The Compound and Friends - Did the Stock Market Just Bottom?

Episode Date: February 25, 2022

On episode 35 of The Compound & Friends, Michael Batnick, Linette Lopez, Phil Pearlman, and Downtown Josh Brown discuss: Russia's invasion of Ukraine, the washout, the one year anniversary of meme stock mania, Apple and Google vs Web3, Facebook's fall, new trading rules for Fed officials, and much more! This episode is brought to you by our friends at Masterworks. Visit https://masterworks.art/compound to skip the 10,000 person waitlist. See disclaimer at mw-art.co/x. Check out the latest in financial blogger fashion at: https://www.idontshop.com 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/disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

I figured like, it's their week off from school, let me do something nice. I pick like the best show in the country, supposedly, Hadestown. Terminator? Which people fucking love. And they were just like so badly behaved that I almost wanted to pull it. And they're teenagers, they're not babies. This is so good. It is so good.

This is from Caleb. Holy shit, I don't know from wine, but this tastes good. It does taste good. What did they do? Were they like talking during the show or like? That's the least of what they were doing. Worse. Texting?

So Justin won't focus on anything that's not sports. Oh no. So I already knew he would be tough. That's boring. He's laying down. She's on Sprinkles' lap. His head. And he's like on his phone.

Oh my God. And he's saying, not whispering. The show is going on. He's speaking in a regular speaking voice. He's like, when is this shit over? 15 minutes in. My God. My daughter is worse.

She does a full face of makeup. She won't leave the house without a full face of makeup. So she doesn't like the mask. So they're like, mask on. She's like, yeah, okay. Pulls it right down. Or her nose is out of it. And they're now watching her.

The ushers in the theater. So they're like positioning themselves so they can watch her. Oh, no. And she's playing cat and mouse with them. I see her looking side to side. Oh, my God. To pull the fucking mask off. So I'm like elbowing her because they already warned us.

If your kids can't keep their mask on, they're going to have to leave the show. Imagine me getting thrown out of a – I've been thrown out of everything. But I've never been thrown out of a Broadway. So it was just not enjoyable. Are they grounded? No. What are you going to do? Honestly.

What could I ground them with? Oh, my God. So anyway, it was – it didn't go the way I intended it. So the show is too sophisticated for them. It's my fault. The last show they saw was King Kong. The show they saw before that was King Kong. Okay. The show they saw before that was SpongeBob.

Okay. You should do Harry Potter. So I'm trying to elevate. No, I heard that's eight hours long. Yeah, that's two shows. It's two shows. There's no chance. It's two shows?

It's just one now. So anyway, we're supposed to go to an Italian restaurant after. And I'm like, honestly, judging by what I just went through, I feel like they can't. Maybe it's better if we just go to McDonald's because they're going to sit there and say, I won't eat that pizza, they put basil on it. They're just really, really tough right now

and I don't see any way forward. If anybody's thinking about having teenagers, I strongly recommend they don't Arc's up 7.5% there's always boarding school but Phil's kids are model citizens I just your boys are very well behaved

they're well behaved it's crazy Michelle is a great mom it's not crazy you're well behaved wait are you saying Sprinkle's not a great mom I'm not saying that at all I didn't say that. Nature versus nurture. Oh, my God.

I already love this. Let's go, guys. Let's go. No, Phil, you're well-behaved. And you know how to parent. Why is your hand in my face? He knows how to parent. You know his wife's a fucking child psychologist, right?

So she knows. It's not Prickle's fault. I would hope she's a better parent than I am. She does some behavioral voodoo shit on them that's crazy. And she does it with love. And it's great. What would she have done in the situation I just described? And don't say it would never have happened.

She would have smacked the shit out of me. Are you kidding me? No, my parents would smack me directly in the face until I was 18 years old. There was fear in my soul. Oh, your dad was very strict. Oh my God, so strict. I wasn't allowed old. Wow. There was fear in my soul. Oh, your dad was very strict. Oh, my God. So strict. I wasn't allowed to do anything.

So the idea of being rude to public. And yet you did everything. Not until I left the home. Right. Okay. I smoked the marijuana. Yeah. And they were very upset about that.

Mary J.K. So they sent me to a Christian counselor to work out my issues with Jesus. That fixed everything, right? Now it fixed. I'm perfect now. I'm perfect now. I'm good now. She would have given him a look. One look.

And that would have been enough? Why? Because they would have known what that look implies. They would have just been like, oh my God, it was a look. I can't threaten my kids physically because they know I'm not going to spank them. I'm not going to do anything. It's not even a threat. It's just conditioning.

Like she started really young. But what do you, like what do you literally do? Or you take the phone away and then they're like, I need my phone to do my homework. The teacher texts the assignments these days or whatever.

So, all right, so that doesn't work. What else? Take away Netflix. They play video games. There's literally nothing I can do to instill fear in them anymore. I think what Phil said, it's too late.

It's too late for us. It's too late for my kids. They can't. Yeah. I mean, that fear was instilled with me very, it's a very deep, very basic fear. I think you just want to promote positive behavior. That's really the key. As opposed to punishing negative behavior.

Punishing really doesn't get you there. It just grows anger. She's saying it's the other way around. I was very angry with my parents, but I also knew really doesn't get you there. It just grows anger. She's saying it's the other way around. I was very angry with my parents, but I also knew that that would get me nowhere. Well, then you've got to be willing to smack the shit out of them. How do you promote positive behavior? If they behave somewhere, recognize it.

You catch them doing something good. Give them a kiss. And you tell them great work. Proud of you. They crave that. You tell them great work. Proud of you. They crave that. Your kids are going to... They act like they're too cool. You have two brothers three years apart?

I'm not saying. I'm not weighing in. No, I know. It's Moskowitz's birthday. 25. Your birthday too. My birthday too. I'm actually shocked because I was a monster.

And I'm shocked that there's no karma so far. You were a monster? Really? Really? I was completely out of it. I have such a hard time. Don't you guys remember me 10 years ago? Yeah, but you weren't, like, lighting shit on fire. No, we had some stories with Phil.

Did we? Yeah. Oh, okay. Yeah. It's completely out of control. Well, congratulations. Thank you. Congratulations on being father of the year. Are you guys Well, I wasn't there for that one.

Father of the year. Are you guys excited to do the show? Yeah. All right. I'm so excited to have you here. Last night really was a fucking bummer. It was a huge bummer. That's a bad way to describe it.

It was sad. It was very sad. It was deeply sad. It was, I expected it, but it was still really shocking to see it. And it was shocking to see how quickly Russian forces just surrounded. Did you know, you knew it was coming? Like deep down, you knew? Yeah, I thought it was coming in December.

Oh, wait. It is surreal to see those fighter planes. I'm sorry, I have to take this. Hi, it's Josh. I'm calling about your sleep study. The doctor has the results in and he would like for you to come in for an appointment to go over the results. Are you able to make that appointment?

Okay, I'm just taping a podcast now. Right when I'm done, I'll call you guys back and set up an appointment. Okay, give us a call. You're on the air. I will. Thank you so much. That's my sleep study.

Are you insomniac now? Oh, last time, Josh was playing with his f***ing snoring. Is that a nine? I have third-degree sleep apnea i think lynette i'm i'm i'm snoring like an animal that's a lopez treat too so i so we'll we'll find out if surgery's gonna be involved all right sorry to disrupt how are we doing on uh cameras everything we're good to go uh yeah we're we're getting getting there i gotta say what's going on with my situation? I feel like we do this every week.

I feel like it's getting worse. Michael's the most high-maintenance podcast host. Look what you did here. What is happening? Oh my God, I love that. Do you have like a bowl of M&Ms in the back with no green M&Ms or something like that? This is good?

No, this is fine. This is totally fine. I'll just do it. Isn't this too high? No, that's fine. I can see you having a tantrum over the green M&Ms. This is literally the worst setup you could possibly have. Do you guys do this on purpose? Alright, so no. No, I got my...

Are you okay? You have T-Rex on. You see the struggle? I mean, what is this? All right, it's good. Let's go. I think they did it so that you would stop scrolling through Twitter. I can't.

I think they're blocking you. I have no computer. I'm just telling you guys this beforehand. I have no computer in front of me. I'm just going to make up facts. Lynette's ready to go, too. Doesn't even need a computer. I mean, I'm just going to go with it.

No, you guys don't need, because you guys don't need to guide the show. You just's ready to go too. Doesn't even need a computer. I mean, I'm just going to go with it. No, you guys don't need because you guys don't need to guide the show. You just be yourselves. You guys are pros. We'll do the heavy lifting. All right, let's get it rocking,

Big John. Oh, shit. Here we go. What about my thoughts? What about my thoughts? Welcome to The Compound and Friends. All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only

and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Today's show is brought to you by Masterworks. Duncan, I bet you didn't know, because I didn't know, that the total wealth held in the art is estimated to be $1.7 trillion. And Deloitte projects it to grow by $900 billion by 2026. Are you taking the over or the under? I'll take the over. You'll take the over.

