The Compound and Friends - Meme Stocks or Manipulation?

Episode Date: July 25, 2025

On episode 201 of The Compound and Friends, ⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠ are joined by Ritholtz Wealth COO Nick Maggi...ulli and Investopedia's Caleb Silver⁠ to discuss: are meme stocks market manipulation, how much bigger can Bitcoin get, where young people are spending their money, The Wealth Ladder, and much more! This episode is sponsored by Public. Fund your account in five minutes or less by visiting: http://public.com/compound Buy Nick's new book! 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 Public Disclosure: All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC. Alpha is an experimental AI tool powered by GPT-4. Its output may be inaccurate and is not investment advice. Public makes no guarantees about its accuracy or reliability—verify independently before use. *Rate as of 6/24/25. APY is variable and subject to change. 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/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript
Discussion (0)
Starting point is 00:00:00 We call it take his snacks away, no food in the studio. Wait, type one? They eat in here all the f*** time. We don't eat in here. Oh yeah? No food in the studio. What do you think this is, Jakarta? I just hear.
Starting point is 00:00:10 They eat in here every day. And then they clean up. I just go clean this edge, believe it or not. They're a fist idiots. You're a scadge. They're very neat. I'm feeling good. Feeling good.
Starting point is 00:00:20 Time for the test. Anybody need anything? I'm fit. So, Jeff Bezos spies CNBC. Good for me or great for me? Great for you. It is, right? Yeah.
Starting point is 00:00:29 Why do you, why? I think you'll get a trip to outer space. I don't want that. Oh. Don't you think he would? I'll get it. Oh wow. Wow, wow, wow.
Starting point is 00:00:38 He was in his mouth. Josh just spit food on the table. Not food, it's a mint. It's a mint that doesn't count. I feel like he would like me. If he like flipped on the channel for an hour he'd be like who's that guy? Keep that guy. He would love you. Especially on maybe he gets you a new jet ski. Isn't that a genius acquisition for him? Yes. Why? I don't get it. It's the world's leader in business news.
Starting point is 00:01:01 It's the channel is on everywhere in the world. Why should he own it? It's a messaging platform. Because somebody should own it. And it's not exactly selling at the highest ever evaluation, right? And no cable TV news is. Right, it peaks. Do you know what the price tag would be? Take a guess. Well, I think the last I checked it was a billion plus in revenue.
Starting point is 00:01:19 Well, it's combined with Golf Channel, MSNBC, NBC News. What does it go for? It was doing a billion plus in revenue five years ago. What does it go for? Two or three? I think on that type of thing, audience, five times multiple. Five? Wouldn't you? So Caleb was like a heavy at CNN money.
Starting point is 00:01:38 Do you know about that? Yeah. At CNN. What was your title there? Executive producer. Executive producer. I'm known for putting Josh Brown on the air. Is that the greatest thing you did the whole time? Maybe Howard Lindsay, not me. I peaked. Putting Howard Lindsay on television
Starting point is 00:01:52 was a big step for you. I peaked. At Future Proof, you brought, who's the food guy you brought? Chef Kwame? No, no, no. I'm watching you. I did at the last Future Proof. No, in California. Chef Jose Andres Yeah, you know who we're having this time. I don't Calicchio. Who is that Tom Calicchio? Wait, how did you get him? Cuz I arranged it we roll. I don't know the food. I arranged a deal My click you is 11 Madison Park our network top you see Whatever you do so I'm gonna him duck duck goose him Whatever you do. Google him. Duck Duck Goose him. C-O-L-L-I-C-H-I-O.
Starting point is 00:02:27 So you know I have a brain defect. When people like tell me numbers and letters, I can't... Alright, so just vibe code into this. Say it slowly. What is it? C-O-L-I-C-H-I-O. Tom Colicchio. Oh there it is. What was his restaurant in the low, in Park South? In L.A. Madison Park. And he was part of Gramercy Tavern with Danny.
Starting point is 00:02:49 And he has a cooking show with Martha Stewart right now on one of the streamers, which I watch. Yes, he does. What the hell is that called? It's pretty good. Have you been to the, it's Jose Andres? Yeah. Have you been to the bar at the Ritz? Yes. Upstairs. Sick. And downstairs. I've seen it. The restaurant's very Andres. Have you been to the bar at the Ritz? Yes. Upstairs. Sick. And downstairs.
Starting point is 00:03:08 I've seen it. The restaurant's very good too. And Zaytina? Zaytaina? Have you been there yet? Yeah. I ate there. It's quality. Oh wait, upstairs?
Starting point is 00:03:14 Nope. I ate at the lobby restaurant. We have to go to the bar. It is so sick. It's the best rooftop bar. Dude, it's the best thing I've ever seen. He owns all the restaurants in that building? It's like a licensing thing with his name. But I think he owns Zaytaina. He's the best thing I've ever seen. He owns all the restaurants in that building. It's like a licensing thing with his name. But I think he owns a tent. He's the chef owner.
Starting point is 00:03:29 I tried going last week with Chris. They wouldn't let us in. Dress code. Let me know. The Bazaar is really good. The Bazaar. I've been there. Downstairs?
Starting point is 00:03:37 No, I think so. Or that's a different location. Second floor. We have to get a rest. It is so high up here. That's high, high up. This is a... So I did a deal with queues. The queues are deep in the chef's base. Like the Nasdaq queues?
Starting point is 00:03:52 Yeah, QQQ. Investgo QQ. They're deep in this. They love fine food and wine. Oh, they're deep in it like they're into the... They're into chefs. They have this video series called Recipe for Innovation, which is awesome, where they have a chef, Jose, Tom, Kwame,
Starting point is 00:04:05 make recipes based on the components of the cues. Pretty good idea, actually. Really? Explain. So they'll say, all right, chef. Apple? They put GPUs in the salad. Chef Mike, Airbnb, Honeywell, and Starbucks, go.
Starting point is 00:04:19 Make me three dishes based on those companies. What inspires you? Airbnb, air, water. Maybe I'll do muscles with a foamy seaweed, that, right? But I think it's pretty smart. It's like... Honeywell, obviously.
Starting point is 00:04:31 Yeah, it's a way. We'll cook with honey. It's a way to illuminate the components of the cues in a content marketing way, but it's shot like chef's table, it's gorgeous. And so they had this thing, and they're like, we have this beautiful series, we paid millions of dollars to do, we paid these guys And they're like, we have this beautiful series, we paid
Starting point is 00:04:45 millions of dollars to do we pay these these guys are on the payroll, we can't get traffic to it. They put it on our ETF channel on Investopedia and on food and wine, which we own. dot dash merida. And they're like, you, Caleb have a presence at future proof. What can we do? And I've been talking to Matt for a while about bringing one of our other brands, like Travel and Leisure or Food and Wine 2 Future Proof, with a sponsor, and this is the one that took.
Starting point is 00:05:11 I was trying to get like United and Travel and Leisure, I was trying to get, and then this came in, I was like, got it. Are you excited? Yeah, I do, this is our third. Wait, did Jose Andre cook something last year? Yeah, we did. I didn't get to see it.
Starting point is 00:05:24 There was a ton of people watching Yeah, you had a full house Yeah, we did you can't cook because they're uptight about it in Huntington Beach. You can't like he can't fire up a stove No, no in Miami. It's a little bit different. Okay, you can have Like you and also they have a tight catering situation and yeah county like it's yeah, it's all locked up there So we did he has his own tin fish, mussels and sardines and potato chips. So we did fish and chips. That sounds disgusting.
Starting point is 00:05:51 It was freaking awesome. And I bring the wine editor from Food and Wine to drink to soak through wine for me. So we do a conversation about immigration, food, his empire, wines that go with the food. And I put it all together into an advertising campaign on our sites, and then this live activation experience. At Future Proof.
Starting point is 00:06:12 That's a great package. Yeah, it's good. And you know what's cool for the people at Future Proof that are watching financial stuff all day? It's like a refresher. Yeah, and it's a power cleanser. Yeah, literally. Here's something relevant to you, but not more fintech.
Starting point is 00:06:28 And we're not jamming the Q's at them. We're giving them recipes. Yeah. Literally, here's the recipe. Kish, five foods to start with the letter Q. Yeah. Wait. You wrote a book.
Starting point is 00:06:39 Keen Wives. Yes. Holy shit. We should talk about it. We should talk about it. So I don't think I told this yesterday. I want to save it for the show. That book is going to live much longer than Just Keep Buying.
Starting point is 00:06:52 Which was a smash hit. Just Keep Buying is one of the best selling financial books of all time. I don't need to tell you that. It's done well. I mean, it's better internationally. Dude, of all time. What a response. Dude, of all time. What a response. Yeah, what the f...
Starting point is 00:07:07 Dude, we're on a podcast. Have fun. Be like, thank you. No, I appreciate it. I appreciate it. That's a better book than the f***ing Bible. And you're like, huh. But do you... A little more data. Do you agree?
Starting point is 00:07:21 Like, Just Keep Buying was great for what it is. The wealth ladder is so much bigger than that. Like, people will give that to people at all ages, at all areas of the wealth ladder, if you will. Yeah. I think that was the point, right? Like, Just Keep Buying was supposed to be my, like, hey, if I don't know anything about you, here's what I give you. Here's my financial advice. And with the wealth ladder, I said, hey, that's actually not correct. Right. Like for people that are just starting out, you got to have a different strategy.
Starting point is 00:07:49 And for people that are trying to get super rich, that's a, you know, but it doesn't invalidate the first book. It builds on it. It's a different thing. Right. It's like where are you trying to go and why and figuring out the right strategy is more important. One of the things that you've done very skillfully in selling the first book and I would imagine you're going to repeat the playbook. You just do every media outlet possible and that way during this four to six week launch period every day there are people talking about your book to their own like some of
Starting point is 00:08:19 them are big audiences some of them are micro audiences but it almost doesn't matter because if there are sales taking place on Amazon of this book, each day, even if it's three books today, they're keeping you high in the algorithm. Dude, you know what his... It's not three books. Very wise. You know what his genius is? On the first day and on the second day, he buys 10,000 copies each day to boost the ruckus.
Starting point is 00:08:40 That's genius. That's a thing. That's genius. That's genius. I think they... So the algorithm's changed a lot. They don't let you do that genius. That's people do that. I think they, so the algorithms changed a lot. They don't let you do that now. Yeah, so that's one of the issues you can't,
Starting point is 00:08:49 if I go and buy a bunch of books, that doesn't, that's not the same as a bunch of separate orders and they take that into account in the ranking. Yeah, both. New York Times takes that into account with their, like, you know, bestseller list and all that. So it's gotta be much more broad based.
