The Compound and Friends - How to Play the Money Game with Michael Santoli

Episode Date: August 21, 2026

On episode 256 of The Compound and Friends, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and Michael Batnick are joined by⁠ Michael Santoli ⁠ to discuss: the surprising strength of the stock market, what’s keeping the bull market alive, interest rates and the growing U.S. debt load, why corporate earnings remain so powerful, and whether today’s valuations can keep climbing. They also get into AI spending and the return on massive tech capex, market breadth and rotation, the rise of retail investors, options-income ETFs, why bears keep moving the goalposts, and what decades of market history can teach investors about adapting when the old rules stop working. This episode is sponsored by DBMF and Vanguard. To learn more about the world’s largest managed futures ETF visit https://www.dbmf.com/TCF Learn more about Vanguard bonds at https://vanguard.com/audio. Sign up for The Compound Newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ DBMF Disclosure: The iMGP DBi Managed Futures Strategy ETF’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and other important information about the investment company, it may be obtained by visiting: http://www.imgp.com. The Fund is distributed by ALPS Distributors,Inc. DBMF is the world’s largest managed futures ETF as of July 31, 2026 with $4.16 billion AUM. Learn more about your ad choices. Visit megaphone.fm/adchoices

Yankees won a few in a row? They did, the squeaking them out. You go to the stadium a lot? I don't go a lot. I used to go. I used to have like a little mini plan. I'm so old. I can't warm up to the new stadium.

I know it's been there like 17 years or whatever, but it's like not the place I walked into when I was five years old. You should have come with me to Jay-Z. You would have loved it that night. Oh, yeah? Oh, my God. So they didn't have Yankee security there. They had announced or security.

And I think there's like 50,000 tickets sold. And then maybe another 50,000 people who thought either somehow they'd get in or if they're on the list. Or if you're right outside the stadium, you can listen and just hang out. And it's in one of the most populous, like population dense neighborhoods maybe in the world. Yeah. And it was just like it was impossible. And I went Saturday night, so it wasn't quite as bad as the next night, Sunday night, where he didn't go on stage till 12th. Oh, my God.

But it took us two hours to get in. We planned for that. And then it took us two hours to leave. No kidding. Which is the worst. Yes. And everybody's like standing shoulder to shoulder. They just, they had two, six gates, Yankee Stadium.

They had two gates open. It's a nightmare. I know. I think what they thought is that they'd be able to better control the flow out of the street. Fewer checkpoints, yeah. But it did. So this is the thing where they like cut it into a dock? or something, the Four Nights or whatever it was.

They're going to have to make a movie. I think they did. They're going to have to because it was a true milestone event. Oasis is coming out of an IMAX. Their tour. There you go.

Probably the sphere. Who knows? That'd be sick. I saw them at the Rose Bowl last year before Future Proved. Oh, yeah. Amazing. You know, is a Yankee Stadium a lot?

Taranova's there. I know it. Like almost every game. I know. He just loves it so much. He has a plan. I'm going with him 9-11?

Oh, with you. Yeah. I was going to go. Yeah. Oh, you're not going. It's Jewish holiday. Oh, what does it fall on? What's 9-11?

September 11th. Probably Rosh Shosh. Rosh. Do you consider yourself the greatest financial journalist of all time? Oh, my God. No, I don't. I try not to consider myself at all. I'm just asking.

Why are you so awesome? I mean, come on. We are going to make you. We are going to make you blush. I've aged into it. No, but you know what? I feel this way, and I think I speak for the fans. Yeah.

You feel. as much like a practitioner as anybody in modern times that has reported on the financial markets. I guess I'll take that as a compliment. You're saying you feel that way about him or he feels that way? That's how I feel. Oh, because you said you said you. Whatever I said how I feel. I know what you meant.

I was there. That's how I feel. You'll take it. Or you take that compliment. I will take that although. You feel like you're more than just an observer. I'm saying I feel that. I just said it again.

Right. Go ahead. I feel like I always view it as like kind of color commentator, but maybe sounding a little more like the color commentator who has a good feel for how the game is played, as opposed to just like covering it in a neutral way. But the funny thing about it is I have zero interest and never have had an interest in actually doing this stuff. Like I've never wanted to trade. I've never, I've multiple times they've been like, hey, come on over, sell side by side, you know, try it out.

And I've never been tempted. You've never, like, been so right on something that ends up happening where you were like, you know, in an alternate universe, I'm a two and 20, and I capitalize on this thing that I saw coming before anyone else. Only in the most, like, abstract hypothetical way, not in a way where I legitimately, like, crave that feeling. Okay. And I just think it's honestly a temperament thing. Like, I don't have the gambling thing. And the more I've kind of covered markets and learned about it. don't have, you don't get the satisfaction out of a winning bet.

Not really. Is that what you mean when you say, you don't, I don't have that either? You know what? Because you're an umpire. You call balls and strice. You don't really make predictions. It could be that, yeah. That's true. I don't actually go out and say this stock's going to here.

Or I think the market's going to have a, you know, 15% drop or anything like that. But I just feel like, and by the way, I love the research on gamblers where they, I don't know if it's been debunked yet, but they say the thing that gamblers are chasing is not the winning. it's the moment right before you find out whether you won or lost. Really? It's like that suspense of like it might happen. It's like Christmas morning right before you pull the wrapping paper off the gift. No, you're right.

It might be when you're happiest. I remember last year I bet I money line the lions in game. I think that's the Giants last year. And when Gibbs broke that run and you knew that you were about to hit the bed, it's the best feeling. Yeah. Well, yeah, exactly. Right before. But I mean, in terms of being a practitioner, like I never would pretend that I could actually,

you know, I could like, Fake it. Have people come along and said, why don't you join my firm? We need a smart guy that understands markets who could communicate to clients. I'm sure you've been tempted. Over the years, that's happened.

Yeah. And, you know, I'm not going to say that I haven't, in a contract negotiation, floated that prospect out there as a stalking horse. Smart. They didn't bite. But, you know, I do think that it's an analogous role to be kind of a strategist as you guys,

you know, anything like you guys are. But for me, it's been much more about like, I didn't come into this with some innate love or interest in financial stuff. Like, my first job out of college was at this financial trade rag, as publisher of like a lot of newsletters in a trade magazine called Investment Dealers Digest. And when I was going for the interviews, I was pretty sure but not 100% certain that the stock tables in the newspaper were in dollars. Like, I was pretty sure, but like they don't put the dollar sign. Maybe it's points of some sort. And plus the fractions and everything at the time.

So, you know, I kind of came into it. And then I realized that it's a great forum for all the things you would ever want to write about and talk about, which is like winners and losers and these complex systems and trying to explain how the world works. And, you know, I think I also have looked up to people who've done this type of thing, whether it's a strategist or a writer, who they utilize everything they know. Right? I mean, what kind of job? So wait, I totally identify with that. Like yesterday, I don't know anything about science. Yeah.

Yesterday, I just happened to have personally found the news about Moderna, effectively being able to, in six weeks, create a personalized cancer vaccine specifically tuned in to, like, your type of tumor. And thereby injecting that MRNA, into a person and having it go to work on any potential risks because it's, and then, and then the stock went up 170% or something on the day. I just went down this whole rabbit hole of like, why is this such huge news?

Because I'm not like a biotech trader, but I agree with you. Like every day you get an opportunity to learn something new and talk about something completely new. And maybe people in other disciplines can say that. but finance touches, money touches everything in the whole world. So sports, like anything that you could possibly be interested in, there's a monetary angle. I was a history major. I was like a liberal arts guy.

And I always joked that I majored in history because it included everything. Right. Like, you know, and so it's like the decision of not making a decision. So like if we're talking about oil, you want to know about the history of Russia, wanting to have some kind of a domain over that part of the world throughout Ukraine. That's relevant. But so where do you get your money? most satisfaction from then.

So it's obviously not about being right. And most of the time you're not like making predictions anyway. Is it, I wrote this beautifully? Like I did a 600 word column. I perfectly explained everything the reader could need. It was a little bit literary and it's just, it was like a flawless piece.

Is that for you? Something close to that. More so than being right about something or being. Yeah. I mean, obviously both are great. but it's much more the former. It's much more I captured what's happening or what seems to be happening in a way that is efficient, eloquent,

and it actually illuminates it for somebody reading it. It was looking at it from a way where it feels like, yeah, that feels right. So I think that's why you're my favorite investment writer, like markets columnist, because you're the best at that. You're the best at that. I think ever. and I could cite specific columns that you've done with the history thing that you'd like you must have written this 25 years ago. You're talking about the Hartford Insurance Group.

Oh, yeah. And you do a column and you explain why are the insurance companies in Hartford. It turns out it's the highest elevation in New England. That's where you got that from. I found out. Because he's taught us. He never gave you credit. I've heard that story a million times.

I never gave credit to the person I heard it from. And what it really actually was, I believe it's like a very wide part of the river. So I almost misstated it. But you've done that every week for 30 years. It's unbelievable. You give people more than the stock went up 5%. The CEO said this.