Okay. All right. Well, Masterworks, they're buying a lot of art. The company's already over $1 billion at evaluation. I am making a small contribution. I've got a few paintings, not to brag. If you are interested in learning about how you can invest in a Basquiat, I've got, what do I have? I have a, who's that? Do I have a Picasso? Yeah, you have a Picasso. You have a Christine Binns.

I do. Last night I was watching Midnight in Paris. You ever see that movie? Yeah. Great movie. Great movie. The guy in Billions plays Pablo Picasso. Right. Great movie. All right. Anyway, where do people go, Duncan, to learn more? They go to masterworks.art.com. masterworks.art.com to learn more. And please see the disclaimer at masterworks.io. This show is blowing up. Let me just start with that. Duncan, what's going on with downloads, with YouTube? It's going crazy right now, right? Yeah, we're doing well. How much credit for that do you want?

Like 20%, 40%? Yeah, like 40%. 40% would be sufficient? All right. We have two very special guests today. Tomorrow's my birthday. We're taping this on Thursday the 24th. My birthday's the 25th.

And there's only two people that had to be here. I really wanted to have them here. And it is Lynette Lopez. Lynette, what's your title at Insider? I am either a senior correspondent or a columnist, depending on the day. Have you been there 10 years? I have been there 10 years. Jesus.

Yeah. All right. Crushing it. Crushing it. Badass. Had my 10 year anniversary. They keep paying me to do what I like so I keep doing it. Do you still sometimes accidentally call it BI or Business Insider?

All the time. Okay. You're not gonna let that go. I do it too. I'm not too like pressed about it. It'll work itself out. It's still Business Insider to me. And technically the page that I write for is still business insider. Do you remember Cluster Stock?

I think about Cluster Stock all the time when I'm sick of writing about serious things and I want to write about men's fashion, cargo shorts, or how everyone needs

to shave their goatee. Yeah. Like, that's when I really miss Cluster Stock. Cluster Stock had some classic posts back in the day where, like, the new trend was icing people

with the Smirnoff Ice. What a time to be alive. They covered that extensively. And it deserved it. And it deserved it. Alright, also here Dr. Phil Perlman. Phil, you are at Osprey, but most people know you. I think your stock twits days,

right? Sure. Okay. And now at Osprey. What what's your title there? CMO. Chief Marketing Officer. Yeah. Look at this. Isn't that crazy? How excited are you to be on The Compound and Friends?

I'm so ecstatic to be here. I love you guys. We love you too. And I love Lynette. It's like... I love you too, Phil. It's perfect. Yeah.

So, all right. Wait, hang on, hang on. Before we get into it, I think you brought me and Ben together in the Yahoo Finance days. There was a party back in the day. And it was love at first sight. It was love.

Yeah, we clicked. Yeah. I think so. Yeah. I remember that party. I think I've had a hand in many connections being made early on. 100%.

Big time. And it's my pleasure. You connected me with Barry. There you go. I would not have been, I would not have met him. I would have eventually met him. I would not have met him when I met him, if not for you and Howard. In Coronado.

Yeah. I was at that Yahoo party that Michael met Ben at. That was when Tumblr was the next hot shit. Remember that? Was that at the Core Club? Mm-hmm. You were there. I remember that party.

2013? I was there. Wow. It's been a long time, guys. Everybody was there I sat at the core club. I remember that party. I was there. Wow, it's been a long time, guys. Everybody was there. That was nine years ago. It was a really cool thing we were doing. And of course, Yahoo dropped the ball. It was amazing.

Do you remember when Marissa Mayer was worse? I never said anything until now it's like ten years later, but she was even worse than all of the reports. Really? Wow. They had Santoli, Mackie, you, Aaron.

Yeah. We were killing it. Who else was there? And it was just like, you know. Could have owned the interwebs. Katie Couric was there. Could have owned the interwebs. I remember getting in an elevator with Katie Couric,

and she looked at me and she goes, how do I get my stuff seen? Katie Couric. Katie Couric said that to me. What did you tell her? I was like, Tumblr? Yeah. I was like, oh, do you have a Tumblr?

So that's good. Insecurity never goes away. Cool. Yeah. Good to know. All right. So your chief marketing officer at Osprey, and just like, let's do full disclosure, Michael and I made equity investments in Osprey, the company. And Osprey is basically building out a suite of crypto investment products for private placements, for exchange traded stuff.

How long have you been there now? Is it a year and a half? I've been there about a year and a half, yeah. Okay. What's the latest and greatest from Osprey? What going on now well we're just launching an nft fund and i got the email for that right it's just like a founder's round justin is an animal yeah uh he's brilliant um and he is chief portfolio manager we have an incredible team around him and it's just really fun. You're being reunited with Justin because Justin at Zero Beta was your protege at StockTwits.

I brought him into StockTwits as an intern early on. He lived up north of the city and so I had a home office up in the sticks and he used to have to come down. Shout to Monticello. Shout out to Montebello. Montebello. Montebello? Yeah, it's even smaller than Monticello. I think Thomas Jefferson's house.

It's even smaller than Monticello. So he would come down, and we would work in the basement at early day stock twits, and then we brought him on. What basement? In my house. I had an office in the house. had this dude doing uh you had this dude doing community management which is basically content moderation yeah we were tweeting we were blogging and there were some days that he was like i would see him we'd be like a happy hour he'd be twitching community of psychopaths early early

stock twits community oh my god all psychopaths and it was just wonderful too like it was lovely all right speaking of psychopaths let's get right into it uh stocks are rallying hard right now on uh the invasion of ukraine by russia which is not as weird as you might think uh this type of thing does tend to happen where there's a lot of fear in the market of an event. The event happens and all of a sudden everyone that wanted to sell already sold and you get this big comeback in stocks. But I want to focus on the event itself first. We're fortunate to have Lynette here. So you have been talking and writing about Russia more than anyone else I know.

And I don't know if you remember this. I gave a guest lecture at Columbia with you. You had a class. Do I remember this? Yes, you came to my class. I came to your class. Yes. But you were teaching that class about the Russian media, right? Yes. Explain what that was. So back in 2010, when I was a student at the Columbia School of Journalism, I did a research project with some classmates into Russia Today, which we now know is this really nasty Kremlin propaganda unit. But at that time, people really didn't know what it was.

So we published our findings. The Kremlin didn't like it. We were like, this is anti-American propaganda, and we need to make sure that it is labeled appropriately and that we're monitoring what they're saying on this outlet. And that got some traction in the world of journalism and eventually I started teaching a class about Russian propaganda at the journalism school in 2014, 2015. 2015 and then of course 2016 we see what happened when the GRU essentially took over Facebook and made Americans go crazy. And you were on that before it even happened?

Yeah. I'm so glad you didn't get poisoned. I, you know, I did go to a thing called PutinCon once where it was like all of Putin's enemies in like one... Is that like Linzenpalooza? Is that somewhat similar? It's like, but darker. Okay. And, you know, I was like joking. I was like

nobody wash your hands because then you got to turn the thing. That's not a good joke now because everybody washes their hands. But yeah, I've interviewed some really interesting people. The former president of Estonia who has been very, very outspoken about shoring up

the region against cyber attacks. Bill Browder, who is the guy who has been pushing. Yeah, we all read Red Notice. We all read Red Notice. He's one of my heroes. So I've been in that community in some way, shape, or form since 2010. Okay, so here's what I want to ask you. You sit in this really interesting nexus of people that understand the stock market

and people that understand russia and there's probably like three or four people like you period like there's not a lot of people who those are their two areas that they really know you must be seeing a ton of coverage by the financial media of this russian situation yeah and i'm betting a lot of it is really wrong. What are we all not getting right? What do we all not understand? I just don't think we really understand what the Russians are working with. You know, there's a lot of talk about Fortress Russia

and how the Russians have shorn up their defenses against economic sanctions and all those things. But it doesn't seem like the Kremlin's men, the oligarchs, are necessarily on board with this. I don't know if they necessarily knew exactly what was going to go down in Ukraine. It seems like this is not going well for them. It seems like this is not going well for them at all. And it's unclear what Putin thought, but we know what happened in 2014. Putin went into Crimea and nothing happened to him. He was able to take the territory without a single shot when the United States and his allies were on much better footing.