Starting point is 00:09:02 And people have tried to game this, but I don't. Skyrimuchi told me, like, he put out, he put out like the little book of hedge funds or whatever. He's like if I told you how many thousands of copies of this thing I have in my basement, you wouldn't believe me. But I'm telling you it's actually even more. But that's another era. Now, I think the algo is going to make another recommendation. Yeah. Go around to like the asset managers who have the new associates or the interns and be like, I would love to talk to your team
Starting point is 00:09:29 about building wealth for 45 minutes. I'm gonna bring a book. Can you buy 20 copies and we'll give them away and I'll sign them for the kids and you spend, I do this all the time, not to sell books, but just to get us out there like a Trojan horse to get us into these firms. And you can literally give a step-by-step
Starting point is 00:09:46 or a nice talk and take Q&A, but they'll buy 20 books as part of the deal. No talent fee, just buy books. Yeah, I mean, I prefer the pot. I appreciate that method. I think it's just kind of tough, because I work, I have a job I have to do. We don't want him doing that shit.
Starting point is 00:09:59 A 30-minute podcast I can do virtually is easy. You know he's the chief operator of all the firms. On Sundays, I was talking about Sundays. If I could do that on Sunday, like's the chief operating officer of the firm. On Sundays. I was talking about Sundays. If I could do that on Sunday, like yeah, but I'm like I wish I could just go in and walk in. Caleb has a great idea for you.
Starting point is 00:10:11 Are you familiar with the term sabbatical? Yeah. We're actually extraordinarily busy this summer. We can't have Nick doing hand-to-hand combat. I was asking Nick the other day, I said, it feels like we're busier than we've ever been during this time of the year. Can you pull up X, Y, and Z, and sure enough?
Starting point is 00:10:29 Yeah, the horse race chart shows that. We stole this from Netflix. Netflix used to report their numbers cumulatively year by year. So they would compare, where are you in 2019 and April, January through April, versus 2018, 2017. So we started doing that that and it's a really effective chart tells you all you need to know a lot of what you need to know so Anyway, Nick has a real drive and he's very good
Starting point is 00:10:53 We're gonna talk we're gonna talk about the wealth ladder once we get into the the meat and potatoes here I'm going to settle are you ready for this? You causing a disturbance, Queen? I'm not a friend. You see what I did to the slate? Oh, I love that. Well done, Caleb. All right. What's in the box? I have a gift. When the time is right.
Starting point is 00:11:11 Whoa, whoa, whoa. Stop the clock. Here's a word from our sponsor. Today's show is sponsored by Public. Public is the investing platform for those who take it seriously. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks.
Starting point is 00:11:19 You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. You can build a multi-asset portfolio of stocks, stocks, and stocks. our sponsor. with no fees or minimums. What sets Public apart? AI isn't just a feature. It's woven into the entire experience from portfolio insights to earnings call recaps. Public gives you smarter context at every touch point. Fund your account in five minutes or less. Check out public.com
Starting point is 00:12:26 Compound paid for by public investing full disclosures in podcast description. Josh Brown, Michael Batnick, and their cast mates are solely their 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. Ladies and gentlemen, children of all ages, investors, traders around the world. It is my pleasure to introduce you to episode 201 of the world's greatest investing podcasts, the compound and friends. All right.
Starting point is 00:13:00 John is here. Daniel Duncan, Nicole, two very special guests, repeat guests. Someone call you guys returning champions, I definitely would. Ladies and gentlemen, directly across from me, Nick Medjuli is the creator of Of Dollars and Data and the chief operating officer
Starting point is 00:13:20 at Ritholtz Wealth Management. Woo! Thank you. He also just released his latest book, The Wealth Management. Woo! Thank you. All right. He also just released his latest book, The Wealth Ladder, Proven Strategies for Every Step of Your Financial Life. We'll tell you all about it. And another returning champion, Caleb Silber is the editor-in-chief at Investopedia.
Starting point is 00:13:43 Caleb is frequently featured as a markets, economic, and consumer trends expert on NBC, MSNBC, CNBC, Fox Business, and many more. Caleb so great to have you back. Thank you very much for being here. Thank you for having me. I want my own air horn. You're going to get one. First things first, let's just get this out of the way. Nick, you got married this summer.
Starting point is 00:14:09 Yes, I did. All right. Like within the last few days almost. Within like a month, a month ago. Okay, we have a picture. The white tux jacket definitely plays. My wife selected that for me. I love, I can't love it more than I love it.
Starting point is 00:14:25 That's tough to pull off, you did it. But he did it with the bow. You need the bow tie with that to really do the whole thing. Yeah, she wanted everyone to wear white. And then so like all our friends are like, are you sure? We're like, yeah, she wants that. So that's what we did. We all went white.
Starting point is 00:14:36 And we did a courthouse wedding. I was going to say, is this City Hall? Yep. Went to City Hall, did it. It was great. We were the last like session of the day. The last one is quick. You go in there and like literally someone from the state comes in. It's less than minutes like do you take yes? Yes? Okay? Sign this whatever and then you're you're married
Starting point is 00:14:50 You get your marriage license from City Hall. Did you do that with Robin? No, did you do that? I don't think I did that I don't know if I'm official so we so we live 25 years later We went down to we went down to City Hall to get the license. Did you take your rabbi? No, we didn't get married there. We just got the license. But there were people getting married there. There was a whole hallway filled with brides and grooms and some of their family members waiting to get married.
Starting point is 00:15:16 Okay, so that was a cool way to do it. Who were all those people on both sides? Some of my friends, some of her friends, and then a lot of her cousins. So it was a very Albanian wedding. So a lot of her family was there. Congratulations we're so proud of you we knew you'd find the one you definitely have she's awesome. She's great lover. You feel any difference?. She's a great lover too. Oh my god. She's great lover. We both heard the same thing. Yeah, Nick, I wanna double click on that.
Starting point is 00:15:48 Wow. Let's do an instant replay. Have them go back like 15 seconds, she's great lover. Okay. We're very fortunate, all of our wives are great lovers. All right, so I'm really proud of you, congratulations. Hard pivot.
Starting point is 00:16:04 Is open door stock market manipulation? What do you think? I'm not going to accuse a person of stock market manipulation in this case. And we'll tell the story why we're asking the question. But it looks like manipulation on the surface.
Starting point is 00:16:20 It just might not be somebody deliberately manipulating it because the crowd is doing it It is it is not stock market manipulation. You say it is not stock market manipulation. Why not? Who has inside information? What inside information and market manipulation? That's one of that's one of the that's one of a component disagree. I can manipulate something with no inside information whatsoever Okay, so what is what is?
Starting point is 00:16:44 Eric Jackson was at the center of this. But, but hold on, I just want, just real quick. Before we get to is it or is it not stock market manipulation, the only way that you have this type of mania, because it absolutely is a mania, is with a really healthy bull market with lots of euphoria. And before we got to this stage of the market, you had a textbook rally. Exactly what you wanted to see. So Chartkin made this chart.
Starting point is 00:17:15 We stole this from Duality Research, who is just putting out killer, killer content. So what we're looking at is, for the listeners who are not watching, and you should be watching, the rolling 78-day change. Why 78? That's the bottom. In the Goldman cyclicals versus the defensive index. And you haven't seen this type of advance, this type of spread, which is 29%, since the bottom in 2009. So you are seeing the leaders leading, you're seeing tech, communications, industrials, financials, and what you're seeing lagging is the opposite. It's staples, utilities, healthcare, real estate.
Starting point is 00:17:52 So this is a very, very healthy market in which led to a lot of excess, which we are living through right this second. We're hitting all-time highs. All- time highs in and of itself does not signal excess, but a lot of the behavior that we're seeing, open to which we're about to talk about, is a result of a very healthy market that is now turning unhealthy. Okay. So here's the heart of the issue. Eric Jackson's a friend of the show. We've had him on the show, not recently, but he's been on multiple times. And he's been around for, I don't know, 30 years. He's a real guy. Hedge fund manager has been involved in activist campaigns at Yahoo.
Starting point is 00:18:31 He's a known quantity in the media. He came on our show three years ago, two years, 2022. The reason why this was possible, this open door mania was possible, is because Eric was on this show talking about Carvana from the business point of view. It was a dollar stock. It was a dollar stock and it ran to 150, whatever it did.
Starting point is 00:18:55 So he had the credibility. So when I saw this tweet, I thought, hey, maybe I should just put like a couple of grand in there. Just see what happens. You should've, turns out you should've. Just see what happens. So Eric, Eric came on our show and said, you guys are, everyone's overlooking Carvana.
Starting point is 00:19:09 This is not, like there's a lot of short sellers in it, but that's not the reason I like it. He said, I actually think it's a good business. And they threw it out with the rest of the excess of 2021. And the stock went from a dollar to whatever. It's a monster stock now. One of the biggest winners in the last three years. So, a lot of people remember him.
Starting point is 00:19:28 330 bucks today and it was a little bit harder. 330 bucks. So, like the type of game that you will never see anywhere. So, he tweeted on July 14th, over the last month my X impressions have exploded talking about BTQQF, I don't even want to look that up, IREN and CIFR because everyone is looking for the next Carvana. We think we just found another.
Starting point is 00:19:54 At EMJ Capital, that's his fund, has taken a position in open and we believe it could be a 100-bagger over the next few years. Here's why. And he did a whole thread and the thread is mostly focused on the fundamentals. And comparing the situation with Opendoor to Carvana a couple of years back. Again, nothing wrong there, I think. Because he's saying he bought it. That's number one. That's number one.
Starting point is 00:20:23 So, right? He's like, I bought it, I own it. Okay, good. Number two, he's laying out a fundamental story. He's not saying, hey everybody, tell your friends, let's move the stock. So, that being said, this is pissing a lot of people off. What's different about this than roaring kiddie
Starting point is 00:20:42 doing his own fundamental analysis on the game? Well, they accused him of manipulation too. Right. But never convicted. What's different about this than roaring kitty doing his own fundamental analysis? Well, they accused him of manipulation too. Right. But never convicted. What's different about this than when David Einhorn goes on stage on Irisone? Nothing. He's got a bigger stage and talking to wealthier people. But this guy is respected, obviously you've had him here. Three things are different. Three things are different.
Starting point is 00:20:58 Number one, it's a dollar stock. David Einhorn doesn't do that. Okay. Alright, right? Fair. Okay. You can move it. You know what you could do to a dollar stock. David Einhorn doesn't do that. Okay. Alright. Right? Fair. You can move it. You know what you could do to a dollar stock. Anyone. Roaring Kitty or not. You're right.
Starting point is 00:21:12 Number two, heavily, heavily, heavily shorted. Now some would say tough shit for the shorts. Overstayed your welcome. You get a stock going down 95% while you still short it. Totally legitimate. But still, when you do something like this, when you say 100 bagger of a dollar stock, you know it's going to 10. You know it's going to 10.
Starting point is 00:21:33 If you have any influence whatsoever, you know. So let me ask you this, because fine, forget about it. I didn't even tell you the third thing. Fine, what is it? The venue. It's not the Irisone conference. It's f***ing Twitter. And the regulators just do not like people using message boards to move.
Starting point is 00:21:49 They just, even if you have the best intentions, for whatever reason, it's different than standing on stage at Lincoln Center at the Iris Own Conference. But market manipulation is illegal, right? Hard stop, whether it's inside information or text or whatever it is that's illegal. I'm not a lawyer. What about what Eric did crosses the legal line? I don't believe anything and I don't believe that the regulators actually care so much about this type of thing anymore. These days, probably not. Probably not.
