The Compound and Friends - Get Back to Work

Episode Date: June 18, 2021

On this week's episode of The Compound & Friends, Michael Batnick, Doug Boneparth, and Downtown Josh Brown discuss: the Fed decision, universal basic income, Wall Street's return to the office, student loans, the health benefits of coffee, horror movies, and more! Follow Michael's blog at theirrelevantinvestor.com Follow Doug at bonefidewealth.com Follow Josh's blog at thereformedbroker.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/podcast-youtube-disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Doug's a real professional. Turn up the volume. Nice snare. Duncan, give me more bass. Keep going. Perfect. Doug, were you a Simpsons guy? Huge.

Same. I have a brain defect or something where I can't laugh at cartoons. That's messed up. South Park, Family Guy, Simpsons. South Park should make you on the floor. I don't know why. Something's not firing. You need the disconnect

between reality and drawn image. South Park and Family Guy are funnier than any live action comedy I've ever seen on TV. Maybe other than Seinfeld. Rick and Morty beats it all. Who? Rick and Morty. I don't think it's that funny. What is that? You think it's that funny? Yeah. The writing's brilliant. It's't think it's that funny. What is that? You think it's that funny?

Yeah. The writing's brilliant. It's brilliant. It's next level. I mean, but it's super nerd. Oh, Adult Swim. Super, super space sci-fi nerd. Do you watch Dave?

No, and I know that. I just went to watch that this weekend. What the fuck? And they will only let me watch season two. Both of you assholes would love Dave. Yeah, I know. I've heard. I tried to watch it,

but they were like, season two, episode one is available. Dude, buy Hulu. It's six bucks. It's Little Dicky, right? It's six bucks. I still want another subscription.

You do my password? I'll give you my password. Give me your password. I'll watch it. Watch Handmaids. I'm out. I'm out of Handmaids. I'm not watching it.

I know it's good, but it's like five seasons. I can't do anything. I'm too far behind. It's dystopian to the max. Speaking of dystopian, it's showtime. 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. First of all, when was the last time I saw you? Is this it? First time since? We did the coffee thing. I made coffee.

Remember? That's pre-pandemic. That's 2019, bro. December 2019. Oh, God. November, December. All right. You look like nothing's changed.

You look healthy. You look happy. How was your pandemic? Is that a thing that we ask each other? Jeez. It's the SNL skit right here. I just had a guy that I used to work with in the brokerage industry text me out of the blue. I haven't spoken to him in, I don't know, 15 years, 10 years.

So, all right, so you made it. Good to hear. All right, Doug Bonaparte, let's big you up first. So you are Bonafide Wealth. You're the founder, CEO, the head of human resources you have employees now yeah we just brought another one on how many employees do you have two okay yeah very cool we've multiplied 100 gain how do you like making those uh how do you like making those uh social security tax payments i enter numbers in a computer all right watch the money go out of the account. All right.

So, all right. But you are in New Jersey. You're not working in the city now? Are you coming in once a week? What are you doing? I'm coming in twice. I'm going to come in twice a week once I get the younger kid into camp. I was here yesterday, actually.

So I'm here twice this week. Okay. I'm excited. I'm doing once a week this summer. I want to be here just to be. I just want to be here. You know what? It's so funny. Everybody's like so excited to come back in and more so than I thought they would be. I

shouldn't say everybody. A lot of people I'm talking to are getting excited to come in once or twice a week. Nobody's excited to be back full time. That's the thing. That's the thing. If you get the hybrid you want, it's a dream. And I think for people who never had that and are going to get that, it's an amazing thing. But if you're asking me, I always had a charmed like commuter life and choosing which days. Like pre-pandemic. Well, you're your own boss. Right.

You're not a good example of like somebody that's like being forced to come back in. Not at all. I'm going right back into what I was doing before the pandemic as far as like time. Oh, actually, we're going to talk about this whole thing today, but let's not- You guys are stepping on our shit. Yeah, let's not bury the lead. I feel like it's obligatory.

We have to talk about the Fed decision yesterday. We're not, this is not a macroeconomics podcast. We don't have to spend a ton of time on it. Good, because I still don't know what dots mean. The dot plot? Well, they basically told you in the press conference to stop paying attention to it. I of time on it. Good, because I still don't know what dots mean. The dot plot? Well, they basically told you in the press conference to stop paying attention to it. I stopped three years ago.

I was going to say, I beat them to that punch. They want you to stop paying attention to everything. Why do they keep doing press conferences? Why do they keep doing press conferences? Oh, wait a minute. I forgot. You're a tinfoil hatter. Yeah.

Doug hit me with a conspiracy theory a few weeks ago. This is awful. If we go down there, it's awful. No, I'm just saying. No, we're going to go there. It was a good one. He's got that. He's got that in him.

It was. What was it? Why Elon Musk can say and do the things that he does. But that's off. Like, that's way off the Fed topic here. Well, so why do they keep going? We don't want Doug getting arrested. If they want us to ignore the dot plot and they want us to give them more time to look at more data forever,

then why even bother with the press conferences? It's on the calendar. Is that it? We said we were going to do this, we have to do it? It's the way it's always been done, no? They've been saying it. No, that's my point. When I started in the business, there was no such thing.

People don't understand that. This started during the financial crisis. Prior to that, Alan Greenspan would leave his office, walk across the street, and they would give their statement or their testimony. And on CNBC, they would show footage of him crossing the street. And the commentators, I swear this is true, the commentators would comment on the size of his briefcase. I want you to find the video because you say that a lot. This happened. You've said this before. This happened all the time. I want you to find the video because you say that a lot. This happened. You've said this before. This happened all the time.

I want the evidence. Sometimes he would have a manila folder and they would look at how overstuffed it was with papers. And extrapolate information based on that. And say this looks like a hike. Yeah, but in the 90s, what was the size of the Fed's balance sheet? They didn't need to report on everything that they were doing. They weren't as activist as they became. They're not as important as they are today.

So you're both right, right? So number one, there's a lot. They say things now. They're doing these activist as they became. They're not as important as they are today. So you're both right, right? So number one, there's a lot. They say things now. They're doing these things from the recession. They now have like an obligation to like follow up on it. So if you're going to create a narrative that, you know, inflation is transitory, right? You've put it out there. Now you got to follow up on that.

So you put this story out there and you have to say something smart, like, oh, okay, let's hope inflation is under control and the economy is going to do well and we got to jack up rates in two and a half years from now. So that was my big takeaway. So the big showstopper was that based on the dot plots, the expectation within the Fed is now that the first rate hike will be in the second half of 2023, which is two and a half years from right now. And I guess markets moved on that news quickly and then reversed. Some markets did. Okay. So the Dow went down, not even a percent.

International bond markets moved. Fair enough. Fair enough. But domestically, I almost felt like the movement was like, yeah, we have to move because they said that. Not like I didn't take like real stock in any of this. Well, because it's just positioning. It's flows.

It's not necessarily the news that matters. It's just where people off sides or not. So Greg Ip did an article in the journal on this line like just – this was fantastic. He said, supplies been constricted by a litany of freak events. Pandemic-induced cuts to production and shifts in demand patterns. A container ship jamming in the Suez Canal, a fire at a Japanese microchip factory in a winter storm in Texas created shortages of everything from used cars and semiconductors to chicken wings and lumbers.

All right. With that said, it's kind of amazing that we haven't had even more inflation. What, with all of those supply disruptions, jam ups? Well, what's also interesting is that the most popular thing that people talk about is like the goods side, but the services side inflation. First of all, it's been running ahead of goods inflation forever, our whole lives pretty much. Second of all, none of that is ever transitory. People don't work for less than they worked for last year. They just don't. And then the last part of this, which I think the Fed, I said this on TV, maybe it wasn't PC. How long does Jerome Powell have to keep rates at zero for a waitress

to start making Ford F-150s on an assembly line? 50 years? There's 9 million open jobs. And I get that we haven't returned to all of the employment that we had prior to the pandemic. Some of that's just not happening. Like at a certain point, you have to recognize it's a skills mismatch and maybe even a geographic mismatch. And interest rates don't really do the trick, nor does asset purchasing. And I'm sure they know that. But I guess that's like what Wall Street is waiting for them to wake up and just say out loud, which politically maybe is not popular for them to do. I don't know how you take these really massive shifts in the way we operate economically and in our lives like that and distill it down to something that's like a sound

bite for people to digest and understand. Look at this chart. So we've got the thing I want you guys to pay attention to is expected inflation in the bond market, the orange line. And then all the way up top, expected inflation from consumers, I guess, is based on a survey. So the bond market saying one thing. Consumers are saying another thing. The bond market believes that it's transitory. Yes. Nick Colas was writing about how the bond market actually doesn't do a good job of pricing and inflation at all.