Here's what you need to look out for in the earnings next week. You're doing pros. It stands out. And I just, I think it's brilliant. Well, thanks. I mean, and, you know, look, a lot of it goes back to, I came out of, I always say people do what I do roughly, financial journalism, any kind of journalism. Some people come at it because they're writers and

they're good at articulating a thing or they feel like that's their edge. Other people are just like news hounds. They just want scoops. Just want to crack heads and find the information first. And I like to speak authoritatively about things and all that. But I kind of got off the scoop treadmill at a very young age and was like, let me just try and describe. But also that goes back to Barron's where I spent 15 years. And you had a whole week of kind of like absorbing digesting what's going on, seeing all the other short-term storylines play out in a given week. You'll see the fixations.

You're filing on Friday night. Filing on Friday night. And then on Saturday morning at the time, you know, physical newspaper arriving on Saturday morning, you had a way of trying to just distill it into what mattered most or was most entertaining to read about the market. So now you're on TV. Michael, why did the Dow just go up 25 points in the last 10 minutes? Not a joke.

That's exactly where it is. Well, I think you do both. equally well. And, uh, all right. Did we do the show? The show's over. All right. All right.

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What's with the glasses? The paparazzi? Are we laying low, Nicole? All right. Ladies and gentlemen, welcome to the world's greatest investment podcast. My name is downtown Josh Brown. First-time listeners. Welcome, you're in for a treat.

Last time listeners, I'm sorry. We tried. We did our best. With me today, as always my co-host, Mr. Michael Batnik. Michael say hello. Hello, hello. We have financial media royalty in the house. Michael Santoli is co-anchor of CNBC's closing bell overtime and serves as the network's senior markets commentator. He also writes regular columns and produces original video for CNBC.com and CNBC Pro. Santoli joined CNBC in October 2015 from Yahoo Finance, where he was a senior columnist. And before that, of course, a legendary run at Barron's 15 years as a columnist and feature writer, having begun his career in the early 90s covering the securities industry for Dow Jones Newswire's.

Mr. Santoli, thank you so much for being here. So great to be here. The crowd is going absolutely. Thanks for accepting my invitation to be invited. All right. I'm telling you that. I have always wanted to have you on, but you're on closing bell overtime. We taped this show at 3 o'clock. Josh is too nice. I've asked you a million times, and he always says he can't do it. I always say, fuck that guy. I appreciate being considered and just left into waiting. I was a little nervous to ask you because I know you're on TV. But I did want to tell you, you taught me the stock market.

This is a true story. And I've told you this before, but I want the audience to understand this. I mean, you make it sound like I'm 30 years older than you, which is fine. But it's okay. But you really did because so I started, I started my career at Lou Lieberbaum, blue chip firm. It was a bucket shop on Long Island, but my parents didn't know better. They knew somebody that worked there and they're like, go work, go work for him. I was an aimless idiot.

But I was smart enough to realize that the people I worked for didn't know anything, like literally nothing, except one guy, and I'll never forget this. I went up to him after 4 o'clock All the brokers were doing cocaine Or whatever they were doing The room was empty And I walked up to him And I said,

You are the only person I see reading the Wall Street Journal You seem to sort of know what's going on How do I learn about stocks? And I'm a cold caller. I'm not even licensed. And he said, exactly, He said,

Very important, the C section of the Wall Street Journal Every single day. Was that the money and investing? Money and investing. Money and investing. Read the C section. Don't worry about B, it's politics.

Don't worry about A. It's like New York Times. Read the C section. Okay, I'll do that. What else? If you want to learn how to, if you want to learn why the market's doing what it's doing, every Saturday, read Barents, except for Abelson.

Yeah, exactly. He said, Abelson, you will leave the business. Everybody else. He didn't say you, but you were the best columnist at Barents at that time. And then the third thing he said, which is maybe where I learned the second most from, he said, Business Week, Gene Marshall. Yeah.

If you want to learn how to pitch stocks, Gene Marshall is the best stock, individual stock storyteller in the world. Yeah. And his column was called Inside Wall Street. And so I did it. I listened to this guy. Yep. And that's how I learned the stock market.

And yours was the first column I'd read because of everything that we just talked about. I just felt like this guy's not just saying what's happening. He's a writer. And I, we've not. I read literature, so it just, it resonated with me. Anyway, that's how I learned the stock market. So thank you for that. I'll take a tiny slice of the credit for that.

Thank you. I mean, obviously, Barron's was a great place to just like find a voice. And also, you know you're being read by people who know a whole lot more than you. Oh, I agree. And you have to therefore rise to, in fact, one of the reasons I stepped off,

you know, a lot of reasons I felt like I wanted to move on from there, but one was I got myself in this trap, on this treadmill of like, you know, this is like early 2010s, and it's like, I'm trying to stay one step ahead of these guys who stay two steps ahead of the overall market for a living, and they have all the resources, and it was just exhausting, and you kind of think yourself into circles. And to be honest, a lot of times what it did, being at Barron's was part of this, is it backed you into a kind of reflexive contrarianism or let me just say the provocative thing that goes against the prevailing trend or whatever it is.

And I kind of bristled at doing that all the time because, you know, you have to have a certain tolerance like Alan did, Abelson, of just like screaming into the darkness and saying, why does the market go down? So he was like this feared there back then, don't you feel like his columns now versus like what else is out there is pretty quaint? I don't even think it would get noticed on Twitter these days.

But back then, it was like, oh-oh, Abelson's about to go to town on Microsoft. Now it's like... It would just be this florid way of saying like, oh, there the crowd goes again, doing it silly, heard like things. And once in a while, there would be a targeted, you know,

take down of a company or whatever. And, you know, I don't know if this is true, but I've had people come to me and point to the crash of 87, that period of time where the... There was course a Monday. And the weekend before that, Alan, who was bearish leading up that. But if you remember, the market peaked in that August, and it was down huge into the crash.

Yeah. Like, it was already kind of, kind of a mess. And I think he was kind of saying like, aha, look at this. Finally, the world's coming around in my way of thinking. There's some good stocks that are cheap now, whatever. Next day, Mark goes down 22%. And it was like, never again. It was he had his moment. I have no idea if that's true. But that's so then he couldn't ever be bullish again just in case. I mean, I think temperamentally he wasn't geared to anyway. Nobody ever expects the crash of 87, right? Right. It's like a Monty Python sketch.

Exactly. All right. And then I taught Michael the stock market after you taught me. That's right. Who taught, yeah, sure. Who taught you the stock market? Nobody really taught me anything. I think it's really just like pulling from every direction and just like reading smart people.

And is that Barton Biggs book up there? Yeah. Because I mean, like Barton's a great example of what I'm talking about. It's like an English major. But you talked to a lot. This is the thing about what's different about. What's different about you versus what Michael and I do. Michael and I, when we write, we're bloggers, we've written books, but like, we're not sourced.

We're just reading other people, synthesizing, looking at charts, looking at some data, coming up with our own opinions. You were talking to real people behind the scenes that were managing real money. And I think that's where part of your edge probably came from. That is true. And especially the people who are a little bit more tactical, willing. to kind of stray away from, you know, the kind of standard playbook a little bit or not the closet index or types. But you know what?

These days, it's more what you do than not. Like, I do still keep in touch with people and try to have a read on what they're thinking and saying. They don't know anything. Anyway, nobody knows. That's almost comforting, though. But you think it's the opposite now? Everyone knows everything because there's so much information up there.

I think, yeah, almost everyone knows a certain level of what's going on. I've always said that that was what I found valuable about, you know, when I first took to Twitter and, you know, I was in, I was in news, I've been a newswire reader in real time my whole career, but it was just like, let me just keep it up with this to make sure I'm not missing anything, right? And it is all there. Like you saw the see the crescendo of attention and certain things. And yeah, so I don't know if anybody is any more saying, you know, in a broad sense on the overall market, I have an edge. And I'm going to be. But I think to your question, I think everyone is now so up to speed and is everyone is like drinking from the fire hose.

Yeah. The skill is like figuring out what to really pay attention to what not to, which of course you can do it sometimes. You can't always do it all the time. But that's what makes you so valuable still is because there's almost too much now that you people need somebody to synthesize it. Focus it down. Yeah.

Give me 800 words. What matters? Right. Focus it down. What theme is either misunderstood? Look, a lot of this comes down. You guys know it's like what version. of history applies today.

Because you can find an analogous period or something that looks like this type of market behavior. And you could infer what you want from it. But it's nothing is, nothing is 100%. Where the, it's always different guys. Yeah. Like unapologetically. Right.

No, this time it is different. And last time it was different too. And that's right. Like that's our step. Michael, I'm so curious, you just reminded me of this about like different interpretations. Yeah. So I was talking with Ben this week. And we've had this argument a billion different times.

when does a bear market end, when does a bull market start? Yeah. So the analogy that I gave to Ben is you could look at a player like Vin Baker, just as his box, right, basketball references. Like, oh, he was a great player. I'm like, whatever, he was okay. It's not the same thing to look back as to live through it. Right.