Starting point is 00:22:18 Yeah. So this guy's using his loudspeaker. He's using his platform X in this case. He knows who he's talking to. He's got 68-some thousand followers. He's done it before. I don't see any difference between this and Carvana. This company loses a lot of money and it's in a pretty tough sector right now. But this is his own research and if people want to follow, they follow. But you know what's also different is we're back in that 2021 phase where everything's
Starting point is 00:22:43 melting up, right? It's like a soft serve ice cream cone with sprinkles on top. Tastes good for the first couple bites and then you get to the middle and you're like, what am I actually eating? Put the chart up. This is Open Door one year performance. So it got to as high as almost looks like almost three and a half. And again, coming from like sub one dollar. And I think what would really seal the deal is if like Eric blows it out
Starting point is 00:23:09 now. What sells? He's not selling. I don't think so. Because I think Eric legitimately likes the stock. He does. Now I would also say I... But that would be very... We would... That would be very bad. I absolutely understand why professional investors absolutely hate this because it feels like cheating, it feels like a shortcut, it feels illegitimate, so I fully understand, but at the same time,
Starting point is 00:23:34 I don't think he did anything wrong. Well, so I don't either, I'm just pointing out the things that people dislike. Yeah, I get it, I would dislike it too. People, including regulators. Dude, if I'm a I would dislike it too. People including regulators. Dude, if I'm a hedge fund manager and I'm competing against him, like this is just not fair.
Starting point is 00:23:49 It feels like you're cheating. And then you fan the flames of social media on Wall Street Bets and wherever else and this is what you get. This is where we are right now, so you can hate it, but welcome to investing in 2025. I mean, why is it cheating just because he has an audience? Is that cheating now?
Starting point is 00:24:02 Like, where's the argument? Yeah, I agree with that. And like, maybe that is, but like, he has the audience for some reason that this, this hypothetical hedge fund manager doesn't have. It feels cheating in the same way that when Kim Kardashian backs a company or Sydney Sweeney in this case, that's where the run works. The audience is the most important thing ever. That's it. He put an $82 target on it, quote, in a few years was the last tweet in the thread
Starting point is 00:24:26 I think that's the other thing that bothers people. He's arriving there On the fundamentals. He's got a reason for 82. But again a $2 stock going to 82 is like miraculous. It's like Bitcoin. Yeah Even bigger than I and I'm not saying it won't do that or it can't do that, but I think when you say that out loud, that's the same thing that pisses people off about Cathie Wood. When she says her base case for Tesla is 5 trillion. Alright, so look what happened. People don't like that.
Starting point is 00:24:55 What people also don't like is when it appears like you are doing this for your own benefit, and people think that other people are going to get hurt because of the result of your actions, that's what pisses people off. So this is from Sherwood, open door call volumes were over a million. The other day this stock, which is a market cap of less than $5 billion I think, traded more shares, more volume than Microsoft. So Matt Levine, as only he can do, wrote this yesterday. New meme stocks dropped. Last week a reader emailed me.
Starting point is 00:25:29 I have a funny AI thing that happened to me this week. My friends and I were talking about Carvana on Tuesday night, which got me curious and I asked ChatGBT what the equivalent of Carvana today is. ChatGBT told me Open Door. So as any responsible investors do, we both bought a fair share of open door. The next day the stock went roaring and went up by over 50%. That's the end of the email.
Starting point is 00:25:49 Matt Levine wrote, nice trade for him. Very much not investment advice for you. Welcome to investing in 2025. I don't know why we should be surprised by this, but this is how a lot of people are looking at the market. Not everybody is going to the Iris Stone Conference and everybody's coming into this office looking for really professional and sound advice. They are looking for hot things to buy. They want to make money. And fan the flames and there we go.
Starting point is 00:26:11 So that's a really important reason why it's not manipulation. Eric doesn't control what other people do, number one. And there's a whole conversation that's taken off as a result of him spotting this opportunity That's away from his Twitter feed. It's on reddit. It's on like Twitter it's on it's in other venues that he has nothing to do with if people choose to Read his opinion and agree with it or think enough other people will agree with it that there's an opportunity At a certain point like we have to hold adults responsible for their own actions.
Starting point is 00:26:45 Nick, how much open door did you buy? Zero. I haven't had an individual stock in years. I haven't because I'm sitting on it. Oh my god. So back to the market environment and where we are today. I bespoke has a chart showing the 100 most short stocks versus the Russell 1000, a three month performance spread. And we're back in 2021 territory
Starting point is 00:27:09 Like we're back. We're back. Wait. These are the most highly shorted stocks as like an relative to the rest of the market Net the rest right, right? So this is 2020 all over again. We're doing it 2021. Yeah Yeah, I mean, it's just the meme stock stuff all over again, right? You just said it I mean, I don't know what else there is to say on that. Why are they shorting $2 stocks again? Wasn't that aren't the memories fairly raw and recent from like three years ago? I mean GameStop everyone you start shorting and then okay that creates an opportunity for prices to go up very quickly because now these people have to close out their positions and it's just... It's almost the most bullish call you can make these days.
Starting point is 00:27:44 If you see the hedge fund shorting stocks right now, the meme stock crowd is all over. because now these people have to close out their positions and it's just it's almost the most bullish call you can make these days if You see the hedge fund shorting stocks right now. This the meme stock crowd is all over it They've been looking for a while for something like this and the right market environment to Michael's point where anything goes right now melt it Up so they got this white Krispy Kreme. We're not eating more doughnuts I'm not eating more doughnuts, but all of a sudden this stocks up there I saw calls calls was up 36% in a day. Kohl's did not come out with AI. Like that's a short. Oh, you only can get that with a short squeeze.
Starting point is 00:28:10 I guess the question is like, has no one learned anything? Why are we shorting $1, $2, $3 stocks? Even if we think they're zeros. Like it's almost like you're asking for somebody on a message board to whip up a mob to wreck you. Yeah, the cost benefit is just not there at all. Well, how about this? If there's a lot of shorts, if 20% of the float is short, a stock under $5, just don't do that. Like you're asking to get blown up. Here's another metric showing that this is even, by this metric it's even crazier than 2021.
Starting point is 00:28:39 This, a lot of this is from Daily Charpook, by the way. Non-profitable tech retail investor participation percent. So I guess that's measuring what percent of these non-profitable names, like whatever these doctrine names are. These are publicly traded companies with no earnings. That are losing money. 25% of the volume is coming from retail investors,
Starting point is 00:29:02 which is higher than it was at the peak in 2021. And it's working. So it won't always work, but right now it is. Yeah, right. So environment, like certain environments lend themselves well to this kind of activity. This is making people way more money than the stuff coming out of University of Chicago
Starting point is 00:29:18 with small cap beta. Oh, I can earn an excess of 1 and 1. half percent a year maybe over time on average, or I could buy open door and ride a one to three in two weeks, not in two weeks, in three days. And blowing yourself up, especially for people that love to trade these meme stocks, it's not a big deal. Sometimes they publicize it. They were doing it back in 2021. I'm taking a flyer here.
Starting point is 00:29:40 People love the drama of the bet. That's what people are doing. They're betting. Why are they doing it now? The environment is ripe for it. It's not like we have all the stimulus money coming our way, but I think people are just tired of waiting around for the next big thing. They probably miss Bitcoin. They're like, I got to get in on this. Probably miss GameStop in the early days. I got to get in on this.
Starting point is 00:29:56 People want the action. I just think there's something, we're going to talk about this later in the show, but I think this is actually caused by housing prices being too high. And so all this money that would have been, hey, I need this is actually caused by housing prices being too high. And so all this money that would have been, hey, I need to buy a house. I need to do that. Oh, that's a good take. It's just money.
Starting point is 00:30:10 And this is, I saw this, it's not even really my take. I saw this recently. Someone said I have an unsubstantiated take that like there's all this money in all these different asset classes because it's not in housing like it normally would be. Because they can't buy real estate at the age that normally they would. Because with rates where they're, and those that even have the money to buy real estate, it's like, well, with rates where they are, I don't want it because with rates where they're and those that even have the money to buy real estate It's like well with rates where they are. I don't I don't want to do that So I have this money sitting either in treasuries or I have it, you know, I'm gonna bet it on things, right?
Starting point is 00:30:32 So that's how I see this playing out It's just there's there's so much money and what are the opportunities to chase right housing is not one of them So it's me and it's not even just rates It's also a lack of, although in certain markets supply is coming back online. Or it's the question that young people are asking themselves, is this the best use of my money? Sinking a million plus into an asset I might sit in for 40 years?
Starting point is 00:30:55 What if I want to move the family to Costa Rica for the year? And I think that's a fundamental change, especially for younger investors, that's going to affect the wealth management business too. If all of a sudden that 30, 40% of their capital is freed up to do things, that changes the equation. Maybe they will, but right now there's no point in doing it if you can't afford it. And if you have that extra money, take a flyer on a few stocks. So interesting.
Starting point is 00:31:17 Or invest in experience. So the Fed is indirectly causing this. Unbelievable. They're keeping mortgage rates so high that people are sitting liquid enough to trade meme stocks when they should be making mortgage payments. What's in the box? Alright, I brought a gift because I always like to bring a gift to this, one of my favorite podcasts and you know how I roll.
Starting point is 00:31:38 Wow, that's nice. I had this made for... That's a sweet deck. This is a sweet deck. Nick's orange and the blue, because that's how we get down. Yeah. And I'd love for you to... Let me see the flip side. Oh, it's green.
Starting point is 00:31:52 Sweet. Love it. Were you a skater? You know what green is. Were you a skater? No, no. I looked like one, but I wasn't one. Were you a skater?
Starting point is 00:31:58 He still is. I'm a full lifetime skater. No, I've seen you on your board. Yeah. I've seen you on a long board. That's right. Did you skate here today? I skated here yesterday to drop off myself've seen you on a long board. That's right. Did you skate here today?
Starting point is 00:32:06 I skated here yesterday to drop off my self-prohedting for the airport. Thank you. We love it. Yes, and thank you for having me on the show. We love it. So, Nick, you're... That's going. That's getting hung up. Yeah, that's gotta get hung up. Yeah, yeah, yeah. Nick.
Starting point is 00:32:18 I'll throw trucks and wheels on it and ride all over this office if you want. Nick is 100% right. On Animal Spirits this week, Ben posed the same question. And I laughed it. I said, come on. No, it's ridiculous. We got two emails. No, two is not a million.
Starting point is 00:32:32 But we got two emails saying, actually, and here's one of them. Wanted to chime in on something from today's episode. Ben asked if people are using their down payments cash to invest in the market. And Michael brushed it off. For what it's worth, that is exactly what I'm doing. And then he laid out why. He's renting, they have money, they can't buy a house.
Starting point is 00:32:52 So he's not the only person that's doing this. Yeah, it's tempting, right? Let's say you have 500 grand sitting in an account. And you're sitting in treasury bills? And you're not about to buy a house because nothing's changed. You're either treasuries or you're ending risk assets. So you take 20 grand or whatever, or five grand.