And it never has. And he doesn't really a good job of pricing and inflation at all, and it never has. And he doesn't really understand why everyone expects it to today. And actually, what bonds do is price in very, very long run inflation, like over multiple decades. They don't react to this year's inflation. So for some reason, everybody's waiting for that to happen. And it will not cooperate, as you can see here in this chart. I think we're missing the silver lining here is that in two and a half years, my high yield savings account is going to get me 60 basis points up from 10 today.

Right. Do you remember that sweet, sweet 200 from Marcus? Like, uh, it was there for a second. I remember money markets getting plus 5%, uh, 2006 before the great financial recession. So all of us in the RIA community have assets custodied at basically three firms, right? And they're all giving away trades to our clients for free. TikTok, Robinhood. TikTok, Robinhood, and OnlyFans. Right.

So the custodians are basically like, okay, trades are free because I guess that's what it is now. And they're hoping to make their money on interest from cash balances. They need rates to rise more than anyone else in the economy I can think of. Because that's not yet a business. I know they make a little bit of money, but the bet that they made, especially Schwab buying TD, is that that's going to be a much bigger business in the future. So maybe that's like the biggest beneficiary is all these brokerage firms with all this cash sloshing around. Watch. So there'll probably be a push to go into

the TAMPs and managed accounts where they can set the 2%, 3% cash minimum in those accounts. So they have control over how much is in those accounts. It frees up the advisor's life to put them in that kind of product, but they're going to get guaranteed money by allocating the cash component. but they're going to get guaranteed money by allocating the cash component. What if they mandate that you have a minimum amount in cash? Wait, what do you mean? So if you're the advisor and you're using a TAMP that's on a custodian platform

to do the investment management for your clients, and they decide how much cash is in the model? Yeah, like 2%, 3% in cash. It's got to be there for fees. It's got to be there just to be part of the model, to create a little, you know, so it's some friction or not friction in there, whatever. But yeah, I mean, that's typical. 3% of $10 trillion is like real money. I don't want to name names because I'm not positive on this, but I feel like one of the custodians did do this with one of their model

portfolios. And I remember a lot of people pointing out like, what are you kidding me? The amount of cash in this portfolio is absurd. It's 2% in a portfolio to make sure there's grease on the wheel, absurd. No, but I'm thinking it was more like 10 to 15. That's absurd. Yeah. Well, isn't that, wait,

somebody got like very vocally called out for that in a robo-advisor. Yeah, I don't want to name names. I'm not positive who it was. You're probably talking about the same thing. You can't have a 10% allocation. So we're doing quote unquote cash management in our client accounts at all these custodians. We're not a great customer for the brokerage firms because we're like on top of it.

What percentage of advisors do you think like just aren't even paying attention because the accounts aren't big enough or they don't even know better? I would guess like half. No way. Greater than half. What? You think more? You think less? Way less. better. I would guess like half. No way. Greater than half. What? You think more, you think less? Way less. No.

I'm with Josh. But not like 70%. Most financial advisors are doing cash management in individual accounts. What do you mean by cash management? I don't think- I mean literally rescuing client money from the default option,

which pays you no interest and kicks all the interest up to the brokerage firm and moving it into a better fund. Well, you're not going to get a lot of juice out of even, you used to be able to go into the money market fund. It's tiny, but as a fiduciary, I feel like you should be making an effort. I watched the sweep account do better than some of the money market funds. So you have a terrible situation.

So what do you go? Short-term bonds and put risk on the money? I wanted to talk about this. Last week, Josh, we were talking to Sam and I said, where are you guys feeling the inflation in your life? You just got a new car, right? But I said like if you're not renting a car, going on vacation, buying a new house, like it's not in your face. Now, for some people, inflation is crushing. I totally get it.

But for example, I went into my account yesterday and I downloaded my data for my groceries because that's what people say. Have you been to the grocery store? And this is – Where are people saying that on Twitter? I don't know. We say – I don't even know if people – yeah, people say it. People say it. I feel like that's the conventional thing.

The eggs, the milk. Because they can like tangibly feel and touch those items. So I don't know that I would notice my eggs going up by $0.30. I know I wouldn't notice because I don't check the prices of eggs because my bill always feels roughly the same when I go to Trader Joe's or King Cullen or North Shore Farms or wherever I go. It's $120 every time. It's like the same range. So, John, throw this chart up. So this is my 30-day rolling average of my grocery spending going back to 2019.

And obviously, there was a huge pickup. Look at that spike when you were hoarding Fruit Rollers. Right, exactly. But it actually – I mean, again, this is just my experience. Hold on. Let's stay on this. What were you buying in February and March? It wasn't. Robin was probably buying toilet paper. Paper towels. Yeah's stay on this. What were you buying in February and March? It wasn't.

Robin was probably buying toilet paper. Paper towels. Yeah, whatever. Clorox. Okay. Is alcohol included in there? Probably.

Legitimate question. Yeah, I honestly- Not in New York supermarkets. Yeah, like Orchard. No, because like bagel was included in here. Like some random things were included.

Well, he's the one tagging the expense. So I wanted to know if he was included. I don't, honestly, I don't know. I'll find out. But I think it was just primarily groceries. I don't know if liquor was including – Honestly, I don't know. I'll find out. But I think it was just primarily groceries.

I don't know if liquor was included. Okay. I was spending a lot on liquor in the early days of the pandemic like most people were. But I don't know. Does this – like just looking at this, does this look inflationary? But do you think this is what everybody's looks like? No. But that's my point is that inflation is very personal.

So we're looking at aggregate data. And the reason why people get mad, it's like because you're looking at inflation through your bills and not everybody has the same bills. We pay tutors for, you know, Tara is taking like a pretty crucial exams right now that are going to count forever. The tutor will not come for any less than let's say double what they were getting. And I don't think they're twice as good of a teacher. It's just this is what it is. And I don't see what that has to do with the pandemic, but what are you going to do? You're still going to pay it.

Michael, to your point, I think you have to also think about the sensitivity of that $0.30 and that dollar increase on your eggs or whatever product it is. Yeah, I'm not going to feel it. Yeah, and I just think it's very situational to the feel it. Yeah. And I just think it's, it's very situational to, to the earner. Absolutely. And yeah. Right. So what's the paradox of that is a lot of that inflation is coming from things that are outside of the world's control, but maybe some of it's coming from the wealth effect from the federal reserve pumping home prices went up 20% in a year and the stock market went stock market values that people have

like us, uh, household stock market holdings are up 30%. So Doug, no, there's, there's no, there's no liquor in here. It's all, it's King calling stop and shop. Yeah. A lot of straight up grocery, a lot of bagel boss, trader Joe's ANS. Yes. It's, it's groceries. Why Ralph's? I don't know why Ralph's is whatever. You have like every bagel store. Bagel Chalet, Bagel Cafe. I don't go to Bagel Chalet. Bagel Chalet is an anomaly.

Bagel Brothers. I'm not a Bagel Chalet guy. Back to your thing about whoever was reading the article about all these things happened and Suez Canal, everything. But doesn't that also – isn't the other side of that like how good the supply chain is that it can we manage yeah manage all of those i mean those are insane shot you get a boat in the suez they're going around africa like well one of the right one of the century one of the silver linings is that they're going to get very serious about making stuff here now like they're not going to put themselves in a position where the medicine or the ingredients for medicine come only from India and China.

Why do you think that? They said they're not. Who's they? First Trump and now Biden. Like it seems to be very bipartisan that they want to move more of the supply chain onshore, which they probably would not have done were it not for the disruptions from last year. Maybe even on a greater basis. They just, this is, when was the last time something like that has happened? I don't know, but I can assure you the world and especially America does not want that

to happen again. Yeah. So we have to find solutions. Like even- Build smaller boats. Boom. Build more canals. Yeah.

There you go. I want to get into Wall Street returning to work in person, which I think is like, I don't know if it has an impact on the markets or market psychology that's measurable but i definitely think there is a sea change that's taken place in the last two weeks and now all of a sudden the largest companies in wealth management banking uh trading they're like get back here they were like we'll see we'll take a but now they're like no no no no, no, no, no. Come to the office right now. And this doesn't affect me, Michael yourself. Um, but this is going to affect a lot of people I know. Uh, was this, is this surprising that they want them back this soon? Or does it seem long overdue? Um, for someone who's never worked a day in the corporate

world, I have strong feelings, which is interesting. Maybe I'm like, this is in defense of my clients and my spouse who does work in corporate America. Number one, is anyone outside of banking and finance being as like forceful about getting back in the office other than like Morgan Stanley and Goldman? Not technology. Okay. Not tech. Jack's like work wherever you want. Yeah. Right. Tech's like move to Montana. We're going to pay you a Montana wage. That was Zuckerberg. And we're all set. Right. So I think it's frustrating that it's so black and white because work from home really means different things to different people. And obviously I'm going to think about it from

the having school age kids at home and a dual, you know, dual working spouse perspective. So I think it's a lot more complicated than, hey, let's just go back to the way it was. Come here. I think it's a little tone deaf for families. But yeah, if you're in your 20s and you're wet behind the ears or you're older and your kids are out of the house, I can see the rationale and the appeal coming back to the office. It's not surprising to see financial firms leading the charge on this. It's kind of cultural and bottom line oriented. Goldman Sachs headquarters was built how long ago? Not that long ago.

