The Compound and Friends - Mike Francesa drops by, Jamie Dimon's letter, stock market shortage, the case for AppLovin

Episode Date: April 9, 2024

On this TCAF Tuesday, Downtown Josh Brown and Michael Batnick are joined by the king of sports radio Mike Francesa to discuss how Mike helped create sports radio as we know it, what the Ohtani scandal could mean for baseball, bad coaches, Mike's favorite sports movies of all time. Then, at 01:01:11, hear an all-new episode of What Are Your Thoughts with Josh and Michael! They discuss earnings season, the shrinking stock market, Jamie Dimon's shareholder letter, buying at all-time highs, and more! Thanks to Rocket Money for sponsoring this episode! Cancel your unwanted subscriptions by going to https://rocketmoney.com/compound Buy your ticket for TCAF in LA Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Instagram: https://instagram.com/thecompoundnews Twitter: https://twitter.com/thecompoundnews Linkedin: https://www.linkedin.com/company/the-compound-media/ 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

Ladies and gentlemen, welcome to the compound and friends. Today's show is brought to you by rocket money. Rocket money gives you full control over your subscriptions, but more important than that, a dashboard so that you can see how you're spending this month versus how you spent last month. So you can look right at it and see what's going on in the big picture. It's going to track all of your subscriptions. It's going to tell you what you're being charged for and when. And it's going to give you a super easy way to cancel the stuff that you don't actually want. They will even try to negotiate to lower your bills for you by up to 20%. All you'd have to do is submit a picture of your bill.

Rocket Money will take care of the rest. They'll even deal with customer service, which if you know me, you know that's the last thing I want to deal with. Let Rocket Money do it for you. Rocket Money has over 5 million users, has saved a total of $500 million in canceled subscriptions, saving members up to $740 per year when using all of the app's features. Stop wasting money on things you don't use. Cancel your unwanted subscriptions. Go to rocketmoney.com slash compound.

That's rocketmoney.com slash compound. Hey, everybody. Great to be back. I want to tell you about something that we're doing in Los Angeles. We mentioned it last week. It is a live recording of The Compound and Friends. Michael and I are bringing out two special guests. The crowd will be investors, wealth management professionals, traders, people who love stocks,

people who love the show, all of your peers. So if you're in Los Angeles, visit the link in the description below the show and find out how you can be in the audience. Come hang with us on Tuesday, April 30th. Tonight's show is a banger. Listen, Mike Francesa came by the compound. Mike Francesa was Michael Batnick's idol growing up. Literally, Michael worshipped Mike and the Mad Dog and Mike Francesa as a broadcaster, as a sports expert, as a New York personality. He was just like, he was Mike's guy. And we had him for an hour in the compound talking about really all things New York sports, sports in general, the Shohei Otani controversy regarding gambling. We did some draft stuff. We did NFL coaching

stuff. It was epic. I don't want to step on the content. I want you guys to listen. And after that, it's an all new edition of What Are Your Thoughts? We took a look at the problem of too much money in the stock market, which believe it or not is a thing. Also, turns out there's a shortage of publicly traded companies that anyone can invest in. And this is an issue as well. We do an earning season preview. We tackle the Jamie Dimon, Dear Shareholder letter.

There's so much going on this week. You're going to love the show. Thank you guys so much for listening. I'm going to send you there right now. All right. So let's rock and roll. What do you guys want? We are so, we're so excited to have you. You don't need them. You don't need them. They're for us. Okay. You can if you want. You can if you want. No, I'm good. First of all, audio and video or just audio?

Both. It's both. Okay, good. Where's the cameras? There we go. All over the room. Just one? Yeah.

Okay. First of all, I took your advice. I went to Sonny at Pete's Golf. I'm all set up. Oh, he's doing it. He's doing it. I got the irons. You got to come play with me this summer.

I'm going to play. They just called me from Mineo. They said the driver's in. Oh, great. So I'm done. Great. Hey, that's it. That's the place.

Pete's Golf is the best. So Sonny took care of you. I said, I'm a friend of Mike's. They go, Mike, Mike? I go, yeah. Yeah. No, Michael Bloomberg. Yeah.

I said, I'm a friend of Mike's. He said, if I'm going to start golfing again, I have to come to Sonny. Yep. And Sonny came out of the back, and he's like, when do you want to swing? It was awesome. It's great. It's great. And it's just a little dumpy place on Jericho Turnpike, as you saw. Well, I went to both. I went to Roslyn too. Yeah. And they make a fortune.

Oh, yeah. They make a fortune. They're super nice guys. Because people will spend anything on golf clubs. They'll spend anything. But when you're ready, call me and you come out and play with me one morning. Yeah, let me play like five, six times first. Go ahead. Come out and play. It's been let me play like 5-6 times first and just like get it's been a minute absolutely

hey you want to click us up? John thank you clickety clack here we go special episode with the goat welcome to the compound and friends all opinions expressed by Josh Brown Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates 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. All right, ladies and gentlemen, welcome to the compound and friends. My name is downtown Josh Brown. I'm here with Michael Batnick as always. Michael, say hello to the folks. Hello, hello. Wait, hit that button. Hit Mike's button. Mike, do you know we have you as a drop? Wait, hit that button. Hit Mike's button. Mike, do you know we have you as a drop? Oh, you do?

Yeah. Every week. Oh, he can't hear. Fight again. Fight again. Hold on, hold on. Ready? Yep. Hold on, just one.

He can't hear. It's too much. Turn my mic on. There we go. There we go. That guy still works for me. Steve Afria. He had a habit, and it's a funny thing because everyone still uses that bite.