So you can look back to 2009 as the start of the bull market, which is what Ben was arguing for. And I said, dude, no fucking way was that at a bull market. No way. I know it was the end of the bear market, I suppose, like on the chart. But the bear market didn't actually end until 2012, 2013. Like, you were there. Sure.

Who was talking about a bull market in 2011 during the double dip, the euro stuff? When did people even start to say the word? I'm on you. I'm on your... I'm on yours. Ben's describing a rally. A rally is not a bull market. But I think what matters is what people were saying in real time.

And nobody was dumb enough to say, ball. I wouldn't say nobody was saying that. But I do think that the end of a bear market. in the beginning of a bull market are really only defined in retrospect. So you're in this nether zone of like, we don't know how it's going to break from here. And it's going to look very similar. A bear market rally is going to, I can remember one of the most highest hit rate pieces that Barry Riddholtz ever wrote. It must be because it was called bear market rally.

Okay. And it was like, I used to just stumble on it all the time for some reason. Oh, on the big picture block. Yeah. And it was probably in late 2009. And it's like rage bait at that period of time. Right. But that's the point that Michael's making.

I know. Saying bear market rally. Yeah. Or, dare I say, new secular bull market in 2009? Insane. People would think that you should be arrested. Well, that brings me to my mystery broker guy because that's kind of what he did in late 2009. Yeah.

He says the financial crisis is over. We don't look back. Should we clear up once and for all that it's not made? Well, we had a little bit of, of, vagueness about that up until last December when he actually was identified. Right. But I wouldn't ever, I would always say it's nobody you've ever heard of. Which is what makes it so fascinating.

Tell the story of the, for people that don't know. I was at Barron's and there was a guy who was a financial advisor, a broker, who would occasionally write, you know, he would like send me his kind of client letter. And he had done so, he had written one in 07 that was really close to the top of the market. And he was like, this is going to fall apart. Not saying he caught every beat. not March of 2009 that he wrote me back, but he did later that year. I think it might have been August, September that year. Foss enough. And he was like, it's done. It's over. Financial crisis is over.

You know, you have to be playing it like it's a new bull market. And I wrote about it without naming him because he did not want to be named. You didn't want credit. But you said mystery broker. Eventually. Not in the first. Not in the first time. The first time I was like, so there's this guy who writes me. And literally that's how this thing started. And for me, it was a lesson of people's psychology of why they just fixated on this guy. And they wanted it. It would ask for updates all time. On Twitter, I would update when he had a change of view. I would never call him and ask him what he thought because I felt like that was a little artificial. I want to make sure he's kind of got a new take before I highlight. And he became this weird franchise. It kind of got away from me.

I didn't really want it to become a major thing. Over the years, he, he kind of flirted with the idea of being identified. The mystery broker ETF. I would always tell you, I would always say, I would always say to everybody, you'll be disappointed when you find out. Because it's nobody from nowhere. It's nobody you heard of. Yeah, yeah, yeah. And it's, you know, and then they would say like,

oh, I think it's Tepper. It's like, Tepper talks about, Tepper goes on TV when he has something to say. Right, he needs to be a mystery broker. Why is that? What's the, what's the, or it's archa- What do you mean by that? It speaks to the psychology of people.

Like, uh, people think there's a secret person who knows the answers. I was going to say, I read somewhere 31% of U.S. adults believe in magic. Yeah. So that's, like, they believe there's a man who can divine the future course of the stock market based on whatever signals he's looking at. Michael, you have a bit in here from Adam Smith's The Money Game, which is my favorite investing book of all time. Oh, yeah.

Like, by far. And I'm pretty sure it was him, but it could have been somebody else. Maybe it was Peter Burnson. I can't remember who said, like, nobody can see the future. We're all so bad at predicting what happens next. Then why? Surely the public, like, must be onto it. After all right, I get it.

No. the quote was like the demand being there, the predictions must be supplied. That's right. And it's demand from the public. People like, no, I know you can't really see the future. But like, so a family member of mine, that's what Josh told about is Josh still bullish on CrowdStrike? Okay.

And I was like, listen, yes, Josh has- Uncle Morty, I'm still bullish. Yes. I said, but he, you know, he would, this is what Josh would say. You probably know as much about the stock as I do. I'm bullish long term on cyber. I like the CEO. I like what they're doing.

But what do I know? I mean, he said, no, I know, but like, does he still like the stock? Yeah. Like, you can't convince people that you don't know the future. That's exactly right. And people come to me all the time. Like, wow, I'd really love to get you, you know, just across the table. And you can tell me what's really good.

What's really going to happen? Can I tell you a thing that I've noticed in that regard? And I wonder if you've noticed it too. I have spent, I've doing TV 14, 15 years. I've spent the entire time complaining that stock people are being held to a different standard than NFL commentators on Sunday. where they go around the table. Terry, what do you think?

What do you think? I like the stealer. And like nobody, nobody's like, you son of a bitch. You said the dolphins. It's just like they made a prediction. And somehow they're worse than a coin flip against the spread. Fine. But they're right.

They're wrong. They have biases. They like the player. They like the coach. They used to play for the team. It doesn't matter. That's right. That's one standard.

I go on CNBC. Yeah. I'm right on three stocks in a row. The fourth one is not good. this scumbag, Josh Browd. Okay. So I always like,

whatever, I don't complain too much. I'm doing fine. But like, that was always, I've noticed that that's changing in the era of everybody gambling. Mm-hmm.

Those guys are getting hell. I don't know if I want to be Howie Long right now. I might rather be Jim Kramer than Howie Long. I want to pick 16 games. Those guys get that thrust. They must. All the fantasy. Sure.

Because now that's almost being looked at as financial. Now that you, you put gambling into Robinhood and prediction markets into the broker into interactive brokers, now all of a sudden those guys are like being treated like, like Kramer. Right. And I don't know if they're having as much fun right now. Real sophisticated seeming tip sheet type, you know, program. And he's like, I'll never forget.

So have you noticed this? Definitely. Okay. I'll never forget, this kind of came into a little more clarity for me when, right in the pandemic meme stock craze. post, you know, and, of course, we could look at Hertz being bought up when it was in bankruptcy, the whole thing. And there was a quote, I believe it was in the FT story about this.

And they went to a guy who's like a golf pro at some club, and he's been playing these stocks. And they asked him about it. It's like, you know, you don't really know anything about this. Like, what's the story? He's like, no, look, I mean, it's better than sports gambling because if I'm wrong on a game, I lose every zero. Yeah. Yeah. If I buy Hertz, it goes down 30%.

I still have 70%. I'm like, I guess. Yeah. That's why you got to do the 10-team parlay birdcage that Michael does. Then you get to be wrong on multiple legs. Right. Okay. You send somebody up to Foxwoods to place the bets for you in the helicopter.

Yeah, I know about it. I want to play a video for you, okay? Yeah. All right. Do we have that clip from Michael's birthday party, 1989? 25 years ago, when the country announced good numbers, interest rates went down because we had a stronger country. Now when we announced good numbers, the better they are, the worse it is for interest rates.

So we could have a GDP of 10 times. You know, they say, oh, it's going to be three times or 4.1. We could have a GDP of 10, 12, 15 times if they just leave us alone. Let us let the rates go down. We should pay the lowest interest rates. You know, every point of interest is $600 billion. Think of that. Every point of interest is $600 billion.

Two points means we make a fortune. But we keep driving it up. It's a very unfair system. And I've said it now for a long time. When our country does well, interest rates should go down. I mean, every time I hear our country is doing well, I say, oh, it's too bad. Because they lift up interest rates. They should drop interest rates because it means we have a strong country.

And it's all based on credit, meaning good credit. And we have the best credit. And we'd pay off the debt very easily, very quickly. but if somebody's paying a half a point, we should be paying a half a point, not somebody else. Right now I think it's Switzerland as the lowest. Again, and I don't want to single them out, but if you take our business away from Switzerland, they have problems. So why are they paying a half a point and we're paying much more than that? Does that make sense?

No, no, it does. No, no. It does make sense. All right, so I actually agree with everything he said other than the numbers. The first thing he said was right. The premise, but it occurred to me, it occurred to me, Trump thinks like a borrower. Of course. He's a real estate guy and a casino guy.

A borrower who was repeatedly cut off and who repeatedly went bankrupt and who therefore did not have credit or access to it. Yes. But as a real estate guy, he's like, if my business is going great, I'm going to pay a lower interest rate. Traders don't think that way. Traders think if things keep going this way, well, they're going to have to tighten the money supply.

Yeah. And that's why the rates go up. Of course. Okay. But I'm making this point. People were mocking him. He's like sort of right. I don't know where to go.