Starting point is 00:33:07 Yeah, yeah. You get a text and someone's like, yo, yo, yo, Eric Jackson, open door. It's like, I was going to buy a house, but fuck it, let's go. Let's YOLO into open door. I guess I could see that phenomenon. I could see people saying, well, the money's just sitting here anyway, and look how good the market is, and look how much action, and my friends are talking about all these things they're trading.
Starting point is 00:33:29 Whatever. I'll take 20 grand. I'll throw it into some stuff, see if I can turn it into 50. I'm a follower and reader of Vanda's research. Vandatrack does great research on what retail investors like us are actually doing with our money. And they track how we're investing outside of the defined plans, outside of the 401k, the IRAs, et cetera.
Starting point is 00:33:46 And we are back at elevated levels, back to the close to the 2021 levels. In the trenches. Yeah. And the things that we are buying outside of our just normal allocations to our 401ks, which is all the big funds, all the big stocks are very interesting stocks, a long AI, but you're going to get an open door in there. You're going to get a Krispy Kreme just because that's where the action is in meme stock land right now.
Starting point is 00:34:07 So retail investors are back in it looking for opportunity because they're seeing this big melt up and want to be a part of that. In the last 30 days, I've been buying Solana, Joby Aviation, and Archer. Oh, the buck mooning. These are the blue chips of my portfolio now. To the moon. The blue chips of bullshit. But like to that point, I see my own drift.
Starting point is 00:34:28 I wasn't doing that six months ago even. Right? And it's just like, now I'm entertaining ideas, even flyers, whatever. Like, I'm entertaining ideas myself. Saying to myself, as I'm doing it, this is so dumb. I almost bought Intel. Yeah, the talk about a money loser. So, I...
Starting point is 00:34:46 Public's options showed up. Calls are almost 70% of the total market volume. Again, hasn't been this high since the 2021 meme days. One more, just more confirmation. The equity euphoria indicator. Last week, the Barclays equity euphoria indicator, which uses options data to quantify investors' giddiness, jumped to its highest level since late December.
Starting point is 00:35:10 So I guess if you're listening to this, and you're listening, please be careful. Maybe pump the brakes a little bit. Maybe no more individual positions for a minute. Maybe just let it breathe. Keep doing what you're doing with your 401k. You're bi-weekly, whatever you're doing. But if you're going to entertain new positions,
Starting point is 00:35:29 just be a little, be careful. Isn't this the hardest thing? When your portfolio value is at a record high and you look at your holdings and in green in your app or on the brokerage website, you see all your stocks like up 80%, up 50%, one after another, after another. It's really hard to talk yourself out of how great you are in that moment. And the problem is it's at that moment where most people are like, what else should I buy?
Starting point is 00:36:00 Because you're getting the oxytocin. It's like firing all your serotonin, oxytocin, all those good chemicals are firing all over your brain. And not just from the money you're making, but from you told other people. And they made money. He told me to just keep buying. Yeah, yeah, Nick. No, but so right now, that's the danger right now. And people that might normally own 20 stocks are buying like 30 stocks because everything they're buying is working.
Starting point is 00:36:31 And they're not looking for the next blue chip stock that could go up 10%. Now they're looking for the junk. I just think it's crazy we're having this conversation. Like, three months ago, April was like the world's ending, tariffs are going to ruin the world economy, and now we're back to meme stock. It's like... Yeah, but there's an adrenaline factor to a near-death experience. That's fair.
Starting point is 00:36:53 And I think three months ago, a lot of people looked at their portfolio and were like, oh my God, this is so horrible. And it looked like, oh, this is really going to be a shitty year, because this tariff thing is going to be going on all year, and then that goes away a little bit, reverses, but we just had a near-death experience. Think about it in real life. People get that shot of adrenaline. They start making out with each other.
Starting point is 00:37:17 Like, think about it, oh my God, we almost died. I think you're my girlfriend now. But the gaps between near-death and euphoria are so compressed right now. We talked about this the last time I was on the show. The bear markets are super cute. They last a couple of weeks. And then we're back off to the races. And then we're back in this concern about a correction. And then we're back off to the races.
Starting point is 00:37:36 There's no time to catch our breath. We haven't had a real economic reset. No. I know the bottom 10%, again, obviously they're hurting always, but especially now. But a real recession that impacts Everyone not just rolling recessions, which we've had obviously real estate and tech in 2022, but where everyone's eating it. We haven't had it Caleb um Bragg a little bit about investopedia. So you're the editor-in-chief
Starting point is 00:38:02 And um, I remember when you joined there and you were talking about the opportunity. Yeah. You have largely- Came right here to this office. Yeah. The Park Avenue office. That's right.
Starting point is 00:38:12 You have largely witnessed that opportunity bear out. Mission accomplished. Yeah. I mean you guys are a super important site. I think everyone at some point in any given month that's searching for investment terms land on Investopedia in some way. What are the most searched terms that people are landing on this summer, and what do you see going on
Starting point is 00:38:28 on the platform right now? I'm so glad you asked. By the way, monthly active users? Monthly, we're about 12 million uniques. Okay, what percentage that America versus rest of world? Half. Wow. Half US based.
Starting point is 00:38:42 These are, I think, a lot of self-directed investors. Not by definition, but students. Students, right? Yeah, students is where we kind of started. I'm actually bringing Investopedia back to school next year on a university tour because I think we really belong there, helping people learn about money before they get out of school with $36,000 in debt. Kids studying for exams. Security industry exams. You guys are like a companion. We are 26 years old. That's like 260 real years.
Starting point is 00:39:08 In internet time. In internet time. And we've evolved, but we've evolved because financial markets have evolved. But we're still there for people to be like, what does that mean? But more and more, and as I've been there over the last decade or so, it's been about what is and now what. And that's kind of what we want to be, the voice and the guide for the educated investor.
Starting point is 00:39:28 But we know a lot of advisors use us to either get smart or smarten up their clients. So we play in that space as well. But we also realize that the nature of money has changed for a lot of people. Now, some principles will always be there, compounding, dollar cost averaging, all that good stuff that we learn, that we teach,
Starting point is 00:39:43 that you teach, that's always been important. but we want to be the ultimate resource for all things money for everybody. We have a great name. We have a great brand. It's an honor to be the editor-in-chief and represent it and be the face of it, even though I have a great face for podcasts, apparently. But we are lucky to still be here, and I think because the brand is so strong. It's really hard to maintain that in an AI world.
Starting point is 00:40:06 I was just looking at a story out of Axios, citing where chat GPT and the other AI platforms take content from. Are they scraping you? Oh my gosh. Right, so what do you do about that? On my screen, I have this, I was just gonna go there. I hit EBITDA, and Gemini gives me the answer,
Starting point is 00:40:24 and you obviously are the first link But I got it now. I have to scroll down to get you. Yes, and that's a problem. They're fucking your shit up That's a problem, and we're doing whatever we can to protect ourselves from crawlers We just announced a partnership with a site that protects that but we also have through our parent company dot-merit of the deal with open AI That's been well publicized where there's a licensing fee and they sign it. Yeah, like Reddit's getting paid, New York Times are getting paid. Money has to change hands.
Starting point is 00:40:49 It does. And our leadership, God bless them, has been behind that 100% since the start from our chairman and CEO at IAC on down to our CEO at.-Merit. We have to protect ourselves. At the same time, we can't just sit here and say, oh no, AI has just eaten us up like Pac-Man.
Starting point is 00:41:06 We got to find other ways to deliver content and experiences to people. We were talking earlier about these live events that I do now at FutureProof. We've been doing a lot more in video, obviously, and various platforms. I just took my podcast to Vodcast Live because I want to find other ways to engage audiences where they are, but we still have to be building the right educational experiences for investors for 2025 and beyond. Because we can't just sit here and let it happen. You got to have to evolve too. So back to the question of what have people been looking for.
Starting point is 00:41:34 I was just looking for the past six months. And obviously we had a lot of people looking up bear markets when we were darn close to a bear market. Call options. What are those? Best inverse ETFs. Oh, that's great. Yeah, that close to a real market. Call options, what are those? Best inverse ETFs. Oh, that's great. Yeah, that's always a good sign. Not ETFs, inverse ETFs. Yeah.
Starting point is 00:41:51 We had people looking up Bitcoin for the first time. If they hadn't looked it up before, what is it? How is it mined? How many will ever be mined? What is this thing that just keeps exploding if we're going to be the crypto capital of the world? They want to make sure that they understand that as well. Smoot Hawley, we went back in history to teach them about the Smoot Hawley tariffs.
Starting point is 00:42:10 Why are they important? And then obviously around Buffett's announcement of his resignation, he's super popular on Investopedia, a lot of people looking at that. But people are, you know, you can see the full spectrum, pretty much of America really, but the world, but what they're worried about. And you can see the people on the on the bottom who are struggling can I what's a hardship withdrawal on my 401k what's the best personal loan to take right now should I tap my Roth IRA to how do I leverage those other leverages
Starting point is 00:42:37 are hitting invest the PDT we have it all we have 40,000 pieces of content on the site so it's everything from how do I protect myself to how do I get promiscuous and take advantage of this upside and take advantage of this meme stock rally or this crypto rally. Do you guys have a fear greed index? We have the anxiety index, which tracks traffic to fear based terms, fear based terms like recession, like correction, like some start able to win all the way. Right. All the way screaming like a two year old toddler in a toy store when it's time to go home. And for good reason. But then it switches just as quickly as our emotions switch with the market. So if you look at price, price is a great indicator of interest. Volatility is very good for us because people get worried and they're concerned and they want to do something.
Starting point is 00:43:18 Learn first, then do something. And that's kind of the way I want Investipedia to evolve. Come to learn and then we're gonna help you do. You have the data on that anxiety index the spikes on it. I assume it spikes like that. We have that going back to the financial crisis. Yeah. You should give that to us and let us plot the different markets against it. I'd love to see if it's earlier than other fear green index. Years ago a hedge fund came to us and did that very very study and I'd love to see if it's earlier than other fear agreed index. That's what matters. Years ago a hedge fund came to us and did that very study and they found that it does precede the VIX.
Starting point is 00:43:50 Was it Scott Besson? I'm sure yours is better than Bull Bear, the AIA stuff that is always quoted. That feels laggy. That's a survey. But it's also older people. It's older people and ours is, if you think about it, when you get freaked out, what do you do? You Google something or you look it up you're like wait what is that what's it called what's it called the anxiety index the
Starting point is 00:44:09 best pd anxiety index so we have it going back to the financial crisis because that's when you know we started waking up to that I wasn't there at the time but thankfully we started tracking that data being around 26 years having as many visitors as we do as many readers and as much content gives you a ton of data we have an incredible data team that helps us analyze this stuff. We want to talk about dumb money? No, we'd skip it.
Starting point is 00:44:29 We're going to skip that? Yeah. Okay, where are we going? I thought that was my segment. It was. Yeah. Where are we going next, Mike? This is yours, personal responsibility.