He liked to ride my mic, if you know what that means. Basically, it's a technician who thinks he can time and turn you up and down in between when you're talking on a two-man show, okay? Well, he was awful at it, and half the time, my mic's still dead. So about the fifth time, I said to him, like, you're on a commercial, Steve, I love you, don't ride my mic. Don't ride my mic. Finally, I said, time my mic's still dead so about the fifth time i said to him like you're on a commercial steve i love you don't ride my mic don't ride my mic finally i said turn my mic on yeah obviously it's been around for like 100 years it's one of the great it's one of the great i thought that was when you were with tiki was that was that something different it was at a remote so

it was a lot of people it was at a remote where i did it where he was in the back of the room so i yelled it was actually at a i think at one of our uh real big charity remote where I did it, where he was in the back of the room. So I yelled. It was actually at a, I think at one of our real big charity events where I did it. I picked a good spot. I don't know where you stand with Tiki, but the irony of him giving Saquon shit for bailing on the team. Tiki. That was not a great day. Tiki's take sometimes is a little weird. I mean, Tiki is very good at getting himself in the hot water with the China fans.

I mean, he really is amazing at it. I used to love the guy. Oh, and he was a terrific player. Watching him play, he was my favorite player before Eli DeLock. And he is the classiest individual you will ever meet. He is the nicest guy, and he's a classy guy. And he was one of the few players who went from being okay to great. Very few players ever do that.

He came in the league. He didn't really have a role. What? He was a pumper turner. He didn't really have a role. What? He was a pumper turner. And he didn't have a role. And then he was a fumbler. And he became- I don't know about the fumbles.

When Coughlin got him to do high and tight, high and tight, he became one of the great running backs over that period of time in the history of the NFL. And Rondé was one of the better players at his position. Hall of Famer. Right. Oh, Rondé was always great. And the

thing is, Tiki did not like Tom Coughlin. It was not a secret, okay? He saved Tom's job in Washington, and then Tom obviously goes on to win two Super Bowls after Tiki's gone, which is really ironic. Tom was tough. Tom was tough and he was inflexible. And give Tom

credit because he changed. He became, he was always tough, disciplinarian, and he changed. He became, he was always tough, disciplinarian and a great football coach, but he became flexible. He said, I understand. Okay,

tell me what I have to change and he changed. So give him credit because a lot of people can't change. Tom did. You're so right about Tiki going from good to great.

I've never seen that before. Very rare. And the way that he ended his career, remember against the Redskins that game and then the Raiders? Unbelievable. Just monster.

I think he had 1,500 yards one season. He used to get 200, 250-yard games. He was great. We are so happy to have you. My pleasure. I wanted to ask you about your new show versus the show that made you famous. But before we do that, we really want to give you like an introduction to the audience

that's not necessarily from New York or hasn't at some point been, you know, heard you or for the people living under a rock, for the people living under a rock, you are in many ways like the originator of a lot of things, but broadcast radio, talk radio, there's almost nothing that exists today that would exist in its present form had it not been for the stuff that you had been doing really for, I don't know, 40 years. Do you feel like people that you interact with

understand that? Yes, I think I've been given a great deal of credit. And, you know, I get called, you know, all wonderful things. I'm in a lot of Hall of Fames. You know, the Pope. And, you know, Dog and I were in the right place at the right time. Yeah.

And that's always a very important thing. We got a chance to be the people who broke through and changed everything. And Mike and the Mad Dog changed everything. It changed everything. It changed things into a two-man or multiple-man show, which it used to be. Sports Talk used to be on at night, never during the day. It wasn't a primetime thing.

And it was a guy with a kazoo or a whistle and, you know, did some scores, took some calls, did some trivia, and it was out. We changed all that. And what we really are most proud of is people go to school now to be sports talk show hosts. When we started, they said, you guys are the gutter of sports media. Now we are the guys in every city. It's no longer a columnist. It's now the talk show host in that town who is the guy who sets the trend, who is the

guy who is the message, who has to be heard, who changes every opinion? That is what changed. And that's the thing I'm proudest of. And yes, I mean, I've gone to the Super Bowl and felt it from people come up to me and say, the thing I hear the most is, this is why I got in the business. I hear that every day. This is why I got in the business. You're the reason I got in the business. I hear that every day. This is why I got in the business. You're the reason I got in the business. I was in the backseat with my dad, okay? I listened to you when I was eight years old. I wanted to go to school and learn how to do this. And listen, Mad Dog is a very big part of that. It was a two-man show. It was a perfect blend. And there was enough edginess.

See, what made it work was we were two individuals who always felt we were better singles. That's funny. And we were very successful alone. Does that sound familiar? And it was very, you two might have that. We had a ferocious rivalry. So we had great timing.

We could work off each other like magic. But we also had this ferocious competition that lasted forever. And we did 20 years that way. And it created an edge to our show, which wasn't made up. It was real. It wasn't bullshit. No, it was real. A lot of those fights were real.

A lot of those fights sometimes carried on during commercials. You know, people don't realize. We did it. And this was showed that we were good at this. And we were really good at this. We were, as a matter of fact, we were great. The best. We were the best.

I admit that we were the best. The bottom line was we did not speak during a commercial or off the air for one year. No. And no one ever wrote a word of it or recognized it because when we were on the air, you didn't tell. Was there a proximate cause or it was just built up over years? It really had a, it built up, but what really started it was my fault. I didn't want to go do a remote in Indiana and Dog loved to do remotes. Dog would do a remote in Timbuktu.

Okay. He loved doing remotes. For a Pacers game? For a Pacer game. And when we got to the airport, our flight was canceled. And I'm like, I'm out of here. Our flight's canceled. I'm not waiting around four hours.

And I went back to the studio and he had to come back to the studio and he was furious. Why? That you didn't stay at the airport and get the next flight? And wait for the flight. Okay.