They're new. Yeah, I worked right by it. This is James Gorman, CEO of Morgan Stanley. Sent a tough message to New York based employees who do not want to return to the office. They're all f***ing off in the Hamptons. Again, arguing that if they are comfortable dining out in the city,

they should feel safe working at the bank's headquarters. True. Quote, if you can go into a restaurant in New York City, you can come into the office and we want you in the office. He signaled that he would take a dim view of employees who did not work regularly in the office and especially those who wanted to do their job remotely from an out-of-state location like Florida or Colorado. I honestly don't have a problem with this. Like, what's the average salary for these people? I was going to say, these are all type A people who work at Morgan Stanley because they have that work ethic within, think about what it takes to become an investment banker.

I'm sure the majority, I'm guessing that people are happy, these people are happy to go back to work. I think, well- Doug, you disagree? I just think your painting was so broad of a brush here. Yeah, of course we are. And I appreciate that in all. I wish it could be like segmented or segregated. Like again, if you're 20s

and this is your third, fourth year as an analyst, get your butt in the office. Like that's important for you and your growth and the culture and all of that. I just, again, my heart goes out. Imagine being 12 years into your job. Wait, your heart goes out to investment bankers at Morgan Stanley?

No, I'm going beyond investment bankers here. I'm just saying like- Traders too. Yeah, traders too, back office personnel. Syndicate managers. Yeah, yeah, yeah. Emerging market bond traders, all of them. What's funny is the back office people

are probably needed more than the client facing people. That's my point. At least until there's a client to face. Yeah. It's just, you're imagine being 14 years in your career, your life has fundamentally shifted in terms of its logistics and where kids go and what you need to do. And you know, you've just gone through a year and a half of showing you can be productive and be, be a big boy or big girl. And you get, you know, boomered. I don't get it. Wait, what do you mean? I just think it's like,

let's go back to the way it was, everyone in the office. It's like we've just, I could show you how many Fortune 100 companies that have had more productivity over the last 18 months. I have to call bullshit on this because a lot of the Wall Street people I know, and I will never name any names,

they basically had a year and a half vacation at this point. And they literally, they're people that just like picked up and like people in their 20s, good for them, by the way, like a pickup with a group of like college friends, all of them work for, you know, they all came out of an Ivy and then they all worked at a Wall Street firm. They literally like rented a house like somewhere and just sat this out and did a Zoom in the morning, did a Zoom in the afternoon and smoked weed the entire day.

Everything I'm saying is- Should you be able to do that for more than a year? No. And everything I'm saying to you is the exception, you know, not the 20 something year olds, you know, blazing blunts and L's in their Hamptons house with eight other people. I'm just sticking up for the hardworking.

Well, let's broaden this out a little bit. Andreessen was on a podcast with Vlad on the Robin Hood podcast. And he said, it's possible that we have decoupled the geography from economic opportunity for the first time in 500 years. And he thinks that this is like,

we're not paying enough attention to this, that the change was massive. It's not going back to the way it was. Investment backs aside. Let me read his quote because it's really good. This is Mark Andreessen at future.com. So he was writing this? This is, I believe, a permanent civilizational shift. It is perhaps the most important thing that's happened in my lifetime,

a consequence of the internet that's maybe even more important than the internet. Permanently divorcing physical location from economic opportunity gives us a real shot at radically expanding the number of good jobs in the world while also dramatically improving quality of life for millions or billions of people. We may at long last shatter the geographic lottery, opening up opportunity to countless people who weren't lucky enough to be born in the right place. So-

And sending Montana housing prices up 500%. Big sky. Boise, Idaho. Big prices. All these places. How many people work on Wall Street and work in finance just because they grew up in the tri-state area and the jobs were here, the training was here? Like that's a huge, I think that's a huge factor. All right. So what's your point? Well, what if like the most talented people

for these jobs just never end up in New York? How about, why is it always about all or none? I think we just gravitate to extremes. I think the best thing for everyone is, hey, I'll come in two, three days a week. Like, let's figure out your life here and what's going to really matter. You're concerned about your employees and you want to maximize their productivity and be valuable as an employer. Find out what hybrid model is going to work best. It's never one or it's always what's in the middle. You know how stupid people are when they're trading money based on this stuff? There were days that we called virus days where the news turned bad.

Work from home stocks. And then DocuSign would go up 10%. But then two days later, there would be news that Moderna got through phase two. And then DocuSign would go down 10%. There are people actually trading what they think the future of jobs is on a minute by minute basis. Yeah, but here's the thing. The hybrid model, you could stay at home if you are already employed at a company. If you have relationships with your colleagues, it's cool. That's totally fine. But for hiring new people and building a rapport, it's very difficult. So in that article, Ally Financial, they're based in Detroit, they took on around 2,000

employees that have never stepped foot within our organization. That was a quote. And turnover is highest among that group. Yes. So the quote was, it's easier to sustain a relationship right now than to build a relationship. So the idea that people are going to get hired out of state without meeting their colleagues and climb the ladder, like that's tough.

How many people did we hire since the pandemic started? Eight? It's been a bunch, yeah. Some of them moved to New York to do this because they had that sense that I know I could do this remotely, but I'm in my 20s. I want to like really meet people in this company and not just be remote. We already had this built, this foundation built.

Half of our employees were outside of New York. Yeah, we were hybrid slash remote before it was cool. I don't have eight, but I got one that I hired during the pandemic, 22. And she's moving to Salt Lake City. Straight out there. Yeah. BYU. You wanted that person nearby.

Rightfully so, right? I definitely, I want, it's the hybrid model, that one. It's the hybrid, until we can really figure out, what are you going to tell a 22-year-old who's, you know, graduated early from college? You're not going to have her sit there five days a week in the office if you're not there, are you? I'm giving them access.

You want to go in, go in. Okay. You know know we're going to do training in in my backyard right so i guess that's kind of what we're doing is we're saying to people go in when you think you need to be in or you want to be in right john throw up this chart the number of u.s workers leaving jobs but mike you're right real quick just like 20 something typical finance, you know, specifically 20 something specifically financial function, big bank. Yeah. Like you, you, I think you should be there. How do they advance being remote? I agree. I agree with that. How do they make inroads with the people above them that arguably are going to be responsible for them getting promoted, learning new skills. Like so much of this is soft.

It's not hard. It's like see somebody in the hallway. Right. Go out for a drink with this person. Wow. This, this kid's got potential. If it's just zooms and they're pre-scheduled,

you lose that. And I don't think you can replicate it. Unless you have a function where your number crunching and analytical prowess actually puts dollars in the firm pocket. It's not going to, that's a small percentage of the workforce. That's the upper echelon of brain trust. And those people are going to be fine regardless. They're getting paid. So look at, look at this chart. The number of us workers

leaving jobs as a share of total unemployment. This is important. Like this really, really, really matters. People are leaving their jobs. This is like, this is, so this was 1% of the workforce quit a job in 2009. Right now it's 2.7%. So that's a double. It's the highest it's been in 20 years. It's a triple almost in the amount of people. So there's a lot of turnover in employment and I'm very excited.

I shouldn't say excited. I'm curious to see where this goes. Dude, you think about how many people just have kept the same job because of the health care, the benefits. Inertia. Status quo. I think what the pandemic did is it took the deck of cards and threw it up in the air. Totally.

And then some of them landed face up, some landed face down. But it's reshuffled everything. I think it's only exacerbated the trend that you saw going from 2009 on up. I think the workforce, you got to look at the demographics of the workforce, millennials going from children into there, what their demands are. The fact that the social safety net blew up, then yeah, then 2009 showing at least my geriatric millennials like, ha ha. I love that term.

Yeah, I love it too. It's the only time I've loved millennials. I'm totally geriatric. Only time I've loved millennials. You had a lot of people turn side hustles into full-time careers by starting businesses last year, which I think will be a silver lining. I mean, look, it's hard to find silver linings right now, but I think in three years, a lot of people are going to look back and say that this was a turning point for them. In the same way that 2008 was a big turning point for my career. You get forced to look in the mirror and say,

do I really want to go back to that job? Plot like when Fiverr and Upwork and all those companies like came online on that chart. And I'd be curious to see like where that's another Uber. Yeah. Like all these new options came along for self-employment. Last thing I want to do on this. This is a Wall Street Journal.