Starting point is 00:44:36 Oh. So, all right, let me tell you a story. This is a true story. This just happened. And a lot of advisors are talking about this. And I'd love to hear what you guys think. A client tells her advisor, doesn't matter what firm it is, it's a big, big RIA.
Starting point is 00:44:55 Client tells her advisor, I wanna liquidate my IRA. The advisor claims that they try to talk her out of it because there are taxes and penalties and the client says, just tell me what the taxes and penalties are. In the IRA? Yeah. Like to liquidate it early. Oh, like get their money out. Give me my money. Liquidate it.
Starting point is 00:45:18 So like at the end of the day, the advisor is not the boss. The client is the boss. So you can warn a client, this is not a great idea. The client doesn't tell the advisor what they're doing with the money either, which I think is a really key part of the story. The client takes that money, $82,000 out of her IRA, also somehow has another $800,000 and this person is listed in the article as a cashier at a retail store. So I'm not a thousand percent sure where that money came from. Anyway, the client gets sucked in by somebody in her DMs who's running a crypto scam. It's someone actually impersonating someone else who she trusted and it's a crypto scam and she puts all her money in it and
Starting point is 00:46:08 880 $2,000 goes to zero. Okay horrible. We all agree Nobody nobody nobody would say something as callous as serves you right or tough shit Like you have to have compassion for people because this person's not getting that money back. But here's the thing people because this person's not getting that money back. But here's the thing. Now this person is suing the RIA. And by the way, only 82,000 of her loss came from the RIA. The other 800 grand came from somewhere else. But this person needs money.
Starting point is 00:46:36 So her answer is, well, I'm going to sue the RIA because they should have talked me out of this. All right. That's over the line. I think that's like, I think it's like outrageous, but I don't think the judge is going to throw it out. I think, I feel like this suit, either it'll, either they'll settle it just to get it over with, which... On what merit? Um...
Starting point is 00:46:55 What is she claiming? She's claiming that the advisor did not... here, let me tell you, I'll tell you exactly. And then you guys tell me what you think. They broke the fiduciary rule. Come on. Yeah. According to the lawsuit filed in New York Federal Court, the woman believed the firm quote would have her best interest at heart when operating as her financial advisor. Instead, the firm recommended a liquidation of her account to meet her objectives when
Starting point is 00:47:21 it knew or should have known its recommendation was unsuitable because of the purported Investment with the fraudster the advisor doesn't know about the fraudster The client is not saying yeah, I want to put it all into this crypto thing that somebody DM to me So like at a certain point I understand the frustration you lost all your money But what do you want the advisor to do like hit you over the the head with a pan? Well, what we would have done, we would have just delinked. We would have said, you're not our client.
Starting point is 00:47:49 Like this is obviously- That is the right answer, is to say, you're not taking our advice. We're not taking money from you. I think it depends on how big, okay, 80 grand, how much other money do they have with you, if that's like all her money. You don't know the full situation.
Starting point is 00:48:04 I read the article and the advisor's basically saying, we were strongly against this, we told this to the client. As long as you have that recorded somewhere, and it's like timestamped, then I feel like you're gonna go scot-free. At the end of the day, the client made that decision. Should you have pried the client more?
Starting point is 00:48:19 Possibly, should you have advisors that are more better at doing that coaching? Of course, but at the end of the day, if someone's like, no, I want this money, I want to pay the fees. What are you? They are the boss. You're right, Josh. Here's the here's the complaint.
Starting point is 00:48:31 Quote, this is the this is the plaintiff. What they're saying, despite the rising prevalence of pig butchering and cryptocurrency scams, no representative ever inquired further as to why Blank's investment required an early liquidation of her retirement account. The complaint read, instead the firm asks no further clarification or explanation of plaintiff's investment purpose and only asked how much she wanted withheld for federal and state tax deductions and mentioned the penalty fee for early withdrawal. So she took out most of her money in June, didn't take long to lose it all.
Starting point is 00:49:12 I don't know. I think the advisor has to say a couple of things like, don't do this, or I really don't think you should do this because. But if the client's not telling the advisor what they're doing with the money how strenuously can you say no to someone whose money it is? I think it's just gonna come down to how good is the documentation because like maybe let's say the advisor super busy and like this client says I need to take this money out and this person's not really pushing back to like sure take it whatever like
Starting point is 00:49:40 what do you need okay I they just want to get it done they're not really thinking through if there's no recommendation to not do anything with it, then she might have a case. Oh, you're right, because the advisor might be like, oh, it's an $80,000, I don't have time for this, just fine. Yeah, like imagine this client has another million with them. I know 80 grands in the grand scheme of the relationship is not that large, it's what, it's 8%, right, basically.
Starting point is 00:49:59 So you're like, okay, yeah, whatever, no big deal, just sign it off, and now they're saying, hey, I should have that money back. The bigger issue is, this type of stuff is exploding, these scams, and it seems so obvious to us. Like how does this keep happening? This is on TikTok, by the way, this is a DM on TikTok, which is incredible.
Starting point is 00:50:19 So how do we, how do we, as an industry and as a society, do a better job of protecting these people? How loud do we have to scream do not give money in DMs people aren't like this? How do how do we do it? You could do whatever you want. They're not gonna listen They're not gonna listen, but you could also have rules in your portfolio that would not allow this and if you know I'm sure her advisor was like, what are you you doing you know if they knew I'm not sure the impersonation and the specificity and the precision is going to get so bad that the scams are going to explode yeah yeah they're worried Sam Altman had a big conclave with leaders from financial services this week.
Starting point is 00:51:07 Of course, he's pitching open AI services. But cyber security in the age of AI, you know how you log into your brokerage account, it's a face ID on the app on your phone, that could obviously be faked. Voice print is another way. When I call into Fidelity, I don't have to tell them anything about myself because they identify me based on me answering a question. All of that can be faked very easily.
Starting point is 00:51:33 And I think Sam Altman's message to the people from the banks and brokerages whom he met with was like, like it or not, we open Pandora's box, it's open. Like, this is what it's going to be. We need Theranos to take the blood from our fingerprint to validate, speaking of scarce. I think what you said is right. If there are contemporaneous notes in Salesforce,
Starting point is 00:51:54 I don't know what CRM this advisory firm uses, if there are contemporary, contemporaneous notes, or God forbid, an AI note taker from a Zoom call, which would be amazing, where the rep is telling this woman, do not do this. That's open, that's like- Case closed. Just give it to the judge.
Starting point is 00:52:13 Why are we even talking about this? But you also think what it, because you really need those details. Without that, it's really hard to know, because you're right, if it's like, oh, it's a small piece of their portfolio, like, okay, let me just get this done, I'm busy. They don't like take it through the case.
Starting point is 00:52:23 Yeah, yeah, yeah, who cares? Fine, take your money. It's like, okay, I don't recommend that. She had an extra 800 grand apparently. I mean, yeah. So maybe she had a lot more money. You don't know. All right, guys, switching gears. There are $7 trillion in money market funds.
Starting point is 00:52:34 Hence the crime wave. And hence open. Yep. What a... What... Look at this. How does this line go down? What would have to happen for this line to go down? How does this line go down? What would have to happen for this line to go down?
Starting point is 00:52:47 Houses get more affordable. Is it just interest rates come down and people buy houses? Maybe that's probably the most obvious one. Yes, literally. That's what should happen. One of three things, either house prices come down, interest rates come down, or both. That's the only way it's gonna allow
Starting point is 00:53:01 these dollars to go somewhere. I'm telling you, I'm in this line here. I have some treasuries I'm waiting to buy. But when I don't know. This won't go from seven trillion to two trillion, but it'll go from seven to six. The trajectory will only change if and when there's something else to do.
Starting point is 00:53:18 What do you think about that? I totally agree. And I think a lot of people who fear the stories that we've just been talking about are just like, I'm fine here at 4.5%. I'm just fine here. Or maybe this is the older crowd that is retired that wants to de-risk a little bit,
Starting point is 00:53:32 take some off the table or keep it in savings. I think it's a lot of that. I don't necessarily think this is a shift where all of a sudden this thing flips on its head. Maybe it goes down to five trillion or six trillion, but it will be because of the big asset purchases, but it's not going necessarily into the S&P 500. Last year when the Fed started cutting rates, we thought it would be a new rate cutting
Starting point is 00:53:52 cycle. It was just a couple of rate cuts. Michael said, I really don't think people are pulling money out of money market funds. Unless like we get to 2% and people really get antsy, they'll probably stay put. Not only they stay put, you can see the number go up. The money just kept pouring in. I guess I'm curious what you guys think.
Starting point is 00:54:14 At what Fed funds rate does this materially change? Is it like, what's the magic number in the mind of the investor? I think it's low. I think it's low at three. You think it's under, it's not 4%. No? I think it's low. I think it's lower than three. I was going to say three. It's not 4%. No, I think it's under three.
Starting point is 00:54:27 Under three. Because 4% is pretty comfortable for a lot of people that just don't like taking risks. And if people are still scared, and they should be, of scams in the market or big crashes like we had for a minute during COVID. Four is still high. Four is high.
Starting point is 00:54:42 Relative to recent history. Yeah, and then what's the equity risk premium for big institutional managers? It's like, where was the... They got to protect capital. They are paid to protect capital for rich people and then find alpha whenever they can. Right now, it's not so hard to find it, but I think plenty of people are very happy with the bulk of their savings, especially older people earning for four and a half percent. What do you think?
Starting point is 00:55:03 Yeah, even after inflation, you're basically flat for the year. And so people are like, yeah, I can deal with that. Oh, like if inflation is 2 points, what is it now? It's just 2.9 over the last year with 4. So like in theory, there was a real return. But you think of real returns. People don't. I know they don't.
Starting point is 00:55:19 But still, you can make the argument right now that if you buy Treasuries, you're basically getting like no return. I mean, yes, technically, according to the last year, we got a real return. Maybe inflation's higher than we think. And so maybe it's only, you know, it's just flat for the year. Plus, and I know you guys probably talked about this,
Starting point is 00:55:34 and I'm sure you saw it, more 401k millionaires than ever were printed last year. And you talk about this as well. I've heard you talk about it. You write about it in your books. A million bucks sounds like a lot, was always the number that a lot of people wanted to get to.
Starting point is 00:55:46 A million bucks isn't a million bucks anymore, but for a lot of people that got there, they're like, oh, I got there, I want to stay here, and this is a way to stay here. I saw something from American Express, as Ernie's called, that I wanted to talk about it, and I know American Express serves an affluent consumer, obviously, but this stood out to me. They're talking about the year-over-year growth and they break it down by Gen Z, Millennials, Gen X, and Baby Boomers. The year-over-year growth for Gen Z was 39%, which is wild.
