. You know, and I have to pull her back.

But the other day, she kind of did one of these and jumped at the dog, you know, and the other guy. I was a little, like, one of those little bulldog kind of, I don't know, not a bulldog, but English bulldog, whatever. A French bulldog or a bulldog? There you go, French, not English.

And the owner goes, like, to the dog. A good job, Denny, for not, like, freaking out. Like, kind of, like, talk, you know, and I'm going to be like, dude, come on. But isn't it, you always, you feel good when your dog doesn't freak out but the other one does, right? Yeah.

Well, yes. That's a great feeling. I have extreme anxiety about dog walking. I am not prone to anxiety and I didn't really know what the feeling was in most of my life. But my other, my first dog, Bianca, we used to take her to the dog park

all every single weekend. And she was great. Got her, boxes have a lot of energy. And when she turned one, something in her behavior change where she would get into fights every single time we brought her to the point where I had to stop bringing her. And she's the sweetest angel, but around dogs, she would get aggressive. And so I felt like my balls in my throat. Like it was just an awful feeling walking her. And so now that I've got like my new boxer, like, I took her for a walk

the other day and two dogs came over and like I just felt it again. I was like, oh, like a very uneasy feeling, and she made it, but I am nervous. Yeah, you do like the wrap the leash around you hand a couple times, it's getting closer. But I love, my dog has a lot of energy, too, for a puppy, so I take her for like two walks a day. And it's kind of nice just to get out of the house. All right, let's do recommendations.

Okay. I've got a bunch. Somebody emailed us. I can't remember what the exact email was, but recommending the way, way back. Wait, is that the Ben Affleck one or the summer one? of Karel won. Okay. That's funny because I really like this movie. Okay. I know you do. Okay.

So, I watched the first 45 minutes of it. And it's just these are just not my type of movies. Coming of age. Yeah, coming of age. You know, not a whole lot happens.

And I turned it off and like I gave like a few different settings. I watched it for 15 minutes here, 30 minutes and then I was like, I I get it. So here's what I... But this is, I thought, like, Ben must love this movie. I do.

The kid in the movie is not very good, but it's got Steve Krell playing a jerk, and he's pretty good at playing a jerk. Sam Rockwell, who I love, and then Maya Rudolph. So I love the whole summer working at a water park thing. It's a great... I don't, I didn't not like it, but like, whatever. It's a Ben movie. So, yeah, those are the kind of movies that you watch them in the summer, and it puts

you in a good mood. Sure. All right. Tire Season 2. Like, laugh out loud, funny. I can't believe... Season one was, was frankly, junk. I didn't even crack a smile in season one.

Yeah, I don't think I did either. I'm literally L-O-Ling. Thomas Hayden Church as Shane's dad was incredible. I love Thomas Hayden Church. What a season, right? Like, just, and I love that the episodes are 23 minutes long, like, that's nothing. I think the dorky guy who plays the boss or the manager, he was so much better than in season one. Yeah.

I mean, it's a rip-off of the office in a lot of ways, but just a little more crass because it's at a tire repair shop or whatever, but it's a, those workplace comedies, they almost always work. Okay, I saw Bring Her Back in the theater. Bring Her Back is the movie that was done by the dudes who did Talk to Her. Talk to Her was a mainstream-ish horror movie. There's some laughs. It's fun. It's scary.

It's a little bit light in certain places. It's a good watch. This movie looks psychotic from the poster. Okay. You could watch Talk to Her and have a good time. Okay. Okay. Bring Her Back was soul-sucking. It was the darkest fucking movie I might have ever seen.

It's up there with Speak No Evil and, not Speak No Evil. Damn it. The Dark and the Wicked and Something Eve. I can't remember. How do they not run out of names for these movies? Just, dude, this was pure black. Did I enjoy it? Kind of? Oh, my God. This movie hurt. This is for sickos only.

So suddenly, Ben, this is not for you. Wow, credit to them. They really did it. Just this movie hurt physically. After that description, I can't believe you said, I actually kind of liked it. It physically, it physically, I'm a sicker. I'm a sick puppy. It physically hurt to watch.

All right, lastly, I saw, I took the boys to see how to train your dragon in IMAX. And we walk in and Logan goes, whoa, that's a big TV screen. And it is. And this was, I think, the best kids movie. I've ever seen. Wow. Like with your kids, you mean? With my kids.