And I think that Putin believed, because he's a realist, all this crap about the history of Ukraine and how he thinks it's his and all that stuff, that's something. But the reality is he chose this moment because we look weak. And that's the kind of person he is. So the timing is more about what's going on in Europe and America than it is about whatever Russia thinks. He already locked down Russian civil society. Starting in 2014, he killed a man named Boris Nemtsov, who had been the leader of the opposition in Russia in some way, shape or form since before the wall fell. So he shot him right outside the Kremlin. And ever since then, he's been locking down journalists, intellectuals, obviously Navalny, anybody that would be able to mount some kind

of opposition or tell the truth about what's going on in Ukraine. His expansionist plans have been pretty clear since then. But the question was, right, would he be able to pull it off like he did in 2014? Would he be able to go in there without firing a shot? And Joe Biden made sure that he could not do that. He made sure that this was going to cost him. And I think that the world is shocked at what he's willing to do at an extremely high cost. It's not like the Russians have ever cared about body counts. They've never. But I think it's shocking to the world what Putin is willing to risk, what he's willing to lose. And once he's a pariah, we really don't know what he's willing to do.

So I don't know what the Russian stock market did today. But Bloomberg reported that – I don't know how they figured this out, but they think the Russian oligarchs collectively lost $32 billion as of the end of last week, and that's before any sanctions. That's just like, I guess what, Russian stocks and bonds? Russian stocks, Russian bonds, companies. what, Russian stocks and bonds? Russian stocks, Russian bonds, companies. Obviously, if we are going to assume that Russia is fine, then what's happening in its markets doesn't make any sense.

Like the ruble is getting completely crushed. The stock market is going to shit. If Russia were really like hunkered down and had this figured out, then I don't know how this would be happening. So you don't believe that they're so good at evading sanctions or there's a secret deal with China or whatever? That's not what the market's telling us. So John, throw up this chart. So the Russian market fell 34% today.

That's number one. Today? Today. Today. But after having already crashed. It was down 34% today. That's number one. Today? Today. Today. But after having already crashed. It was down 34% today. So what this chart is is credit default swaps on Russia. And look at this compared to 2014 when they invaded Crimea.

Like this is off the charts today versus what it was then. The market is taking this very seriously. It's a very different situation based on what we're seeing. And I think it's because the world is actually aligned on this. Because the world is actually aligned on this. Boris Johnson, whatever his political domestic issues, is going super hard in the paint. The Germans are getting dragged along even though they know they have major energy issues. Yeah, they seem more reluctant than the British, right?

I mean just from the outside looking in. Yes. They have major energy dependence on Russia and a very different relationship. And one of the things I think that the Germans don't have going for them is that they didn't have to fight the Nazis. So they don't know what this is like. But this is bad. And I think that another thing we need to consider as Americans is that Russian occupation is not fun. They are going to destroy Ukrainian civil society, the intellectuals. Anybody who could stand against them is going to destroy Ukrainian civil society, the intellectuals, everybody, anybody who could stand against them is going to get crushed. It's going to be a very ugly day in Ukraine. And it has been very ugly in Donetsk.

So today's stock – so today's US stock market, I don't want to call it a reaction. I don't think people are bullish because of an invasion. But today's risk on, I guess, late-day rally, especially in the NASDAQ, that's not about people saying, oh, this is no big deal. That's just like stocks. It's capitulation. Stocks have been down so much for so long. Or it's the opposite. Or it's they think, you know what, this is so bad that the Fed may not raise rates.

What if the Fed doesn't raise? So I think you're dead right about that. Nobody's going to say 50 basis point rate hike in March anymore. It's off. I don't think it's ever on, but no one's saying it. That went from 70 to 50 to down to 20 today. I don't know where it goes. 20% probability?

Yeah, it's probably close lower than that at this point. I mean, if I were the Fed, I wouldn't say anything so that we can just – the selling continues in the bubble and the market kind of deflates a little bit. But I don't know. We've got really, really mixed up inflation picture now. And I don't know if the Fed hiking rates is going to help or hurt. Those conversations are above my pay grade. They always jawbone though.

Money is a picture. They always jawbone. And it's effective and beautiful. They haven't raised once. The two-year treasury went from basically zero to one and and a quarter they haven't done a single rate hike right the market did it for them based on their posture right uh let me read this to you uh this is bank of america outside of its commodity sector russia is a marginal player in the global economy unlike china it plays little role in global supply chains. Even countries in Central and Eastern Europe only send 1% to 3% of their exports to Russia.

U.S. linkages are even smaller. Savita Subramanian points out only 0.1% of sales by S&P 500 companies go to Russia. So economically, it's a non-event other than sentiment-wise. I've always said that Russia has four main exports. Oil, steel, hackers and hookers. You've always said that? And I've always said that.

Generally not publicly because it's not nice. You know we're doing a podcast. But now there's a war on, so f*** them. So f*** them. I am astonished. This morning I woke up and wrote to some of my friends with family in Russia, and they said that this morning Russian television and radio was saying that,

yes, Russia invaded Ukraine, but they weren't using any missiles. I guess they're just going in for lunch or whatever. Peace troops, nerf. Nerf. Nerf guns and silly string. I don't – the media in Russia is extremely locked down. They're not going to hear from us. They don't hear us.

So I don't know how Putin keeps this up if he keeps the borders open and keeps a free flow of people. I don't know the ultimate wouldn't it be the ultimate troll to keep natural gas supplies flowing as normal like almost like he's like what yeah what's the problem like because because one of the statements that he made in the run-up to this was we have never cut off the flow of natural gas to Europe. Something like the idea that we would do that is preposterous. These are long-term contracts. He's a big-time liar and Sergei Lavrov is a big-time liar and comedian. So I don't believe anything that they say.

I just watch what they do. What's the most – I mean it's ridiculous at this stage in the game. What's the most I mean it's ridiculous at this stage in the game But what's the most hopeful outcome here That he loses A lot of political cred Because this goes really wrong And maybe this is the end of his regime

Is that way too hopeful That's way too hopeful This is Russia You know it's my birthday though Oh yeah that's right Can we say one hopeful thing before we move on? The best case scenario is that he's satisfied with Ukraine. I'm going to pour more wine for you.

Please pour more wine. Happy birthday, bro. Happy, happy birthday. Thank you. When you look at the way investors have been behaving so far year to date, like even pre, like what's your take on market psychology right now? Well, I think right now, so there's this paradox that occurs every time the market gets killed. And that is, we know that people behave irrationally or whatever.

But the paradox is, is that when everything's great, nobody cares about risk management. And when the market gets killed, risk management comes to the forefront. You're going to see- Every time. Every single time, over and over again. Never changes.

It's not about any particular market or any particular stock or any dynamic. It's universal. Just human nature. It will repeat again. Beware. So nobody can give you any good advice right now because if you're getting crushed and you're all,

okay, I got to manage risk, I got to manage risk. The time to manage risk. So here's the only thing you could do, right? You set up a calendar event every month in your calendar. And it's like, hey, look at risk management. And one of those months, and you get that, you get, you know, it's like the third of the month or whatever. And then you get it, whatever, you don't do anything. You get it, whatever, you don't do anything. And then when the market makes a new high and everything's great again, because everything will come back. Like that's the beauty of it. Patience is genius. And you're just, you just have to wait it out. And there's going to come a time where the market's making new highs and everybody's,

that's the moment to manage your risk. The reason why people throw risk management out the window, though, there are very practical reasons why. A, if you're a professional, it keeps you from, if you're more concerned with risk when markets are trending higher, sure, it's the right thing to do, but it keeps you from making as much money as the other guy is one reason. And there's career risk inherent in that. Like if you're walking around 50% invested and the S&P 500 doubles, everyone's comparing you to the S&P 500. You could risk manage yourself out of a job on Wall Street, which is like-

It exactly depends on the audience that we're talking to right now. If you're a professional money, there's people out there watching this right now who are professional money managers and I'm not talking to them as much. They have their own set of problems. They have their own set of ways that they get rewarded for great performance. an advisor who's managing people's retirement accounts in a rational, you know, tortoise beats the hare type of manner,

or if you're just somebody who is preparing for retirement over a long period of time, then that's the person that I'm talking to. So how does the person who's preparing for retirement risk manage? Is it as simple as 60-40 portfolio and rebalance? Is it? It's having a methodology beforehand. Because the reason I'm asking is. And then carrying that methodology out religiously. Yeah.

Tying yourself to a mask, whatever you have to do. Having great advisors who are well, you know, have great experience and can help you and talk you down. I think that's part of it. Yeah, because I think the regular person on the street, you say the word risk management to them, they honestly wouldn't even know the first thing,

like what that really means. No idea. And even if they do- They'd be like, wait, so you mean sell? Right. Well, once they, and even if they do, the moment, you know, animal spirits start really getting going, they just throw everything out the window and forget about it.

So it's a paradox. It's difficult. I agree. We're going to talk about the washout. The washout is finally upon us. You wrote about, Lynette, you wrote about the washout this week. And I love your writing. And I want to – oh.