So that was the coup de grace. As a matter of fact, when I, and this is true, and it's in the Mike and the Mayor Dog 30 for 30, and it's a true story. I got married in 2000 to my wife Ro, and I said to her, when I left that year, I said, you guys decide. He's coming back or I'm coming back. We're not both coming back in September. So you pick, okay? You got all summer. I'm gone. I'm gone and he's gone. We're not going to work together all

summer. We never worked together in July and August ever. And that was something else we did. We worked single. One was gone, one was there. Most shows shut down. We didn't shut down. We always worked alone. So our show was always covered. Baseball season was really important to your show. You couldn't both be gone. No, we were always there. So one of us was always there. But I said to them when I left, I said, decide.

I said to Ro, I said, I'm not inviting him to the wedding. And she said, he's coming to the wedding. We were getting married in July. I said, I'm not inviting him to the wedding. She said, well, I'm inviting him to the wedding. And she said, he's coming to the wedding. We were getting married in July. I said, I'm not inviting him to the wedding. She said, well, I'm inviting him to the wedding. She invited him to the wedding and we made up. If that didn't happen. They just instinctually know better.

She saved Mike and the Mad Dog. She really did. It's a true story and it's in the piece, but it's true. Without it, it would have been over. It was completely over. I was never working with him again. Who was your Mike, Francis? I know how important Jim Nance was to you, but.

Jim Nance, I put it in stages. Nance, I broke Nance in to CBS, into TV. I was there first. I worked for Musburger. They put me with Nance. I worked with Nance. Then I went on the air. Nance helped get me the job at FAN.

I couldn't get the job. So they wouldn't give me even a chance to go in. He worked with a guy on a syndicated show who was a producer there named Luke Griffin, who he said, you got to give him a chance. They gave me a chance. They liked me. And next thing you know, I'm hosting Pete Franklin show when he's sick in Afternoon Drive.

So Nance was a big part of it. Musburger was the first one who said to me, you know the sports talk radio? You should go try it. This is right up your alley. I said, really? Because you were doing research for him. I was his right hand or his brain.

They used to call me Musburger's brain, which wasn't fair because he was brilliant. He was really smart. But everything came from me. I mean, everything. I was his information guy for every sport. And he did everything in those days. He was the, everything came from me. I mean, everything. I was his information guy for every sport. And he did everything in those days. He was the monster anchor in those days. He was the guy. And they wanted to bring Nansen. So they did. And then when I got to radio,

I learned a lot from Imus because Imus was really smart about radio, about business. And Imus said to me, you know, when I was a kid, I was working for the Southern Pacific Railroad. He said, I was a teenager. And he said, we had a terrible crash. He said, everybody called for a doctor. I called for a lawyer. That was Imus. And I learned a lot from Imus, how to negotiate contracts and do,

I learned a lot of, so those would be the three people who really influenced me. When you are doing your podcast now, what do you miss about radio or what do you like better in your current situation? It's very different, but what I have set up with them, which is great, is I'm allowed to work whenever I want. So if I want to drag them down there

at one o'clock in the morning, like I did last night, and work, I work. Oh, after that Nick, so, okay, see you, game. Incredible, right? I work. After that Knicks OKC game. It was incredible, right? I work. Whatever the event is. You know, somebody will die or something like that. I really missed.

The callers? Sometimes I miss the callers, but I used to battle with the callers. My deal was this. Here's what I always said. And people say to me, you're so mean to the callers. You know, what is wrong with you? Your attitude, you're so mean. No, it was a love hate. And it's what I used to say. You guys don't get it. I said, I cherish the audience. I challenge the callers. Only about one and a half percent

ever call. 99% or 98% never call. I cherish my audience. I've never not signed an autograph. I've never not been nice to them. But here's the deal. If you're going to call my show, it's like me standing out in the middle of the stage. And you walk out. Be ready. Into my act. And if you're going to do that, you better bring something.

So if you come out and have the audacity to come into my act and you want to get involved, you better bring something that's worthwhile to this show or what are you doing? So I basically would kill them when they were bad. What did you dislike more? The person that just said, hey, Mike, the Mets, they're going to win it all this year. Was that more annoying or was it like somebody

that just had a ridiculous take? The ridiculous take you could really play off. I was going to say, I feel like that would be entertaining. The boring guy they wouldn't give me because our guys were smart enough to know how to screen because they'd get fired if they did that stuff. Our guys knew we always directed calls. We always did calls thematically. We had a plan with calls.

We weren't just putting up the next call. We didn't do that. We had a plan with everything we did. Everything was thematic. Everything was planned. We weren't just putting up the next call, okay? We didn't do that. We had a plan with everything we did, okay? Everything was thematic. Everything was planned. And a lot of things we did sometimes to create, to start, you know, hey, dog, it's slow today.

Follow my lead. And we do something insane, okay? But you had listeners who knew how to get around the guards, like the jackass who said, oh, the Giants are in town. What about the Giants? The San Francisco Giants, the New the Giants are in town. What about the Giants? The San Francisco Giants, the New York Giants. There's four or five calls that have gotten great acclaim. And then people always say to me,

what started this Giambi thing? I don't know. It was some kind of internet game, if you got to mention his name on the show. But I don't even know where that originated from. I really don't know. And then it was like- Like basically prank callers. Yeah.

They'd get through the screeners and then they would say Jambi. Yeah. It's like Baba Booey. They have to get him in the conversation. So, I mean, stuff like that, you get that sophomoric stuff, but it's part of the, see, I took so many calls because I'm working by myself for a lot of years after Dog left. And that was a big challenge, you know,

because it's now me by myself and people like, oh, he's going's gonna do this and we did it actually better than when the dog was there so i was very proud of that so uh but you're doing a lot of calls then i used to do calls very rapid fire i'd go through click they couldn't do them fast enough they'd be like we most most shows screen four my show they always schemed eight because what does that mean i would they had them waiting they had eight waiting not four that mean? They had them waiting. They had eight waiting, not four. Because I'd go through them so fast. Bing, bing, bing, bing, bing.

