Animal Spirits Podcast - What Would You Do With $3 Million? (EP. 451)

Episode Date: February 11, 2026

On episode 451 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss how the bull market is changing shape, software stocks getting slaughtered, it's finally a stock picker's market, Anthropic changed the AI narrative, ex-Mag 7 is finally working, the case for emerging markets, the crypto bloodbath, the best airline and more. This episode is sponsored by Pacer ETFs and YCharts Learn more about PATN at https://www.paceretfs.com/. This episode is sponsored by YCharts.To download YCharts’ click here: https://go.ycharts.com/-charlie-bilello-2026-signals?utm_source=Animal_Spirits&utm_medium=Original_Research&utm_campaign=Charlie_Bilello_2026_Signals&utm_content=Podcast And start your free YCharts trial through Animal Spirits (new customers only) at: https://go.ycharts.com/animal-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.   Pacer Disclosure: Before investing you should carefully consider the Fund’s investment objectives, risks, charges, and expenses. This and other information is in the prospectus. A copy may be obtained by visiting www.paceretfs.com or calling 1-877-337-0500. Please read the prospectus carefully before investing. All investing is subject to risk, including the possible loss of principal. Pacer ETFs are distributed by Pacer Financial. 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

Today's show is sponsored by Pacer ETFs. Over the past year, international stocks outpaced U.S. companies by a significant margin. Now is the time to diversify with international innovators that share the growth in sector dynamics of the NASDAQ 100. The PASDAQ International Patent Leaders, ETF, PATN, targets the 100 non-U.S. companies with the most valuable patent portfolios. That's a tough word.

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This and other information is in the prospectus. A copy may be obtained, excuse me, by visiting www.com. www.paceretoffs.com. Please read the prospectus carefully before investing. All investing is subject to risk, including the possible loss of principle. Pacer ETFs are distributed by Pacer Financial. Today's animal spirits is brought to you by Y charts. Markets may feel messy right now. Leadership is shifting near as a breaking and a lot of what worked over the last few years isn't as clear anymore. Why charts put together a new visual deck that helps the advisor step back and see what the data is

actually saying across history, valuations, and current market trends. It covers why markets don't move in straight lines, how leadership evolves over to time, where parts of the market looks stretched or underpriced, and highlights the charts advisors turn to when diversification comes back into the conversation. No predictions, no hot takes, just clean client-ready visuals. You can use right away when clients start asking what's changed and why. Download the deck for free with the link in the show notes and get 20% off your initial Y charts professional subscription when you start your free Y charts trial through Animal Spirits, new customers only. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben

Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt'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.

It is Tuesday, February 10th. We're recording at 9 in the... morning. All right, Future Proof is coming up. I am excited to get the hell out of Dodge. It is cold. It's cold here. It's called where you are, Ben.

You excited for some sun? I can't wait. The timing of Future Proof conferences are great because September is like the end of the summer. We extend the summer a week or so. Miami in March is great timing because I'm so sick of the weather. I said at the opening remarks in Huntington Beach that the September event is the start of my fiscal year. That's like, that's how I think about.

I'm trying to come up with something from Miami. Don't have anything quite yet. But here's what I want to say. The CMO of Future Proof. You have two fiscal years. Listen, two fiscal years in one year. Double that. You're living like three days in one.

All right. I like it. I like it, bad. All right. Nile, the CMO of Futureproof tweeted, or LinkedIn or whatever, we've seen more registrations in the past two weeks than any two-week stretch

for any Futureproof event ever. Okay? 47% of registrariness. advisors have never attended a future proof event before, not a festival, no retreat. It's amazing. So if you want to sign up, hang out with us, fun in the sun. The dates are March 8th to the 11th. Come hang out. It's going to be a great time. And you have to sign up if you want to be part of the breakthrough meetings, which a lot of people say that's their best thing they get out of it. That's the sauce. It's the one-on-one breakthrough. So you have to sign up for that.

The deadline is Friday, November 13th. Friday the 13th this week? November 13th. Sorry. So Ben is under the weather. So him completely going to the other side of the calendar. You're forgiven, Ben. My brain is broken. Sign up by Friday if you want to get the breakthroughs. I am talking with Matt Middleton, founder and CEO of Future Proof on Wednesday on the talking wealth feed where we go all over the RAA spectrum, the wealth management spectrum.

So we're going to peel back the curtain, so to speak. So that's Wednesday at 11. All right, we have another busy show as a result of what we opened the show with last week. Man, things are changing. News is news and we've got 46 pages to get to. So let's get right to it. All right, tale of the tape of the stock market from last week. This comes from duality research.

The S&P, basically unchanged. Boring week, felt 10 basis points. You didn't pay attention to the headlines or the underlying what's going on with the stocks or the precious metals or the crypto. You looked at that and you go, ah, nothing happened. happened this week. Yeah. I'm sure there was memes made about index investors yawning. This is the crazy thing, though. The average stock last week was up almost 2%. 337 stocks outperform the index last week. Wild.

Because all we hear about is, oh, this is crashing. That's crashing. This is going nuts. And this really is, seems to be the year where it's like, it's turning. The other stuff is working. That's turning. Everything. I had Matt going to the lab last week. I said, dude, this feels weird. Like, there's a lot of bright red on the screen, and yet the index is near an all-time high. So let's like, let's like look at some of the data. How often does this happen?

And what we came away with was on Thursday at the close, there were 107 stocks over the previous two-day period that fell 4% on an individual day. Okay? So not, not they fell 4% over a two-day period. there was 107 stocks that fell 4% over a single session. That's a lot. Yeah. When that has happened historically, the index was in a 28% drawdown.

Jeez. Right now, or when that happened, the index was 1.5% off its highs. We're basically within spitting distance of an all-time high again. Very bizarre scenario. Equal weight hit all-time highs last week. Small caps are at all-time highs. S&P is basically there. This is another one from duality.

Every year, I feel like someone says it's going to be. be a stock pickers market this year. This actually is. Sixty-six percent of S&P 500 companies are outperforming this year. Whatever, we're one month in. It's great. But still, this is a total sea change from what it's been like. The MAG-7 has gone nowhere for like six months, basically since September. Wait, hold on. People can't see this chart. So within the S&P 500, duality research broken down by sector and asked how many stocks are outperforming within each sector, every material stock is outperforming the S&P 500. That's pretty nice. nuts.

96% of energy stocks. 92% of staples. Consumer staples are going nuts too, yeah. 86% of industrials and 77% of utilities. So finally, there was a bit of a reprieve from the, my God, with the Mac 7, just let me in. Give me a chance. So explain to me the staples thing, because this is, to me, the one that sticks out the most for doesn't make sense. Why are consumer staple stocks going so nuts?

That's a great question. I mean, I would make up two reasons. Number one, it's sentiment. Like the rush out of previous leaders and the previous laggards, some of the high flyers into some safety, it's the, I guess staples are the anti-AI trade would be number one. And then number two, there has been a fundamental re-rating in some of these names that are maybe the beneficiary. I don't want to say that Coca-Cola is benefiting from AI. That sounds kind of absurd. But I don't know.

Maybe those are, maybe I'm just making that up. I just put this in here. Ed Ellson treated this yesterday. Walmart's PE is 46 times. Costco 54 times. This is, this is kind of crazy that we're seeing these valuations for these stocks in this market. So those valuations on Coxscor and particularly, that's not, that's not new news.

But what is new news. Walmart, right? What is new news is the forward PE of tech and staples are basically at parity, which is wild. Whoa, that is crazy. Yeah. Okay, so yeah, the Mag 7, I pulled this out. This is the Mag. Roundel has a Mag 7 ETF. And it's gone nowhere.

I mean, whatever, it's six months or something. But still, in the midst of the supposed AI bubble, it's just, it's not going anywhere. Here's a Mike Zucardi one that kind of lines up the duality. So 60% of the stocks are outpacing index, but it's been 35% in the previous three years. So this really is a totally different market environment we're in right now. Like a lot of other stocks are doing well.

What does J.C. like to say? It's not a stock market. It's a market of stocks. That's right. Okay. So I pulled out. I had chart can Matt make this for me. I just picked a bunch of household names. How are they doing? And this is through Friday. Netflix and Robin Hood and Disney and UPS and Target and Coinbase and Nike. And all these stocks are down anywhere from 40 to 70%. S.A. Lauder is on 73%. Can I make a chart gestion? Yes. This is beautiful, but would really bring it to life. What would really tie the chart together is if instead of the names you had the logos. Ah, I like that.