I mean, he's not at all right in talking about interest rates. No, but the premise of a, the premise of it with the United States and the economy is going great. Yeah. And I think that's fairly true. Yes. Not for every single person in the economy. But right now, there's a ton of activity.

people are making money. Consumers are spending. It's like it's good. Business is spending. He sort of has a point like, wait, the news is good and they raise our interest rate. I understand the disconnect, but I just thought that was an interesting way of phrasing it. And he has said things like this for years. And it's very clear.

It's exactly where it's coming from, which is what you said. You know, but also he's not talking about the country. It's the government. And the government has to sell. trillions of dollars worth of paper every year. Right. And next year, it's going to be two trillion dollars more than it was this. And so, obviously, you know, global markets set those rates.

We don't pay a premium because of bad credit, right? It's because of the macro conditions. By the way, we've been so fixated this week on where treasury yields are. It's not the creditworthiness that's driving the yields. No, exactly. Which is what he's experienced. That's right. Okay.

It's definitely not directly creditworthiness. Now, I think there's a lot of debate as to why. rates are where they are if you look longer term. I don't want to get too, like, wonky about it. But, like, how low do we think 10-year yield should be when nominal GDP is, like, close to 6%. Right. And we have all this borrowing going on to invest from the private sector and everywhere else.

It's not weird. It's like it's kind of in the range of where you'd expect it to be. Even if it does the computer. So here are the things I want to hear your response to them. Thing one is political dysfunction as if, as if. as if like three years ago, everything was like not politically dysfunctional. Right. Okay, fine. Throw that out.

Maybe that's an issue, but it's like a forever issue. It's global yields. Okay, thing two, to Michael's point, this is happening everywhere with long bonds in every country. Thing three, $1.7 trillion worth of corporate debt, which is like 30% more than the same time last year. Competition for, you know, it's AAA debt for the most part. on top of at least sticky inflation, if not rising. Yeah, the war and higher energy prices. So to you, this is where the rate should be.

Multiple weather systems all interacting in a way that are pushing in a direction of higher, not lower rates. It's everything you said. It's basically the world is demanding so much capital. The bond market has to reprice and ration it, right? You have to just find the clearing price in it's through higher yields. The fiscal concerns, which arguably you could say long term, are kind of a creditworthiness thing in a vague way. I always feel like that's, it's kind of like the underlying autoimmune condition, where it's like under high stress, all of a sudden that starts to flare up and it starts to create symptoms and people start to get really worried about it. But it's not really the thing.

You're describing the difference between the weather and the climate. Yeah. And I think, and so the fiscal concerns are always going to be there. But like, you say $40 trillion in U.S. debt today, we could have had the same panic at 30. I'm not, I don't think there's a magic hard trigger level where all of a sudden the world changes. What I will say, you talk about political dysfunction. So we're basically at 3% of GDP goes to paying interest on the debt. Okay.

We were last there in the early 90s. So in the early 90s, what it did create was a single issue third party. presidential candidate, Ross Perot. Like, literally that's all he cared about. Got to bring down the debt. Trade and the debt. Right. And, you know, right or wrong, it did, you know, maybe just because the pendulum swung,

and you had gridlock between Congress and the president in the 90s, you actually did get fiscal discipline, even though nobody really kind of planned for it or expected or wanted it. Right. And I also think that's one of the reasons and, you know, reason that, you know, the kind of hoped for AI productivity miracle. might have a harder time happening in exactly the way it happened in the 90s. Because in the 90s, you had, you know, debt to GDP coming steadily down the entire time to the point where you had a surplus on paper by the end of the 90s.

The other piece of it is the demographics. You had, you know, very few retired people per working person. Which is not the case today. That's not the case now. So I just feel like those are a little bit of headwinds to some kind of huge productivity boost. But as you guys are saying, it's always different. Put up the chart, guys. Can we do that?

What is this saying? This is, public debt outstanding. We've got two colors. The light color is debt held by the public, which Michael and I have said like, yeah, we owe ourselves money. Yeah.

We are the investors in the debt and the debtors. Robin Peter to pay Paul. And then the other is intra-governmental debt, which, I don't know, what is it? It's like a accounting plug factor for like Social Security trust funds and other things that we say. they have a surplus now, and so we say that they own treasuries.

Is it too convenient for us, me and Michael, anyone else, to say, hey, we're the people that hold the treasuries. We own them in our money market funds. We own them in our 401Ks. We own them, like, we're the whole. Is that too convenient and simple to just say, ah, 40 trillion? We own 30 of it. Yeah, I mean, I don't know that you can dismiss it.

Like, in other words, any level will be fine because we owe it to a little. ourselves because at some point in theory, it crowds out. Turtles all the way down. Yeah, it crowds out other productive uses of capital. Let me ask this, but I don't know. Are you surprised how strong the stock market is? So you have basically every index at or near an all-time high. We are still involved with the war. The straight is still closed. That should have been or could have been or would have been predicted to have been a Black Swan event. Energy limit up. Stocks limit down, right? That didn't happen. The AI trade is not really that hot.

Yes, the memory stocks. Yeah. And the chips had a moment, but Nvidia is flat. Meta is down. Microsoft is down. Google, whatever. Apple's up. But it's not like the Mag 7 are powering the stock market higher.

All their free cash flow is down. You had a report earlier this week that, that Open AI's revenue numbers look kind of shitty. I would have thought just, and with interest rates where they are, given all this, that the market would be, I don't know, in a normal 12. drawdown, considering how long the bull market has lasted? Yeah, I wouldn't say I'm outright surprised. I do think all the things you mentioned could easily have served as a handy excuse. Easily. For something much more damaging on the downside.

We have. Now, on the one hand, I don't know how much trouble the economy of the market can get into with, you know, 6% nominal growth, deficits, 6% of GDP, corporate earnings, absolutely flying, to the point where I'm more worried about over-earning and, overstating of earnings than anything else. But earnings are just supporting things. And I think this is massive swing from, you know, labor to capital. That's all going on. And that's to the benefit of what the S&P 500 captures, which is mostly a business-to-business capital goods kind of wholesale economy. And so for those reasons, I'm not super surprised. I guess like it wouldn't also

surprise me to be down of it. It's a bull market that to me that means three to seven percent drops happen for almost random reasons. You make such a great point. Like, Micron is 10 times bigger than Disney. Yeah. People think about how's the economy doing. They think about it. By the way, Disney's doing okay.

It's like $107 stock again. But like people, when they think about how's the economy doing, their minds go to Disney, maybe a hotel chain. Target or something. Target. I mean, I guess Apple. Yeah. But like their minds don't go to Micron.

But that's what's in the earnings. That's what's driving it. I mean, look, I always say, saying this in June back when, you know, semis could, you know, were just vertical to the upside is so many approaches and strategies got you to the same place. It's like, oh, I buy the best earnings revision stocks. I buy the best price momentum stocks. I buy growth to the reason. They're all the same stocks. It's like, congrats, you own semis. And value. Microns is the biggest time. Yeah, exactly. Very true. And so you had a situation where it's like 18% of the S&P is semis.

Another 16% is the four hypers. They kind of were a zero-something trading a, you know, against each other for a while. I think another part of the answer, and I think you guys have kind of tried to puzzle out this whole dynamic of this immaculate rotation, as I call it, where it's just like on a given day, oh, semis are down 2%, that has to mean apples up a percent and a half

and health care is flying. Like, it's just almost like... Programmatic. It feels programatic. It's very mechanical. Yeah. And it kind of is, right? It's like there's these big trays on where the incremental dollar,

at least tactically, is all about trading one factor against the other. essentially trying to stay neutral across all these different variables, and also not be out of the market. Like, you kind of, you know, all the signals say you should probably have exposure to equities. But on the other hand, nobody has to buy. But when you talk to traders about the modern market, most likely you're not talking to a trader who's trading news. You're most likely talking to somebody that works at a hedge fund that's acting as a market maker. So if you talk to somebody at Jane Street or Susquehanna or Citadel,

Like, they don't give a shit what the news is. So that mechanical thing that you're describing, that rotation, we just look at headlines and say, oh, that's why this is happening. But it's not that way. It's machines with machines. And every once in a while, they'll be like a Moderna-esque moment where the news actually is the thing that the traders are reacting to. I think a lot of intraday trading. Yeah. It's senseless.

It's mindless. Intriday for sure. I do think, look, there's news, there's economic data that gets released. It creates a bit of a flutter. Something moves on it. And then everything else we're talking about sort of like reacts. Counter moves against it. Yes. I feel like this year, more than any in recent memory, John Charlotton, please. It does feel like it's basket trading. Yeah. Where it's like so predictable that one thing is going to happen and one thing we'll get taken up or down by it to the point where bespoke said, we haven't seen an all or nothing day when the advantage of, when basically every stock went up or every stock went down. We haven't had that since December 31st, 2025. That's the longest streak since 2001.

Now, a huge part of this is March and the energy stocks, not being all or nothing. So that sort of distorts us a little bit. But it's also been like AI is going to kill everything. Oh, shit, AI is actually now what we thought it was. So it's the AI semi, the AI software stuff. It's just been a very interesting year. It has.