Starting point is 00:56:15 What is it? But what is it? 39% in terms of services build business. So spending. Equally remarkable is Millennials, people my age, make up 30% of all spending on Amex on the consumer side, which is more than baby boomers are spending. So Millennials are doing alright and Gen Z is doing alright. This is the experience economy. People are spending it on experience, not on the home. They want to have that ultimate Instagram photo at that special place with that special chef and that special chef and that
Starting point is 00:56:45 special drink and... So Nick, here you are, I want to give this to you in a sec, but the next chart shows Millennials and Gen Z, it compares the delinquency of American Express customers versus none. And it's 4.4% for Millennials and Gen Z. Those are 30 days past due, okay? And for Amex customers in this age cohort, it's only 1.9%. And there's a similar spread on Gen X, Baboon, Rubber Side. So again, Amex, I know is not representative
Starting point is 00:57:13 of the entire economy, but for these people, they're doing all right. And Nick, you are these people. You spend time with these people. What do you see in terms of experience, services, spending? I mean, I think this, a lot of this, once again, I keep repeating the same point, but it comes back to housing and like the whole idea of the American dream is supposed to buy a house and do all this stuff.
Starting point is 00:57:31 I think the American dream has changed a lot of ways and people are traveling a lot more TSA throughput is hitting records. And so if you think about like, I think about my parents when they were young, they did not get on airplanes often. I'm guessing your parents didn't either. But now it's like very common for people like my sister went to Japan and she does not have a very high paying job. It's like people say, you know what, I'd rather not own all rent and I'll travel the world and see stuff. And so you're right. Everything Caleb said, Instagram generation, that is more
Starting point is 00:57:56 important to have that photo versus just like, oh, I own a house, right? I actually think it's smart. So do I. I love that. Now here's where it's where it's not that smart is they are, if you live in a top 20 city, you're throwing away a lot of money in rent. Some would dispute that characterization. You're not throwing it away. You're consuming it. Okay, if not, we agree. But you are not building equity in an asset.
Starting point is 00:58:20 That's fine. You don't have to. Or maybe you work for a company that's comping you with stock options and you are building an asset, you're just not in a physical, that's perfectly fine too, I know that's more common than ever. So that's where it's to me not that great,
Starting point is 00:58:35 but where it's really great. These are the times of your lives. Like the times of our lives I should say. Like what's more important than how you spent your life? Like, I spent my life seeing, going out and doing and seeing the things that I wanted to see, not anchored to a fucking pile of bricks in a suburb somewhere. I kind of find that to be really admirable about the way millennials and Gen Z are carrying on. I'm sure a lot of them wish it were the opposite and they didn't have to go out and look for somebody. Because when I watch Instagram video
Starting point is 00:59:10 of people standing in two hour lines in Montauk, it just looks dumb as shit to me. But I was also that age and I'm sure I was doing things equally that dumb. I just wasn't doing stuff like that. We were cut the line kids. We knew the promoters. I come from a different world. But like, I sort of get it in the absence of the ability
Starting point is 00:59:30 to buy a house. Well yeah, we should be in Montauk waiting online to get into a bar. I also think there's a little of this going on. I have 19 and a 21 year old, two daughters, and I talk to them and their friends about investing in this whole thing. They know what I do, but a lot of them just reject the premise. two daughters and I talked to them and their friends about investing in this whole thing.
Starting point is 00:59:45 They know what I do. But a lot of them just reject the premise. Not like why, you know, they understand what investing is and why you can build and how you can build wealth with it. But I get a lot of the time from them the question that I can't answer, and I think I've asked you this before. Why does this keep working? What's this?
Starting point is 01:00:03 This stock market. This, you know, why do investments continue to grow? Why should I, you know, I know it's worked forever and it's worked for the last 100 years or so, but they reject the whole premise of the fact that this market is just going to keep going up. Companies are going to keep generating profits. The stock market is the place to generate returns. So if they don't believe in that, less and less younger people may not believe in that.
Starting point is 01:00:24 They see the get rich quick schemes, whether it's crypto or meme stocks or whatever, and they're maybe not as invested in the investment process as we were taught to be in the financial services media and the market has taught us to be. Maybe they just reject it and they're like, I'm gonna spend it on. So their role models though are super involved in business.
Starting point is 01:00:44 Gen Z's role models are all creators and influencers and people that have built companies. They look up to people like Kaisenat and MrBeast and they look up to like Alex Cooper and Alex Earl and these are people that created their own lane for themselves, they built their own platform, their own content. They hired their friends to hold the cameras. Like, iShow Speed is a kid surrounded by his old friends that he grew up with,
Starting point is 01:01:14 traveling the world doing stunts. But it's a business. So I do think that Gen Z is enamored with business. But to your point, I think they look at the stock market like another casino. Oh, there's no sport on I want to bet on? All right, maybe I'll do some crypto, maybe I'll do some stocks. That part I agree with you,
Starting point is 01:01:33 but I don't think they dislike the premise of capitalism and business and making money. They don't like corporate capitalism. I think the question, the premise, That could be the difference. I think there's a lot of that as well, and they're also, a lot of them going into a job market where they're fearing and they're hearing that AI is gonna Take every job anyway, so what's the point of it all why even buy into this if it's all come crashing down
Starting point is 01:01:54 This is a really nice segue to my answer to why does the stock market go up? And why will it continue to go up hopefully forever and ever? Positioning obvious because yeah, and obviously you know with bear markets in between and lost techies and all that sort of stuff, is greed in a good way. We are all greedy. It is never enough for each of us, and it is certainly never enough for any of us. And at the corporate level, people are motivated to get up, improve their financial situation, and all of that shows up in earnings per share.
Starting point is 01:02:22 And that is what drives the stock market ultimately. It's really that simple. So in 2018, I tweeted this pie chart. And I said, the market cap of the top five S&P 500 companies were equal to the market cap of the bottom 282 companies. And seven years ago, this seemed out. People lost their shit when they saw this, by the way. I remember that. I was on Twitter then.
Starting point is 01:02:46 People seemed outraged that how could this even be? It does not compute. Please make it make sense. Well, here we are, seven years later, and they're equal to the bottom 411 companies. The top five. The top five. The top five. The same market cap.
Starting point is 01:03:04 Or is it the top seven? No, no, no. Hold on. No, no, no. The top five. The top five. No, no, no. The top five. No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, It's just unbelievable. That's a great argument for index funds if I've ever seen one. Alright, last thing to kick the hornets' nest a little bit before we move on to Nick's books. Last week, JC was in that chair talking about how $2 trillion is around the air, $4 trillion for crypto is around the air. And I'm like, dude, come on. It's Nvidia. It's not nothing. It is a lot of money. You're sounding ridiculous. And I was thinking about this yesterday, and I was telling Josh, hey, wait a minute. It's not actually $4 trillion. And the reason why it's not actually $4 trillion is because it's not a market cap.
Starting point is 01:03:58 We have transposed this idea of, okay, coin's outstanding, time's price is market cap, the same way we do with the stock market. It's not the same thing. Because hypothetically, if everybody went to sell Nvidia, just everybody wants to sell it, I know there's buyers for every seller, but if everybody wants to do that, at some point, either Nvidia would buy all of its stock back, or more likely private companies, a private consortium of investors would come in, whether it's at two trillion or three trillion or one trillion and say, whoa, whoa, whoa, we'll buy the whole thing. We'll take all of it
Starting point is 01:04:27 and give me the 90 billion dollars in revenue. We'll just take it all. There is a floor for these businesses because there's cash flows and fundamentals. Similarly, there is a theoretical ceiling because at some point the numbers don't make sense. With Bitcoin and crypto, these are not real numbers because Bitcoin can theoretically go to a dollar. If everybody truly want to sell, and Michael Saylor was the only buyer, nobody would want it.
Starting point is 01:04:51 He's not gonna want all the Bitcoin if nobody else wants a Bitcoin. So the four trillion is all- The leverage would take him to zero way before it got to zero. It's artificial. There's no floor, it's artificial. Similarly, the cap or the ceiling
Starting point is 01:05:03 for which we're thinking about these numbers, as crazy as this sounds, it might be a ceiling for which we're thinking about these numbers, as crazy as it sounds, it might be a lot higher than we think. Because not only does everybody not want to sell, but it's a race to buy Bitcoin and there is a fixed supply. And so it might get, if this argument, if you're listening to me and you want to f**king strangle me and this is pissing you off, it might get a lot stupider. What part do you think would piss people off that there's no ceiling?
Starting point is 01:05:23 The part that I'm saying that $2 trillion. Like Bitcoin could be $25 trillion and there's no loss. Because it's not actually $25 trillion. Well, that is the bull case from an investing standpoint is that there's no ceiling, but there is a limit to the amount of Bitcoin. That's literally what the bull case is. I mean this is true of any stock, this is true of any individual stock. No it's not. I'm saying like if everyone goes to sell, pick a stock, if everyone goes to sell that stock it's going to go down and the only, just to play devil's advocate, I more agree with you than disagree but- But he's saying the fundamentals would create a floor.
Starting point is 01:05:58 But I'm telling you, if everyone's selling Nvidia, I mean everyone, it's going to one trillion, the fundamentals don't exist anymore. But you're being literal. But they do exist. The company continues to sell chips and earn money. In what situation is Nvidia down 75% and that is not a fundamental... Like the chips aren't worth anything. Nick, it went down 70% in 2022 when the crypto market crashed.
Starting point is 01:06:20 And I know that because I owned it. But the fundamentals of the business, they might have been up and down, but they were still earning revenue and profits. Yeah, I hear what you're saying. Trust me, I support asset ownership versus like an income producing asset, like a business over crypto.
Starting point is 01:06:37 I get that, I'm just saying, in what world does that happen where this is like, you know, Nvidia's off 80, 90% or something. Pick any business. My point is the cash flow support a floor. Wherever the floor is. There's no floor to Bitcoin. The insight is what I gave you yesterday. It is. I said, invert! You must always invert! No, what I said was we are borrowing this term market cap from the stock market world
Starting point is 01:07:03 because it's all we know It's like a skew emorph like Apple made the icons on its desktop The filing cabinet the clock because we're comfortable with that iconography and we understand file cabinet. Okay, I put files in there That's why we use market cap. What it actually is is supply like a dollar We don't talk about the market cap of the U.S. dollar. We talk about the dollar supply with Bitcoin. We should really be saying supply. We should not be saying market cap or shares outstanding because it's not a
Starting point is 01:07:35 corporation. But too late. That ship has sailed. And I think we're stuck on this market cap mentality for the end of time. I think things are going to change really fast here. I was at Bitcoin 2025 in Vegas about a month or so ago, and I've been to a few of these. This was very different. There were entire aisles now of Bitcoin lenders that'll give you fiat currency, legal tender for your Bitcoin. There are plenty of multimillionaires out there that don't own a single share of stock in the S&P 500,
Starting point is 01:08:05 don't own a single treasury, have very little money in a savings account, but they have $10 million in Bitcoin because they started buying because they heard somebody on some chat group, you know, who knows where back in 2014. They're in the system and they're borrowing against it. You can now buy a home with Bitcoin. You could put, put down money for a mortgage, and as soon as you're using it for leverage to access legal tender, fiat currency. More inflation coming. Right, more inflation coming our way,
Starting point is 01:08:31 but if it goes to zero, what happens then? There are real assets now tethered to the value of Bitcoin. Right, so when JC and I heard him say it on your show, if it goes to zero, nobody's gonna care, there's about 50 million people that are gonna care because they own Bitcoin in some way, shape, or form. Now there's probably about a million that own most of it. We all know that.