And I never pressed the buttons. I would just go. And you would bust that chops. Another dope who waited for four hours. Viciously, viciously. So just getting back to the show, number one, all markets for decades. Probably the only 30 for 30 about broadcasters.

I don't know if they did any others, but, you know, it was a great honor to have that, no question. Yeah. I didn't want to do it. And Dog was like, we have to do this. You got to do this. Was Simmons involved in that?

Yes. Yes, he was a huge fan, a huge fan of the show. And he used to actually do a takeout, when he used to do a takeout, where he would do a whole Mike and the Mayor Dog show that he made up doing me is he the guy that you think right now is the closest descendant to what you built what you created if you if you had to like think of i don't think who is the next i don't think there's anyone who does exactly what we do of course not i think that sim Simmons mastered the internet

and made a lot of money, obviously everywhere he's been, and a lot of enemies, but he's made a lot of money where he's been. And remember, he's a guy who was a writer. He's related to Jimmy Kimmel and everything else. So Portnoy with Barstool has hit a nerve. He's not that kind of broadcaster, but he's got what he has,

part of what we had. We knew what worked. We knew what the audience wanted. We knew what the audience would love, and he does that. And that's what we had. But one thing that we had, which was a huge advantage, we came along at the perfect time. I mean, everybody wanted us.

I mean, they came to us. Before they created the best damn sports show, they came to us and said, we have to have you. And we said, all right, let's talk. Well, they said, we want to show Monday to Friday. And we said, we already do five and a half hours. You want us to do it every night? They're like, has to be Monday to Friday. And we said, we can't do it. How about two nights a week? And they said, five nights a week. And we said, can't do it. It's just ridiculous. When are you supposed to eat and sleep?

Right. So we said no. And then they created the best damn sports show. Kornheiser would tell you that part of the interruption, which changed a lot of stuff on television, came from Mike and the Mad Dog. I mean, he admits that. I mean, Tony's a guy, you know, he's from Long Beach.

I'm from Long Beach. He's older. He's a great writer. And he's a guy who was as much a part of the style section in the washington post as the sports section but uh and he's a very bright guy but he admits i created a lot of the stuff from listening to they had a two-man show with uh with like a uh him and wilbon but they went out they went at it an edge yeah an edge very different video so they could put the topics up and they came at it. An edge, yeah, an edge, very different. They had the video so they could put the topics up on screen.

And they came at it very differently. Yeah. Very differently. And that was it. You know, Dog was a unique character, and I knew how to reel him out and reel him in. I knew how to play him, and he was very good at letting me play him,

so I would know where to take him. And he knew what I was was doing and he was a superb performer in that regard because he knew what his role was and he would play it and now there's a dog essence now he's blown up again he has because the the espn thing helped him a lot that was a very good thing for him he really needed that because serious didn't ever give him the identity needed now espn has done that which i'm happy. When did you know that podcasts were really a thing? That you said to the station, hey, we ought to pay attention. I fought with them about this. And I said, you guys don't understand what's going on here. Explain to me how you were going to monetize this

monster. Because you're bastardizing our business. You're taking away from our show and our sponsors. What are you doing? How are you making money on it? And they could never, while I was there, tell me how to monetize it. And that's radio's big problem, because they've never realized how to play in the podcast world. Were they afraid of killing the golden goose? Like, what took them so long?

They didn't know what to do with it,? They didn't know what to do with it and they didn't know what to do with the internet. They wanted to use the internet as a promotional tool, but they didn't want to use it as a vehicle. Now they, well, a lot of stations make more money off the internet than they make off their own broadcast. It's just that nobody wants to cannibalize their own business because you have people internally that even if they get podcasts right, there's going to be displacement.

They're going to be people who lose their piece of the fiefdom. So it's one of the hardest things a company could do is cannibalize itself. Most people don't make any money with podcasts. There's millions of them. There's only two ways to make money. Number one, you have a podcast that gets a gazillion listeners. Now, Murder Mysteries do real well. The Obama guys did real well

with theirs. There's a handful. Adam Carolla, you know, Joe Rogan. There's a couple of guys. If you don't have that, firstly,

you have to have a brand. If you're not a brand, you're dead. It's like one guy in each category. Like, there's two guys in health. See, I was a brand. Simmons is a brand. If you're not a brand, you're dead. It's like one guy in each category. Like there's two guys in health. See, I was a brand.

Simmons is a brand. So you can go in and do this. So you got to get a company that'll say, hey, I want to own the podcast. And I get paid because Bet Rivers owns the podcast. And they pay me a very good amount of money to do the podcast. So because they want to publicize their product.

They want to get people driven to their app for gambling. And that's my job, to drive people to the app and to do that with the podcast. And that's what they do. And that's what we do. So you're either going to get it from a company up front or you're going to get it because you have a lot of listeners, which is very rare.

I would say 98% of the podcasts don't make any money. Yeah, I would agree. I would say 98% of the podcasts don't make any money. Yeah, I would agree. I would agree. So speaking of gambling, what are the leagues supposed to do to police what's going on with Otani and Jante Puri, who I've never even heard of? Here's what they're doing.

They're taking, first of all, the Otani thing, okay? I don't know what happened and I'm not accusing Otani of anything. I don't know anything about Otani's dealings, gambling or anything else, but I know a couple things. And you guys know this too. You're successful business guys. Nobody who is an interpreter can send eight or nine $500,000 wires out of somebody else's account, okay? We all know that the bank would have been on libel already.

All right? You know that if you send a wire, people have to send you passcodes. Phone call. Phone call. Especially that dollar level. A second person has to get involved. You know how hard it is to send a big wire? Is this person being held hostage? I mean, come on.