And what I want to – oh. So the elite investors who have been predicting this really for a very long time, but they all of a sudden look smart again. They do look smart. Like Einhorn looks really smart. He does. And he is really smart. But I'm saying like once again, people are like, oh, yeah, I should have listened to that guy. Right. And timing is everything.

But I think that there's a lot of schadenfreude, you know, going on amongst the value investors. They love this. They love this. And they're watching this and they're sitting on their hands and they're saying this is this is wonderful. But, you know, one of my sources said, you know, what we would have liked would be to get it right on the way up as well as the way down. Like you'd like to be able to manage through both these situations. And there are very few people who are getting it right on both sides because there's been such a dramatic shift in the market. Nobody gets all the upside and none of the downside.

Michael and I were talking about Einhorn on the way in today. We're both fans of his. And he's had a rough couple of years, a lot of it because of Tesla and the Fed just allowing insane bubbles. Tesla? What's wrong with Tesla? His bubble basket, I think he wrote that in 2015, so it's been a long time. I was saying,

I think he did 18% or something last year was his final number, and the S&P did 28, but it was a very bullshitty 28 because it was very heavily concentrated on Apple and Microsoft. Not true. Not true. We can go back to that.

But I was saying that's an awesome 18 because probably his shorts were like starting to be a positive contributor at some point or maybe not until this year. Like what's the way to think about a value investor who plays long and short? His shorts have to be going down more than his longs. Like, he's got to be making money in this environment. So I'm not 100% sure about that. I don't know. What do you think? I think he's making money in this environment.

I talked to him, and I think that he is one of those investors who would say he wished he got it right on the way up and the way down. But he also doesn't have the constitution to think like that. That's like not how he is. He cannot – he's like Chanos. Like they cannot physically just caution to the wind, go full Tiger Global and invest in dog insurance. They can't do that.

Well, I'm rooting for him because it's been a long time of suffering for him and his investors, at least on the portfolio side. And to his credit, he was not out there like a maniac, flailing and blaming the Fed at every chance. He's been relatively quiet as far as I could tell and just sort of licking his wounds. And it's nice to see the other side of that. Yeah. Yeah.

This is a good environment for all of a sudden once again for people that actually focus on company fundamentals. And it hasn't – or I shouldn't say that. It's been a good market for people who are focused on fundamentals but preoccupied with growth for like five years. And now it's more about cash flow, profitability, balance sheet. And it always was going to be. It always comes down to this. It always comes down to the math. It always does.

And we – you know, people kept saying this. And there was just no way to make people – there's no way to make people listen when they're making money. It's just a full-on scoreboard check, that kind of attitude about look at how much money I'm making. And you can, like I said in my piece. You sound really smart, but look at my portfolio. Look at my portfolio. And like I said in my piece, when there's a party on Wall Street, you can dance to the music or you can stand aside. But what you cannot do is pretend the party won't end because it will always end.

Right. And we just don't know when. But ironically, we're talking about the party ended and maybe the anti-party ended. Like maybe today was the bottom. No. No? No. I don't think so either.

You still have garbage. You get great rallies in bear markets. Listen, listen, listen was the bottom. No. No? No. I don't think so either. You still have garbage. You get great rallies in bear markets. Listen, listen, listen. Hold on. Bear market rallies are huge. Hold on. We've been saying that bullshit for the last five years

every single time the market bottomed. It was at a 9% up day and everybody's like, this isn't how markets bottom. Every time over the last five years, markets have bottomed on a day exactly like today. And I'm not saying that the market did bottom. We'll see.

I tend to think it didn't, but it's possible. This was a serious washout. And the move today off the lows in every area, especially the most beaten down names, was pretty remarkable. We had like amazing, amazing intraday rally. What was the close? It could easily be bottom too.

I'm not saying it isn't either. I'm just saying it's, you know, not necessarily. So the Dow Jones was down 900 to close up 90. NASDAQ, I don't think opened down that much and rallied all day. So NASDAQ was in a bear market at the open. Like it was down 20%

of its highs at the open. So we'll see. We'll see. As usual, we'll see. But 3.35% NASDAQ rally. You can't say it's me i mean you could say it's bear market rally and probably that's right but still it's big i just wanted to add one last thing about einhorn too he did 18 last year i think i might have just made that number up the only thing harder than risk management in a in a in a in a raging bull market is

making money shorting stocks kudos. Kudos to that guy. It's so hard. Phil, you made a good point earlier about like, who are you talking to? Who's your audience? When I'm talking about like risk management or staying the course, whatever, I'm not talking to David Einhorn.

He doesn't need my advice. The professional traders don't need my advice. They know a lot more than I do. I'm talking to the people that are scared, that just need like some sort of voice of reason, a calming voice. And I think for most people, the answer, the simple answer to risk management is just asset allocation. It doesn't

need to be overcomplicated. Find where your line is in terms of how much risk you take. And unfortunately, nobody knows where their line is until they go over it. You have to go over your personal line at least one time to figure out, oh shit, I overestimated my risk tolerance. You did that post. I think you've done it multiple times. I don't think it's Ben. I think it's you, where it's like, this is 60-40. This is max drawdown. This is average drawdown or whatever. And then 70-30 and then 80-20.

And then you went all the way down. Here's a 10-90 portfolio. This is the best it'll do. And this is the worst that it's just hopefully done. That's the way to frame this is, okay, you look at history because it's a decent guide for drawdowns, right? Like returns, who knows, but risk, we know like the past is a pretty good barometer for what the future is

going to look like in terms of risk. So you say to yourself, okay, I have $20,000, right? This portfolio at its worst lost 14% and you calculate what's a 14% loss in $20,000. That's 2,800 bucks, whatever it is. Okay. That's too much money for me. I can't, I can't, that's too much. And then you just go from there. And that's like a reasonable way to think about it. Do you agree? Dude, you're the best. I'm contractually obligated not to trade.

I love you. You blow me away. Phil just opened an account with you. Just how far this guy has come. What's that? Phil just opened an account with you. Yeah, let's go. No, because you know what?

Phil, you were the one that encouraged me to start a blog in 2013. I love you. Dude, I remember you at the beginning. Snot Yeah, let's go. No, because you know what? Phil, you were the one that encouraged me to start a blog in 2013. I love you. Dude, I remember you at the beginning, snot-nosed mofow, and now you're like ridiculously brilliant. He was such a smart ass. Spouting your spitting numbers. Is that what they say? You're spitting, dude.

You're spitting. So one year since, speaking of things that we knew had to end badly, one year since the meme stock mania, I wanted to ask you guys, did anyone win? Who won? Robin Hood. No, Citadel. Of course. Citadel won.

Robin Hood did not win. Robin Hood. Good call. Robin Hood would not have been able to go public at the valuation it did if not for the meme stock mania. You know who else? Sure, but the clients are going to get burned in this now downturn, and who knows what's going to happen to Robinhood. Have you seen the stock price lately?

Yeah, it's yikes. Hit an all-time low today. Can we talk about this one thing? I couldn't believe the stock price. Wait, wait, wait. Time, time, time. It's crazy. What is it, like two?

One? Yeah, where is that bottle? Hello. So here's another winner. AMC. That company legitimately might be out of business if it were not for the Wall Street bets. And here's the crazy part.

Shout out to Michael Antonelli for pointing this out. AMC's still a $9 billion market cap. Like, that's not tiny. That would have been a zero. That would have been a zero. GameStop also still $9 billion. How is that possible? It's only a matter of time.

And, you know, here we go. For what? Until it's worth $20 billion? I totally agree. You think they're still screwed? I think they're still screwed. The business model hasn't changed. They just have a bunch... Oh, GameStop. GameStop, yeah. What is GameStop? Everybody's

waiting for this magical announcement of what they're going to pivot to. They're not. They have no pivot. And if you tell me it's NFTs, I can't. They had to have taken money out. The people controlling that company had to have taken so much money out when it went crazy. Insider selling in all these companies. So what do they care?

So what will they care? Well, I think they – They made a ton. And that company is like – what is it? It's a store that sells video games. What is that? Everything is streaming. And actually-

I'm no video, you know, I'm no game analysis guy. Well, that was why it was so heavily shorted, because obviously. Right. Melvin Capital is fine. They just raised- I heard Ken Griffin is giving them their money back. He doesn't want- They just raised, they're launching a new fund.

Oh. Which makes perfect sense. I really – I described this last night in terms of like – I think – OK. So let's just use ARK as an example not to pick on them. But ARK is down 61 percent from its highs. OK. That's like a big number. But like so what?