Right? That just like, it just pops. Giving Matt more. Yeah. So the S&P, again, is almost at all-time highs. It was 66 basis points off on Friday. And all these other stocks are down 40, 50, 60, sometimes 70% in some cases. I think we buried the lead.

We'll get to this in a minute. But it's the software unwind. software slash momentum unwind. We'll get to that in a second. But it's also a lot of brand names. And I think sometimes it feels like you feel like you're kicking people when they're down if they are in some of these stocks. But I think you have to remind people of the concentration risk. Because when these things are going crazy and going up, we talk about that too. So I think it's just worth reminding people how concentration works both ways. Because I think there's a lot more concentrated investors now than ever. Would you say

that's accurate? Well, when you say concentrated, are you talking about concentration within the index or meaning like people that own outsized positions in the names. People who own a handful of stocks. Yeah. Two, three, five stocks. And that's it because they've worked so well. And why would I own anything else with these? Yeah, but yes.

And it's probably in a brokerage account, maybe not the whole portfolio. The only stock that people own in size that is crashing is Microsoft, there are not a lot of people that are loaded up on workday or service now, except if you're an employee there. And even Microsoft, just anecdotally, I would say, is from what we see, the least owned Mag 7 name. Okay, how about this? So I've talked to Joey Fishman is our sort of in-house expert at Rittholz on employee stock shopping plans and RSUs. And he's saying, like, the conversations are so much different these days because in the past it was, why would I ever sell out of my company stock?

So people who are with these companies and have these stocks, they're the ones who are having challenging conversations and decisions of, holy crap, my stock options. Now, right, correct. All right. So for the last 10 years, the S&P has been the winner, right, above everything else. And the Dow has just been like, the Dow is taking a backseat. Nobody cares about the Dow Jones, the sleepy industrials. I thought this is a great chart from S&P Dow Jones showing the constituents average tenure, meaning how long is a company in the index before it's booted?

And this peaked in the mid-80s at 45 years, and it's come down steadily since then. But still, the average tenure is 25 years, okay? So once you're in, you're basically in unless you're Exxon and you get kicked out when oil goes negative. Which, by the way, Josh traded with us. Ooh, that was a rough swap. They kicked out, they kicked out Exxon for Salesforce. Now was, I think. Three or four years ago, probably.

Holy mackerel. I think that was 2020. Yeah. All right, whatever. point is this. Last week on Friday, DIA, which is an ETF that we almost never talk about, led all flows. This is from Boutunas. Wow. This index is equivalent of a rotary phone, price weighted, invented when Grover Cleveland was POTUS, but it could be perfectly situated for 2026 equity rotations. So to that point, last week,

This boggles my mind. I had no idea this was the case. People are still allocating to the Dow. Oh, yeah. I'm going to guess. I'm going to guess there is $40 billion in that thing. So this, it has $44 billion. Yeah, it's $44 billion.

I was just looking. Oh, credit to me. That was pretty good. Okay. So Alex Summona. As a percentage of the total AEOM, that's a massive number going into this fund. Because all these other funds are way bigger probably.

VOO and such. Wow. Yeah. Okay, Alex Seminova tweeted, today, value over growth posted the third largest one-day outperformance ever. And then bespoke zoomed out a little bit. Value versus growth was in the 99th percentile of outperformance over the last six days. We've been asking, like, when is this going to, when is this whole thing going to change what we've been talking about for feels like forever now? We're in the midst of a seat change. It feels like. Credit to chart kid, I don't know if I asked to make this or whatever.

Maybe it was my idea, maybe it was his idea. Who knows? We share ideas. Four weeks ago on what are your thoughts? I had a chart of the Russell 2000 divided by Spy on the bottom pane breaking out. And we had the Mag 7 divided by the 493 breaking down. And that has since severely accelerated, which is exciting, right? the last couple years have been kind of boring.

It's like been the same talking point over and over again. Last year was the start of it with international stocks, but now it's small caps and midcaps and microcaps and value stocks and consumers' staples and high quality. All this stuff is finally working. This is all Matt. He made a chart on Friday showing the spread in the equal weight versus the cap weight S&P through February whatever is like the largest spread,

maybe in history. I forget what the exact stat was, but it's extreme. All right. On Friday, we got a big bounce back in the most shorted stocks. They jumped 8.8% on Friday.

Kevin Gordon tweeted best day since April 2025. Because I'm sure they were getting killed before then in a few days leading up to that. So Josh and I have spoken a lot lately, a lot, a lot, a lot about not catching falling knives. Although, let me be very clear with my words. I have tried a million times and beat my head against the wall about trying to buy stocks that are in, not falling knives per se, but downtrends, like severe downtrends and thinking that,

you know, you let it stabilize, not just guessing, but like let it's, even when you let it stabilize, it's still difficult. I'm a knife catcher. You always want to wait for it to turn back up. Well, so you could have an asset class or a stock that's trending lower and then it just sort of bottoms, right? And it goes sideways for four, for three months. And to me, that is an indication of sellers drying up. I used Intel as an example last year. I didn't buy it. But I said to Josh and what are your thoughts? Like, there's no more sellers, right? Like, the stock is down

70% and it's gone sideways for the last four months. It's stabilized. I don't know what it is about psychologically for me, dollar cost averaging into a losing name feels better than dollar cost averaging into a winning name. It's it's backwards of what you should do. It's backwards what you should do. So anyway, I don't do that. I do not dollar cost average into a fall in enough. I just, I don't, into a stock that's going down, excuse me. All right. But when there is a stock like Microsoft or a basket of stocks like software stocks that are going down, right? And then there is a puke, a panic, a liquidation where you see it in the volume. That's the type of thing that I buy. And it's not to say that like software stocks bottom less Thursday.

So I bought IGV less Thursday. And. Initially, I bought it for a trade. So my intention was, think about like a buoy, right? Something that like floats where it's just been held underwater for so long and just pushed all the way down. It's going to pop back up. All that you need, you don't even need buyers to step in. You just need sellers to chill out.

And when there was a panic like there was on Thursday in a basket of stocks like that, that's the type of thing that I buy. No question is asked. You're time to pretty good. So the IDV. Hold on. I'm not thinking of Victory Lab. It's not always right.

But when I see like a panic like that, I have to buy. It was down 33% over the course of, I don't know, four months. So we got to talk about why this is happening. So Wall Street Journal had an article basically saying like Anthropic tanked the software market. Like Anthropic came out with Claude, Claude Code, Claude agents, all this stuff. And people go, whoa. Is this totally changing what is going to happen in the software stock market? And my take on this is this is, this is,

people finally waking up to the potential of, what if the AI bubble doesn't pop? Like, what if AI just works right away? And we get more productivity and, yeah, sure, there's losers, right? Remember at first it was Microsoft and Open Eye are the winners. Now it feels like Google and Anthropica are the winners. I don't know if that'll change or not. But there's going to be losers, of course.

But what if this AI stuff is working in, it actually disrupts this technology field? And so Salesforce sold off and all these other software companies. And IGV, yeah, was down 33%. Microsoft was down 25% or so. And obviously it feels like there is a huge overreaction here. But I would not want to try to jump in and make like a pounding the table on this. Because what if, I said this to you and Josh this morning,

what if it's just these software, yes, people aren't going to just code in their own stuff on AI and totally get rid of their CRM system. Like that, to me, seems like a stretch. but could these stocks be re-rated forever because of this? I think that's a possibility. Because their moat has been damaged in some ways. That's what would worry me about diving into these names for being a long-term investor. Okay.

So just to return to the trading example, for the few of you who were interested in this. So Adobe, the stock was already down 50%, 60, whatever it was. Adobe, Adobe peaked at 630, okay, or 640 in February, 2004. And the stock got as low as 315. All right. So the stock was cut in half. So Josh and I were talking about the stock. It had gone sideways.

Buyers were stepping in at 3.30. We tried to take a stab at it. The stock balance and then rolled over violently. And we both sold. I took a 3% loss. No big deal. The stock sold off violently from 330 down to 260,000. So when you're fighting the tide, the market is usually right.