I mean, this is a— The first time he said was, I covered the bets. The second time, I didn't know what happened. That second time was a complete lie. I don't know what's going on. Now he's saying he's being stolen from. Yeah, I mean, it's not true. He knew.

I don't know what his involvement is, but don't tell me he didn't know that those were coming out of his account. Do you think it's wise for the LA Dodgers to have a guy who's going to make $700 million be basically coupled up with a guy who's making $85 grand a year? Isn't that a recipe for larceny? Listen, and have him at poker games where the buy-in is like $250,000. The guy makes $80,000 a year. It's crazy. He's playing in a poker game where the buy-in is like $250,000. The guy makes 80,000 a year. It's crazy. He's playing in a poker game with a buy-in, it's 250 grand. Why can't they pay the interpreter a little bit more

to protect their $700 million asset? And then you wonder, and I think a lot of times, Manfred Goodell, who I've had my battles with, they know, they're not dumb guys, okay? So they act like they're naive about gambling. They're not. No bookmaker in the world takes a bet of 100 or 200 grand from someone he doesn't think can pay it back. Nobody does that. So that money was stamped Otani. It wasn't stamped an $85,000 a year

interpreter. What about this theory? They're extending that amount of credit to the interpreter because they think it's a gateway to get Otani. No question. But they still wouldn't. Get him as a client. But they wouldn't want him

to go millions into debt because if the guy can't get Otani to pay it back, they're never seeing the money and the guy's going to run to the FBI. That's the one thing, which somebody ran to the FBI. Okay, because this guy

was under surveillance beforehand. But here's the thing. Baseball's got a headache with a tony. The Dodgers have a huge headache with a tony. And sports, the leagues have a huge problem. They act like they want to police their people. And at the same time, they are stuffing the money from gambling in every pocket so fast that they can't make it fast enough. It is the golden goose for them. So we're going to tell a player, a backup player, don't you dare gamble, but everyone else can gamble and the leagues and the teams can make a gazillion dollars on internet gambling. Give me a break. It's not a system that can work. So what do we do? This is going to keep happening.

But don't you think it's not asking a lot to tell a guy, hey, you're nobody, but you're making $2 million this year and probably for the next three years. Just do us a favor. Don't open the f***ing gambling app. Three years. Players are not the smartest people in the world. And not every one of them makes a fortune.

Okay? That's another thing. Not every every one of them makes a fortune. Okay? That's another thing. Not every one of them is making a fortune. Who is John Day Porter? I'm looking up John Day Parker Sally right now. You know, everyone in the NBA makes a couple million. So that's beyond the point. But here's the thing.

You can police them. The bigger problem they have right now is college. They have got to stop the individual player bets in college. No props for kids. You can't have props in college. They have to be outlawed because there's no way to police them. Are you going to know if a kid in Waco who's averaging 20 a night is taking an envelope and scoring 18 that night? I mean, come on. Or 15 and taking a bet? You can't know that. Most places, they don't take big college basketball bets anyway because there have been so many places where they've shaved points.

A team is, hey, UConn's a 30-point favorite one night. How would you stop somebody from shaving a point, you know, and win it by 26? Is that Bovie Blue Chips? It's a big problem, right? It's a big problem. They have to police it in college. In the NFL, in the pros, I think it's much easier to police it.

Much easier. But it is a huge issue. And at the same time, they're not going to kill the golden goose. They are making a ton. And they own some of this stuff. They don't only run it. They own it. Yeah.

And it's huge for engagement. And I think it's- And it's going to get worse. I think it's great because people were going to do these bets anyway, but I think the negative is they haven't yet figured out

how do we draw this line. You know what the big problem is? The high school kids are betting. Oh, yeah. That's a big problem. And a lot of them don't have money in their betting

and they are betting. My son's doing prop betting. It's $2. Yeah, it's $2 and then it's $20 and then it $2, and then it's $20, and then it's $50, and then it's $100, and then he comes and says, Dad, I'm down $1,000, and the guy wants his money. The problem is it's too easy for those guys to gamble now. It's got to be policed a lot better.

And Congress, you know, as soon as they see an easy score where they can look like they're holier than thou and get an easy win like they did with the steroid issue, they'll do the same thing here with gambling and they'll punch in some serious rules. There's something about this moment in time where we got legalized. We got legalized cannabis for recreational purposes and legalized sports gambling inside of an 18 month period of time. Basically went from no, no, no, no, no to maybe to yes. To everything is permissible. And now the whole economy is basically based on sports gambling. So I don't – I guess –

A county could put a hole in the sport if he was dirty. Yeah. If he was dirty. If they have him dead to rights. And I don't know if – and I'm not saying he bet because I have no idea that he did, and I'm not accusing him. Worse than 98? Worse than the steroid stuff, you think?

Him? If it's him? It would be a disaster. Okay. A PR disaster for baseball. I mean, Pete Rose. It'd be worse. Worse.

Worse. I want to ask you about the Knicks. Is this—I get scared saying this out loud. I think this is my favorite team since like 96. It should be. Okay. Is this one of your favorite teams ever? Yeah. Villanova North. I mean, it's a wonderful team. I love these guys. And we're getting

Bridges. You know, that would be a dream come true. That's the last Infinity Stone. He is so underrated. It is ridiculous. If that could happen, it would be so much fun. Seven first round picks? Oh, it would be. Listen, I'd give them anything. Really, I would give them anything within reason, as long as they didn't damage the team other than Randall, they can obviously have. I would give them almost anything, as long as I don't break

up my core right there. OG was a very good pickup. He made the team a lot better. Robinson is a great rebounder, so he will be a positive. The way some of these guys have played, like Haunstein and McBride. Josh Hart. And even Achua. I mean, these guys have played so far over their heads. Mike, I went to a game recently.