I think like it – there's no context there. So here's what a 61 percent decline actually is like to live it. If you start with 100 bucks and you lose 25%, you're at $75. From there, you lose another 25%. You're at $56.25. At that point, like most people are like, I f***ed this amount, right? You lost 44%. Like, I got to get out of here. Then you lose another 25% and then you lose another 8% and that's what 61% down is. So that's what the nature and what I was writing

about in my story is the nature of this of this bull market got religious. It got... What do you mean by that? People had this like real deep connection to the talking heads of this market,

people I call charlatans like Cathie Wood and Chamath Palapatiya. They thought they were like Moses leading them to the promised land. And they have these like deep connections to these stocks. And it's literally what they don't tell you to do in trading school, get emotional, develop an affection for your positions. Like this is what they tell you not to do. Generally speaking, and I'm guilty of this from time to time, generally speaking, one should not wear a T-shirt

with the ticker symbol of the stock that they just bought. Definitely not. You should not be rooting for these things like their baseball teams. In December 2020, remember I told you my neighbor said, I just don't think Kathy could lose money? And I went like this. That was December 2020. Remember I told you my neighbor said, I just don't think Kathy could lose money. And I went like this. That was December 2020. So the point, somebody emailed me the other day, why does she get so much attention? Like Ron Banner manages a very similar fund. And the reason why, and not picking on her, but this is just facts. The reason why is the way that she talks

about her investments. The fact that her bear case on Tesla was a $2 or $3 trillion market cap, these are not serious conversations that investment professionals typically have. And so that's why the spotlight, and also to her credit, there's never in history been a fund manager that had five funds up 100% in a single year. So she deserved it, right? Credit to her. She managed a great fund, whatever. But the statements that she made and the money rushing in and the way that she was cheerleading it out, of course, it's her, you know, it's her fund was just something like, like that deserves all the spotlight that it got. People in South Korea refer to her as money tree and people call her mama Kathy. Like this makes no sense. Yes. So this religious aspect again, and this goes back to the conversation we were having earlier

about risk management and being just universal that when the market's going crazy, nobody pays attention to it. There's a universality to this as well. And so anybody listening, this is going to happen again. It happened in the late 90s. I've seen it like eight times already.

I've seen it eight times already. There's going to be a ninth time. Maybe it's going to be three years from now. Maybe it's five years from now. Maybe it's a year from now. A month. Or maybe next month. Dude, we live in a meme market. It's never going away. So it's going to happen again. Be aware of that. What do you mean meme market? I mean the ability for stocks and NFTs and whatever to quadruple in 30 days. That is never going away. It's structural. I'm not saying that we're going to be in a bull market forever. That's not what I'm saying. Well, no, the gains don't last, but the fact that they can happen.

The way that people can mobilize in two seconds on TikTok, we've never seen these coordinated attacks on stocks and that is never going away. We're never going back to the way it used to be. And we had versions of this with Yahoo Finance, like Iomega was the first message board stock. It was like probably 1997 or 98. And they just, every trader who was on Yahoo Finance message boards just coalesced around one stock. And it was literally the same. And then the short sellers got involved. Like I think Herb Greenberg was like debunking Iomega 25 years ago or whatever. It happened like crazy. It happened before.

Now it's faster. TikTok before Twitter. It's bigger and faster. Now it's maybe bigger and faster fueled by social media. But the phenomena is greed, avarice, FOMO, whatever you call it. It happened in the 1920s. So that part of it is not unique, but the transmission mechanisms that happen today. This also happens in bear markets.

We get a new hero in every bear market that people become obsessed with and hang on their every word. Like who? Who is the guy that I wrote about in my book? You can tell I'm aging. What's his name? The biggest charlatan in history. Newsletter guy. Tip of your tongue, right?

in history. Newsletter guy. Tip of your tongue, right? Anyway, this guy was filling basketball arenas with, this is the late 70s, Joe Granville. Now that is religion. Granville was a f***ing like outright, like almost like he wanted you to call

him a charlatan because it was more press. I was about to Google Josh Brod charlatan. I was afraid of what I was going to say. Yeah, no. That wouldn't have been good. But anyway, the point is in the late 70s, markets had gone nowhere already for like 10 years. So he was like this guy that would constantly call the next big drop. And he was right half the time, but it didn't matter. They would pack like NBA arenas to see him speak.

And it's the same thing, but in reverse, like it's no different. So we will always have this religious attachment to whoever just looked like they were the most right person in the world. And you know what about like environments like we're in, like these volatility spikes, they never persist, right? Because you can't stay capitulating.

That's an event. And so pessimism eventually subsides. It always does. Sometimes it takes a lot longer than other times, but when we have like prolonged pessimism, it's because there's a recession. And if we don't get a recession, which we might, then we're going to be back at all-time highs. And if we get a recession, you know, all bets are off, obviously. You know, the definition of panic is that your, you know, the physiological, is that your heart rate reaches a very,

it goes really, really fast. Like scientific definition of panic. This is scientific. Yeah, yeah. Your heart rate gets really, really high and it can't stay that high for an extended period of time. So panic, by definition, is a very short event. As a matter of fact, you know that panic euphoria indicator,

it always pisses me off because I just feel like it's poorly named. Like it shouldn't be panic. It should be something else because it could stay in panic for a long time. Pessimistic. Fear and greed hit like negative today almost. Right, right. But anyway, panic can't last that long. It can't show the Vick spike.

It's the same exact thing. That's the physiological aspect of it. When I was doing this reporting for the story, one thing that one of my sources said was, it reminded me of that from, what do they say? The beatings will continue until morale improves. He was like, the losses will continue until these guys are out of business. Warren Buffett said that?

Warren Buffett said that. And actually it was Charlie Munger. Who's these guys? Are we saying like Tiger Cubs? Or are we saying like Robin Hood kids? We're saying, well, the Robin Hood kids, who knows what's going to happen,

but we're talking Tiger Cubs. They pivoted to fantasy sports. Like serious people. Very serious people. We're talking serious people. And we are talking like definitely Tiger Global, like all these hedge funds that basically stopped hedging and converted into early stage VC funds. And like marked up companies and insane valuations. You know what's great about –

We know what was going on there. You know what's great about like that they what was going on there. You know what's great about like, that they're all pivoted to early stage VC funds. Now you get the illiquidity and the losses. Isn't that fun? With high growth stocks, you only got the losses. Actually, with Josh and I were just talking about this, one thing that we didn't discuss,

what if these guys step away from growth equity where they're like, all right, we're not writing checks for $40 billion companies anymore. We're going to either, either there's better deals on public markets or we got to get earlier. So now they create bubbles in like the seed rounds, right, where the checks are still tiny.

And the opacity is better so that they can bullshit even more than they were doing before. I want to do Apple and Google versus Web3. Everybody versus Web3 or Web3 versus everybody maybe is the best way to put it. Oh, this fucking Brian Armstrong tweet was the worst. He makes me – Wait, wait. Let's fucking Brian Armstrong tweet was the worst he makes me what's the wait wait let's say what the tweet was

Lynette tell the story I don't want to tell the story okay you guys tell the story Michael tell the story so he went on this like whole tweet thread about the creativity

and how working with advertising agencies just did not work they just they couldn't get there or whatever the case may be so it was telling the story

of that QR code that was floating over the screen. And then one of the PR agencies that he works with was like, actually, page 18, line four, motherfucker. Like, what are you talking about? Meaning it was an advertising firm that came up with the QR code?

These people, like... So insecurity persists. That does persist. Persists forever. And I mean, Coinbase is one of those companies Where I'm just like From jump reading the S1 They were like we're scamming

We're here We've got a lot of insider mishmash We got a lot of self-dealing and self-interest Anyway buy the stock Thank you very much But it's disclosed Isn't it disclosed? Isn't that nice?

Coinbase CEO said something that I agree with recently, though, which is that the only arbiter of how Web3 is going to work is Apple and Google because none of this shit can go mass market until it's an app

in those two app stores. The general public will not be doing anything crypto related in their real lives unless it's on an app on their phone. And it won't be an app on their phone if it's not approved by Apple and Google. And so from that standpoint, big tech is going to control Web3. And a lot of this decentralization hippie shit is just going to end up being an illusion. It's nonsense. But all of it?

Hold on, go on. There's a technology aspect to this, and I agree that decentralization is very, you know, that there's going to be, you know, companies who are controlling this. Nobody cares about decentralization. 2% of the people do. But here's what you're going to see over a longer period of time.

Maybe. I mean, you know, I don't know what's going to happen in the future. We're going to hold you to it. Go on. Right. We'll all be dead. But here's what I think. And that is that these technologies will continue to add efficiency to the way we do business. And so that's been an

amazing boon. Companies like Google, companies like Apple, all of these technologies, Intel, whatever. You're going to get incredible efficiency, potentially incredible efficiencies from these great technologies, and it will be an organizational efficiency, whether it's truly decentralized. I mean, even at the beginning of the internet in the 90s. Is there anything efficient, though, about how any of this stuff works today? No. It's the opposite. It's so early.