The market is not 100% right 100% of the time. But when a stock is down 50% and you're just blindly trying to buy it, you're probably going to be wrong. And this stock hasn't bounced at all. A lot of stuff bounced on Friday. Adobe has not bounce. So just so that's why like my working assumption when I buy names like this is I'm wrong and I keep a tight stop, right?

Maybe you get a 20, maybe you're right. But like, anyway, Last week, we were so busy, not to belabor the point, with news, that we forgot to mention a huge piece of news. So, yes, last week was the story morphed from the anthropic law program to, oh, my God, like, this is, vibe coding is serious. All of these enterprise SaaS names are, like, in deep trouble. Maybe not today, but in three years, their margins are dead, like, the growth is

gone and we're just going to kill the stocks and we're overreacting. Fine. Okay. But prior to that, the week before when Microsoft reported, which I don't even, did we even talk about Microsoft last episode? No. So much stuff is crashing. We missed it. Okay. So from Bloomberg, Microsoft shares got caught up in a cell off Thursday that wiped out $357 billion in value. the second largest for a single session stock market history. The software giant stock closed down 10%. Its biggest plunge since March 2020. The only bigger market cap loss was Nvidia on the deep seek selloff.

So this has been going on for months and weeks. And yeah, last week it was like, okay, what's happening with software? the future of software. And investors don't know. The people at these companies don't know, the venture people don't know, the futurists don't know, like nobody knows. No. But it's, but I think the, the overreaction to me makes sense. Totally. I, I, I, I, but here's the thing that's going to happen, though. Whether this, like, whether these companies are impacted forever, like, I imagine these companies, most of them will probably be okay. Well, it depends which companies you're talking about. Well, true. I'm, I'm,

bumping them in. But even if they are, like, there's going to be, there's going to be huge layoffs in these companies. They can't continue to give stock options their employees. Like, there's going to, if you're working one of these companies, you would have to be very nervous right now. There's going to be huge layoff. And this is one of those things where there are going to be layoffs because of AI that people are going to think this is a recessionary indicator and it's not. It's going to be a, this AI is going to break economic indicators of the past. There's going to be software layoffs because of this productivity tool. And people are going to go, right?

Square now called Block, Jack Dorsey's company, is laying off 10% of their workforce. All right. So Pitchbook had a really good take, I think, on these names. Replacing a core SaaS platform effectively is open heart surgery for an enterprise, entailing immense operational friction. It's far easier to add an AI co-pilot. to existing operations,

that to fully migrate to an AI startup. I think that's totally true. And I also think that the overreaction makes sense too. So here's Ben Thompson. Ben, I'll read this since you're on the line. He's been all over this. His podcast on Friday was all about software and was excellent. Totally worth a listen if you're a subscriber.

So Ben Thompson writes a substack called Strathecari. I think you and I have been known to say tetrory. I'm not quite sure why. That's like when Bobabooy said McKin, which you're not a Howard Stern fan, but for those of you who are listening, you'll understand. All right, here's what Ben Thompson said. The beauty of AI writing code

is that it is a nearly perfect match of probabilistic inputs and deterministic outputs. The code needs to actually run and that running code can be tested and debugged. Given this match, I do think it is only a matter of time before the vast majority of software is written by AI, even if the role of the software architect remains important for a bit longer. That then raises the most obvious bear case for any software

company. Why pay for software when you could just ask AI to write your own application, perfectly suited to your needs? Is software going to be a total commodity and a non-viable business model in the future? That's what investors are asking today. All right, back to Ben. I'm skeptical for a number of reasons. First, companies, particularly American, ones are very good at focusing on their core competency. And for most companies in the world, that isn't software. There is a reason most companies pay other companies for software, and the most fundamental reason to do so won't change with AI. Second, writing the original app is just the beginning. There's maintenance, there are security patches, their new features. These are

changing standards. Writing an app is a commitment to a never-ending journey, a journey to return to point one that has nothing to do with the company's core competency. And third, Selling software isn't just about selling code. There is support. There are integrations with other software. There's compliance. The list of what is actually valuable. It goes far beyond code.

This is why companies don't want purely open source software. They don't want code. They want a product with everything that entails. Still, that doesn't mean the code isn't being written by AI. It's the software companies themselves that will be the biggest beneficiaries of end users of AI writing for code. In other words, on this narrow question

of AI writing code, I would contend that software companies are not losers, but rather winners, they'll be able to write more code, more efficiently, and quickly.

Well, I mean, do you think we would give up on our CRM system and let like some vibe coding 25 year old write it for us? No, we're a regulated company. Yeah, the compliance. But I think the point is that the moat has been damaged here

And like, there's going to be software companies that spring up that don't need as many employees that can have AI write the code and have someone oversee it. And that's the big thing is the moat has taken a massive hit. Exactly. Exactly. So that's so. And then Ben concludes with the problem, not this Ben, Ben Thompson. The problem now, however, is that while businesses may not give up on software, they don't necessarily want to buy more. If anything, they need to cut their spending so they have.

more money for their own tokens, that means the growth story for all of these companies in serious question, the industry-wide re-rating seems completely justified to me. And I could not agree more. So, for example, a company like Salesforce that we work with and we have worked with for a decade, guess what they do every year? They raise their fees. And they can't imagine that we're a one-off. We're not a very unique business.

That's over. Right. How about we just say, you know what? No. Right. And we negotiate, but like we only have so much leverage. And so, yeah, the re-rating both makes sense in the long term and simultaneously can be overdone in the short term. Yes.

I think that's where I'm at. And whatever, one or two of these stocks is going to look like an amazing long-term deal after all this. And a bunch of them are going to look like dogs. That'd be my takeaway. All right. So I have been a relative defender, I would say, to some of the private credit stuff. I think I've been pretty fair. You've been trying to get people off of like the just going crazy because they hate it and it's going to be a crash.

And yes, I agree that. Like so a lot of the cockroach stuff, my take was like, listen, sometimes loans go bad. Sometimes there's fraud. And it's not just in private markets. Okay. This is tricky for private credit because a lot of the businesses that they lend money to are SaaS businesses. Why? These are recurring revenue. This is predictable. It's easy to model. Uh-oh. Okay. Wall Street Journal, private investment firms have piled into the software industry in recent years. At the end of last year, almost 9% of private equity-backed companies were in the software space. The exposure is even more significant on the loan side. Within the private credit universe, the firm classifies, this is KBRA, about 17% of borrowers as software companies, representing about 22% of the $1 trillion plus debt exposure in that universe overall. Yikes.

So I spoke to one company yesterday in this universe and I said, what's the duration of these loans? And they said, for us, it's four to five years. And I went, ee. So, all right, so all the publicly traded BDCs just murdered last week. Absolutely destroyed. A.RCC, which is the Ares business development corp. And this is basically liquid private credit. And it's the biggest one.

I think it's $15 billion, something like that. So right on their website, software and services. Now, I don't know how much of this is horizontal, SaaS companies, which is really in the eye of the storm. how much is vertical, which I suspect will fare a little bit better. But it's 24% of the portfolio. Yikes. So investors are obviously selling down the, not just the BDCs, but like the private equity managers.

So Loll is down 50%. That's not a surprise of Blackstone, KKR, Apollo are all down, I don't know, 30%. These are getting hammered too. So to me, like Blackstone is a screaming by. I don't own it. But I think like that is way overdone. Okay, just because they're bigger and more diverse than... I'd say it, not investment advice.

Okay. So Blacks don't getting caught up in the software stuff. I mean, like, I get it. I get why investors are doing that. But come on, this is the biggest winner and my estimation is going to be a secular trend. Wait, I know it's not fun to see things crash because people own these things,

especially people who work at these companies. Like, that's got to be a lot of turmoil. I think the most interesting thing about the AI from market's perspective is this reshuffling of deck chairs. in every month, every couple months, it's like, oh my gosh, over here now. Wait, over here. It's very exciting.

It's one of the more fun parts about this market, I would say, watching this stuff happening in real time. All right. So we mentioned like there's horizontal software companies where there's a piece of software that serves a lot of different industries. There's no real specialization. Software, I mean, Salesforce, for example. Right?