It's unbelievable. The guy in front of me called Achua the big sneeze. You know, they are so likable. of their heads. Mike, I went to a game recently. It's unbelievable. The guy in front of me called a chew with a big sneeze. You know, they are so likable. Is Jalen Brunson the most talented player we've had since Patrick Ewing? Melo is more talented. No, but talented like on the team, not in the Olympics.

He is in this era, again, this is a player who came from nowhere to not stardom, to super stardom. He is playing, even LeBron said he is now playing on a level that is so high, it has to be recognized. That's scary for a guy who, I got to admit, I always liked him.

I loved him at Villanova. I liked him in the pros. I thought he was a guy who'd be a 20-minute-a-night player. Maybe an all-star. A nice backup point guard. No, I thought he'd be a backup point guard, but a good one. Like a guy who played meaningful minutes but was a backup. He's a superstar.

Now he's a superstar. Let's say it. They're blitzing him. Every team is sending two guys at him. Now he is a superstar. And that team, here's the thing. The way they're built, I don't think in the playoffs, where the game changes dramatically, dramatically,

I don't think they can compete with Milwaukee and Boston and beat either one. But I think they can beat anybody else in the East. They could beat Cleveland again, I think. I think they could beat anybody else. And I think they will win a couple of games even against them. But I don't think they'll beat either one of those teams. And I think the team, I think Milwaukee is scary.

Why? They don't have any weaknesses. They just don't know how to play yet. Well, listen. All due respect. What Doc did was terrible. Listen, I like Doc personally. I've played golf with him a lot of times.

He's a wonderful guy. But let me tell you something. When you're brought in as a consultant and for a young coach to help him and you take his job, that's an ugly look. That is an ugly look. I'm sorry. You were brought in as a consultant to help the kid. And next thing you know, hey, you know what? They want me to coach. Yeah. I thought he was a podcaster. I mean, that's a stab in the back. I mean, that was an all-time stab in the back. It really was. It's been a long time since we've had anybody like Jalen. So this is every Knicks point guard starter since 2009. It's unbelievable.

It's an ugly list. Duhan, Raymond Felton, Tony Douglas, Felton again, Pablo Prigioni, Shane Larkin, Jose Calderon, Derek Rose, Raymond Sessions, Trey Burke. Oh, my God, my eyes. Alonzo Trier, Alfred Payton, Kemba Walker. The Calderon era was probably the bottom.

It was all so bad with him and Bargnani. It was all so disgusting. And finally, the franchise is in good shape for the first time legitimately in 20 years. what they've done is

they've done a brilliant job and they made the heart move, which took them up a level. And then they made the OG move and took them up another level. Leon deserves a made the OG move and took them up another level. Leon deserves a ton of credit. He's done a brilliant job. Is he like, if you had to force rank the factors that have led to this,

would you put him one? Or would you put like just all the draft picks piled up? No, I put him there. I think he's done it. I think you got to give him the credit. And he selected, basketball is not about more. It's about the right guy. It's never about more. It's not like if I take this guy who can score and bring him in or this star and bring him in, it's going to work. It doesn't work. It's a team. You need the right guy. Hart made them so

much tougher. And then he wanted to take them to another level, and OG took them to another level. And I'm telling you, if Robinson comes back healthy, he will take them to another level because of his offensive rebounding. They have a chance to really have so much fun. I've said to my boys, I've said, hey, the Knicks are going to be, that ticket is going to be hotter than, I remember when it was the hottest ticket in the world. When Riley was there, it was – they were rock stars.

That place rocked every night. There was never – you didn't miss a game at the Garden. You didn't – we used to go to Madhouse on Madison in the playoffs, then right back to the Garden. We'd go to every game, Nick's Balls, every game, Nick's Spaces. You didn't miss a game. When Riles was there, it was must see, must watch. They were the biggest stars in this town. We would talk Knicks for four hours. There were times in the last couple of years where I didn't talk Knicks four hours in the year. That's how bad it got. That's how big they were.

We're back. They're back. Mike, so I have a half season ticket package. They're back. I tried to get, I saw my rep the other day. I asked if I could get a follow. She said, probably not. She said, get in line. And the tickets aren't cheap. Yeah. No, they aren't cheap.

So getting back to Leon and the credit he deserves, executives, they have a lot of sunk costs, right? If they draft a guy, they're married to them. He got rid of Obi, IQ, who was a fan favorite, and RJ. And look what he's turned them into. I can't believe it. You know, when he made the OG move, most people were not going to— Fans did not like that.

They didn't like it. And I'm like on a podcast saying, are you guys paying attention? This guy fits like a glove. I mean, this is like— Most fans weren't watching him. Listen, I know the Villanova guys very well. Jay Wright's a close friend. I was around those teams.

I know those teams. Hart was the perfect guy. And the Garden took it to it right away. They knew right away. Immediately. Right away. The first time he went in the stands for a ball, they knew right away.

And that's what they hadn't had in so long. Hey, it's a fun thing. And building a basketball team to the top is really hard because you need exquisite chemistry or that guy. You have to luck into a Luka Doncic or a freak or someone like that. He's got a blossom. Or look what Brunson has developed

into that kind of player, which is crazy. You know, Doncic knew it. He was furious when he left. Furious. A-Rod. Holy shit. What a story. Have you ever seen anything like this? I texted, A-Rod had texted me a couple of times last week and we text back and forth. And I said, sorry, you lost the team. Because I saw the story, bullets can come out that the A-Rod thing is dead. And he said, don't believe it story, bullets can come out that the A-Rod thing is dead. And he said, don't believe it. Let's set this up for the audience.