It's terrible. It's so early. Phil's right. So here's the thing. So early. On the one hand, imagine judging Netflix in 2010 with the worst streaming library of all time. You would say this company is shit. What are they talking about? What could you stream on Netflix in 2010?

Nothing. Garbage. Garbage. Now, that's on the one hand, OK? On the other hand, it's the fault of a lot of the people in Web3 and the crypto bros who are like so fucking loud and obnoxious that if you keep saying every day that Bitcoin fixes this, well, then you got to show us where's the beef because right now it really kind of sucks. It sucks. And I hope all of you guys are reading Matt Levine's column.

I mean, the legal issues surrounding this are essentially, you know, it's cool if everything's on the blockchain and blah, blah, blah, blah. But what if somebody inputs lies? What if somebody just steals? And then how do you, what is your recourse? Well, I think that will definitely happen. You're going to be begging for centralization when you get stolen from.

It seems like the recourse is you have to go to a judge, which is exactly like centralization. And so what is the point of this exercise? I think what they would say is that because it's open source, like people can see what's going on. It's all right out there in the open. But it doesn't stop anyone from stealing anything and it doesn't stop anyone from refusing to give something back. So if I were a pomp, I would tweet back to you. I would say, Madoff didn't believe in blockchain.

And I would say, block. Think about how slow semiconductors were in like the 60s. Yeah, imagine you judge them in the 70s and say, what is this bullshit? Yes, but we knew what they were doing. We knew what they were doing. We knew they were going to get faster. We knew what they were going to get better at. And there was no community. And we knew what Netflix

was going to get better at. We knew what Netflix was going to do. We had no idea what they were doing. We didn't know we were going to be able to stream any movie we wanted. An Uber? We had no idea about that. That was the promise of Netflixflix yes the movies are shooting now but eventually you'll be able to stream any movie you want and semiconductors like that came

out of like what 30 40 years of research from rca and like you know uh like ibm and bell labs and all these amazing companies that were like doing in-house research so obviously they knew that they were going to continue advancing this technology and they already had the commercial applications for them because they were making them in-house. The thing is that semiconductors didn't need a cheering section in the 1970s and 80s. They fulfilled a purpose.

It wasn't social media world. That's my point. There's no laser-eyed Intel shareholders screaming at everybody to listen to them. In their defense, if you're going to try and rebuild the financial system, you need some yahoos. You need some cheerleaders.

They're doing too much. I don't disagree. No, they're doing it a disservice. As a matter of fact, Vitalik the other day- Well, how fun staying poor is the grossest thing ever. Vitalik the other day said something about CryptoWinner, and he was welcoming it. He was like, listen, it's a good thing. CryptoWinner.

We have CryptoWinner, and it's actually a good thing because it separates the wheat from the shaft. And you're going to get a lot of these yahoos, as you said. I always gain so much weight during crypto winter. I can't help it. All right, go on. I'm sorry. I just wanted to make Lynette laugh once. It's biological.

By the way, I gained weight during crypto summer also. Crypto summer is hot. This is Chris Mims in the journal. He's saying – this is his headline, which obviously deliberately was meant to cause a shitstorm. NFTs, cryptocurrencies, and Web3 are multi-level marketing schemes for a new generation. Basically like once you get long, you almost have to promote it because that's how it works.

It's not entirely wrong. I don't think there's much there. There's not entirely wrong. I think that, again, it's difficult to be constructive when there's so much toxicity there. However, I really do believe that this is going to like,

we don't know what this is going to become. And I do think that there are going to be parts of this that absolutely change the way we live. What's the first, Phil? I ask this of every crypto person that comes on the show. And we have packing on all the time. Phil is Phil. Phil's not a crypto person.

No, no, no, no, no. But people that know what they're talking about. Stop. People that know what they're talking about. But when this does become a mass market thing and more than just trading coins, where will it show up first? The consumer or like what will be the first killer app for decentralized finance or any of this? Here, I'm not sure if this will be the first, but this will be one thing that we'll take note of. And that is this, that when you pick up an iPhone or let's say a three-year-old picks up an iPhone,

they don't think about what's inside it. They don't think about how it works. They just swipe and it's very natural. Everybody gets it immediately. There's going to come a time where you're not going to be thinking about the blockchain. You're not going to be thinking about what token it is. You're not going to be thinking when it just works, that's going to be a major sign. So that's like the application level. That's like the user interface level. We're nowhere, you know, I mean, there's, you know, there's decentralized search engines or whatever,

and there's wallets. It's very early, but we're nowhere near that place yet. Do you think that the promise of this will truly be felt by the people that are supposed to be, which is the unbanked, the people who can't get a visa card? Like, is this really going to be, is anyone going to build anything for them? Do I have to answer that? Right.

Just kidding. No, I don't think so. Okay. I think the, you know. You and I agree on that. The wealthy get wealthier. And, you know, I mean, Andreessen Horowitz are up to here. They're not decentralized.

So Mike Novogratz was lying when he told me that this could help the young women of Afghanistan? It may. It may help. Is he lying to me? It may help. Here's a situation where it does help. I think the intention is that it could do that. I just don't know who's going to build that.

We're Americans, and so we have in terms of currency. You have a currency that's being completely devalued and have your money in Bitcoin. That might – OK. You're a Ukrainian fleeing to Poland. You're a refugee. You want out. You're a refugee. You want out.

You want your kids out of there. Okay. How do you get money that you could travel with, not be afraid to be robbed, and that you can be reunited with once you get where you're eventually going? Well, today you can. That's a great point. Today you can't. With crypto, you can't today. Why not? You can.

Why can't I move? I don't know what the currency is in Ukraine, but why couldn't I move my native currency onto FTX, have it in the cloud, cross the border with nothing on my person, and then once I get where I'm going to end up, Lithuania, Moldova, whatever, I could do it back in the cloud. All money is in the cloud now. That's right. But I don't know if I can move legal currency via the traditional banking system. Yeah, but if you don't have a bank account, like for example, Canada, what they were doing with the truckers and like blocking off their bank accounts. How does crypto fix that? If you can't get – if you can't put crypto into your bank account, like what – how are you supposed to transact and barter?

Right. NFTs. Dude, I have no idea. All right. I'm getting over my. NFTs. Dude, I have no idea. All right. I'm getting over my scores with this. Facebook, full disclosure, I bought the stock this morning. Not to brag. Not to brag.

I'm up 18 points right out of the gate. I don't like it, though, and I can't wait to get out of it. This stock last week fell from among the top 10 most valuable companies in the world by market cap. Oh, it did? It did. It's out. It is no longer in the top 10. Mark Zuckerberg's social media giant was worth about $565 billion as of last Thursday's close,

a stunning decline from a few months earlier when it was the sixth most valuable company in the world. Now what? Is this it? Have we seen the peak Facebook as a company? Mark Zuckerberg, as Lil Boosie used to call him, seems to be making some mistakes.

This whole meta thing, I wouldn't follow Mark Zuckerberg into a bodega to get a bacon, egg, and cheese. I don't know who's following him into the metaverse. It seems like it'll be one of those things that so far you need a headset or something to get there. I don't think most Americans are taking that leap.

The reason why Facebook and Instagram are so addictive is because they're right there. They're on your phone. They're very easily accessible. And that's not what the metaverse is. So far, as Satya Nadella told us after or maybe before he bought Activision, so far the metaverse is. So far, as Satya Nadella told us after or maybe before he bought Activision, that so far the metaverse is gaming. So you want to focus on gaming. Maybe it'll never be more than gaming. But the idea that I would go to the office with a giant headset on that prohibits me from drinking coffee and makes me want to die. People are like, oh, well, you could buy like Balenciaga clothes with Bitcoin that you wear in the metaverse.

And I'm like, that sounds so bleak. I don't think I want to do any of that. I don't want to do any of that. But there are people that do. Well, a lot of Silicon Valley and the things that they say that are just like preposterous to us could be read in like novels from the 80s and 70s, like tech sci-fi novels. And the metaverse is a concept from a sci-fi novel in a dystopian world. The world sucks, but we can still breathe the air. We can still go out. Our world is not a dystopia. The reason in these novels that you go to the metaverse is because the world sucks

and we're not there. So I don't understand what Mark Zuckerberg is doing right now. The world does not suck enough for me to go to the metaverse. You think if you lived in San Francisco, you might? I might go to the metaverse if I lived in San Francisco. Okay. I think we're so early. And I was actually astounded by Zuck's depiction of the metaverse in that video he put out the day they changed their name.

It looked like Blue's Clues. Why did they do that? Did you know that people are already getting groped in the metaverse? People have already complained about getting groped in the metaverse. What does that even mean? Getting uncomfortably touched by other cartoon figures in the metaverse. All right, all right. This is why Russia could basically do whatever it wants.