Companies push employees to prove they're vaccinated for COVID-19. Goldman Sachs, Morgan Stanley are among employers requesting staffers to disclose vaccination status. So they basically are saying that they want you to tell them if you're vaccinated. And if you're not, they're like asking you not to come in or at least wear a mask. Can you do that? Because I didn't know that I could do that or not. I'm getting mixed information. I've had some lawyer friends tell me you can tell your employees they have to be vaccinated to come into the office.

I would love to talk to someone who actually knows if that's true or not. Companies are getting covered to ratchet up the pressure from new guidance from the Equal Employment Opportunity Commission, which recently said U.S. employers can require all workers entering a workplace to be vaccinated against COVID-19. I feel like somebody is going to want to try that with a lawsuit. Easily. That's a given. Right. It's a given. Straight to the courts. a lawsuit. Easily. That's a given. Right. It's a given. Straight to

the courts. I should say many people. Maybe that should depend on the nature of the work that you're doing or how close you're asking people to be next to each other. I think this is just the beginning of things like this. You're going to get into schools and kids and on and on and on. You know, we're just first trying to get out and have a nice summer and do some stuff. And then we're going to have to deal with people trying the courts and asking questions of what their rights are. So let's stop drug testing and start vaccine testing.

I'd be okay with that. I'm in. Yeah. Doug, you have a young client base. Are student loans something that you deal with regularly? Regularly. All the time. Wrote a book about it.

So how do you deal with that? You just. All the time. Wrote a book about it. So how do you deal with that? You just pretend it doesn't exist? No. Bury your head in the sand. Yeah. It just goes away, right? Early on in catering to millennials, this was, I think, a lot more of an issue

than where it is now as geriatric millennials. Look, it's for a good problem in that they're making more money. They've overcome the hurdle of their student loan debt being a burden on achieving their goals. They can get over that. Geriatric millennials are born like early 80s? Yeah, I'm 84.

So 36-year-olds to 40-year-olds, I think, are in the geriatric phase. So if they did well and worked really hard, and so if they got like the law degree and took out 200, 300,000, whether they liked it or not, they kept at it. They're now out earning those student loan payments. So it still shows up. But you're a wealth manager.

So by definition, you're not going to have clients that are struggling with student loans. Right. It's annoying. I actually take those pro bono. I'll never forget one where it was a young girl. Literally, I saw no way. I had to tell her, leave the city, move in with your mom,

work as much as you possibly can. It was terrible. Her dad died and co-signed the loan. It was a disaster. It was a heartbreaker. And the only right thing to say is like, you have to grab this thing by the horns. There is light at the end of the tunnel.

It's going to be the most uncomfortable thing you're going to be dealing with over a five, 10 year period. But let me shake pom poms for you and tell you, you can do this. The alternative, there is none. How did she, how did she react to, uh, to that advice? I never heard from her again. So in my mind, I imagine she moved home and it's now five years later and she's on her way. All right, so Parent PLUS Loans. So define this for the people that aren't even aware of what this is about. Yeah, so Parent PLUS Loans allow your parent to co-sign a student loan for you up to,

this is the important part, up to the cost of attendance, no different than getting Graduate PLUS Loans. So these two loan structures, the PLUS, creates an interesting student loan trap. Because if you're going to a super expensive school or graduate school, you can take out up to like two, three, four, you know, if you're a medical school, you can take up a multiple six figures in student loans. Who can take it up? The parent can take it as though they're the student. With plus loans, it's typically parents and their undergraduate

attendee. Okay. Okay, because the undergraduate federal loans can't get up to the cost of attendance. Okay. All right. And then when it goes over to the grad school, basically it has the borrower, the student borrower, can go up to the cost of attendance. That's how you get my wife with $300,000 in student loans. So this seems dumb.

There was an article in the journal about a couple who took out $200,000 in 2005. It's now half a million dollars. It's the New York Times article. Yeah, I've heard of it. So the Parent PLUS loan does not come with an attempt to understand the parent's ability to repay it. That sounds dumb. Well, why? Because thanks to the education department, they view these loans as they do all student debt as quote instruments of social

insurance policy and not traditional debt end quote which is why they are not subject to traditional underwriting norms are you kidding me so you don't look at the parents ability to repay it at all they don't look at the kids on the grad plus in their ability or payment at all this is what's fundamentally wrong that i understand but i i guess i i don't know why i assume this That I understand, but I guess I don't know why I assume this. So, all right, in this case. Well, this is the coup de grace. This is totally f***ed.

If borrowers default on or consolidate their loans, or if they receive a forbearance or a deferment, putting payments on hold, the interest that accrues is capitalized, which means it is added to their principal balance, pushing payments higher. What are we trying to do here? Hurt people. Well, who's going to take the loan? Who's going to make the loan if that's not in place? Well, then put some underwriting standards on it. You got to zoom out here. It's just, all right. So it's like the something that's got to give with higher education and the way we let people borrow for it. And it's a multifaceted problem, and it touches on everything from financial literacy to the alignment. This is the big one, the alignment, the incentives between borrowers and universities

and how the cost of education got to where it is in the first place to allow that. Who are the lenders here? Is it the government or is it private institutions? It says parent plus loans now account for nearly a quarter of new federal borrowing for undergraduates. So 25% of undergraduates who are borrowing money for college,

there's a parent plus loan attached to it or superseding it. I don't really know. It's all one loan. But that's only 6% of the $1.57 trillion in current federal student debt. Because they've got a more popular recently. So it's a small portion of the overall portfolio, but this is where the balances are high because, again, they borrow up to the cost of attendance.

So you get the most dramatic and glamorous, not so glamorous stories, you know, out of both the Parent PLUS loan, which you see right here, and the Grad PLUS loans. It creates, again, the most putrid downfalls. So what are these families supposed to do? They've got half a million dollars worth of loans. Well, they have a kid in NYU, which is probably your first mistake.

So what is NYU a year now? $60,000 to $70,000 a year. $70,000 a year. So four-year undergrad degrees. And you've got to live here. And you have to live here on top of it. So here, wait. According to the most recent scorecard data, the median total debt

at graduation was $74,201. One-fifth of students had a parent who took a parent-plus loan at NYU. So, what do you, so, is your kid

Steven Spielberg? Because if not, and you're putting yourself in that financial position, you're fooling yourself, you're fooling your kid, and... There's a lot of parents writing checks to send their kid there. You know, you got to look at that data and see, well, what's the average household income

or net worth of, you know. Is this because they're not educated or they're trying to do the right thing? They're trying to help their kids instead of having the kids take out the loan? They think they're doing the right thing. Yeah. So we have an advisor here. You know, Tony, right? Of course. they're doing the right thing yeah so so we have an advisor here you know tony right of course tony isola has gotten very deep into finance like uh financial planning for college and he got the

he got the license or the accreditation or whatever because he had twin boys that he just got into college this past year during the pandemic and he was saying there are all these quirks in the algorithms that change every year um but if you like for example last year there were no foreign students so the schools were left with huge shortfalls because uh foreign students pay full boat yeah they don't really get financial aid there's no financial aid for kids coming from china so that but there weren't any there's no no foreign students so tony was saying if you that, you understand how the algorithm works, this is a situation where it actually benefits you not to ask for financial aid.

Because when they go hit the list, they're looking for the kids that can make up that shortfall. But that's not every year. So it's so arcane how they're figuring out who gets in, who doesn't. But paying for college, I feel like, is a whole sub-genre of financial planning. Guys, the schools are off the hook with the borrowers. Government gives you money. Get in whatever school you can. The university doesn't care if you fail out. They're getting the money. The incentive's gone. And you can't discharge these loans.

So that's the last thing I really have. It's impossible. Is this the only one that falls under that umbrella? No, they all can't. I'm saying when you declare bankruptcy and these don't go away. You can discharge credit card debt. You just have f***ing credit.

You can get rid of it. My very, very good friend from college, bankruptcy attorney, federal clerk. I mean, this guy knows the stuff inside and out. I just called him up one day for that case where I was helping that girl. And I said, Mike, is there any way we can get rid of this? Michael, I've always been told this is very hard. Is it really impossible? And he's like, I'm not going to waste your time on this call. Impossible. And then he brought me through why.

And I was just like, my God, it's pretty, it's pretty unbelievable. Let's keep moving here. So you're a coffee addict. Yeah. You and I had a little bit of a run in pre pandemic.

It's all good. We're good now. Josh, Josh is truly a coffee peasant. Yeah. I will drink gas station coffee. He's at the shell gas station. I called you a call. I called people, coffee assholes, and you identified with that.