This is the Minnesota Timberwolves. The owner is the richest man in Minnesota, Glenn Taylor. He effectively has presided over a team that couldn't get to the playoffs if their lives depended on it. He's had talent. He's had some bad luck, but he's just not a great owner. Like, like flat out. It's just, and I think he probably knows it.

And he got tired of it. And he got tired of it. So, so 2021 comes along. A-Rod and who's his, who's his primary partner? Mark Lurie. Mark Lurie. And then they get some private equity backing. Well, like Carlisle Group,

which they didn't like maybe where that money was coming from. Cause you know, it comes from a lot of different places with the Carlisle Group. Sure. So, but, but so they,. So they strike a deal in 2021 that they're going to pay on a schedule, like it's a condo, like it's a pre-construction building. And the number. The number's important.

$1.5 billion. $1.5 billion. And now I think the floor for an NBA franchise is three. Hey, it's a home run. I told them, you got to get the team. I said getting the team is, I said, getting involved at that level of ownership as a player is so unbelievable.

And you know, during this time, Tom Brady has now become the first owner. There's only been two NFL players who were owners. George Hallis, who was a player when the team was worth 2,500 bucks. And Jerry Richardson, who left the Colts and started Hardee's and then bought a team later on. So he bought Carolina.

But he bought them as a rich man years later because he started the Hardee's franchises and he was a player with the Colts in the 50s. Those are the only two who have ever, ever owned NFL teams, ex-players. Now, Brady has been approved to own part of the Raiders. Derek Jeter got private equity backers to take the raise. Like, now they want athletes involved. Football is on a different level.

Yeah, yeah, yeah. And now you have Brady in as an owner, which means that money just multiplies. He knows that. And the smart player knows now, you don't want to be a broadcaster. You don't want to be a coach. You want to be an owner.

You want to be an owner. If you're LeBron James or Brady, you want to be an owner because then the money goes from 20 million to 50 million. Look what Jordan did. Jordan made himself, with no money down, made himself almost a billion dollars. I was going through the Timberwolves draft picks,

and Mikael was at the helm for a long time. I mean, obviously famously, they took Ricky Rubio and Johnny Flynn over Steph. I mean, just, they took Derek Williams second, Wesley Johnson fourth, just a run of disasters. Right. And the owner, who the last time they won a playoff series was 2004.

2004! So, yeah, sellers remorse. They sold it for a billion and a half. So, now he's saying they missed. So, the story is— Now he's saying I'm keeping it for a billion and a half it's worth three so now he's saying I'm keeping it because he knows he gave it to him

they missed the payment which sounds like bullshit right A-Rod says it's not over now that's what he texts me and he said just wait it's not over

he should go to war right now they own 40% of the team what are they going to do he gets to keep that but the point is he says the other part's not over

that's what he texts me so I don't know what that is and A-Rod and Laurie built like a nice owners type box Glenn Taylor said you can't go there anymore He gets to keep that, but the point is, he says the other part's not over. That's what he texts me, so I don't know what that is. And A-Rod and Lori built a nice owner's type box. Glenn Taylor said you can't go there anymore. It's going to get ugly. It's going to get ugly.

It's going to get ugly, and they will clean that up very quickly. Who's that? You think the courts? The league? No, the league. They own it. The commissioner will clean that up. See, in every league, there's always an inner sanctum where there's two or three owners who really run the league.

And they work with the commissioner and they're the power. Who's that in the NBA? Well, in the NBA, it has changed a lot in the last couple of years because you've had so much turnover. It's got to be Lakeham. It's now different, guys. And it's very unsettled now because you've had so much change. Like in the old days, it was Modell, Roselle, and Klein. They're the ones who developed with Mara always being the guy who could placate anybody

and get any consensus done. Like get Halas to agree to split the money, even though he had Chicago. He didn't want to split the money. The Giants said, yes, we'll give everybody the same TV money. Halas said, I'm in Chicago. I'm not giving them my money. I'm not giving Green Bay my money. But Halas, Wellington Mather, who's the hero of having the league be as successful as it is, because he got Halas to agree. In the old days, though, the guys who made the TV contracts and took them into the real world were Klein and Modell with Roselle, that threesome. They were the ones that took the NFL to the moon. There's always strong guys.

And Kraft has been very important in the league. And Jerry Jones has been a rebel, but he's also been smart sometimes when he's not playing for himself, which he often is. But there's always guys in the league. And the league always, with ownership, likes to have peace. They don't like to not have peace. Look how they got this guy from the Clippers out. That took 10 minutes. Right.

They get guys out quickly. Are you surprised Belichick didn't get a job, if able to for that matter? I think Belichick could have got a job, but he wasn't going to take a job under the wrong circumstances where I think he needed to have, if not complete control, at least veto power over certain things. He wasn't going to have some guy he didn't like. See, in Atlanta, he and Rich McKay have never liked each other. So that was a problem. They were keeping Rich McKay. I didn't see how

that was going to work with him and Rich McKay there. Okay. Now they had clashed many, many times. Here's the thing. How would you like to be a guy on the hot seat this year with Belichick sitting there? Wanting to coach. That's a disaster. I mean, if you're a dable, if you're anybody, the first call is going to Belichick. If you're an owner, would you be excited to give Belichick the keys? I mean, obviously as a coach.

Yes, I think. Listen, Belichick and I have had our issues, and we're not friends, and we never have been. But he has got, listen, he's not a quarterback guy. He doesn't, everyone has a weakness. His weakness is he does not pick quarterbacks well. Or anyone. Although he let Dick Rabin convince him to draft Tom Brady.

His drafts have been horrendous. Right. He, though, can still build a defense, build a special team, and as long as he has somebody inventive, like he had Bill O'Brien, who came up with the two tight end thing with Gronkowski and Aaron Hernandez, as long as they have guys like that and Dick Rabin to pick Tom Brady, he would still do very well, I think. And I don't know what will happen with the Giants. Everyone thinks it's a foregone conclusion. It's not. Which part? What is it? That he would be the next coach of the Giants.