Starting point is 01:08:49 His point was systemically. Systemically in the capital markets. Bitcoin can't bring down Citigroup. He's right about that. Not until Citigroup gets into the, yeah, we'll take your Bitcoin and give you a mortgage. So let me ask you a question, and that's a really great point.
Starting point is 01:09:03 I'm glad you made it. This week, just an acceleration in TradFi. We'll take your Bitcoin. So let me ask you a question. And that's a really great point. I'm glad you made it this week. Just an acceleration in TradFi. I hate that word in regular financial institutions doing deals in the crypto world. We saw PNC Bank do a tie up with Coinbase. PNC Bank has customers that are multimillionaires that want a solution to crypto in some way tied in with their regular bank account. This makes so much sense.
Starting point is 01:09:29 Of course we're going to see more of that. Coinbase is rapidly emerging as like the legitimate way for traditional financial institutions to link the traditional financial assets of their customers with their crypto holdings. If you had to bet, you would definitely say over the next six months, there'll be way more of that. It's just starting.
Starting point is 01:09:50 It's just starting. Every single early call had questions about tokenization and stablecoins on the financial side. Every single one that I listened to. Yeah. And you had Rick Edelman on here and he was just talking about everything is going to be tokenized. So there's going to be a proxy for everything else out there, but a lot of it is going to be based in this crypto world So I understand it would not affect the capital markets necessarily not yet But it's coming creeping to your deeper and deeper into our capital your argument is even at the current four trillion for for the crypto asset
Starting point is 01:10:19 level It's plenty systemic. Yeah, itRock has $78 billion of Bitcoin. Yeah, zero would hurt. Zero would hurt, for sure. I think it would hurt, and it would be also people who have grown up with this as the next way to make money, or the best performing asset they've ever seen in their lifetime, and best performing asset,
Starting point is 01:10:39 in air quotes, that we've ever seen. This would be, not only that, it would be like a confidence ripper, it would be like ripping the rug out from under a lot of people who believe that this is the future. Imagine the lawsuits. We asked people in our recent survey what asset class you think will perform best over the next four years under this administration. Stocks number one, US stocks number two, crypto. Yeah, I'm not surprised by that.
Starting point is 01:10:59 I actually, if you told me the order were flipped, I'd believe that's it. It's pretty close, I'll tell you that. Yeah. Can we talk about just keep buying the original Nick Medjuli book? Okay. Let's do it. It aged exceptionally well. So you put the book out in 2022, sold 400,000 copies.
Starting point is 01:11:17 That's insane. You definitely did not buy most of those. The book is a huge hit, dude. 80% of that is non-U.S. So let's start there. Why do you think this book translated so well to investors around the world in a way that most finance books in America really don't?
Starting point is 01:11:36 What do you think it was? I think it was just the data I put in there. Because if I'm being honest, Just Keep Buying is not like, I mean, the name is, I guess, original, but idea of oh, you just you know, dollar cost average over time that is an old idea. But to a new generation of investors, it's brand new. But I also put a lot of I think the new piece was the data and like I basically proved it.
Starting point is 01:11:56 I was like, look, this is a you know, the subtitles proven strategies, right? So like I wanted to prove this like undeniably. And so that's that was the point of the book. And that's why I did it. And that translates all the data and all there that you're not going to really find that in many other books that are talking about these types of things. And so because I had all of that, it translates.
Starting point is 01:12:13 But there's a chart I put in here, I think is very useful. So, you know, the biggest countries I've sold in our Japan and Taiwan, I have over a hundred thousand sales in each of those countries. And I think one of the reasons- By the way, dude, you sold a hundred thousand books in Japanese and a hundred thousand in Chinese. And in Taiwan, yeah.
Starting point is 01:12:30 I mean, it's great. The Taiwan, like I knew about Japan. Kids selling investing books in a communist country. It's unbelievable. Wait, what about Thailand? Do you get paid in Dong? No, I don't actually think I have a, no, there's no Thai version yet. It's in production, but it's being delayed.
Starting point is 01:12:43 Long story. But I'm saying, look, this chart, I think, is very useful because there's a lot of Asian investors buying US assets. 42% of their assets are actually in US assets. That's crazy. Of their abroad assets, foreign assets. And that's US stocks and bonds. And so this is from a Bloomberg article.
Starting point is 01:13:00 And these flows are happening. And so when I'm thinking about, well, how is this impacting me personally as an author, it's's like that's how it's doing it but everyone's like they want to keep buying what I was this I didn't cause it Julie effect ironically if you did I joke that like you know I was born in November 1989 that you know the Nikkei peak the next month and then like my book came out in Japan in June 23 and it peaked seven months later like in early 2024, right?
Starting point is 01:13:25 Or they, or I'm sorry, it re-reached those highs from 30 years ago, right? So I got a 30 year drawdown and finally, you know, 34 year drawdown and came back. And so, no, I'm obviously not causal at all. I mean, in some very, very marginal way, but no, this is, this has been happening for a long time. The Chinese are buying a lot of homes here in the United States, the apartments in New York City. You can think about all these things where there's a lot of money in Asia that's coming in here.
Starting point is 01:13:47 And I think that's a big piece of it. There are a lot of Asian retail investors that are buying these. There's a couple of things I love. One of the things is that the repudiation of your message, just keep buying, has always been now do Japan. And you can say, all right, I'll do Japan, mother- New record high for the Nikkei this week.
Starting point is 01:14:06 What else you want me to do? What do you got? What else you got? We have stock markets around the world now breaking out. But you did Japan. The dumbest thing is like people went all in 1989 and they never bought another single share. Yes, Japan sucked, it happened.
Starting point is 01:14:20 But what if you dollar cost average in Japan? And that's what I did. I have a chart in the book where I say, if you put a dollar a day into the Nikkei, right? And of course, you know, with currency fluctuate, there's a lot of other things there. But let's just say a dollar a day in there, you would have kept pace with inflation, which is not great. But that is typically what you see in the worst from like 62 to 72, I think, or 62 to 82 in the US,
Starting point is 01:14:40 which is like one of the worst like 20 year periods. It was something similar. If you just kept buying dollar cost averaging over that period, you would have basically kept pace with inflation, which is one of the worst periods in US history. What's so funny is like you one of your most known blog posts was where you answer the question with data the way that you do. What's smarter? Lump some investment at one point in time or dollar cost average.
Starting point is 01:15:05 Don't put it all in now but put it in over time. Definitively the right answer because markets trend higher over time is the lump sum wins out over most time periods and you proved it. But the message of just keep buying is a DCA message. And the reason it's necessary is because most of the people reading it don't have all the money they're ever going to make. They're going to make more money next year. So it has to be a DCA message. Yeah, and also, I mean those are two different, I think there's a definitional issue here. So there's two different definitions for DCA, which we both use all the time.
Starting point is 01:15:37 And so like we're talking about like, oh, everyone just calls, you know, we call Bitcoin market cap the same thing as the issue with DCA. So when you're doing dollar cost averaging the the original definition, it means you're just buying over time, but you're buying when you get paid. So if you think, like your 401k, you don't say, oh yeah, I'm lump summing every two weeks in my 401k, but that's what you're doing. People call that dollar cost averaging,
Starting point is 01:15:55 but you're actually making lump sum investment, because you're buying as soon as you have the money. That's the important piece. Like when are you buying? If you're buying one as soon as you have the money to invest, that's like lump summing. The 401k contribution looks like a DCA because it's periodic over time,
Starting point is 01:16:11 but it's a lump sum because you're not getting the withholding and piecing it into the market. You're just throwing it in. You don't say take 15 grand out of my, I mean, no one has a 15 grand first paycheck, but like, you don't just say, hey, I'm going to donate, you know, or contribute 15 grand, take that in my paycheck,
Starting point is 01:16:25 and I'm slowly going to put it in. No, you just take it out throughout the year, right? That's technically a lump sum investment. Which speaks to what we were talking about earlier. Why does the market keep going up? You tell me this. Well, it's a really good answer. It's the relentless bid.
Starting point is 01:16:37 Every two weeks we do the same thing. We don't change our allocation. That's you? Credit to you. The relentless bid is great. But you're right about that. And we don't change our behavior at all. First of all, your books are terrific.
Starting point is 01:16:48 Just Keep Buying is an amazing title. I appreciate that. For one, this book is incredible too. I've recommended it to people already. And you're great at taking the data and storytelling with it in a way that makes sense to educated investors. So my hat's off to you.
Starting point is 01:17:02 Let me see this. This is terrific. The wealth honor. So camera two, I'm showing you Nick's new book. This is called The Wealth Ladder. Proven strategies for every step of your financial life. Now you did something in here that's getting traction on social media. You broke people up. It's not a caste system. I saw somebody say that. I didn't see that yet. You'll love it. It's not a caste system. It's somebody say that. I didn't see that yet off to look. You'll love it. You'll love it.
Starting point is 01:17:25 It's not a caste system. It's rungs. You're not ranking people based on where they belong in society. What you're saying, the rungs of the wealth ladder, right? So you're saying like the lowest rung, but you're not using that term. I use levels.
Starting point is 01:17:38 I use levels. Level one. A lot of this is marketing. Like if I had called my first book Dollar Cost Averaging, no one would have bought it. Just Keep Buying is a better thing. I call these levels. What's levels one through six and where would you put me?
Starting point is 01:17:50 Yeah, so this is household net worth. So it's households and then net worth is all your assets. So this is not income. This is not current income. This is literally assets minus whatever debts you have. We'll get to this chart in a second, but for the levels, just straight up, level one, less than $10,000. And this up, level one, less than $10,000,
Starting point is 01:18:05 and this is for the US, less than $10,000 in net worth. Level two is $10,000 to $100,000. Level three is $100,000 to a million dollars. Level four is $1,000,000 to $10,000,000. But you're calling these things something. Yeah, yeah, these are all level, oh no, in the tweet online I said, let me get to that. These are all different economic classes
Starting point is 01:18:23 we'll all get to at the end. Level five, eight. Wait, hang on, I know you have to draw the line somewhere. These seem a bit wide, the bands. These are all different economic classes we'll all get to at the end. Level five, eight. Wait, hang on. I know you have to draw the line somewhere. These seem a bit wide, the bands. They are wide. They are wide wide. A million to 10 million? Yeah, they're wide.
Starting point is 01:18:32 Somebody with a net worth of a million does not have the same lifestyle as somebody with a net worth of 10 million. Yeah, I agree. Those are, but the one at a million's closer to level three and the one at 10 million's closer to level five. I'm saying the people, four and six are basically identical.