Like, they work with financial services and I'm sure they work with every other industry. in the world, as opposed to a company that only works in one vertical. So I pulled this, where did I pull this from? I think this is a pitchbook again. Pitchbock is all over this trend, by the way. So they were talking about investors to Southing Software Private Credit Loans. All right, a spokesman for a New York City parking garage company, GMC, explained that the company had recently ended a multi-year contract with a parking garage

management software provider after it stopped providing certain features. Instead, GMC hired a programmer to develop a bespoke system that will organize the company's New York City Valley Park and Garages more efficiently. Quote, now we won't be subject to another company's price hikes. They have all the leverage that they know the customers really rely on it. Pitchbitt goes on to say, but it certainly won't work for all. A media company executive said there was, quote, no chance of canceling the content management software system it used, adding that alarms about the depth of software were overblown. That's a good both sides thing, right?

Yeah. Okay. Last week, I asked, like, what stops this train? What stops the margins from rising so much? And it seems like the hyperscalers are going to try to test this theory. So another Mike Succardi tweet, via Bank of America, hypers capax as a percentage of operating cash flow with 65% percent. 2025 expected to be as high as 90% in 2026. It was 40% from 2017 to 2023. So they are really

going for it. And maybe the market pushes back, but you don't think you don't believe this. There's no way. There is no way that investors will allow 90% of the operating cash flow to be spent on CAPEX. That would be my thinking too. The stocks will crash. But they're saying this is in 2026. This is right now. This is going to happen this year. So look at the numbers that they've said in their, like, listen, their expectations, but this is from Matt Vincent on Twitter.

He said 314 billion of incremental CAPEX spend in 2026, on top of what they've already done from the Big Five, and that's Amazon, Google, Microsoft, Met, and Oracle. That's one point, one percentage point of GDP growth and more than 2% of total US GDP from five companies in spending. These numbers are astronomically high. So to your point, when do investors say enough? No, enough. I mean, I guess they're kind of already saying that.

Microsoft's down 25%. So this is like a quick, like snap your fingers, 10% correction in the market when one of these companies goes, all right, you got us. We're pulling back. Right? Isn't that it? Isn't that the fastest correction ever? You know, you know, the Cranston meme? Yeah.

But I don't know how the market will respond to a pullback of CAPEX. Or do you think they looked at positively? Like, okay, great. I really don't know. I don't know either. But these numbers just, this is why the AI bubbles up is so hard to wrap your head around. Like, because these numbers just seem so ridiculous. But then you see this stuff that's happening and you go, well, maybe it's not ridiculous.

Because this productivity is going to, it's going to happen. I don't know. Oh, this is a great tweet from Bucco Capital. Jassie was too slow to invest in CAPEX and got a wedgey from investors who said, more CapEx, you loser. So he said, fine, want to see Capax? I'll fucking show you CapEx, but now everyone hates it. So, all right, CapEx for Amazon.

2025 was $130 billion. They're guiding to $200 billion. By far the highest of the Mac 7. $200 billion. What? How? How do you spend $200 billion dollars? It is kind of crazy that they're even higher than meta and Microsoft and Google.

Okay. Now, think about it from this point of view. The output of all of the spend is going to be so insane. Remember the video we showed last week of Henry the bot? Like, think about what's coming. I think we're like so deep in the stock price and the numbers that we're like, think about what's coming. And this is why, all right, zooming out, like, I think it's hard to get too bearish on the

stock market overall. Well, the question is, but what is all these cool tools? How does it actually help the bottom line? I get it meta is going to give more ads. But that's the thing. Like, how does it actually make more money for these companies? That's the hard part. Well, I'm sure they know what they're doing.

Do they? Famous last words. Yeah, dude, I'm sure there is a plan. They're not idiots. They're not spending the most money in the history of the world because they just like lighting money on fire. These are not dumb people. And if you're making a face like they are, come on.

Zuckerberg did the Metaverse. They literally changed the name of the company. These people are not always right. Okay, that was pretty dumb. You do have me there. But they're all... You're right. We're going to get some cool stuff out of this.

I just want Scarlett Johansson on my ear. That's all I want. Make it happen. Hey, take all my emails and do... My bigger picture, amongst the software crash, amongst the rewriting of the momentum trade and whatever, whatever, we've got a new Fed. chair coming in who's going to cut. The consumer is fine. There is giga gaga

cap-ex money being spent. Like, the market's going to be just fine. And I hate to say that out loud because I'm making this up just like everybody else's. But I guess I would just say, like, if you're like nervous right now and like, uh-oh, like this, the market's about to fall out of bed, I don't say it. It could be wrong, of course. The market is broadening out. Well, there's that. I mean, thank you. That's the key point. Right. Yeah. Like that's, if this other You don't see that at market tops. If you saw all this stuff not working still, then I think you'd be rightful to worry about stuff.

If the rest of the market was rolling over, I've said this a million times. If the rest of the market was rolling over before the AI stocks did, I would not be saying this. I would be getting nervous. And this is the money thing, too. So Gungin from the Wall Street Journal. Wild inflows the sectors outside of tech this year. Sector funds excluding tech have seen a record $62 billion in inflows in the first five weeks

of the year. To put that into context, that's more than they saw. on all of 2025. Are you kidding me? So the money is also, it's not just the performance of these things. Like, hey, they're bouncing. Investors are taking notice and they're diversifying. Yeah, so when you asked me earlier in the show, like, why are Staples mooning?

It's, it's flows. Yes, money's going into them. I thought this is kind of interesting. There's an ETF XMAG, which, by the way, credits them for being early. There will be more popping up. This is the only $493 ETF that I could find. And assets are, I mean, it's not a lot. It's $125 million, but it was like nothing until the flows have only really just started to come in.

And they've taken off like a rocket ship in the last three months. Holy cow. All right. Market check, Ben. Market check, Ben. It's 945 on the East Coast. Oh, S&P's flat. Equally, it's up 23 basis points.

The beat goes on, Ben. All right. Small caps up a little bit. All right. So last week I talked about, like, what is the case for EM? like why would EM and international stocks keep outperforming? And this is from the economist, why the dollar may have further to fall.

And it talks a lot about like the safe haven status. And I think the dollar is down 12% from the highs or something. It says 17 years ago, debt security is held by foreign governments and central banks accounted for 38% of all portfolios investment into America. Today, it's 13%. The lowest level in modern history. So like the overseas, they're not only,

money as many treasury bonds, and that impacts the dollar. And it says, like, there's no rival asset that looks ready to supplant the dollar's reserve currency. And I totally agree with that. But demand for greenbacks can add in meaningful, meaning to flow, evident flow without any serious challenger emerging. So it says the ongoing erosion of America's safe having status, together with uncertainty or policy and independence of the central bank, meaning the dollar's appeal increasingly rests in the ability of American assets to help perform the rest of the world. That is a precarious base on which to build investor loyalty. So it's saying, like, the dollar could, just cyclically, It doesn't mean the dollar has to crash and go away forever and lose its global reserve currency status.

But we could be in a cycle of that. And that's the, that's the bull case for emerging markets last week that we didn't talk about. I'm looking at a ratio chart of EFA divided by VTI. So international developed divided by U.S. Who, man, this looks like a bottom. It looks like a real bottom. And there's been a lot of false starts over the years. This could be happening.

It could be happening. And or two years, this is a blip. But yeah, who knows? My mind is, I mean, my mind is blown. We asked for years, what would be the catalyst for this? What could possibly make this happen? And it wasn't like a rhetorical. Like, we were serious.

It was like, I can't, what could have, what, how? And so we have a talk your book coming up in the coming weeks with Invesco about real assets. And the point made on that show was, listen, part of the AI buildout means we need more stuff. We need more energy. we need more physical labor, we need more data set, like we're building all this stuff. That's like bullish for all these other countries still with the materials and the industrials.

And it's interesting. All right. Let's talk about AI. All right, Ben, look at this chart that I just dropped in that I was just talking over at the end of before tariffs. Okay. Okay. So like you said, it flatlined for a number of months there

and then now it's taken off. Is that what you're looking at? It puked, recovered when side was. and is now accelerating very hard. This looks real. It does. Okay. Kai Wu had a new piece out.

You read it, I assume? I read it. I did. Kaiwu is one of the most interesting white paper writers. Now, he's more than that. He manages an ETF company. He's a very smart guy. But he does white papers.