I can't believe how good it was. I was certainly, I was more expecting to like to be on my phone. And the plot is it's kind of like free willy, but with dragons. Remember that movie? Oh, yeah. Just fantastic. It's going to do half a billion, I think. Kids are going to love this one, huh?

It was. My kids can't wait. And not just kids. You're going to have a great time. It was so, so good. so if you have a child of age go see that movie okay uh my daughter and i are still going through our sports movies we started miracle this week and the the credits for miracle at the beginning this is like a 2004 movie i never saw that one i don't know how i just missed it i heard russle

they go through because this it was the 1980 olympics that this happened right and do you believe in miracles and they show the 70s how awful they were like it's just this constant um barrage of like The 70s are so bad, and it was kind of like how this was an uplifting moment for the country after the terrible 70s. It's funny that I feel like the sentiment of the 2020s and all the crazy stuff that's happened kind of almost feels like it matches the 70s, but we've also had a good economy and a booming stock market. It's weird to think the 70s had a lot of bad stuff happen, but also a terrible economy and a terrible stock market. Like we've had some crazy things happen, but at least like that stuff is going okay. so I think there's a lot of TV shows that should be miniseries and miniseries that should be movies

like the better sister I finished it probably not for you now that I think about it that should have been a movie because there was three episodes that were totally unnecessary and then at the end they hurried the last 20 minutes like shoved all this stuff in there and didn't explain it so it was decent but it should have been a movie and the Handmaid's Tale that we finished

that should have been a miniseries because I read the book now Chris talked to me into reading the book and the book is fantastic and it actually makes the TV show better but it made me realize that the TV show was way too long. So this was the last season? Yes,

and I didn't realize that the book is written in like 1985. It's really, really good. And finally, Chris Hutchins was on Tim Ferriss this week, this past week. Chris from all the hacks, friend of the show, I'm going to be on his podcast soon. I recorded it last week. I don't know what's coming out. But he talked about, he is like the most optimized points person

there is, and there's kind of like a dark web for credit card points. He was talking about how he's buying $300,000 worth of gold bars on Costco for the points and reselling the gold bars and like making the difference and buying a million dollars worth of cards on Amazon, gift cards on Amazon for resale because he can somehow get the points. It shows you how create, this is like, this is what you're up against in the points world. Because Tim Ferriss, Tim Ferriss has 15 million points because he's never spent a dime of his points, even from all his business cards. What does he say? Why is he doing that?

he's just decided never to do it. So Chris is giving him advice on what he should do those 15 million points. Okay. Very interesting episode. Did you see the Sapphire Reserve is now going to $7.95? I'm out.

Well, they're also increasing their benefits to $500 cash back. I'm still out. That's too much. Sorry. See you later, Chase. Okay. Too much inflation.

There's other cards. It doesn't... I'll report back next week. I have some... Maybe some work to do there. Lastly, I know we're... By the way, I could feel Duncan sweating. This is probably the longest pod we've ever gone.

I saw 45 pages in the dock. So thank you, Duncan, Daniel, and the rest of the team. Out for Justice rewatchables. You have to listen to it. It was laugh out loud funny. Now, mind you, I don't think I've ever seen this movie. It's Segal's first big hit. Or I might have seen it when I was a child.

I don't remember. I saw all the Segal movies back then. Here's my problem. I don't really like the, I like this movie ironically. that doesn't do it for me. How could you like Seagal movies unironically? That's the thing. You don't.

So I don't get the point of liking something ironically. I don't get that. I'm telling you, just listen to the podcast. It is so funny. All right. It is so funny. Some of the Segal stories are hilarious. Okay.

All right. I was a big fan of Under Siege. Of course. Under Siege too. Under Siege might have been the first time I saw Nick. woman on the screen. All right. Who rest to you? All right.

It might have been Terminator 1 with Linda Hamilton. I remember my dad putting his hands over my face and pass forwarding. Okay. You can come with your top 10 list of naked women you've seen at a young age. Desperado number one. That's obvious. Shoot us an email, Animal Spirits, at compoundnoots.com. We'll see you next time.

You know what I'm going to be.