So there are all these offset trades. And the other piece of it is, you mentioned energy, and you know everybody is on this idea of, like, this group of stocks that act as negative beta. Yeah. So now that's just an outgrowth of this current situation. By the way, so much of this stuff was like, oh, how many days have we had negative breath when the index was up and vice versa? That's all downstream of the concentration. Correct. I mean, like, that mathematically only happens.

Oh, this has never happened. Yeah, it never looked like this. Exactly. But the negative beta thing is really fascinating to me because I think it became really consensus in the industry that energy is your diversifier because bonds can't be owned, at least in the way they used to be. So describe this factor that we're talking about? So it means stocks that have a tendency to move in the opposite direction of the S&P 500 on a

given day or even longer than a day and therefore can act as a diversifier. There used to be utilities that doesn't work anymore. Exactly. Those are AI trades now. They're AI trades. A lot of trades are a little more rate sensitive than they used to be like, you know, tech hardware and all that. So I think that's definitely part of it.

What I want to hesitate to actually suggest is it's not the same as saying, like, the machines are mindless and the machines run the market, and therefore, you know, it doesn't make any sense and it's not connected to fundamentals. Because if there was a macro shock, if there was something that came along that really did change the underlying equation. Another COVID. Every stock would drop. Of course.

Yeah. The machines in that scenario, the first move they make is they turn off. Right. And then they might trade. But I've been dealing with this my whole career where it's like, you know, HFT was a huge thing 15 years ago as if it was just like, you know, and I was like, yeah, fine. It's just, they're market makers, you know, they're kind of trading these little like flow models.

Flash boys. Yeah, exactly. And it's like, oh, you know what? They're like, these models are right like 51% of all trades and they're making a sliver. It's not like they're, you know, racking up the big gains. And it's funny when I, when I also first got into it, I get into the, business in 92. It's really psychologically still in the in the hangover of the 87 crash and like the 1990 real estate crash and the um savings the LBO crash savings loan. Oh, it's a financial

markets really had it back. Um, and so if you remember after the 87 crash, they did this forensic thing. What caused it? You know, oh, program trading. Portfolio insurance. So from that moment on, they mandated every single week, there was something that came out, New York Stock Exchange that was the program trading, a ticker. you know, report on Thursday after the close. And I used to look at it every week. It was in the wires. And it would be kind of meaningless.

But to show you like volumes each firm executed by index ARB strategy or other strategies. And it's like, what are we doing here? I don't know what to do with this information, but somebody decided that that was the tail that wag the dog once. Let's make sure it doesn't wag it again. And so years later, this is probably mid-2000s. I was in with the head of equity capital markets at one of the big firms.

And he said, yeah, he's like, you know, that wasn't really a sign. thing, program trading. It was like his definition of, you know, at least 20 stocks traded as part of a strategy. It's like I'm working like an order of like multiple. But it was like open to interpretation. And he said back in the day, the stock exchange, like the examiners would be like if there's a gray area, just say it's not a program. We don't want to make it look like, you know, this is all bots doing this stuff. And then at some point in the early 2000s, it changed. And New York Stock Exchange is like, no, no, we want to seem high. We want to seem like we're, you know, we're up with it.

More program trading good. Yeah. Loaded into program trading. So I sort of see flows that way. I don't know what to do with it. Exactly. Is it contrarian? Do I always?

It's just interesting. Right. It's for, it's for a content. Yeah. But do I need to know at Merrill Lynch? I know. We have a weekly report. It's what you're getting at.

It's institutions, hedge funds, retail. retail bought the most tech stocks in five weeks. Okay. Good? Bad? How about this? That data is probably valuable to somebody. I do think there's a way to actually make a model.

Look, you guys had Todd Sown on from Stratigas. He does good work with ETF flows, in sectors. As a sentiment as a sentiment. You create bands that say this is normal, this is extreme, and then you can trade it. I will say that, you know, one thing that has been consistent is people now track retail net buying obsessively. Vanda does that. It's been happening, especially since the meme stock got crazy. Definitely, retail is much more of a force, much more active. They push and push. They stampede in some directions. And they're just, they buy. Like, that's what they mostly do.

But Scott Rubenorovett Citadel, who's this flow guy, used to be at Goldman, you know, you have retail net selling. It's not happened often. Last week of March, guess what? The market bottom there. And the last week of July. It's just another way of saying the VIX. Exactly. It's another way of saying like, yeah, That's why stocks were down. We could arrive at that answer in 50 different ways. I could look at RSI. Yeah.

At 30, I could look at advanced decline washed out. Like, it's all the same. My only take on that is I kind of bristle at the what's happened more recently, which is to lionize retail traders as actually they're the ones that are the smart money because they always buy the dip. They buy the dip until it gets a little scary or goes on a few weeks. And then they sell. Not in 401 case. No, of course not.

That's the exception that proves the rule. But that's different. But that's like. That's the best. Of course. Anywhere in the country, better than any hedge funds. They will buy. Vanguard talked about how they reacted to COVID.

Yeah. The answer is they didn't. I know. They literally bought every, every print on the way down 30%. Well, Vanguard also fire a client that trades too much and gets too over-excited. But that's good. You know, they don't act like retail investors, but they are. It's the same people.

Here's another great example of just, it's great stuff to talk about. Is it actual? I don't know. But what we're looking at, John authors shared this chart, DRAM ETF total assets. So he's comparing it with the SOX index and we know semiconductors got the shit kicked out of them during the situational unwind. And then individual investors didn't care. They just kept piling in. And Michael, you're right.

I think there's maybe too much of them. They're now the smart money. It's a reflection of the market environment that we're in. So it's not to disparage them. 100%. Credit to them, they've had the boss to continue to pile in. And it's a reflection of the market that we're in. Yeah.

There's no doubt about it. And they have the tools now. And, yeah, I also think there's a thing with retail is they don't crystallize losses. What do you mean? If something's down, they're not quick to sell it. It's like, that'll come back. And so therefore, there always seem to be the next move is always to buy. It's more often to buy than not.

I know that this isn't borne out by like when interactive broker says what their people are doing. They're quasi-head funds. They're kind of semi-professional traders, a lot of that flow. But I do, yeah, I totally agree with that. I mean, now you have... They don't sell unless it's a margin call. Like, I don't get obsessed with, like, zero dated maturity options and all that stuff. It's kind of just noise.

And if anything, it creates a little more of a mean reversion effect throughout the day. It's kind of like, it kind of keeps things in a range over the course of a day. Because it's kind of like the public buys the calls in the morning. The street sells them to them. And then by the end of the day, you have all this decay in the options values and then they buy them back. But it's so true. There's this push and pull because Citadel Millennium, they're done. percent sell, don't care, sell.

Yes. And the retail's like, great. We're sold to us. Thank you. Totally. And I think there's so much of that going on. Like I, I've been working on this thing where like the options income funds are like private social security. Because it's like the young people, they pay for juice call premium to play the upside in these stocks.

And you have all these people who just want income out of options. And it's just like, let's sell the juice calls covered calls. Somebody's funny. I never thought about that. Yeah, of course. And, you know, it's kind of. of, you know, it's sort of overstated that it's actually like, you know, funding the retirements of people. But I know people own those out. Oh, you're right. And look at the most popular

ETFs this year. A lot, like a lot of the names in that in the winter circle are selling calls. So Neo is an innovator. The ones that Goldman just bought. Both of them, big time options ETF. I find it somewhat ironic. It's a transfer from traders to to investors. I find it slightly ironic because I understood why that stuff became popular at zero percent interest rates. You know, money markets weren't yielding anything. But I guess people just like it. I, so Ben and I interviewed Bruce Bond in 2018 or 19. And I immediately said, holy shit, this could be a huge category. And the reason why I was so confidence, because there's never, there's never been anything for the everyday investor where they can guarantee their range of outcomes. Yeah. With a 60-40 portfolio,

all right, you're shrinking the range a little bit, but then 22. comes along. Like you don't, right? So it's offset a little bit. But when you could say, uh, negative 10 up to plus 12, now, that doesn't work for me. Okay, fine. Negative five plus up to plus seven. Oh, that's, that's more my flavor.

Yeah. There's never been anything like that with the stock market where you can say, this is the risk I want. I totally agree. And, you know, look, there's a reason that annuities have been around forever. People, psychologically, some people just want the certainty of outcome. You put this in the dock, I guess, about the current bull market, prudent to assume that the valuation peak is in, then be open to pleasant surprise,

if not. What do you mean? Yeah, what's your problem? So, at least on a P.E. basis, we're trying to confuse everyone, Santoli. I know. We get to 23 times last October forward. You know, you were there in the pandemic, but that was depressed earnings. So you're on 23 times kind of peak earnings at the time. And since then, it's compressed, right? Earnings are grown a lot faster than stocks have gone up, even though stocks are up since that. And I just feel like a few things are mitigating the rebuilding of that PE premium. One of them is, and I know you guys talk about this, the whole like, well, we don't have free cash flow anymore, right? This is all kind of like CAPEX heavy capital intensive type drivers of the growth right now. Actually, on a forward

price to free cash flow basis, we're at 30 in the S&P. Don't love that. And so. But it's voluntary. They're doing it on purpose. Yes, I agree with that. And everyone knows it's not against their will. I totally agree with that. And that's the fascinating element to me, which is, it's funny. Because, you know, you have like Google does their earnings call and, like, you know, they get out there and they're like, no, it's early. Trust me, it's still early.