He's usually at our future proof conferences too. He might be there. He does like two or three a year. And every time they're just, he looks at things differently. because he's like a machine learning smart dork who puts all this stuff together. So he has a chart showing companies mentioning AI-driven ROI, which has gone from nowhere up to 7%. And he's pulling this from earnings transcripts. And then he's also got a chart showing companies mentioning AI-driven economic gains,

which has gone to 32%. So, but think about it like this. Only 7% of companies are talking about an ROI that they're getting from all of these the KAPX spending on the hyper scalers? So it's coming. Do you think that's going to 30%? That's probably. He also looks at like a lot of the winners here.

Like what are the companies that are benefiting from this? And I pull out one he didn't mention. Look at the chart for C.H. Rabbit. And I mentioned this one on the show a couple months ago. I put it in here right below his charts here. What does this company do? This is the logistics company. I think I mentioned on the show unless I mentioned to you just a phone call.

I had a friend who worked here. And so I know about it. And it's a trucking logistics company that is using AI to make it faster to match drivers of trucks. Look at this chart. Parabow. It looks like the silver chart. They're using AI to make their company more efficient

to match drivers and trucks and shipments around the country. This is so good. Right? What a great example. So in the previous lines that I mentioned, in the previous chart, he has another one that shows, all right, so those companies that are talking about AI-driven RIs

have beaten the market by five percentage points a year. the companies that I've mentioned in AI-driven economic gains are beating the market by 4.8% a year. That's a great. That's a great chart because a lot of times you say, okay, sure, they'll say anything in their earnings called, but does it actually translate? So this is showing, like, what people are saying

actually is translating into economic gains. It's not just fluff from company management. It's hitting the bottom lines. Right. And I don't have this chart in here, but there's a chart of S&P 600 earnings estimates. and they're skyrocketing. There is a reason why small caps are catching a bit.

I don't know that it's all productivity, but I'm sure it's a part of it. All right, here's one part of artificial intelligence that I don't love. Google now has suggested responses built in to Gmail. I don't like them either. And they're good enough that,

and I'm sure that they're going to get better. I just don't like the idea of this. So, for example, This is a suggestive response in our inbox. Hey, Joe, Nick's win was huge. For three plus years, I probably, oh, it was somebody asking about, like, what do I do with my house money? Right?

I'm buying a house in three years. I don't know if I just want it to sit in cash, but what do I do? Hey, Joe, Nick's one was huge. For three plus years, I probably leaned short duration bond funds or just keep it in a high-yield savings account. Volatility is the enemy for a known future expense, Michael. Now, I would hope that somebody's going to know that that's a fake email. By the way, I did not send that email.

I just don't like this idea. What, you wouldn't send the cookie, the Chinese fortune cookie at the end there? Yeah, volatility. Yeah. If you ever see me doing that, that's not me. That's, I accidentally hit send by accident on the, on the suggestive reply. So you talked to me into Claude a little bit last week, and I took, so Whitecharts has the ability to do these comp tables where you can take an index or a group of stocks or a fund and break them out into all these different categories and variable. So I just took year-to-date gains in every S&P 500 company.

I downloaded this spreadsheet. So it takes, what is it done so far this year? And I put it into Claude and I said, tell me what's going on in the market. And it spit this out in, I don't know, 60 seconds. It says, industrials are on fire, chemicals are having a moment, consumer staples rotation. Hershey is up 27%. Food names, even airlines showing surprising strength. Defensive characteristics plus pricing power equals working.

And then it talks about tech carnage deep end, and we'll show this in the YouTube, if anyone wants to see it. FinTech collapse. Here's the bottom line. I just thought it was really good. The market is experiencing an aggressive rotation from high multiple growth. into tangible capital-intensive businesses. And it says that's equipment, logistics, chemicals, semiconductors, consumer staples.

This looks like a classic late cycle value rotation. Investors fleeing expensive, momentum-driven names for businesses with physical assets, pricing power, and operating leverage. Like, this is really good. That part that you just mentioned, this looks like a late cycle thing. If I was to like have one thing that's like, how did I miss it? Right? Earlier in the show, I said, like, I like to set up.

If there was one thing that I would point to. that said, oh, you dumb, bald idiot. It would be this dynamic. Yeah. Yep. It's kind of funny that Claude pulled that out. But I just think, I don't know, late cycle, it hasn't even started. That's the hard part.

But the dot-com stuff, I know this is different than that. We had to go through the dot-com blow up to get everything that the Internet promised. Maybe it's exactly the same. I don't know. So I thought this was pretty good. I think one of the most ironic things that we're talking about is a, fact that the AI boom so far is probably going to disrupt tech more than anything at the beginning, right?

From the start, tech is the biggest industry. They're disrupting themselves. They, like, accidentally, like, turned the gun on their face. So Adam Azamek has a substack, and he wrote about, he wrote a really long piece about, like, how the human touch stays through all these technological developments. And I thought this was, he said, there's still 67,000 travel agents, despite the, which is crazy to me, despite the fact that there's widespread leisure hospitality and stuff online.

self-checkout has failed to replace 3.2 million cashiers and 4.2 million retail sales workers. I remember Scott Galloway when he came to speak at one of our very first conferences, said, what's going to happen when you don't need cashiers anymore? They're 3 million people displaced. They're still working. And he's saying, like, part of it is just people want a human touch when they have an interaction for a transaction. Not always.

But that's the thing that's going to be hard to map out with all this, is how much are people going to still require the human touch? This is the topic for the next 10 years of our career. Oh, yeah. For sure. Like, yeah, this isn't like going away quickly. You're right. All right.

All right, crypto. Last week, Bitcoin was at $78,000. I can't remember I want context, but I said, I have no interest in buying it right now. Right? It's just like bleeding and there's no whatever. And then just a massive puke. So I bought it on Thursday. I actually bought I bet.

I've never bought the ETF before. Again, this is not investment advice. and it's acting like dog shit. It's barely bouncing. I'm probably going to dump it. Bitcoin's getting smoked again today. It's sad. I bought out 66.

It went down to 60. It's at 68. Here's what's going on in Bitcoin. Alexandra Seminova tweeted. IGV and Bitcoin look like twins. I mean, they are moving in lockstep. This chart is a tough look for Bitcoin. Yeah, it's acting like the butter tech world.

All right. Somebody tweeted when I said things will get ugly, this is what I feared. Maybe the worst sentiment I've ever seen to B.H. The good news this means opportunities are near and the tourists are whatever. Okay. So Nick Majali quote tweeted it and said, I've now seen multiple big crypto accounts saying this is the worst sentiment they've ever seen. And we aren't even in a recession. Can't imagine what would be happening if stocks were crashing too.

Very good point. My God. Yes. That's like the Homer Simpson meme. No, this is the worst sentiment yet. Correct. So last week, again, when I said I wasn't interested in buying it, I really wasn't. But then it crashed and look at this chart.

So you see put volume spiking. You see volume number of share spiking. So like you saw a physical get me out liquidation and I buy that all day long. I just do, right? I like that's right in my wheelhouse. It hasn't worked yet. And if it rolls over, I'll just sell it. And if it bounces to 72, I'll probably sell it to.

So this is, you remember the player haters ball from Chappelle show? I don't know if you were a big Chappelle show watcher. Oh man, we went on spring break one year in college. My senior year of college, we went to somewhere in Mexico, and there was a big bus to pick us up from the airport, all these college kids at one resort. And Chappelle's show, like, was just huge at that point. And people were doing the little John the whole way there. What? Which one? Just, you know, yeah, yeah.

Pretty bad. But anyway, remember the player haters ball? They had iced tea in there. Like this, the last couple weeks has been the player haters ball for crypto. If you were a person who wanted to dunk on crypto, you've been doing it incessantly. I've been seeing a lot of people on, and this is like, I feel like more, crypto more than anywhere else is dunking when things are up if you're owning it and dunking when things are down if you don't own it, you hate it. It is more than any other asset class. It is the ultimate light.

So last week on TCAF, which was awesome, by the way, we had a new guest on John Maui, who's phenomenal. He asked me, because we were talking about crypto, I said I just bought it today. And I think he asked me how much of it I owned. And I don't know why I didn't divulge, but I guess it was just like live and I wasn't whatever. So before the recent sell-off, I sold it down to 5% of my liquid net worth. All right. So whatever. That's where I was.