I didn't call you one, but you definitely took that a little personally. But I learned a very valuable lesson. You came in, you brewed me some shitty coffees, and then your favorite coffee, and I could correctly identify that yours was better. So there is a difference it is discernible even to people that aren't going out of their way to learn about this stuff yeah i don't i don't expect people to like fall in love with my hobby and and you know wait a minute you don't have to defend it like coffee is more defensible than my hobby which is being a tequila asshole i love that too And I became a 10X tequila asshole during the pandemic.

Still am. Doug, I use the drip every single day. I love it. I got you that. You got me that. I actually wonder in the morning if Michael is like waking up, grinding beans and making a pour over. Doug got me the-

I got you a Chemex to do pour overs. I use it every single day. You're doing that every day? Every single day. It's ritual. It's super easy. I use it every single day. You're doing that every day? Every single day. It's ritual. It's super easy. Like my K-Cups. But anyway.

Like you going to the Shell gas station. So apparently, coffee has some health benefits, which is good because my body is breaking down at a young age. Michael is the oldest 36-year-old in the world. It can reduce all kinds of ailments, including Parkinson's disease, heart disease, check. Type 2 diabetes, check. Gallstones, depression, suicide, cirrhosis, liver cancer, melanoma, prostate cancer. But the rub is, I mean, you got to drink five cups. This sounds fake.

I mean, so you have to drink four or five eight-ounce cups of coffee. I love coffee. What's wrong with that? How many cups do you drink? One and a half to two. Yeah, right? Who drinks five cups? Just really good coffee.

You don't drink five cups. Yeah, I could see it. In the course of one day. Well, what do you know? I used to. Hold on. Hold on. You know't drink five cups. Yeah, I could see it. In the course of one day. Well, what do you know? I used to. Hold on. You know, a cup is an actual measurement. It's not.

It's eight ounces. But you would drink a K cup. Doesn't matter to Josh what it is. I'm like a dumpster. I drink two cups of gasoline. Hold on. You think it's two cups. You're drinking four cups.

The mugs that you have at your house are not eight ounce cups you know why they're 16 they would look like they're part of a dollhouse yeah they're 16 so you're drinking two of those you drink four actual cups of coffee right a cup is eight ounces i mean look i drink grams of coffee that's how bad when you get the tall coffee cup at 7-eleven yeah that's five cups 7-eleven yeah no i can't believe I just said that to him. If you said Wawa, but it's Jersey in me. If you said Wawa, I'd be like, cool, man. Like, yeah, those are 16 to 24 ounce cups is what you're grabbing.

But you don't live in Wawa, Jersey. You're in North Jersey. We have two in town now, and my wife's from South Jersey. They're expanding upward. I'm now a Philly guy because my wife's from South Jersey. Does your wife talk like Mayor of Easttown? Great show. You mean Gloomy Pennsylvania?

Yeah. It's an alternative name? You know, she was on The Ringer and she is British. Yes. Like her accent is very British. Her Philly accent was actually kind of, when you think about how British her accent is and the fact that she could even attempt to pull off- Makes it more impressive.

Yeah, it makes it more impressive. Although it was like, eh. All right. Numerous studies conducted throughout the world consuming four or five eight-ounce cups of coffee or about 400 milligrams of caffeine a day. That sounds like you've got a problem. Has been associated with reduced death rates.

Bullshit. Correct. In a study of more than 200,000 participants followed for up to 30 years. Are you kidding me? I was one of them. What's bullshit? I'm 36.

So starting at six years of age, they fed me coffee. You think these people were accurately reporting how much coffee they were drinking every day? I was doing my part from six years old. Josh, don't ruin it. See, he wants to. J.P. Morgan did this really good study, family cash balances income and expenditure trends throughout 2021. We're moving on from the coffee.

Did you have more to say? I feel like we dominated that. What else is there to say? Go ahead. I just had one thing. Finish your thought. It really was your comrade Ben Carlson, right? Does not drink coffee. Has never had a cup in his life. What is that? He drinks Diet Pepsi for his caffeine?

I figured while I'm here, I wanted to call him out on that. And, you know, rest in peace, Ben, based on this news. It sounds like he's, yeah. Oh, no. Sorry, Ben. I need a backup podcaster. I didn't even think about that. So Ben's longevity is not what it could be if only he were fiending coffee. So he doesn't drink coffee and he eats Chick-fil-A, but yet he's got like veins in his arms from muscles.

He better have life insurance. Oh, he'll be, Ben is in better physical shape than any of these coffee drinking maniacs. Michael, when he's gone, you hit me up, animal. You're a great backup. Okay, so there's a lot of great charts in here. One of the ones I want to talk about was low income families experience the greatest year-over-year percent decrease in labor income during the early months of the pandemic, which is the chart on the right.

Not surprising. Wait, what is this? The chart on the right shows the year-over-year percent change in median labor income by income quartile. Okay. So I can't read that. What's the bottom quartile? It says – The lightest blue line.

It says people that earn between $12,000 and $30,000 experience the biggest shock, obviously. They get laid off. And then, but the good news is the year-over-year percent change in median total income by income quartile, again, low-income families experience the greatest year-over-year percent increase. So my point is that the economic incentive programs worked. Well, you're putting money into their bank account that is equal to or greater than what would normally be hitting their bank account. So the debate that Ben and I keep having is going forward, how do we ever not do this? going forward. How do we ever not do this? But one of the reasons why I think this was such an outlier is because both sides of the aisle agreed on the same day, we have to do something. This is

a national emergency. Can't you guys foresee a recession where maybe we're already in a recession, but one side doesn't even agree that we're in a recession. And then like, they want to point fingers. Like by the time everyone knows that we're in a recession, it might be too late. And there might not be like the political willpower to do something like this. Are you comparing it like apple to an orange with a pandemic situation versus I think your, dare I say, run of the mill financial? But it might have nothing to do with the pandemic, but they might look back at this experience and say, we basically had a three-month recession because we put all this cash in people's hands and they went out and spent it. So the cause of it won't matter. So I don't know what causes the next massive recession.

Like who knows? Probably a stock market crash. No, the reason why it could matter is because we – absent a very serious event, we might not all agree that we're even in a recession. Yes, I agree with that. There are parts of the economy that were in a recession in 2018, right? Like anything manufacturing. And energy in 2016? Right.

Anything manufacturing in 2018, anything energy related in 15 and 16, those were, if you worked in those industries and lived in those parts of the country, you experienced the recession. So why not just parlay your thoughts into UBI? I love it. I'm here for it. I just want to make sure. That was a logical connection here.

Yes, I'm here for it. You'll only love it if there's no associated uptick in taxation, which, of course, there would be. We're not just going to do UBI and not try to raise the revenue from somewhere else. Well, I'm also here for the MMT. You're here for the MMT? Yes. I kind of have.

And the UBI. Well, you have to be, I guess. I have some of those vibes too. You do? There has to be a way to like... So the money doesn't have to come from anywhere and we could just give it to everybody and then we're going to complain that there's inflation?

No, no, no, no, no. I don't want to give it to everybody. they're going to complain of the disinflation. No, no, no. I don't want to give it to everybody. Then that's not UBI. The word universal is in the acronym. M-U-B-I. Modified UBI. That's where the war starts. Modified based on what? Income.

Where's the line? My cap is low. Let's start with the poverty line and go from there. What's the poverty line and go from there. What's the poverty line? I don't know. 36,000. We consider somebody under 36,000. So we top them up to 40,000 if you're changing their life?

I would make it higher than that, but yes. I think you're helping people. Did they run this experiment in some cities around the U.S. and the results were phenomenal? I know you're helping people, and I don't hate it. I'm just telling you that's a political battle every single time. Yes. I'm not here to debate that.

First of all, that's true. Like good luck, like pushing that through. I don't think the apparatus we have installed today has a shot at doing something like that. The Republicans are going to say you're paying people not to work and 70% of the American public are going to agree with that. Correct. And they're going to say that we're turning people into sloths who were never who are going to just be lazy democrats agree with that lazy drug addicts so i think that's not actually a winning man believe it or not free money is actually not a winning message even if we're doing it via mmt

and it's not coming from higher taxes yeah i still don't think the majority of america is in that place right but wait a minute i also don't think the majority of America is in that place right now. But wait a minute. I also don't think that we should give people enough money to live. Like, I'm not saying that you give everybody $30,000. What are you going to give them that would matter? If they're, let's say they're 36,000,

they're at the poverty line. I don't know, man. I haven't really thought about this too deeply. Just imagine if $500 a month is the difference between like feeding yourself and taking care of basic needs and like literally like not eating for a day. All you're doing is the money ends up back at Walmart.

So I don't, I don't know that it's wrong with that. I'm not saying anything's wrong with it per se. And actually Walmart is, has changed radically in terms of the way they're paying their people. Like they were kind of a leader recently in raising minimum wage. Wouldn't this be good for the economy if more people could spend more money? Well, let me finish the thought. Most of the shit you're buying in Walmart

is made in China. So you're basically saying, you're basically saying we're going to do more importing from the Far East because the goods are cheap. Walmart's going to keep all the profit spread and the taxpayer is going to fund this. Fine.