So – Because this is what we're fucking preoccupied with. Mark Zuckerberg cannot control Facebook or what's going on there. He wants to build a new world that he can't control either. Why are we letting him do this? The risk of – and anybody with a soul does not love Zuckerberg. But the risk here- I don't hate him as much as everyone else seems to hate him.

I just don't care about him. You know, it turns out in real life, the Winklevi- What is it? Winklevi? They were so hated in that movie, right? They were heroes. They might have been the good guys. And now, you like them better than Zuckerberg. It's a Hitler versus Stalin situation.

All right, well, guess what? Hitler versus Stalin. Coinbase. Steel death. Coinbase is down 7% in the after hours. Why do they invent a new type of metaverse? Big revenue beat. Expects trading volumes to fall in Q1.

This is Kevin Dugan at New York Magazine. We may be witnessing the early days of the fall of Zocustis. He was comparing him to a Roman emperor. Facebook's once unbeatable ad tracking system, the engine that made it a more than $1 trillion company, has effectively been neutralized by Apple, which allows users to block the company's trackers. Google is going to phase in the same thing, blah, blah, blah.

On their conference call, they said headwinds in Apple like a billion times. TikTok is kicking their ass and is perceived to be less toxic, although it's probably more toxic if you're a parent of a teenager. My kids never got hooked on an Apple app. I don't TikTok. I think Facebook's powers have peaked like a few years ago. I think Instagram is cocaine and TikTok is crack. Like they literally cannot stop. That's why I haven't downloaded it.

I can't. Don't go there. The only risk is if Zuck buys a young company that is. They're not going to let him. Antitrust regulators are all over him. I don't know. I have no idea. But a young Metaverse company.

He paid like $4 for Instagram. Anybody can make their own coin. and he tried to make a coin, and they said no. By the way, both parties hate him equally for slightly different reasons, but there is no universe in which either political party just lets that happen, almost no matter what he tries to do, and that might be a big part of the problem. And he brought this on himself. And Josh is long. And I own the stock.

All right. Fed officials now have rules. Finally. Holy shit. Why did this take 100 years, do we think? Senior Fed officials must now announce that they are buying or selling a security 45 days in advance. That notice will not be retractable, meaning if they say they're doing something, they actually have to do it.

Investments must be held for at least one year. I love it. The Fed's 12 regional bank presidents will be required to publicly disclose securities transactions within 30 days. Is Nancy Pelosi going on eToro, a Webull? Is it Webull where you can file somebody's portfolio? The Fed will also extend its financial trading blackout period, which typically applies in the run-up to Fed meetings by one day after ESO. If they say something in their statement, the Fed can't trade within, I don't know, two days instead of one. I don't know what that is.

Long overdue. What about Congress? Can we do that? Can we do that next? But wait a minute. They must have a new racket. They're like selling used cars or something. What do you think the public approval of these rules would be 100%?

Is there an argument that's against this that anyone outside of the Fed would champion? Can you think of anything? I think most Americans would say, what's the Fed? And then, great. Yeah, Fed who? Fed what? Okay. When am I getting Fed?

Starving. Yeah, exactly. Speaking of. So going the other way, I didn't read this yet, unfortunately. I put it in the doc. I forgot to read it. There's some talk about the SEC looking at the accredited investor rule and wanting to raise the limits, which I think is totally backwards.

I just lowered it. I don't, I don't know that everybody should be investing in venture capital, private equity, whatever, but like they're going the other way and trying to raise. It's a rich, get richer play.

What is going, what the hell is going on? It's a rich, get rich, richer play. Like don't, you know, don't give the poor people the same,

uh, uh, access to anything that we have. Here's the argument against doing that. Quote, the inclusion of more people pushes economic development, ingenuity, returns for a group of people who've been historically financially locked out of the ability to buy homes, locked out to levels of loans and access to capital, said Shelly Bell, founder and CEO of Black Girl Ventures, who spoke in an SEC meeting. So there is a groundswell of opposition to continuing to lock people out. I oppose.

I oppose. You want higher? No, lower. You want lower? Lower. So you don't oppose what you said? I'm sorry. No, I oppose what the SEC is doing.

I don't know if they're really doing it. I think they're considering it. Well, I oppose what the SEC is doing. I don't know if they're really doing it. I think they're considering it. Well, I oppose the consideration. You know what they should do? An IQ test instead of a financial autopsy or whatever. Instead of worrying so much how much money do you have, it's like how f***ing stupid are you? Can we trust that you're not about to take your net worth to zero immediately? You have some self-control.

What do you think? I don't know. Marshmallow test and – Marshmallow test would be good. There are so many ways for investors to blow themselves up in public markets. Yeah, that's true. They don't need private investments these days. They did the Jobs Act, was meant to expand the way companies could raise capital.

And so far, there has not been like this crime wave. There have been the regular scams, but it doesn't appear that there was a huge uptick in swindlers, just the regular amount of swindlers. I don't – we're fraudy right now, y'all. Everything's fraudy in this world. Well, that's because things are falling. Oh, my God. It's the golden age of. I have.

Chaytos has been saying that for a while. And I agree. We're in the same club there. This is the worst you've ever seen it, you think? In my career? For sure. I think it might be. There's some really scammy companies.

Without naming names. Like where? Like crypto? Biotech? Well, no. Now it's also really bad because celebrities are involved to an extent celebrities are promoting look the crypto people have all the money what is fortune favor josh the brave obviously but they have the money now to get

like rappers to post then it doesn't take much but like lil yachty is being sued why was somebody taking financial advice from lil yachty in the first place? I'm not sure. He literally has rainbow teeth. But no, I swear. Like I'm not even exaggerating. I'm Googling. Lil Yachty?

Yeah, no, I've heard of him. He is – I believe he raps. Jewish? He's the hip hop. Oh, wow. He's in the hip hop. Rainbow teeth indeed. He looks like he's in the hip hop rainbow teeth indeed could you imagine

following him on Instagram and being like wait I should buy SafeMoon he's no Lil Baby though he's no Lil Baby lyrically he can't touch Lil Baby alright anyway I would agree with you it's pretty scammy alright we're gonna go to favorites and then we're gonna go to Bobby Vans does that sound good

oh we're going to Bobby Vans we're not gonna bring the equipment we're going to go to favorites, and then we're going to go to Bobby Vans. Does that sound good? Oh, we're going to Bobby Vans? Yeah. We're not going to bring the equipment. We're not taping there. We're not taping there. There's where we're going to say what we really think. Let's do favorites, though. Lynette, start us off.

You have something more interesting than our typical guest comes with. Oh, she's got a great one. Well, the New Yorker, I believe maybe one or two weeks ago, had a feature on Caetano Veloso, the Brazilian musician who has been, I mean, just, not just Brazil, the world over, an amazing- How do you pronounce his name? Caetano Veloso. Okay, what is he? Is he jazz? He's jazz. Well, he started a movement called Tropicalia, which is kind of like bossa nova, rock, jazz,

and is the heart of Brazilian music. It was hated by the fascist regime of the 1970s. He was exiled from Brazil. He wore wild costumes. He was very sexual. He was very interesting. And then he went back to his homeland, and now he's raging against the regime now,

which is destructive and awful. He's got to be in the 70s. Yeah. He's got to be. But it's, I mean, he's a beautiful man. He makes beautiful music and it's a beautiful story. Where can we read this? This is The New Yorker?

Yeah. Okay. He's a genius. Written by my friend John Blitzer. He's a genius. And the other thing to do is go to Spotify and Gaetano Willoso. Okay. He's a genius. Written by my friend John Blitzer. He's a genius. And the other thing to do is go to Spotify and Gaetano Veloso. Absolutely. And just put on Gaetano Veloso radio.

Is it accessible to somebody that doesn't listen to this type of music? Yes. Could they put it on and get why it's great? Throw it on. You'll want to dance. You'll want to like. We don't want to pace. We don't want to get sued.

I would love to throw it on. All right. So we'll check that out. Phil, do you have a favorite for us this week? I have a favorite, and this is not a Homer either. This is real. So your boy, Nicky Numbers, has a book coming out in April. I wish it was out right now. Go, Nick.

He sent me a PDF copy a couple weeks ago the other day. We have a copy here. Here's a real copy right there. That book is a beautiful, great book. If you're in your 20s, in your 30s, in your 40s, 50s, in your 50s, I mean, you know, the best time to start saving money and investing was 20 years ago. The second best time is today so you could start right now but he blends great stories with data which i love yeah and because he pulls you in and then boom he hits you over the head with with with the data to back it up chapter 17 in particular needs to be out there now not in two months let's say the name of the book because it's a podcast. Don't Stop Buying.