It's now smaller, obviously, since it's gone down so much. But I bought, again, the $66,000 that I bought, that's not like a, I'm not adding to my holdings. Like, I'm going to sell to the thousands. That's probably where I am, too. I'm probably like 4% to 5%. And for me, it was up to like 10%. And that's what got me nervous and why I sold some because it was way too high a percentage.

I was significantly, I mean, I was significantly higher. And I said, like, whoa, you know the scene in old school when Will Ferrell is on stage? He's like, I blacked out. What did I say? Yeah. That's sort of what I had with my crypto stuff. I was like, wait, because when it went to 120, it grew to an outsized portion of my liquid network. I was like, what am I?

This doesn't make sense. So better to be looking at the timing there. I've always said a hugely volatile asset like this is great for portfolio management, if you're rebalancing around it. But it's really hard to do. So here's my game plan. for my short-term trade. Again, I'm sure nobody cares. But here's what I'm thinking.

You're catching knives. You're just catching knives all over the place here. I'm allowed to change my mind. No, I caught two knives. I caught two pukes. I caught Bitcoin and software. That's it. If it balances like 72, I'll sell it.

If it goes down to 63, I'll probably sell it. And if it pukes again to like down to 50, I will buy and hold more. So by the way, we didn't even mention this because so much other stuff is going on. Ed Bradford on Twitter is a good follow. He showed a chart of silver. and it's, you know, spikes, and then it crashes. And he says, this is the craziest market I've ever seen in my life. And 40 years of trading or whatever.

And I responded to him, I said, I didn't even realize Silver crashed again today because so much other stuff is crashing. Sean, our research analyst, shared this with me. The two worst days in history for Silver have both happened in the last 10 days. In history, going back to, like, 1970, this is the two worst days. It's everything is a Kaine's beauty contest now. Like, everything is a derivative of a derivative and people getting ahead of and ahead of and ahead of,

and it just takes things too far, right? I will say, with all this trade talk, I guess 95% of my liquid net worth is in strategies that we want to have clients with health wealth management. So it's not like I'm day trading my butt off over here. All right? All right, Ben?

Yes. All right. I told you, I've taken my hands off the steering wheel more and more as time has gone on for me. I don't like having the brain damage of constantly checking my stocks in crypto and it's not. I can't help it. I'm a maniac.

All right. This chart from Goldman Sachs has been flying around a little bit. They show the cost of homeownership in L.A., San Francisco, New York, Boston, D.C., Atlanta, and then the rest of the U.S., in 2000, 2024, okay? Owning the income ratio in the initial year of homeownership, okay, when you're a first-time homebuyer, how expensive is it? What's the ratio of the price to your income? And they've all gone up way, way higher, right? The rest of the U.S. is not that much higher, but some of these big cities, L.A. and San Fran and New York, and obviously they're not building enough, and these places are still very, you know,

people want to be there, right? Here's how I equate this. So my wife's talking about wanting to do a summer trip somewhere this year. I said, well, how do we have to go anywhere in the summer? Michigan, we have to stay here because it's finally nice. You had to hunk her down. But she wants to go to like a national park or something, and we looked at a bunch of places, and it's February right now.

And everywhere is already sold out. All these places, you can't find a place to stay. in June by booking in February. Because these places are known now. Like, that's what big cities are, I feel like. They're not building more national parks. They're not building more housing in big cities. So I think if you're wanting to buy in a big city

and you're a first-time home buyer, unless you have rich parents or you strike the lotto, you're out of luck. Huge national park guy over here. Okay. What kind of national parks are we talking? The national parks. I love all of them.

Have I been to more? and then four, probably not. Love them. Okay. Here's where I've been. I've been to Bryce and Zion. I've been to the Grand Canyon.

Yellowstone. The Teetons? Is that a national park? So what's the best one you've been to? All of them. Just love America. All national park, okay. Although my wife is very much

not a national park person. Like, there's no way. I mean, and I can't do a solo. Do you want to go to the National Park with me? Let's do a little boy's trip. I would love it. Lace up the boots. Let's go hiking.

What do you say? All right, I'm in. We did have a nice hike together in San Diego last year. We had a great hike. Are you kidding me? Anyway, all kidding aside, I really do love the outdoors, but probably not in my near future, unfortunately. So, Ben, I don't know if you know this.

The Seahawks won the Super Bowl. I don't know how many people in our inbox reminded us of that fact that Michael was wrong. Yeah. You know what? It was all in good fun. I think everybody that texted me, DM me, emailed me,

it's all good, clean, wholesome, family fun. I put myself out there. That's what we do in the show. I can get dunked on. It's all good. But here's an interesting thought that I had. I mean, the most obvious one is, hey, wait a minute.

markets are efficient. Because when this happened, the Seahawks were the reason why I bet against them. They were the favorite, right? They were the favorite, okay? The market was right. They were the favorite in week 15. I said, wait a minute, this doesn't make sense. Why are the Seahawks the favorite?

Sam Donald is not a good football player. I mean, that's the stretch. I said, Sam Donald's not winning a Super Bowl. And the market was right because the market usually is right, which goes back to the point I made earlier last week, I understand that people feel a certain way about the prediction markets because it's like all speculation and DGM behavior and nonsense. And I'm with that, okay? Like, I don't love that aspect of it. But we need more markets in places where markets don't exist because when people are just giving their opinion, who cares? There's no skin in the game, right?

when think tanks are writing about the demand for this or the price of that of real giant pools of capital, right? If we made markets and things like that and money could be allocated more efficiently, that gets me excited. I get it. I mean, the financialization of everything, like, we're there already. Like, this is just our society now. Because markets, price discovery, it's a thing.

Markets work. Markets function properly, right? Yeah. Put your money where your mouth is. So, ChartKit had an awesome chart showing the net income percentages of the S&P 500 by sector versus the market cap. And wouldn't you know it, Ben, they're not exactly the same, but directionally, they all move together. The market is, the market is usually. right.

So you sent me this polymarket thing for what price will Bitcoin hit in February. And this is interesting because you talked about like is stuff priced right or not. This is a really interesting way to play it. So it says you basically pick the price of Bitcoin and it goes from 35,000 to 150,000. In February, okay? So if you think Bitcoin is going to take off from, what do you say it's at now? 65? 68.

68. If you think it's going to- If you thought it was going to go to 80,000, it's going to take off again. You can buy yes for 20 cents, right? Meaning your upside is 80%, right? It's a huge upside. It's a bigger upside than buying the price. Here's another thing that I have come around to.

And I did say this to Vlad. Think about people that are speculating on Bitcoin using options or some sort of leverage. Hey, guess what? No offense, average degenerate, myself formerly included. when I was buying options on stocks, did I really understand the Greeks? Of course I didn't. Right. Of course I didn't.

I was like, wait a minute. I bought this call option. Why am I down 16% as soon as I hit enter? So that's the thing. If you're an options trader, you'd be looking at these markets as well to see where the mispricings are. Yeah. Yes.

I'm thinking more of it from the person that does want to speculate on the future price of an asset. Isn't this a better way to do it if you're going to do it at all? Right, because you're putting a little amount up for, yeah, you're getting implied leverage there. But it's just, it's crystal clear what you're doing. Right. You either think the price will be above this or not at a certain date and time. It is interesting.

It's options for dummies. And I don't mean that disrespectfully because I was a dummy. I have a question for you. So Nick McGooley posted this tweet. And he says, why is a $3 million home a status symbol, but a $3 million portfolio isn't? How can someone value looking wealthy over having more financial freedom makes zero sense? Obviously, that's correct. I was thinking about this, though.

Wait, I love Nick. I think this is a dumb take. So where I'm in my life, I was thinking about this, let's say I'm in the price is right, and I'm in the showcase showdown, and I win both showcase showdowns, right? One showcase showdown is you get a $3 million portfolio in a brokerage account, free and clear,

Vanguard funds, whatever, whatever you want. The other showcase showdown you win is a $3 million home. And in Michigan, Ryle of a $300 home get you very far. I don't know a $3 million home, obviously. At my stage in life, what would I rather have? a $3 million house or a $3 million portfolio. Wait, Duncan, pulled the audience.

Duncan pulled the audience. Doesn't everybody pick the portfolio? Yes. I personally, I would pick the house. If you gave me... Oh! I would pick the house... Where I am today?