Or how about the government funds it? I just think that who would be against like less people starving? No one. I hope. What if UPC codes of like, you know, homegrown? What if they got a, what if you get a debit card that only recognize certain scan codes? I mean, get creative with it. I don't have, you know, I don't know how far tech and create.

The thing is, if it's universal and it has to be universal and you have to send checks to people that really don't need it. And it's there, I think moral obligation to return those checks. So at what, at what point in your mind, just out of curiosity,

does the social good get to it? Like where is it at? Where social good outweighs the cons of, of running the program. There's going to be a stigma. People that are going to get into this whole makers versus takers thing. It's so toxic and I hate it. So just we cannot go down that road is your conclusion.

So maybe universal is the key word. No, I like universal pre-K. Why should the family you're born into dictate how much opportunity you have in life? It's disgusting. So I like that. And they did that in New. Okay. It's, it's disgusting. So I like that. And they did that in New York city. I think it should be federal. Yeah.

Pre-K doesn't determine your success in life. No, but why should you start off in kindergarten a hundred yards back from the starting line or that other kids are coming into kindergarten, ready to read. And you had two working parents who didn't spend time reading books with you and you start off at a, at a disadvantage

and the ripple effects of that could be exponential throughout the course of your life. But same with food and basic necessities. I'd rather do that than just here's a check. Universal healthcare, I feel the same way about. I think you're hung up on just a check and it's now free range on that money because a lot of things could,

that money could go a thousand different ways. If you do universal healthcare and you're in a situation now where people can choose, I want private insurance for better access or I want Obamacare, whatever, and I'll take what I can get right now. And if you solidify that in society, you give people the wherewithal to quit their job, which is what we're seeing in that chart. I think that plays a role. People not thinking that their life depends on them staying somewhere that they don't want to stay.

I would be interested to hear the other side in a way that's not like anger. It's just like, what are the actual downsides in an unemotional way? What are the economic downsides? What are the potential societal downsides? What would make you or I think that like, geez, that's something we really would not want to happen. If that happens, maybe really. The something we really would not want to – if that happened to be really – The downside is the lack of dynamism that you see in Europe. And Macron has been making enemies all over France for the last few years talking about the idea that we need to encourage people to learn to take more risk and to stop relying so much on the state.

Okay, fair. Don't you think the dynamism is in like our cultural DNA and maybe UBI doesn't change that overnight? You could lose it as a result of that. Over three generations, you could look like Western Europe, which has a dynamism problem. They're not as entrepreneurial as we are. They're not risk takers.

That's because their food is too good. And they drink too much coffee. There are a lot of cultural reasons. And this is why a lot of people don't like the social capitalism dynamic when you're mixing. We want to be socialist, but we also want that spark of U.S. capitalism in there. I think we're all capitalists first. I agree with that. They point to places where what they're doing is unrealistic for our population.

Like they'll point to Norway. They'll look at the oil wealth in Norway and how it's shared by everybody that lives there. That's not relevant. It's not relevant because that's a homogenous population. Everybody's related to each other. They all look pretty much the same. We don't have a culture like that. Like people don't love their neighbors here as much as maybe they should.

And people – we have such disparate regional differences. I hate my neighbors. No, but it's like – It's not the cute Italian village where everyone in the village is helping out. No, no. We don't do that. We don't do that here. We're too dynamic.

I saw a commercial the other day. They bring dinner over to the – it was like ragu. They bring over the pasta and sauce to the little girl. I'll smack that tupperware right in your head. The little girl goes, no, it's with the china, with the plate. Here you go, Mr. Smith. Here you go, Mr. Smith. I'm like, what is that girl doing going over?

I mean it's a very beautiful thing. If somebody rings my doorbell, I call the police. Yeah. Straight up. And you're definitely – you're a tomato sauce asshole. Oh. That's a whole other show. Josh, I made you a Prego.

Here you go. I'll take it. I'll sample it. I know the wife and kids are out this week. We're worried about you. Here's some pasta. I'm like the critic from Ratatouille. All right, we're going to move on to Overbought, Oversold.

This is Michael's favorite segment. This is the part of the podcast where. All right. So I think building a culture is oversold. The word culture gets thrown around too much. It's actually offensive to me. Wait, can I just say one thing? The oversold overbought, it's confusing because I feel like it has the opposite meaning of what I'm saying.

Because something is oversold is it's going down too much. But you're saying it's oversold in a different way. All right. The idea is being oversold to us. I guess you could take it either way. I was confused. Merrill Lynch underscores commitment to recruiting pullback. I actually respect them for doing this. Merrill Lynch Wealth Management, which is now a wholly owned subsidiary of Bank of America. They'll probably lose the Merrill Lynch name sooner or

later. But they stopped writing these checks to advisors and they started getting much more serious about internal training. And I actually respect that. And this guy, Andy Seig or Seig, I don't know how to pronounce his name. Um, but he's the president of the wealth management group. We have been out of the recruiting game because we don't think it's a good formula for clients, shareholders, or the firm overall. Instead, Merrill Lynch is relying on newly redesigned advisor training programs to replenish its ranks. All right. So there are still firms that are doing this thing where they're trying to recruit established brokers, right?

Advisors. Or the raise 10 mil in two years or get out for the unestablished. Yeah. Or they're saying, okay, you're 22. Your uncle works here. Yeah. Here's a quote unquotelished. Yeah, or they're saying, okay, you're 22, your uncle works here. Yeah. Here's a quote-unquote job. Yeah.

Cold call for the next 13 months, and we'll tell you if you made it. Call every cousin aunt you've ever – All right, so I respect them for that, getting out of that race. Yes. And he's right. That is how you build – I'm not saying they'll be successful, but the first step to building a culture is to have people in the firm that are there for the right reason.

And if you're just writing people checks, 300% of their trailing production, you could never have a culture. You could say it until you're blue in the face about your culture, but it's bullshit. It's fake. The culture, what happens, dies because the people at the top in these big wealth management teams are the last of the Mohegans, are the last ones to successfully cold call and build the book and brokerage and sell stocks. And the game's changed. You can't effectively build that way anymore.

They've lost. I give this guy a ton of respect. When this article came out, I was like, I never thought I'd see the day. I never thought I'd see the day. One of our principles is that cultures can only be built. They can't be bought. 100%.

There it is. You agree with that? Yeah. So you got all these kids coming in, hitting phones, doing this stuff, and 99% of them flop out. Whatever they did get in goes back into the – Look what the Nets did. There's no culture there.

I never understood. So now you're the 70 – They'll disband that like in one year. No culture. It was never there. If you're the 70-year- disband that like in one year. Like it was never there. If you're the 70-year-old advisor, like running the couple bill, three, four, five bill team, then you got your heir apparent in their 50s.

He's like, okay, I could see like my time is coming. Your son-in-law. In your 50s. It's the guy who married your daughter. Yeah. And then, wait, then you got the 30-something-year-old, the next one down, and he's going like, I'm never going to get here.

And he's right. And then, yeah, so wait, and there's still one more after that. The new recruit is just like, I have no idea what I'm never going to get here. And he's right. And he's, and then, yeah. So wait, and there's still one more after that. The new recruit is just like, I have no idea what I'm doing. The one after that is the one that hits me up on LinkedIn and is like, hey, I just wanted to, I wanted to pick, I wanted to pick your brain and what am I going to do? I'm going to get on the phone and be like, dude, you should quit. Start an RIA.

That's not realistic either. I should stop telling people. start an RIA. That's not realistic either. I should stop telling people. So I always recommend that they try to, if possible, marry the boss's daughter.

All right. That's all I want to say about that. What's your overbought, oversold, Dougie? All right. If I'm saying it the right way, investing. We're all doing this wrong. Yeah. Investing is oversold.

This last year, and perhaps even over the last decade. I think we created a double-edged sword when it comes to investing with one edge being that people, notably younger investors slash traders, are getting more involved with investing and learning about the subject. So that's the good edge? That's the good – and you talked about this. I remember in a video. You're like – it was the leave the kids alone thing, right? But things are a dick.

You got Robinhood meme stocks, NFT, crypto, blah, blah, blah. And social media fueling a lot of this, sure. The other edge is that we're focusing almost exclusively on investing when here we are in a wealth management firm as a wealth manager. We don't start the conversation with investing. That's not where, it's the sexiest thing, which is how we get people into it. But, you know, no one's tweeting, no one's posting, you know, cashflow wins on social media here, insurance wins,

but we don't start the convo with investing. That's not fundamental personal finance. What should it start with? Start with savings rate? Goals in cash management? These are kids. These are kids.