Just Keep Buying. My bad, Nick. By Nick Maggiuli. Just Keep Buying. Oh, How to Buy During a Crisis. That's timely. Chapter 17, How to Buy During a Crisis. Is Nick out there?

Is perfectly timely. He is out there? Get over here. He looks like Robert De Niro's love child. And he only wears turtlenecks. I don't know. With the female Robert De Niro. He's doing the turtleneck thing lately, too.

It's such a De Niro thing. He's not around right now. But that chapter 17, you should read that chapter today, or maybe before today if it is a bottom. Nick writes like Morgan. I've told him this before.

He writes like Morgan Housel. Runs like Usain Bolt. But he's like coding. Like he's putting graphics onto his blog. His blog is of dollars and data. He's putting charts in that move. He's doing things that like most financial bloggers cannot do. It's beautiful. Oh, here cannot do. Will not do.

It's beautiful. Oh, here he is. Come here. You talking to me? We're your fan club. Your ears tingling? We're just loving you up. We're your fan club.

We're talking about your book. We're so proud of you. This is amazing. Bill loves chapter 17. Chapter 17, dude. I DM'd him today. I was like, you wrote that for today. Perfect.

Yeah. And so think about it this way. You get a 10% correction once every two years. Something like that. Something like that. So if you were 30 and you're going to be investing for another 30 years, let's say you're going to retire 30 years, you should have that book. You should read it, have it on your shelf. And then every other year, whenever there's a 10% correction, you

pull it out and read chapter 17. You're going to use it 15 times. It's a gift. Perfectly, it's a gift. You should make chapter 17, now that we just memed this thing, make it a PDF and give that out for free to promote the rest of the book. Okay. Although the rest of the book is not that good.

That's really the best part. I started reading it. I haven't finished it, but I think it's great. All right. You're relieved. Thanks for coming in. And Nick's coming on the show in a few weeks. And Nick will be on the show when the book comes out.

Michael, what's your favorite? Oh, wow. Square's only down 4.5% on the after hours. They must have crushed earnings. Duncan, we literally can't keep his attention for like more – at this point, like more than two minutes. Block. It's like 30 seconds. What is my favorite?

Oh, Drawer Pelleg wrote this amazing chef's kiss of a post. What's like 30 seconds. What is my favorite? Oh, Dror Poleg wrote this amazing chef's kiss of a post. What's the name? His name is Dror Poleg. Jewish? I believe he's Israeli. Okay. So, yes. Ken. Oh, is he Israeli? He speaks Hebrew. I don't know. Anyway,

what I do know is that he wrote this amazing blog post called The Perpetual Gamma Squeeze, which in plain English describes the current meme environment. And not just current meme environment, just how things take hold and how the metaverse grabs and runs with it. And it was spectacular. This is a great lead. A crowd with a bank account is turning the economy and society on its head. Who's that crowd?

Options traders? Yes. Phenomenal. I haven't read this yet. I'll definitely read it at some point this weekend. I just want to talk about Kanye for a second. Is anybody watching? Any of you guys watching this?

He's imploding right now. No, no, no. The Netflix show. Not the shit show. How was it? Is it not bad? Is it about early Kanye? It's amazing.

It's about early Kanye. He's like 19. Miss that guy. You will not I think people don't appreciate like how much of a genius he really probably still is but really

was in the time that nobody believed in him and he was just so, forget about the music the cleverness with which he became what he became and all the decisions that he had to make with really no help at all just to like get himself in front of Jay-Z. Like just the first episode is every step he had to take from 12 years old to getting himself in front of Rockefeller. And then episode two came out, I think, last night, which is like-

The blueprint. This is like where he breaks into a studio where Pharrell is, plays him a tape, and Pharrell is like, I'm your new biggest fan. Like episode two, you really see him start to make it. None of this is about today's tabloid Kanye. This is about like a young artist that will fucking not take no for an answer.

And the only reason we have all this footage, his like best friend from Chicago was like, I'll grab a camera and come with you and comes to New York with him. And they literally have footage of every rapper that you've ever loved interacting with him behind the scenes like in real life like ludicrous sitting in his car like you really need me to do a feature for you all right fine i'll do it like stuff like that and it's just like the most epic show i've ever seen you are you watching it like duncan you watching it no not yet my sister was telling me i need to you really have to watch it kanye fan back in college i saw him twice who was it yeah yeah seriously but now i it's phenomenal But now it feels depressing now.

It's so strange. But he has nothing. He didn't make this documentary. Okay. It's about him. Okay. But like this guy just collected years worth of footage. That's cool.

And everybody is in it. I'll have to watch. And I think what you get from it is, oh my God, this guy was going to become famous no matter what happened. And it's a loss. You know, it's a loss of that kind of like focus. You're not going to buy the stem player to listen to his new album? There's no focus on what he's doing. He's like, I'm this, I'm that, I'm do, you know, like somebody like that is like, I make music and I know who I want to listen to my music.

I know what my music sounds like. Right now, he's all over the place. Can I make a statement that I think is true, but I don't know how to prove it? I think he's the wealthiest artist in history. Why do you think that? Because other artists have created works of art that are worth more than his, but mostly after they died. He's worth $11 billion alive in his 40s.

I think he's my age. $11 billion? That's what – For what? That's what Forbes calculated. Why? Let's say that's wrong by half. $7 billion.

Adidas, Yeezys, which he owns, Gap, which he's like the creative – or pretend creative director, whatever he has going on with Kardashian money and E! Channel money, but he's estimated to be worth over $10 billion. Let's say that's wrong by double. Do you think there's ever been an artist, even going back to Da Vinci, whose net worth would even come close?

He's definitely more wealthy than any current singer, rapper, performer. There aren't movie stars who are worth 10 billion. I wonder how much Paul McCartney is worth. Not as much as you'd think because he didn't own the rights to his music for a long time. Right.

And actually still doesn't. Like Michael Jackson owned it, right? In the 80s. So I think he's the richest artist in history to actually have the money while he's alive. I don't know how to prove that but that's pretty remarkable when you think

and by the way if you ever needed proof that money doesn't make you happy look at what is going on with this man right now oh my god

and do you feel bad from it all or you're just you're post Kanye I think he's ill oh no he definitely is and I feel really bad for that

no he definitely is yeah so money can't buy happiness alright so we had a very happy show we talked about Ukraine and Kanye's implosion and I feel really bad for that. No, he definitely is. So Money Can't Buy Happiness. All right. So we had a very happy show. We talked about Ukraine and Kanye's implosion. I think we did a lot today.

Did you guys have as much fun as I did? I didn't get canceled. You did not get canceled. I should have ended with the oil, steel, hookers, and hackers line. That's how we should have ended it. That's the title of the show. Are we going to beep that out?

Why? I don't think so. That's fine. Why? show. Are we going to beep that out? Why? I don't think so. That's fine. Why? I'm pretty sure you said something very similar last time we had you on the podcast. He's trying to censor you. I say it all the time. No, don't let him.

Okay, we're going to leave it in. We're going to leave it in. We're going to leave it in. The important part is that I wagged my finger when you said it. Josh has a moral high ground. You have that on camera. All right, listen. Go ahead. It's war on,. All right, listen. Go ahead.

It's war on, so I don't care. Fair enough. We love you guys. Thank you so much for coming. Happy birthday, Josh. Thanks for coming to the birthday show. Happy birthday, Joshua. I'm telling you.

I've known you for, oh my God, 10 years at this point. And every day is better than the last. We didn't really tell too many stories about the, you know, early Josh Brown. Like, you were out of control. By the way, he was completely out of control. You were all bananas. Bananas. All bananas.

Now I am a paragon of responsibility. Did you do a bunch of videos of Josh back in the day? Thank God, no. Oh, man. Thank God, no. That's a whole episode in and of itself. I mean, whenever I would hang out with you guys, I felt like Wendy hanging out with the Lost Boys.

When are we all going to hang out again? We're going to Bobby Vans. Well, that's true. But I'm saying, like, everybody. What's the next thing? Well, Barry keeps threatening me with a dumpling crawl and then running away. Oh, my God.

Barry is a dumpling crawl. That we're going to edit. All right. We're going to let everybody get out of here. Make sure if you want to watch clips from today's show and you definitely do

youtube.com slash the compound RWM look for brand new episodes of Animal Spirits Monday and Wednesday. And what are your thoughts

every Tuesday night on the YouTube channel? Thanks so much for listening. Make sure to give us a rating or a review or whatever it's called, and we will see you guys next time. We're going to see live music at the summer, you guys. Oh, hell yeah. Hell yeah, we're going to.

Hell yeah. All right, take us out of here. All right, you guys feeling warmed up? You ready to do this? Ow! You ready to take this for real? Yeah. Why don't you just, like, do it?

Why don't you do it? Ow!