I would pick the house. Wow. Why? Now, a lot of people would say, you're an idiot. You are an idiot. You could take a million dollars and buy a per million dollars.

The house has insurance. It has upkeep. It has maintenance. It has property taxes. At this stage of my life, And this is not a looking wealthy status symbol thing. I would rather have a very nice home than a... Looking at a $3 million portfolio,

seeing my portfolio go up in value brings me no joy at all. I don't get anything from that. I would get way more utility out of a $3 million house. So what would you do? You'd take the portfolio? That's a very...

You're right. Like your opinion of that assessment, I understand. I want to say you're right. I understand it completely. But I know 90% of people would say, you're an idiot. But that's what... At this stage of my life, I would take the house.

I think Ben is secretly trying to tell us he has a $3 million portfolio. No. I'm saying you get these two things. Wave a magic wand. Which one do you want? No, I think your point is because you are at a level of success, that a $3 million portfolio doesn't do anything more for you than what you already have. No, no, no, no, no.

This is like my stage in life with kids and like, no, I'm not, that's okay. That's, that's right. That's, I understand what you're saying. Like when you see rich people buying up all these properties and stuff, like, why would this person need three more houses? I totally understand it. I think you get a lot of utility from a very nice house. How's that? Of course you do.

Yeah. If money's no object, like if you could have, if the people that are buying all those houses can legitimately afford them and some can't, some can't. Yeah, it sounds awesome. So, Duncan, that is a good, that's a good survey for our channel. I'd like to say that. All right. Hold up. But let me understand next tweet.

why is a $3 million home a status symbol? How could someone value looking wealthy over how? Oh, I think he's like talking about like an internal. Okay, I understand what I'm saying that. Yeah. But it's also because no one shows off. No one walks around and saying, hey, I got a $3 million portfolio. Check it out.

Remember that? Was it a crypto person that had their net worth in their Twitter bio? I think we spoke about this person. It had to be a crypto person. It might have been a Tesla investor or something. Wall Street Journal. ranked nine major U.S. airlines on seven equally weighted operations metrics

to parse out which is the best airline. And number one, Southwest. I've never flown Southwest. I did it for the first time this year when you and I went to Vegas a few months ago. Wasn't the greatest experience of my life? I mean, so Southwest and Allegiant are one and two. And they're talking about a lot of it

is like lost bags and timing. And those are two of the more uncomfortable airlines as far as I'm concerned. I'm surprised Delta is not first on this list. and they were last year. And here's the thing. Southwest and Allegiant are supposed to be like the budget carriers now. I feel like after you add all the fees and stuff,

they're not cheap anymore. It used to be like Allegiant, the flights used to be so cheap. They would say like, hey, $150 for a flight. Like if you add on, because you have to pay for your lug and you have to pay for an overhead and you have to pay for a seat, like if you add all the stuff, the add-ons, it's just expensive as any other flight, but it's not as comfortable. It's like you feel like you're sitting on a piece of cardboard on these flights

because they really pack people in. I'm a big Delta guy. I only fly Delta if I can help it. I put everything in my Delta. That's my favorite one. On my Delta Amix card. So you don't pay for bags. On time arrivals, it's number one.

And it has been for the last five years. I've had like two bad flight experiences with Delta. Which happens. I fly a lot. Anyway, this is probably deeply boring for most people. But anyway, I thought that was interesting. Southwest number one. They see, on time arrivals, Delta is best for it.

I think that makes sense to me. Okay. here. This is from The Economist. One study found that between 1965 and 2012, the amount of time parents in rich country spent with their children doubled. Now look at this. This shows millennials, Gen X, Baby Boomers, and Silent Generation between how many minutes per day they spend with their child on child care. And we are totally the helicopter generation because we spend way more time with our kids than any other generation. And this tracks with me. With every other parent I know, the dads are so much more involved than they were in previous generations.

you think about the silent generation, even the baby boomers, like a lot of times it was like, the kids just go do what you want. This, and I don't know what the ramifications of this are. Like the fact that the parents are so much more involved in the kids' lives now. So for our six-year-olds, there was baseball, not true, evaluations, okay, for Little League. And a bunch of the- Which is an insane thing to do at that age. Yeah, six, what?

We have had that too with football, like a football, like, camp that you, they're taking notes. How about the evaluation is just, evaluate them during the season, like they're babies, if you have to evaluate them at all. So anyway,

there's a lot of like back channeling and make my kid rank a three and not a two. Like, and I'm just thinking, like, come on, guys, are you serious? Right.

They're six. So even like, to what end, you want to win a Little League World Series for six-year-olds? Who gives a shit? Like, literally who cares what is wrong with you right i get it if like fine they're they're 10 they're 13

you know you want you're it's fun it's competitive you want to win six this is where i mean my my parents went to every single one of my games but they never ever put themselves in and like they never talked to me about my performance they never like it was hey good job great you did awesome or whatever you know we're excited for you uh they didn't try to like guide my sporting life in some way. And I feel like that is a thing that's changed more than anything is like the parents are so in Uber involved in this stuff now than they were before. And I'm more than, I'm way more than my parents were. So I'm a hypocrite here. But I try to like back off. I try to like not just not, I try to not ever criticize my kids about what they do in sports and just I always say like,

do your best and have fun. And that's all I care about. Yeah, it is. It is so much, isn't it? I had the boys over the weekend. So Robin left me. Robbins. And Evan went with her friends to Vegas to see the backstreet boys at the sphere, which is, this is probably the first thing that she's left me. That actually sounds like a pretty fun girl's weekend. This is probably the first time she left me with the boys. But look at, look at these notes. So she left me like full notes of where I need to be hour by hour with clothes lined up on the counter with post-it notes. And boy, did I crush the assignment. You should have seen me. Not only did I do that. She came home to a clean house. Well, it sounds like she made it easy for you to crush the assignment. sync. You know, she did. She made it like completely Michael proof because I am not the best with

these things. But yeah, I wonder if we're like, sometimes I feel like I'm like not doing enough with my kids. But I'm with them. I put, I take them to school every single day. I'm here when they get home. Right. I go to their practices. Um, because like I work, so I work, obviously I work a lot. Kobe said to me the other day randomly like, Daddy, if the Knicks were in the finals, but you had a work call, what would you do? And like part of me felt sad that he asked that. Yeah. And I was like the next, of course. I would never schedule a work call during the next game. He's like, but what if it was like a really important call? Like a really one you couldn't cancel. And I was like, well, I care about you guys and provide it for you guys more than I care about the next. So like

obviously I would choose that. But the fact that he said that he's noticing that I'm like working all the time. But fine. I'm still with them. I live in the house with them. I'm with them every single time of all days. And our parents weren't like this. Now I grew up in like a divorce house. So it was a little bit different from me, I suppose maybe. But I think my my mom was gone in the morning and like not home when I came home. And I didn't feel not loved. I was like showered in love growing up. It was just normal.

It was more normal. And this is, this is more normal. This feels abnormal. But this is the way it is now. I was about to say, I feel like I'm roommates with my kids. Yeah,

I guess that's what being a dad is. But I feel weird about the fact that we can now track them on the phone all the time. Like I know it's helpful. Like, hey, you can see where they are and you can follow them and you can see the stuff they're doing. And,

but to me, like that almost feels like invasive. Right? But you can't, because when I was, when a high school, whenever we wanted to go out and, like, get in trouble, I would, I would say, hey, mom, I'm saying at Chris's house. And Chris calls him to say, hey, mom, I'm saying at Ben's house. And that's all we needed to do. We were free for the night to do whoever we wanted. Kids can't do that anymore.

Well, tell me if this is, if this is true to you. Again, my growing up situation was a little bit different with divorced parents. But I feel like all parents and friends are like friends with each other's parents. Yes. Was that like that growing up? I don't think it was, but maybe that was just my experience. Not as much. There's way more competition among the parents.

Like the parents feel competitive with each other about the kids. Stuff the kids don't even care about. That's the hardest part. Is that like, oh, that parent cares so I have to care. It's like, why? There's a bunch of tryhards, am I right? Yeah. All right.

Ben, it's been a minute. It's been a minute since I've spoken on this pod about email etiquette. Right? You're being like a guy. No infractions, which I think that cements my standing as I'm not an email snob. I'm really not. It's been 18 months. Find me the last time I brought up I said anything about somebody's email.