They don't have cash. Their cash is at Robinhood and it's play money. Building good habits. So when you do finally come to money, you know what you're doing. And you really don't think that's happening in the background of all this Robinhood shit?

Because I think it is. That's my question. I want to know when the tide eventually goes out, did we push the ball forward with all this craziness that's happening on the investment front? Does the focus on investing push financial education forward? Or when this thing goes out, we're just right back where we were. We took the wrong path here.

It was all a multifaceted bubble of some kind. What does it depend on? The person. I got this nonsense out of my system when I was a young person. Right. You had to make money, lose money, realize how random half the shit was. I think a lot of money has been lost in pre- pre-ipo uh pre-deal spacks already um crypto like a lot of money's been made too it's not all bad but i'm i think like there's been a lot of

uh a lot of education this this spring uh nfts uh what are the other things in here but but let's say this thing blows the meme these things bloweme stocks, nobody's learned any good lessons yet. But if young kids blow – But see, there's things in here that are so stupid. But if you do blow up a few hundred bucks, a thousand, two thousand bucks, you learn a valuable lesson. We've all been there. I'm not denying that. I'm taking a more macro approach.

What if I say, are we moving it forward? The potential problem is – I don't know. The potential problem is if you go to the market and you view it through the lens of, oh, this is a casino, can you unlearn that behavior? And I think you can. I think you can. I also would say the same people that would have eventually found good financial habits would have either way. So you were focusing on trading stonks instead of figuring out that the student, those direct loans, the student loans that you're about to take out might actually prevent you from moving. Had you got a different lesson and understand the ramifications of entering into debt to fund and how you get an ROI. And yeah, I'm using lingo, how to get a return on the 30, 40 grand you're about to plow into, you know,

watching football games in the fall and getting a degree, that to me has an infinite, it will set you up for success far greater than, oh man, I leveraged myself on GameStomp and lost the money with my bros. But here's the problem with that. What if you did that and you turned $30,000 into a hundred grand? You won survivorship bias. You won. You did it. Great. A lot of people did it. A lot. Fantastic. I honestly believe millions of kids just did that. That could be the exception, not the rule. It is the exception.

It'll never happen again. Right. So, okay. A little flash in the pan moment in time where they put themselves. The S&P 500 just doubled in a year. That's not what's going to happen this year. Okay, Peter Schiff. It's the guys in the Ethereum and Bitcoin shirt. Everyone's. Okay, Peter Schiff. Stop saying. It's the guys in the Ethereum and Bitcoin shirt. Everyone's getting rich, but you affect.

All right. I got one. I don't know if this is overbought or oversold, but it's something. Yeah. Estate planning. Overbought. It's overbought? Why?

That's what you wrote. Okay. Maybe it's undersold. Maybe we won't do this next week. Maybe it's estate planning. What is it? Undersold. Like it's under-discursed?

That wasn't one of the options. They're not talking about it enough. Yeah, so for example. Why aren't the millennials talking about estate planning? I got you, Josh. Listen to this. I went into Salpino. Salpino's?

Salpino's. Apostrophe S. I got the Kraft pit turkey. Okay, Pit Kraft. Pit Kraft. So far, I like where this is going. Boar's Head. Doug, you know Boar's Head.

Oh, yeah. Okay. I don't love the flavor, but I can appreciate it. It's not my palate, but I totally get it. Okay. So I got that sandwich. A little bit too much smoke for me. But I saw an article in the New York Daily News.

What's that? Legal beef boiling in New York City court over Boar's Head Deli Meats Fortune. What, did the guy just die or something? So, let's see. I got some notes here. The death of Barbara Brunkhorst, the daughter of Boar's Head founder Frank Brunkhorst, has sparked a court fight

among the two families who control the Secret of Deli Meats company, estimated to earn around $1 billion annually. Wait, can we just pause with respect at Secretive Deli Meats Company? Because that is a cool band name, I would say. All right, go on.

So anyway, that's it. I mean, oh, but it's funny. Boar's Head moved its headquarters to Florida in 2001, like many longtime New Yorkers. That's what the deli meat said. Yeah, those trucks are still growing up in South Florida. They're everywhere and in every Publix too. Yeah, those trucks are still growing up in South Florida. They're everywhere in every public too. Okay.

So how come there's so many fortunes that are fought over after the person dies? Like why aren't – why isn't estate planning done for people with this amount of wealth? I think you only hear about the ones that are. That's a good point. I think you only hear about the prominent ones where they made a mistake with estate planning. Yeah, but I feel like it happens regularly. A lot of people die each year, and there's no shortage of wealthy people dying.

This happened with BB King and- Prince. Probably now DMX. Had a whole bunch of kids, and it was unclear who's getting what. Yeah, Prince. I did a podcast that was about Amy Winehouse's estate debacle. Right.

She didn't have kids. Who's supposed to get that? She made a lot of money post-death and it going to her pseudo-boyfriend. So estate planning really for people that are inheriting huge businesses or they're celebrities? People don't like to talk about death.

No kidding. But I just feel like you can destroy your heirs. The people you care most about, you can ruin their lives if you don't button the shit up. Or make them hate each other. Or you. All of it. Legacies get tarnished. I like the idea of creating an estate plan and then not

sharing it with anybody and surprising everybody after. Like Knives Out. Bitcoin fixes this. We're going to do favorites before we get out of here. What's the best thing you read, watched, listened to this week? I'm going to go first. Why didn't anybody tell me about

the Conjuring cinematic universe? I love the Conjuring. This is the greatest thing I've ever seen in my life. Wait, hold on. Explain. Take a step back. Walk us into it. So the Marvel cinematic universe, which is worth hundreds of billions

of dollars. I don't even know. How do you even quantify that? It's priceless now. Okay. But they like make it very clear when you're watching a movie that it's part of that. There are nine movies associated with The Conjuring that have all come out in the last eight years starting in 2013. They don't like put it in your face that these movies are related.

They're like Easter eggs. Like they'll have characters cross over from one to another. Well, The Conjuring 2 didn't give it away. In The Conjuring 2, the Annabelle doll is sitting there. Yes, yes, yes. And then you're like, wait, what?

And then they did Annabelle creation and you see the nun for the, like the nun for the first time. And then they make a nun movie. Yeah. The nun's in the conjuring too. All right. But these are Easter eggs that they're like relying on you to figure out.

That scene. That scene is so scary. Did you see that scene? That's conjuring too. Okay. So I just watched the nun. Okay. The nun's not that great.

Now the timeline of the movies, the nun takes place in 1952. The Annabelle doll is created in 1958 wait how do you discuss why are you now i'm losing my i'm losing my mind we could wiki dive on no because i watched the conjuring 3 on hbo max it wasn't that good oh it's okay so you had to go back i loved it you dude did you see the first one i've seen them all now okay now multiple times and i can't stop watching them and there's two more on the way. The first two are the best. So there's this one guy, James Wan,

who's like the creator of all this. He did not do the third one. Right, but he's been like producing them now and directing some of them. Not in canon. Yeah, he did not do the third one. No, they're all canonical. Okay.

And there's one called La Llorona, which- The curse, yeah. That was not great. Not great, but- I'm just looking at you like I know what you're talking about. I love these movies. Listen to me. I'll check it out. This is the coolest thing you like I know what you're talking about. I love these movies. Listen to me. I'll check it out.

This is the coolest thing ever. And there's a whole article about how they're all related. Wait, what's the coolest thing ever? The Conjuring? You're that into it? What's the spook factor? Because I like horror movies that become franchises, but they're not doing that with this.

This is almost like they're expanding horizontally. They're taking minor characters and creating new movies. Patrick Wilson is great. Vera Farmiga, is that her name? Via Formiga. They're not gory. I don't really like porn. No, they're jump scares. Yeah. And then they're creepy.

They're thrillers. They sneak up on you. I like how you say horizontally. They're called spinoffs. They're spinoffs. That's it. They're spinoffs. But then each spinoff is the beginning of a new series. Can I confess something? This might even defeat the whole purpose

of horror movies. So I like going to see horror movies in the theater because if I'm home, I'm too scared to watch them where I will watch them, but before the scary part, I'll press mute or something. I had a Dreamcast and had Resident Evil 3 or 4 or whichever and I stopped playing it within 10 minutes because I turned off

the lights in my room, turned up my sound system and here I am playing this game. A dog, a wolf jumped out at me and I was like, we're done,

we're done with this. If you have not seen The Conjuring 3 on HBO Max and all of these. 3 is not great. Start with 1. It's a 7.

Yeah, it's a 6. It's a horror eight. How about that? I'm a six, seven. Will you grant me a different scale for horror movies? Absolutely. So usually terrible. No, no, no.

You got to – what's the sliding scale called? There's a curve, right? Like in grade school, there's a curve, a grading curve. Horror movies deserve to be graded on a curve. 100%. Because objectively, they're not that good, but I love them. So I think it's a horror – I thought The Nun was like a horror seven or eight also. Real quick, I asked this question about horror movies.