I'm not sure investors want to still hear it's early. Like, they want to get to a destination. But the people running these companies, they grew up worshipping Jeff Bezos. Totally. That's what they studied. 100%. When they were in business school or when they were in business school or when they were in. at Stanford, that's what they start.

No, the shareholder letter from the S-1 is like in their crib. That's right. So these are Amazon cover bands. Totally. And Wall Street's not stupid. They get it. Like, oh, you're doing this on purpose? Okay, in that case, we can live with it.

I mean, to a point. Well, look, and I also totally agree with the other bull case of these companies are responding to genuine demand signals. It's not like totally speculative that we're going to build it and maybe somebody's going to use this stuff. I still think it's a little bit of a threat. Like capitalism shouldn't work that everyone all at once decides to spend all the free cash law on the same thing to build the same thing and everybody gets a great return off of it.

But maybe that's not today's business. This is what Katrowski is saying. He's like, I get the fundamental evolutionary technology. Yeah. We're not spending because we're dumbasses. Exactly. But the ROI is just not going to be there. And maybe that's okay.

Like, I don't know. You know, the longer I do this, like the more I sort of doubt that there are. any of these ironclad rules of like, what creates value and what does stocks need to, like, I was always pushing back against the, oh, buybacks jack up the market. Yeah, well, we don't have any anymore. You don't have any, well, you have a trillion dollars worth, but it's not as much relative to the size of the market cap. But it just didn't really hold up.

Like, it was just, it didn't goose the stocks that were doing the biggest buybacks. In certain circumstances they work, I do think that the economy runs on stock-based compensation to a degree most people don't appreciate. And so you have these huge companies that they're buying. live acts are effectively soaking up the equity compensation that they give to their employees. And that's great because those people have the money. Who's more disingenuous, generally, bowls or bears? You know what I mean by that?

I do. I do. I would say. Because I think it's a landslide. I think bears are probably more opportunistic in terms of the information that they will deploy. They will change the argument, but maintain the stance. Right. almost no matter what.

Here's why. I don't think Bulls do that. Here's why you're right. Bowls will always concede that there is a bearish case out there, almost universally. That's like, yeah, we know, like I understand the risk.

I'm not naive. Bears never said that there's upside risk. It's just they just keep digging and digging and digging and then changing the story. So here's why I'm asking you that question. Because I know you, I know you respect the Bulls and the Bears at all times. And that's,

that's, I think, why you, you have almost universal approval on Wall Street. People say, like people, you have credibility. Let's put it that way. You have credibility on both sides. It's not that you're like catering to the balls this week and the bears. You just, you recognize the risks you write about them. You don't pretend they don't exist.

But you're also not one of them. Right. Just for clicks. You're not going to say the scariest shit you can in the headline to get people to click, the way I do on YouTube. Okay, wait a minute. Right. So, but here's, here's my point.

Two years ago, 2024, we were in a bull market, extremely concentrated. Yeah. Definitely led by Mag 7. Can't argue it. And the bear said, this is bad. Here's what happens to concentration. Look what happened at the end of the 50s. Myth, 1960, this time, that time.

And then all of a sudden, the market broadened out over, like two years later, to the point where we had multiple Mag 7 names in 20% drawdown. and the SPU's at all-time highs. Did one of those people come along and say, okay, I was bearish about that thing. That thing has been cured. Right. Therefore, therefore, I'm not bearish anymore.

No, they move on to the national debt. No, it's true. That's the disingenuous thing that I'm referring to. I agree with that. And look, I start with the premise, as everybody should, that market goes up 70% of all years, it goes up 55% of all days, you're fighting the tide

if you really think that you're going to be down a lot and on a sustained basis. It's a conspiracy. Now, yeah, I mean, every incentive moves in that direction. Why wouldn't it, you know? That being said, I do find myself just like temperamentally, not always wanting to play along, like in this recent period where, and it's funny, because I sit there in front of the wires, in front of the screens,

listening to CNBC and all the guests all day. And you start to hear the mantra. You start to hear the echoes. Everyone starts to sound. And once the market came back after the July sell-off, it was like earnings. Earnings are my North Star. Earnings of the lifeblood of a bull market. And everyone is very self-congratulatory about having stayed the course because it feels virtuous.

And it was all fundamentals all along. And it's a foolish game to bet against it. I told you not to panic. And that's fine. But I start to bristle at that a little bit, not because I think they're wrong, but because, you know, I wrote about it this week in my column where I said, you know, in Madman, Dr. Fay Miller says to Don Draper, you know, you only like the beginnings of things. And I only like the beginnings of things.

I like when a rally feels like it's in the face of challenges or it's not just extending it on the obvious information. Earnings were amazing. You're like, yeah, I know. But what I don't do anymore is say, that's why it's over because it probably isn't over. Yeah. I still feel like there is a wall of worry. There is a lot of disbelief.

up there. But I would be moderately surprised if a year from now we're having the same conversations with the continued negative free cash flow. Yeah. The continued like it's coming, it's coming that it's going to pay off. I would be surprised if the market is given, it's cool with that a year from now. Yeah, I think that's right. Or at least if there's not some kind of intervening jolt, some kind of gut check, some kind of, because honestly, I sometimes feel like that's what the market needs. It's like if it goes along on the same storyline for a while, it needs a scare. And a scare and relief cycle is often what can kind of cleanse it.

You need that. I love it. So we had that. We had situational awareness. We had a leverage unwinding career. And then the earnings bailed us out. Right. What else would you want to be bailed out?

No, and I don't think, I don't think that that's wrong. I think that the extraordinary part of it was you never have more than 3% pullback in the S&P 500. So you had the choreography work so well. Yeah. And, you know, you mentioned the broadening. I'm like known for not necessarily thinking that. broader market is by definition a more stable or rewarding market. Mobuson empirically proved that.

He said, Mobuson has a piece with Calhian. He said, actually, bull markets are where concentration happens. Be careful what, beware what you wish for. I agree with that. But they can be like these interludes, these phases where when the big stuff is correcting, it's good if the rest of the market kind of, you know, rises to take up the slack. I mean, that's what's happened multiple times. The other thing, though, that I think has been a hallmark of the last 15 years.

everyone assumes everything's going to be a catchdown. Yeah. So they assume anytime there's a negative divergence, small caps are lagging. Yeah. Or value stocks are in a 20% drawdown, what growth is that all the time. They assume the cure is going to be the whole market succumbs. Sure. And I know that does happen, but almost never.

What actually happens is it's a catch up. Yeah. And that's got to drive the bear is absolutely insane. Probably. if they even are aware of it. Yeah, probably so. I mean, look, the flip side of that is, you know, this chart that I just, I'm not going to expect him to see it, but it basically shows like, did you hand draw that?

That looks like a, that looks like a Luis Yamato special. I printed it out from somebody who had hand drawn it. Okay. Percentage of S&P stocks above 70%, above the 200 average, exceeding 70%. So 70% of all stocks above the 200 day. And these are all periods when you had a 15 to 20% drop from that level. Like, in other words, it's not like a get-out-of-jail-free car. Oh, it's a broad law.

So basically, is this as good as it gets? Which brings me to this. Was situal awareness a tremor? The same way that LTCM was, the same way that the quant quick was. Like, are we a year, two years away from... Is it the canary in the coal mine? I don't know how to answer it. I don't think it has to be.

Like, for example, I don't think long-term capital was a tremor that somehow you could draw a direct line from there to March 2000. Had nothing to do with it. You're right. Nothing to do with it. If anything, the only thing you could say is it creates this huge global, tightening financial conditions, recession scare, Fed has to cut, gun the economy into 99, and then you create the excesses.

So in that way, maybe, but it wasn't the long-term capital, the imbalances themselves. Where are you on this? People say, and I'm sympathetic to this, this is a service-based economy. There is so much money. Something seriously bad needs to happen for, for, for, uh, that train to be slowed down. Sure. I mean, I think that adds a stability to the macro.

I think so many of those like rules of thumb like we were talking about, like, oh, market 15 times earnings is the long term, you know, multiple. Not now it's not. No, I know. I'm saying. When I came up, that's where it was. Well, that's because you used to be like trapped in this manufacturing business cycle. Margins used to, every three years.