Starting point is 01:18:43 I know, I know you have to draw the line somewhere. I'm saying like four million, six million are basically identical. I know you have to drive a lot of someone. I'm saying like four million, six million are basically identical. Like you're saying that's two million dollars, but that person is not going to spend that two million. Their life is seen. They're going to have a little bit more income, they're going to maybe have a vacation home. They're not flying private. Your lifestyle changes with massive, like a 10x logarithmic jump.
Starting point is 01:18:59 That's where you're starting to see this stuff. That was your big insight. That's my big insight. And the whole reason I came up with this levels framework, because a lot of people have done levels of wealth. A lot of different people have done it. The problem is there's no easy way to memorize this. And so by using the logarithms, it would just made it so many easier doing 10x.
Starting point is 01:19:15 So hey, if I know that level three, 100,000 to a million, if I know that's like the middle class, which it is in the United States, 43% of households are in level three. What's the middle class? Level three? Level three, 100,000 to a million. 100 to a million States 43% of households are in what's the middle class level 3 level 3? 100,000 to a million 100 to a million is 40% of the country 40% of the country okay some of us households, okay?
Starting point is 01:19:32 But then you talk about the difficulty in getting from one level to the next yep And of course most people don't ascend into level 5 Yeah, then all that's less than 2% of households ever make it to level five. And level six, which is 100 million plus, that's like less than 0.0001%. Now, do you have to fight a main bad guy at the end of each level? No, unfortunately no. You sort of do though.
Starting point is 01:19:53 I guess there's the bad, the thing to look out for. In level five, it's like it's over concentration. Who's the final boss? Oh, I was gonna say the end of level five is a mistress. Oh, no, there's that too. I mean, there's like the personal attacks. The temptations that come along. Of course, that's everywhere.
Starting point is 01:20:10 And level three is the IRS, level four is Powell. Jesus. All right, so congratulations. The book came out this week? Yeah, came out on Tuesday. All right, she's doing a ton of shit. Yeah, a lot of stuff dropping. Can we get you on Caleb's podcast?
Starting point is 01:20:23 It's on. It's on. It's booked? He gives me the best intro, so I love stuff dropping. Can we get you on Caleb's podcast? It's on. It's booked. He gives me the best intro, so I love your podcast. I know you're going on Jill Schlesinger and she texted us to find out the most embarrassing thing about you that nobody knows. I should just send her that photo of me in high school. Maybe that's pretty good.
Starting point is 01:20:35 But I actually like the photo. I have to be honest, she might be in possession of that photo. You are metalhead. Yeah, I know Ozzy. I mean, the other, I mean, crazy, like I'm supposed to be celebrating my book and everything Ozzy dies this week And so for me, that's like a big deal. I know that's a big deal. If you're a Metalhead Ozzy is your Jerry Garcia or Kurt Cobain or? He's your Ozzy basically.
Starting point is 01:20:56 He's your Ozzy. He was there before all, I mean I guess I don't know what Jerry Garcia was but in the timeline. But you know what's interesting Ozzy's biggest songs all predate you basically being born. Yeah for sure I mean, yeah, he was you know early eight with Sabbath Sabbath was the metal band They started metal in the 70s like that is they started that entire genre, right? The Beatles actually started heavy metal What song Helter Skelter? Caleb tell them. I say it's more rock. It's not really the Beatles. The Beatles were a rock band from Liverpool Oh, yeah, I know the Beatles, sorry, thank you.
Starting point is 01:21:25 Helter Skelter's the first heavy metal song. Some have said Steppenwolf, Steppenwolf, Born to be Wild. They say that's the first metal song. This has been debated, trust me. I've thought about this a lot. This has been highly debated. Have you quantified it?
Starting point is 01:21:38 I have not quantified it, but I think it's Born to be Wild by Steppenwolf. He says Heavy Metal Thunder, you know, when he's- What was it that attracted you to metal when you were a teenager? It was just the people you were around were into that or was it something else? It was high energy. It was high energy. Yeah, there's a lot of high energy to it.
Starting point is 01:21:52 I just like the sound of it. I mean, you know, I started growing my hair and I just, I liked it. For a metalhead, you quote a lot of great rappers in this... I know, well I love that too. You got Jersey. They're also high energy, right? Did you watch Billy Joel Doc yet? No.
Starting point is 01:22:04 Yeah? Worth it? Not yet. I'm going to watch it this weekend. It's a requirement for Long Island people, right? I got pushy teeth. Did you watch the Billy Joel doc yet? No. Worth it? Not yet. I'm going to watch it this weekend. It's a requirement for Long Island people, right? I mean, you're from New York. Well, what were your... I'm guessing your music was like...
Starting point is 01:22:13 She was skater? You were like one generation older than me. Skater, snowboarder. Clash? Pearl Jam. Reggae. Are you the... What?
Starting point is 01:22:21 Reggae. Scott? Reggae. Pure reggae. Dancehall reggae. Roots reggae. I had a Reggae? Scott? Reggae. Pure reggae. Dancehall reggae.
Starting point is 01:22:27 Roots reggae. I had a reggae show in college. Wow. If I wasn't doing this, I would probably be a reggae entertainer at Sunsplash. Wow. Exactly. Alright. Can we do the-
Starting point is 01:22:36 Why another white guy with dreads? You're amazing. That's what the world needs. Can we do that chart real quick? Yeah. Throw it up. So, this is showing, this is the snapshots of wealth over time from the survey of consumer finances, the Federal Reserve. I've broken this into the levels, right? So the level one less than 10k level two, etc. And what you can see that bottom dark blue and level four,
Starting point is 01:22:55 that's the big story here, which is in 1989, which is the first bar, it was 7% of US households. And by the way, this is inflation adjusted to wealth. So this has already been adjusted for inflation. In 1989, that's 7% of households. Today, it's 18% of households. And by the way, this is inflation adjusted wealth. So this has already been adjusted for inflation in 1989. That's 7% of households. Today, it's 18% of stock market. It's stock market home prices, a lot of different things have contributed to that. There's just more wealth than ever before. It's not just stock market, though. It's compensation, home equity, home equity, compensation, compensation in stock market. Level one was 25%. Now it's about 20%. So that like the poorest part of society is much smaller. And this is once again, this is inflation adjusted wealth. And so those
Starting point is 01:23:29 are shrinking and there's more, you know, in the upper middle classes, I call it one to 10 million, which is supposed to be location agnostic. Obviously, if you have like $8 million in your in Alabama, you're definitely upper class. But like, I was trying to say even in New York City, like I'm trying to be location agnostic here. I think this is the big story here because there's more people in that bottom bucket and that's creating a lot of competition for these resources. I wrote about this recently. And for stocks. Yeah, I mean for stocks, I mean house prices, you know, as I said, the Amex lounge is overrun
Starting point is 01:23:57 right now. It's crazy. You go there's lines to get in there. There's more people with these cards than ever before. I think the upper middle class is going through an existential crisis, and I think we're gonna see this play out over the next few years. Right, the system is not built for this much affluence, this many people experiencing affluence.
Starting point is 01:24:14 Everything is buckling. There are no more VIP experiences because everyone's a VIP. It's turned the travel rewards and the credit card rewards business on its head. If you watch what the airlines are doing with reward points, it's not what it's worth. On the IMAX call, all they asked about,
Starting point is 01:24:26 they're like sorry to keep belabing the point, but it was all about competition with cards and rewards. It's a new game. Agreed. All right, guys, do you have fun on the show today? What? I loved it, loved it. I had a great time.
Starting point is 01:24:37 I gotta tell you, you two are my favorite people to talk to. This is just a dream episode for me. The deck, the book, so proud of you, Investopedia. So proud of you coming out with your newest book. This is just an awesome time to have you guys. I want to just say thank you so much for being here. We end the show by asking people what they're looking forward to. So obviously I know selling a million books is on the list for you.
Starting point is 01:25:03 My honeymoon. We're going to South of France. So tell me what you're doing. We're doing it We're going nice for four nights and then three nights in Paris and then we'll be back. Oh, that's a sick trip Yeah, what do you do? What are you doing? Is nice nice as beaches, right? Yeah, we do a little bit of that You'll go to Monaco. You can go down to Saint-Tropez. There's a bunch of different stuff you can now Monaco Monaco all right now famously your wife is a renowned lover you shared with us. So is Four Nights at Niece enough?
Starting point is 01:25:31 That's a great question. We'll ask her. We'll do it after we turn off the... Maybe we'll have you back on after the honeymoon. We'll have her come on and interview her. What are you looking forward to Caleb? I'm looking forward to pictures from Nick's honeymoon. Um... LAUGHTER
Starting point is 01:25:47 CHEERING Beyond that, I'm trying to arrange a university tour for Investopedia, take us back to school. Where do you want to go? Some of the biggest schools throughout the country, especially those... Are you in the process of planning this? In the process of planning it, looking for partners that want to be a part of it, but I have this dream
Starting point is 01:26:05 of making us a real part of young people's complete education, because they don't think they're getting it, so that's one big deal. But also, Future Proof's coming up, shout out to that. We're going to have some real fun there. Got some great panels coming up. And we're thrilled to have you guys there. It's really an honor for us, and this has been an honor too.
Starting point is 01:26:24 But right when I'm out of here, I'm on my way home to New Mexico to see the parents and see some old friends. So I will be in the land of enchantment when this airs. Good for you. Caleb, thank you so much for being here. We really appreciate it. Michael, what are you looking forward to my friends? Visiting them.
Starting point is 01:26:36 Oh shit. That's what I should say too, right? Our kids are at a summer camp. They're at a sleepaway camp and this is the third weekend Which is when you go up and and see them and bring them bring them food What do you got? What do you have to bring him? What snack list that he asked for? She's not like a big eater. So I don't know. He doesn't care really Not a huge eater. I think the nugget wants me to bring him a porterhouse of Peter Lugers. Stop. Wow
Starting point is 01:27:04 No, I I bring him I bring him like an Italian hero. He's thrilled. You know. They're not babies anymore. They're not asking for candy. Oh, Smith Street Deli. Again, it's the only deli that's open on time. I know.
Starting point is 01:27:15 I asked Sherry, my hero, she said no, it's closed. It's closed. Yeah, so we'll hit the deli. We'll hook them up. Alright, guys. It's been a pleasure. Hey, shout out to all the listeners, all the viewers. We appreciate you guys.
Starting point is 01:27:27 Thank you so much for coming to tune in. Please make sure you check out of Dollars and Data, which is Nick Medjuli's blog, buy his new book, The Wealth Ladder at fine booksellers everywhere. Check out my friend Caleb Silver's website, Investopedia, and make it, what the fuck are you going? He's gone, he's already leaving. All right, you know visiting day's tomorrow, right?
Starting point is 01:27:48 See you later. This f***ing guy, can you imagine? He's going to buy some open door. He just Irish exited a podcast. He's going to buy some open door, I think. What's funny is, this is our 201st show. Like, he knows how this is supposed to end. I've lost my train of thought.
Starting point is 01:28:03 Good night, good bye. Thank you,. Good night. Goodbye. Thank you. Thanks for having us on. Thank you. That was so unbelievable. He just Irish exited a podcast.

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