What's the last one that was literally a stain your underwear moment? The first It I saw in the theater. Or caused an issue. Okay. Oh, well, for me. The first It. Blair Witch. The new first It.

The original was from the 70s. The new first It was the best movie experience I've ever had in my entire life. Because the theater was – you never saw It? No, no, the original, not the new one. No, no, no. The original, that was too scary for me because I was a kid when that came out. I couldn't watch that. This guy, that one, the first one, but there was a horror movie that literally f***ed me up.

And my mother was very angry at my father for taking me to see it. It was called In the Mouth of Madness. It's a John Carpenter movie with Sam Neill. I remember that, but I don't remember the movie. Vaguely remember it. I saw it in the theater. What year did that come out? 96?

I was maybe 11. You did not belong there. No, dude. No. No. And that genuinely terrified me. Yours is Blair Witch? That did nothing for me.

No, I actually never saw it in theaters. I was just asking the question. It was shot in the theater in 99. What is Blair Witch? That did nothing for me. No, I actually never saw it in theaters. I was just asking the question. It was sort of in the theater in 99. What caused an issue? And there's only two in my mind that ever caused an issue. It would have been Exorcist before that and Blair Witch were the two I can point to that actually caused pandemonium in the theaters. This movie, it was 1994.

I was nine years old. I should not have been in that movie. Who was that actor? Is it Sam Neill? Jurassic Park? Is it Sam O'Neill? Do you like exorcism and demon stuff? Well, that's The Conjuring. So The Conjuring has that but also ghosts?

I feel like it's a combination. Paranormal activity is very scary. That's good. I gotta go Hills Have Eyes type stuff. You like the very violent. That's demented and I love it. I'm very wrong I like that stuff. Very wrong up here in terms of that. I always have eyes or hostile, really.

No, hostile. No, no, no. That's horror porn. I don't like that. Not into hostile. Just too gory. No, when they cut the f***ing Achilles with the. Gotta have it.

Gotta have this type of stuff in there. I hate it. The guy with the blowtorch. Stop, I hate it. Going to work on that girl. I hate that stuff. I have to look away. I hate that stuff. I had to look away. I hate that stuff.

So I know we're lingering on this. I just want to know given how exposed we are to like stuff on the internet and gore. And I mean, we've seen it all now.

We're desensitized. I'm not desensitized to that. That's too much. What would it take to create exorcist 70s, exorcist level pandemonium

in a theater? Like people running out going, oh my God. Is that what happened with the exorcist? I think it killed people. No, it did. No, no. Yeah, exorcist caused a real problem. I heard it.

Made the news. I think it – because it caused copycats, kids acting like they were possessed, parents thinking that people in their house were possessed. No, no. It's just – literally just watching the flick. Yeah. Running. I mean, you got to run out of the theater. Excuse yourself.

People couldn't handle it. Yeah. Because there was nothing like that. I don't think you could do that anymore. Blair Witch is the only one I can ever recall people like a newscaster. That's already 22 years ago. Blair Witch did mess people up. I don't think you can do it anymore.

No. I don't think so. I don't think so either. I agree. I think you would have to do it with a reality show and it would have to be on Netflix. Or if you did do it, you can never put that on screen. I rewatched The Exorcist recently. Too slow for me.

Yeah. It's just too slow. George C. Scott is pretty badass. Who's that? Did I ever force you to watch Patton yet? No. How many hours? Wait, is George C. Scott in The Exorcist?

How many hours is Patton? Which character were you referring to? I don't know. The millennials are rolling their eyes. All right, let's keep it moving. Doug, what's your favorite? I did not expect it into horror movies. That was fun.

That was great. So my five-year-old daughter learned about space for an entire school year. And she literally knows more about outer space than her nerd father. The teacher brought this in? It was block learning. Yeah, she taught them.

It was like a whole STEM year. Space was like the big, volcanoes and space were the two things. Space is cool again. So cool. Like space is like a thing that's happening right now. But guys, there are things I didn't know. First of all, they troll all of us in the lessons. When your parents were in school, Pluto was a planet. Okay. We all get it. It's not, but get this. It's a dwarf planet. And there are four other dwarf planets in our solar system and a belt called the kuiper belt unnamed no they're named maki maki which is the stupidest name i've ever heard of in my life tuna yeah cirrus um aries and there's one more forgive me the fact

i remembered for dwarf planets there are and there may be more there may be more complicated i don't think they're going to change the textbooks for that. No, I mean, look, you got a five-year-old coming home, talking to me, and he could have been very specialized to this one teacher. Anyways, so now subconsciously in the back of my mind and my wife's mind is all things outer space. So what's your favorite space movie?

I'm kidding. Go ahead. Event Horizon. Horror movie. Awesome. Also Sam Neill. Very scary. Too scary. Lawrence Fish Also Sam Neill. Very scary. Too scary. Lawrence Fishburne, amazing job in there. Right, Lawrence Fishburne? Yeah.

Yeah. Anyways. That'd be funny if they spent the whole year teaching your kid like Event Horizon. Oh my God. And all these space horror movies. Bending space. All right. The Final Flight about the Challenger on Netflix came out in 2020.

It's a four-part miniseries here. Really deep dive into like what was going on in NASA. Is that Bruce Willis' arm patch from Armageddon? I was – That's Buscemi's. I was in third grade when the Challenger happened, and we watched it live. They wheeled the TV into the auditorium. I would love to know what went through your mind.

It's a tiny ass TV the whole school was watching. Do you remember? I don't remember having a reaction to it. But my mother told me that her cousin was training to be on the mission and didn't make the cut. He was a science teacher. Yeah, so it's about the recruitment of teachers to be the first non-scientist. I think my mother's cousin almost was on the shuttle or something. So they wanted to reinvigorate the space program because, you know, the Apollo missions were done and the Saturn V rocket was retired.

So they put civilian teachers. Well, then they did the shuttle program and America was like, yeah, shuttles in space. You can watch it land. And then they did like 25, 30 successful missions and people were like, whatever, I want to watch baseball. Who would they put on now? TikTok influencers? Elon. TikToks from space? Yeah. Well, Bezos is going to go. Yeah.

The shuttle program was created to get us to kind of where we are right now where everyday people can go up and we're still not there. That was NASA's hope anyways. But it was awesome. You got to take a look into the space program, seeing what was going on in the 80s, and obviously the thing blowing up and killing people

was not the highlight of the play. All right, so they saw Netflix? Yeah, it's kind of scandalous. There was an issue with the, they kind of knew about an issue with the boosters. There was an O-ring sealing problem that they dive into throughout this. I think I'm ruining the whole thing, but check it out.

You definitely got to watch your O-ring. All right, I want to plug the I Don ruining the whole thing, but check it out. You definitely got to watch your O-ring. All right. I want to plug the I Don't Shop store before we get out of here. What about me? What? We skipped them. Oh, you didn't add one to the doc. Yeah, because I didn't.

You're here to surprise us? Well, yeah, because I don't want to. All right. What's your favorite? Oh, you wanted to surprise us. Okay, go. So I saw a perfect movie this week. I already spoke about it on the podcast, but I saw it before Sunset. Was that the sequel?

Before Sunset. Oh, that's like with Ethan Hawke? Yeah, it's a perfect movie. Is that the first one or the last one? It's the second one. It was only an hour and 20 minutes, and from start to finish, it was just perfect. He makes awesome movies, Richard Linklater. Yeah.

He made- Days Unconfused. Days Unconfused. Days Unconfused. And a bunch of others. You like it? It's a romantic comedy? It's not a comedy, though. What is it?

It's just a romantic movie. Just a romantic movie. Yeah. All right. When did that come out? 2004. So you're digging. You're going back in time.

Dude, it was so good. Good for you. All right. We'll check that one out. What else are we doing? Oh, for those of us listening to the podcast, if you want to watch clips, we're posting these to youtube.com slash the compound RWM.

We appreciate our guest, Doug, coming in today. Did you have fun? Had a lot of fun. Was it everything that you expected? Sure. And maybe even a little more? More. Long.

Over, over, undersold. All right. And for compound merch, we we're gonna send you to the compound store that's idonshop.com and if you love investing podcasts and you probably do uh make sure you check out michael and ben every wednesday morning on animal spirits as well as the goldmine podcast have you heard have you heard any of our goldmine podcasts yes what do you think awesome pretty cool right it's. So the goldmine, we're reading our blog posts.

So if you are an audio learner rather than a, somebody who likes to read, that's a great way to consume our stuff. Thanks to Doug. We appreciate you coming by. Thank you.

Thanks to Duncan. Thanks to John on the controls. Guys are killing it as always. And we will see you guys next week good job guys all right let's go watch horror movies now