Margins used to me to revert. Right. And now, that doesn't mean I don't think people are over-earning right now because I think John, we're going to title the show, earnings can never fall. Dash Michael Santoli. Yeah, I mean, it's... With his Twitter account in the headline. Plus, you know, it's all...

I mean, you want to wear bears. Like, there used to be a big thing of, like, I can't believe that people bless operating earnings as the standard. Yeah. You think about that. Like, he used to be gap earnings. What about this one? This, the current crop of CEOs and CFOs might be the most battle-tested

group of executives collectively ever to run the S&P 500s companies. Look at what the last 10 years has been like for these people. You could start 10 years ago. You could start five years ago. But let's just say Trump won. Trump term one. Literally being screamed at on Twitter by the president threatened. Roll right into the original tariff and all the...

issues with soybeans and whatever we were dealing with in 2018, manufacturing, blah, blah, blah, blah, blah, roll right into COVID, January 6th, gay pride issues at the retailers, like, how dare you put that display up, Disney having to fight social, culture war stuff in the parks, blah, blah, blah, blah, blah, blah, blah, blah, right into like the next Trump term, the new tariffs, liberation day, the Iran war, record high inflation, yeah, work from home, Like, these people running these companies, and I know there's been some turnover, but by and large, can you think of another era, like, without going to World War II? Yeah. Of people running companies through this fucking shit that never ends and seems to get crazier with every passing year.

Like, these are ninjas at this point. Yeah, I mean, I think you can definitely credit the kind of institutional resilience. And profit margins are 15%. Yeah. Take everything I just listed. and profit margins are 15%. Revenue growth this quarter was plus 14. I mean, so much of that is, I had to say,

so much of it is compositional, right? It's like the kinds of companies that are that big in the index are magic. Yeah, Starbucks and Jopolde can't get out of the runway and they're not run by dummies. UPS's earnings are going to be like they were like three years ago and Nike's bet where they were 15 years ago. And, you know, I was just looking at Thermal Fisher,

great growth company over the years. It's been flattish earnings for a couple years. But I agree with you in general. I mean, you probably have to go back to like maybe 6872, 72, like hyperinflation oil crisis, Nixon, Vietnam. But, you know, look, I think it always seems like we've just been through the worst or the most or the most extreme.

I always go back to Byron Ween, the Morgan Stanley and later Blackstone Strategist. One of the Greats. He, is he one of the greats? Absolutely. He was a sweet guy as well. I remember hearing him speak at this event, and he said that he came into the business in like 1958 or something like that,

Kim's at a business school. He got a job at an asset manager. And he says it was at exactly the moment when stock dividend yields crossed below treasury yields. Which was supposed to be a market top. It was supposed to be a market top. Never happened sustainably before that. It was supposed to mean you were massively overvalued market. And then it stayed there for 50 years until the global financial crisis.

Right. And he said he saw what it did to the people at the firm, the older guys. Broke their brains. Yeah. He said they couldn't adapt. Because they set their watch by it. Anytime the dividend, anytime the dividend on the stock market goes below the treasury,

that means stocks are too expensive. Buy bonds. Yeah, sell stocks by bonds. And then the market quadruples. Even more. And so he said it kind of taught him, he used to have a funny way of saying. Like, you know, these guys like,

they obviously are wrong for a while and they kind of lose some of their clients. And, you know, he said eventually they go from a corner office to an interior office. All they got to do is called a college roommate for new money, you know, whatever. And I think,

I think that that he said that it fed into his idea to do the 10 surprises list every year. Because that was a big surprise. Let me test myself to figure out blind spots and where things might go different. Okay. So you like Ween, you liked Barton Biggs. Sure. Would Barton Biggs or Byron Ween be saying right now? I think they would, for one thing, be celebrating the long-term economic and sort of societal benefits

that we're probably building with AI. Whatever you think about how the equity market's going to metabolize all this and whether it's overdone in the short term, if all this gets built, the way that, like, it just increases capacity so much, whether it means that, you know, we accelerate the renewable energy thing. It's going to create, you know, I think that they would embrace that while also being nervous about, I think, pockets of, you know, unthinking excess. I don't know how they would think about, you know, three times levered single. stock ETFs. You know what I mean? They probably wouldn't love them. What's this money game

anecdote from Adam Smith? Let's let's do this. Yes. So Adam Smith, you want to read it? Sure, let me read it. Adam Smith, of course, was a pen name. I believe his name was George Goodman. Jerry Goodman, maybe. You might be right. So there's the money game in 1968. And this was like a kind of a real slice of life of Wall Street at that time. It was, of course, a real booming bull market. And so he's kind of talking about how the younger people in the business were so excited about mostly the mainframe computer craze and how it was printing money. So this is in the voice of one of the younger people saying computer leasing stocks, sir, he said like a cadet quiz by an upperclassman.

The need for computers is practically infinite, said Billy the kid. Leasing has proved the only way to sell them in computer companies themselves do not have the capital. Therefore, earnings will be up 100% this year. We'll double next year. will double again the year after that. The surface has barely been scratched. The rise has scarcely begun. What's its core weave?

Yeah, exactly. I mean, that's obviously why I chose it because, you know, hey, but you know what? The mainframe revolution was real. And it's just about like, I mean, so here's another premise. Here's another longstanding principle of mine. And everything ends in a boring place. Whatever company you're excited about right now, if everything goes beautifully, like, it ends up being kind of a utility or a mature company or some parts of the guts and operations

of the economy and it slows down. Like eBay was a moonshot exciting stock at one point. And I even think this about things like, oh, Circle comes public. It's a stable coin company. It's like, congrats. You know, you're a custodian. You earn a spread off of T-bills. Bank of New York Mellon has trillions of dollars and trades at 12 times earnings, you know.

So I do think that you have to be aware of that. and you kind of ride the exciting phase and then figure out how it, how it decelerates off of that. I just, I think that's true except if Elon is involved. Right. Because he will cannibalize his own company. He will reinvent. He just shut down. No more Model S.

Yeah. No more, I forget which other, no more Model X. We're going to make robots instead. Nobody has the license to do that. Right. I think he's the exception. But generally, I agree with you. And actually, one of the most fun parts of the rally this year and late last year.

how many throwback stocks have become their former selves. Okay. And I'm thinking about Siena and Dell and Cisco. Totally. And I love that so much because those were the momentum stocks that I grew up with. Yep. And they all became momentum. Whichever ones that left all became momentum stocks again.

Yeah, exactly. Can I? I was looking for MFNX. I couldn't find it. I would buy that if that was still around. Let me read something. Another thing from the money game that always stuck with me. And I think this is so important for.

for individual investors to heed this statement because it's so true, especially when momentum breaks. All right, here we go. A stock is for all, again, 1968. A stock is for all practical purposes, a piece of paper that sits in a bank vault. Most likely, you'll never see it. It may or may not have an intrinsic value. What it is worth on any given day depends on the confluence of buyers and sellers that day. The most important thing to realize is simplistic.

The stock doesn't know you own it. All those marvelous things or those terrible things. things that you feel about a stock or a list of stocks or an amount of money represented by a list of stocks. All of these things are unrecipricated by the stock or group of stocks. You can be in love if you want to, but that piece of paper doesn't love you. An unrecipricated love can turn into masochism, narcissism, or even worse, market losses and unrecipricated hate. How good is that? That's beautiful, yeah. And of course, the corollary, as people always say, is like, it doesn't know what price you paid for. Like, if you think there's something magic about your cost basis, that it has

to gravitate back there or anything like that. I still do that. No, of course. It's a natural way. By the way, one quick thing like Elon. I don't revenge trade, though. One of my favorite observations right now is if you look at Tesla relative to the S&P 500

in its history, go back however far you want, it's outperforming the SP by like, whatever, 3,600%. It's massive. Every basis point of the outperformance happened in calendar year 2020. It went up 10x. Wow.

Right? Yeah. So it's like, but it held it. I'm not saying it's like a disaster since that. It basically has mostly held it. But it's just fascinating that it's just like so many things hit perfectly well for that moment. And people love their Tesla. So one of the other features of this bull market is I find myself on a weekly basis, maybe daily, asking myself out loud, am I dumb or are they dumb?

And I don't know the answer, but I want to run this one by you. Yeah. Just as a. not that this particular story is that important. Open router. It's basically a harness. So it's like you used to go to Google as a search engine and it indexed all the links.

So you went to Google first because it would take you to where you eventually wanted to go. Okay. So open router is the same. You have a project you want to use for AI. You go to OpenRouter. You'll select from hundreds of different LLMs and you'll pick one or it'll be a combination of multiple. It's a great idea.

Yeah. It's sort of like the Google for the AI age, except it's tiny. But it's so they're calling it like the harness, like the AI harness rather than going directly to Claude or directly to, okay, fine. This is the news on OpenRrador this week. Stripe is going to buy this company, which is, quote, this is the information. Like a retail store that sells access to hundreds of AI models. they say including anthropic, but I would assume it's a lot of anthropic.