I'm going to need to AI to get on this, but you've said a lot of stuff over the years. But it's been a while. Okay. I think people, maybe people have respected my etiquette. Okay. Maybe I've trained them through this podcast. All right. So I got an email from somebody that I was maybe doing your favor for.

Maybe it was somebody on LinkedIn that I said that I would be happy to speak with them. I'm like, because I'm a give her backer, right? You know this. I speak to a lot of people that email me. Give me my number. Give me a call. This person sent me a red receipt. Oh, that's the worst.

I hate that. Hate it with a passion. If I see that, I'm like, I'm not responding to you. To me, and I hate to be so black and white about this, Because last week we did a people that suck type of list. And I know that there's people that do shitty things that aren't shitty people. I'm sorry. And I don't want to call this person a shitty person.

I don't know them, but I kind of did want to say this. That's desperate. So it doesn't make you a bad person. But if you, it makes you somebody that I don't want to be around, okay? It makes you something that I don't, don't, don't, I'm having trouble putting into words what a weird personality trait that is. Somebody that sends a red receipt. That's bad. Hey, did you see that?

Hey, so he said that. Why don't, dude, come on, get out of here. All right, somebody responded, somebody emailed us. Michael doesn't know what he's talking about. There's as much caffeine in a diet Pepsi as there is an espresso. Okay, first of all, true. I was making it up, talking on the fly. That's what we do here.

I've said this over the years many times where I will listen to a podcast like this one, tomorrow when it comes out when you're listening. And I will say, I will violently disagree with something that I said 24 hours ago. Why? I'm off the cuff, okay? I'm wrong all the time. I'm making most of this up. We're having a good time.

We're talking. All right, but I wasn't talking about espresso emailer. I was comparing Diet Pepsi to Starbucks. And here's what Chatchipati said. A 20-ounce bottle of Diet Pepsi contains about 59 milligrams of caffeine. A standard Starbucks Grande brewed coffee, which is what I drink, typically has around 310 to 360 milligrams of coffee. So that's one-fifth.

So, Ben, in Miami, I want to see you drink a Starbucks coffee. You will be shaking. You'll be so hopped up. Can I just have a Red Bull instead? Isn't that easier? A monster? Drink a Starbucks. I won't make you drink Starbucks.

You know, the thing, they have these studies that, like, drinking one cup of coffee a day can, like, help you live longer. Like, there's no way that's healthy. That much caffeine in your system. There's no way. I don't know. All right. All right.

So I had the boys for the weekend and I thought to myself, I'm going to get after it. Did you take him to the movies? What am I watching Friday? What am I watching Saturday? No, but I did. Kobe won't stop talking about the goat movie. Oh, my kids are going to see. Because we have a midwinter break.

They have so many stupid days off of school. So they have Friday and Monday off of school. I think my wife's taking them to see it on one of those days. So Kobe keeps saying this is going to be his favorite movie ever. And I'm trying to teach him a lesson about. lower your expectations. Yeah. He goes, I can't help,

but it looks so good. All right, so anyway, so I thought that I was, so no, no movies this weekend. I don't really think there was much playing, but I thought I was going to have myself a movie fiesta. And Ben, I was sleeping by 10 o'clock both nights. You're tired?

But here's what I did watch. I plowed through the HBO movies. I want, not the shows. The pit, the new Game of Thrones show, and industry are just, is the game of Thrones? any good? Oh, it's so good.

Is it? Well, the first two episodes were pretty slow, and I was about to throw in the towel. But I heard the third was good, stick around, so I did, and the fourth was amazing. Okay. I'll give it a try. I watched, I think someone actually told us about this in the inbox a few months ago. I told you I was looking for all the Apple movies. There's a Tetris movie.

There's a movie on Apple called Tetris. It's about the story of how they got the rights to Tetris to go worldwide. Okay? And that sounds like the most boring movie ever. It was actually pretty good. It's got Taryn Edgerton in it, and basically, I didn't realize this. So here's the one thing I learned. Tetris, I've played it a million times, you know?

And my wife actually got it for Christmas, my son, it looks like a mini video game console of Tetris. And my kids are playing it. I never knew. Tet means four. And so each of the pieces, if you would have asked me how many pieces are in each Tetris piece because they're built by blocks, each one is built of four squares. If you would have told me, like, the long one, I said, oh, it said for sure that's fine. It's got to be five. They're all built on four squares. Okay? I didn't realize this. So they showed

the guy who made it built it in communist Russia in the 1980s. And it was about these video game developers who was going into Russia and having to deal with the KGB to get the rights out of Russia to bring the game worldwide. It's actually like it's kind of like a spy thing. At the end, they kind of ramped it up and it was a little unrealistic. But the first hour of the movie or so, just the negotiations with the KGB and the Russian diplomats about trying to get this game out of Russia. It's actually really good. One of the best of the best. business movies I've seen in a while. You mentioned the show his and hers.

My wife watched it. Did you finish this show? His and hers, which was this again? That's the John Bernthal show on Netflix. It's six episodes. It's a murder mystery. Yeah, yeah. I finished.

So one of the fun things about these shows is you try to guess the twist, because you know there's a twist coming. This show had the most ridiculous twist I've ever. Was it, me and me my wife were, we couldn't, but we were speechless. It was so dumb. The twist was so dumb and so bad. first twist, it's like, oh, oh, the first was that, it's the girl, and she lost weight.

But then, anyway, it was the worst twist I've ever seen, maybe ever. It was so bad. Okay, it was so bad. It was borderline comical, right? It was, like, funny. Like, come on. Are you kidding me? But I, so for me, it didn't upset me because, A, I'm very understanding that these planes are hard to land. B, it's Netflix. And C, it was only six episodes. So I wasn't, like, fully invested. I think it was based on a book. Maybe the book, it was a better translation. Okay. But it was...

If it was 10 episodes, I probably would have been upset. Did it bother you? Like, were you like, that was a waste of time? My wife said, I can't believe we put so much time into that. There's only six episodes. Yeah. I get it. It was, it was comically bad.

So I've been having a hard time getting into new Audible books lately. Like, you start one and you're not immediately taken in. You kind of, eh, I'm not into this. I'll come back to it later. But then I started catching confidential by Anthony Bordane. And I was never Bordane, I never watched. I don't watch cooking shows, really. That's not my thing. My wife always loved the cooking channel, not me. My brother gave me the Bordane book a long time ago, and I just never

read it. So I said, you know what, I'm going to listen to this. And he narrates the book. And it's kind of, it felt a little bit like the Cameron Crow book where just them telling their own story makes it 10 times better. And I flew through this book. It's just the whole, him coming up in the restaurant world, in how restaurants work. And it's, I feel like they could have used him as a consultant on the bear. Because the bear, like the chef takes himself, karma takes himself way too seriously. Bordane takes, he took cooking seriously, but he didn't take himself seriously. Like, he was very self-aware.

And it's just, it's so good on the, if you ever worked at a restaurant, like the stuff that they, he explains about working in a restaurant and the people you encounter in the shady business deals. And it's just, it's really, really good. I can see why he was so good at his, at his shows. How, because, you know why you like me love a memoir. Yes, I do. Okay, so I just started listening to this one. Okay, I read that one.

Oh, you did? I read that book last year, yeah. No, no shit, how? I don't remember where it came from. I heard him on a podcast somewhere. It's really good, right? A lot of good stories, yeah. Okay.

So hits, flops, and other illusions. This was served up to me by Audible. So Ed Zwick, and he narrated it. So that's why I bought it. So he directed Glory. He did Legends of the Fall, The Last Samurai, Blood Diamond. Love that movie. Defiance.

He had some Julie Roberts stories in her that do not pit her in the greatest light. I'll put that way. I can't wait to listen. It's a good one, though. An hour 20. Is the news going to be slower this week than it was last week? I think so. I don't know, man.

It just keeps coming. It's just keep coming. Thanks to the production team as always. Daniel, John, Duncan, Nicole, Rob, Graham, who else? Travis, we appreciate it. We have show notes every week on our blogs. Wealthofcommoncents.com. Orlantinvestor.com who want to see all the charts if you don't watch it on YouTube.

Check out Talking Wealth. What else we need to plug? Remember, by Friday, if you want those networking things for future proof, sign up. That's right, Benial spirits at a compound news.com. See you next time.