They're going to buy this company that just had revenue triple to $13 million with an M. 13 million. Stripe is going to pay $7.7.5 billion. The valuation on OpenRouter in May, which was three months ago, was $1.3 billion. So in three months,

and I don't know what, User growth. All I know is it's $13 million in revenue valued at $1.3 billion three months ago. It's going to get acquired for $7.5 billion. Am I an asshole? I mean? Like, am I dumb? Right. Are they dumb? I don't know. Do the numbers really mean much? I don't know how they're paying for this? It might be a brilliant. Who am I? Like, I don't know. Number one's like about WhatsApp for $11 billion. And we were like, what? You can go back to Google with YouTube even. Instagram. Instagram for $11 people, a billion dollars. Like, who knows? I mean, people freaked out that Apple paid $3 billion.

for beats and they like you don't even notice that number. But do you find yourself asking that question? I do absolutely 100%. And to me, if nothing else, it's a measure of, you know, the desperation of the buyers to play in a certain area or to kind of find this sort of like skeleton key to the next thing we need to do. I did hear somebody just talking about open router as one of the thing that makes it valuable is it has all this data for like all these agents that are flooding into it. So like there's a way I'm sure you could use it to exploit and map. other things and have access to other information.

But I am actively ignorant about a lot of the details of what's going on right now in AI and everything else. And I know everyone tries to pretend that they know everything about this kind of wafer and what tokens are going to cost down the road. I try not to pretend I have a strong view. It's impossible. I listen to Ben Thompson, who I love. I read his stuff.

He was on with Patrick for an hour and 15 minutes. Listen to the whole thing. I can't tell you a word of what he said. I have no idea. I mean, I'm a late adopter. It basically, buy. But this is another thing that I think is going to stop. And we were talking about this last week.

There's such an intense focus by traders. People that if they tripped over, a wafer couldn't tell you what it's used for. They think it's a waffle iron. Now all of a sudden, they're talking about like, they're talking about like chip yields. That's not going to persist for more than, I would guess the next correction. Right. That'll stop. But right now, I've not.

never heard so many Wall Street money guys talk more about the intricacies of manufacturing a memory chip. Right. I can't remember a time where people were this comfortable spouting terms. They have no idea what it even means. Yeah, I was at a dinner where there was a lot of that talk going around, small group. And one, but one guy, too, was like a new Parker dinner. No.

I can picture it. All right. Go on. Every single thing about like the kind of repurposing of jet engines into, you know, gas turbine generators. Oh, sure, sure, sure. And I mean, look, he obviously did the work. He's up huge in the stock he was talking about.

Like, it's not that it was for nothing. But I was like, you know, the other, probably two years ago, he's trying to figure out like Lulu Lemon comps, you know. That's my, I think that's my point. And it's not as though I'm not guilty of it. Everyone's not guilty. We're all to some extent now forced to learn this new language because this is what the stocks that we care about are trading on.

But I'm just amazed at how far it's gone. And now they're launching ETFs that will build a basket of the companies that are in a specific AI company's ecosystem. Yeah. And I just, I have no problem with it. And I bet there will be people trading it successfully. My, I guess my point was, that's got to be toward the end is one. And two, people are going to lose interest in that shit real fast. Because I remember when they were taking apart the iPhone.

Yeah, right. And building baskets of whatever components were the component makers. How long did that go on for a year? It's true. Okay. Or like the LiDAR companies and the EVs or whatever, yeah. Right. So that's topy behavior, I think.

It feels like it. I mean, it also is, I mean, to your point about the old kind of guard of companies that are coming back, I mean, they obviously have a durable know-how, and they're going to be in the middle of whatever these trends are. And the microns and, you know, Western Dig and all that stuff, great. Let's see how this renaissance. But never forget, Western Digital spun off sandisks. A year and a half ago.

Because you couldn't care about it. That's so crazy. It's so crazy. And so, and Stantz's what, how many thousands of percent? I think their shareholders demanded that they get rid of this. It was an officer. It's an anchor. It's unbelievable.

Right. So, so even the people in the business aren't quite sure what the next move is going to be. Do you have fun on the show today? I loved it. We had so much fun. So we're going to do a quick intermission. We'll do dinner. Sure, of course.

Can we talk? You need me to cook or what's more? So I want to do two things before. let you out of here. Yeah. I want to do, I want you to tell everybody about closing bell overtime.

Yeah. So you're the, you're the anchor. Co-anchor with Melissa Lee. Fine, of course. Love Melissa. So you haven't had your, you've been the anchor

on every show in the network. Yes, as a fill-in. As a filling, but you've done, squawk, you've done, you've done it all. Pretty much. You and I had a show together.

We did. We got canceled after six weeks, but I knew we would. It was a planned cancel. It was temporary. Because they told this it was canceled before it and Netflix calls it a limited series.

That's why we did a little limited series. Tell us about closing bell over time, what you love about it, and how it differs from what's elsewhere on the network. Four o'clock every day, four to five. And, you know, the simplistic analogy, but it's an accurate one is the post-game show. The immediate, like, here's what happened, but also just pulling the themes out that matter. I mean, it's not just like the numbers, and here's the up and down. We keep it pretty close to the markets. It's an amazing time slot because you get earnings. And we get earnings. And so like the best. And which feels like, you know, it's basically

seven months out of the year. Yeah. Pretty much is like pretty full of earnings. I can't believe Wapner let you have that real estate. Imagine that? He took three. He does get to, he does get to kick out a little early. Okay. It's great real estate. The earnings are great. I mean, look, it's always tricky

to figure out exactly how to execute that tradeoff between speed and depth. That's really hard. It's hard, you know, it's always like kind of a moving target on that. Like, you're never going to be faster You have to do that with the right guest selection. Then the headline reading algos to trade these things.

But you want to be fresh and want to make sure you have an urgency about getting these numbers. And so, yeah, it's been great so far. Started in January and having fun with it. And you are still writing. Yeah. Okay. So tell us about the writing and where people can find your stuff. Sure.

So, yeah, I've written a weekly column for CNBC Pro since I got there. Now it's kind of being repackaged in a way into a newsletter. It's called the market memo. Most of it is just the body of it is kind of like my column, my market comp. Maybe a little more targeted, a little bit less like here's the whole state of play for the markets. And then maybe just stray observation, stuff like you guys would do. Like here's a chart that's fascinating.

Here's a point of conversation that really kind of got a skate velocity during the week and what are people saying. And then a little bit of pop culture nonsense and Gen X, you know, complaining that. That's the part I'm looking most forward to it. Because I know what happened in the market that day. I've been suppressing all these years, yes. Why don't they brand that as like the Michael Santoli column? You have like...

I think it's Mike's Market Memo. Can I pitch you a different version? Go ahead. Okay, San told me. It's not bad. It's better than... John loves it. You know, people have tried nicknames over my course of my life.

They haven't stuck except for the kid in fifth grade, write my name on the board. And you misspelled it. And so it became Santoylet for a little while. Nice. But I'm glad that didn't hang with me. And then the last thing, we're going to settle a beef. The Long Island's eternal North Shore versus South Shore beef. Well, where are you from?

Well, here's the thing. I'm talking down to us. I'm sort of, I was originally from the North Shore. I was from Plainview. That's not the North Shore. I was originally from Port Washington. Okay. That's not sure.

But my whole extended family had lived there for a long time. Look, I like the hills. But what's the beef, though? I'm making that out. I think there's good and bad on both. No, absolutely. You guys got the ocean. Yeah, for restaurants.

You have more of the good restaurants. Meanwhile, I live in the city, let's be sure. No, no, no. I'm saying that's the North Shore. Obviously, better school districts, but not crazyly better. No. Slightly. It's preference.

It's a lot of preference. I do like the woods and the hills. The North Shore is obviously way prettier. The woods and the hills and the whole, like, you know, if you go down a certain area, it's Gatsby and all the rest. Yeah, but the coast sucks. Like, we have better beaches. Of course. Right.

Yeah. The Long Island Sound beaches are... So I wouldn't jet ski off the North Shore. You'll hit a rock. Like, where I am, I have, like, white sand beaches. Right. Which... So it is...

You're right. It is preference. It's 100% preference, yeah. So if you live in Middle Island, you get the best of both worlds. I kind of grew up, yeah, more like in the middle. Yeah. I could ride my bike to either North Shore or South Shore. All right.

So I guess we settled that with no answer. Yeah, I now live on a different island. And then happens. All right. Michael, we're obviously huge fans of yours. Thanks so much. You did an amazing job on the show. You did not disappoint.

We're going to encourage everybody to check out. Closing bell overtime, 4 p.m. Eastern, five days a week. Check out Mike's Market Memo at CNBC.com. Definitely subscribe to that. And just thank you so much for everything that you've done. Everything you've taught us. You guys are best. I really appreciate it.

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Challenge yourself, friends, and family to walk 21 kilometers in support of life-saving research. Together, we can carry the fire and help create a world free from the fear of cancer. Register today at pmcfwalk.ca.ca.