Here's the thing. He and John Mara are very close. They're very close. But the Tish's don't have any relationship to Belichick. He left the same year they bought into the team. They have no relationship with him. And they don't want to have a guy who's close with the other owner and have to pay him a lot of money to come in as owner.

So remember, Belichick's not coming cheap. So I don't know if that's a foregone conclusion. I think he'll get a job next year. He won't take a job in season. He'll wait now this year. Supposedly he's writing a book and ESPN is offering him carte blanche to do anything he wants. They'll give him a ton of money to do basically very little. Have some of the shine come off of him since he started coaching without Brady? I think the shine will come back when you look at the overall record and realize how unbelievable he was. Listen, Don Shuler didn't have a great finish. Guys, no one wins without players. And he got caught without players.

Now, he deserves some of the blame for that, but he can still coach. There's no question about him coaching. You don't know that Mack is going to be what he turned. To me, knowing nothing, it seems really hard if even the best people in the business can't select a quarterback with any reliability. Well, he also has a thing for certain types of players.

He, you know, he's the guy who brought in Randy Moss. Yeah. But he didn't bring in any explosiveness to this team in recent years. You have to have. Like the Giants are going to draft a wide receiver. I was going to ask you. I would think they're going to for sure. There's so many good ones.

Harrison will never last to six. If he lasts to six, the Giants should throw the party of all time because he's the second coming of Larry Fitzgerald. He will be an all-pro multiple times, okay? Now, he's not the burner that some of these other guys are where he catches the ball and he's gone, but he will still catch 100 balls and 15 touchdowns. We haven't had a guy like that since Odell.

But neighbors and the kid out of Washington, Odunze, are tremendous talents. Giants can probably have either one of them. They will probably take one. How about the Jets? They made moves. They finally took, I mean, I wanted to take the tackle so badly.

I mean, to get Tyron Smith, who's a, yes, he's been injured, but he's a Hall of Fame player when he's healthy. Last year, he was the number one pass blocker in the league, and he played over 900 snaps. If he stays healthy,

they're going to be in great shape. So giving him the money they gave him was a home run. I would still, if I'm the Giants, if I'm the Jets, at 10, I would absolutely draft an offensive lineman. I would not draft a tight end.

I know the tight end's very good. You've got to protect this guy. I've got to draft one more, and then I can get a good receiver on the second round. And they just brought a good receiver in. And you know what? I can shape tight ends. I've got to take another tackle if I'm the Jets.

This is the best offseason, and I can't remember when. This is the most interesting draft that I can ever remember since the days of the Eli draft where you didn't know where I was going to land even the night before. And you had Haas-Stetler and everything else.

Oh, yeah. And you had Haas-Stetler in the same draft. Kurt Warner with the... The bottom line is there are so many quarterbacks and so many teams need quarterbacks. What is Sean Payton going to do?

You know, what are the Giants going to do? Who's going to take all these quarterbacks? How high is the Michigan quarterback going? Some people have them going as high as two. I mean, so this thing is wild right now with the quarterbacks. Most quarterback openings in, I don't know, pick a number, 20 years? You could have five quarterbacks go in the first 12 picks.

And start. Five quarterbacks. That's first 12 and start five quarterbacks that's a lot what why do the jets uh why is robert salah still their coach right now he lucked out because if aaron wasn't there he wouldn't be the coach he'd be gone he would have gotten fired last year he's the coach because aaron wants him to be the coach and aaron's doing whatever he wants there as long as he's there aaron he didn. He didn't take the blame. It's more Jets bad luck. Salah is a awful, hideous head coach. Say it louder. Hideous. He is not a bad defensive coordinator and his defense plays terrifically well. But

here's his thing. He's got the same disease that so many defensive coordinators have. After the game, they lose and he says, hey, we shut that quarterback down. You lost, you moron. You're a head coach. What do you care if your defense shut the quarterback down? You still lost the game. And you lose almost every game. First, you got to win games.

Don't worry about shutting down. They won three last year. Hey, he bragged about shutting down big quarterbacks instead of – he doesn't win any games. The object when you're the head coach is to win the game, not to stop the other team on defense. Or if you're the Jets, it's to get a draft pick. You sound like Herm Edwards.

It's – hey, he's hideous, okay? Rex Ryan had the same problem. They're more interested sometimes in the performance of the defense to prove that they outsmarted the offense and outsmarted the quarterback than they are with the win. Do you miss being able to, because you pulled no punches, do you miss being able to tell the coaches this to their face or on the radio? Well, you know, I had a lot of love-hate with coaches.

I mean, I had a lot of great relationships with them. I had a lot of bad relationships with them. I mean. How many refused to come back on? A lot. I mean, you know, Buddy Harrelson quit us. And he just passed away. So God rest his soul.

But he was, I mean, he harbored, and so did Tom Stever. He hated the dog and myself. Because he felt we were, he loved Buddy. And he felt we were mean to Buddy. Buddy was just a hideous manager. He was a wonderful, captivating player who over to Buddy. Buddy was just a hideous manager. He was a wonderful, captivating player who overachieved, but he was a hideous manager. Jeff Tolberg was a hideous manager.

When they're a hideous manager, you got to say so. You know, Bruce Coslett accused us of getting him fired. And I said, I've never gotten a coach fired in my life. You know, when I got power, when I get a guy who's 11 and five fired, okay. The guy's five and 10, 5 and 11. He got himself fired. Yeah, the radio doesn't get a winning coach fired.

No. What do you make of the criticisms about the way Tom Thibodeau ends games for the Knicks? Do you think that's a liability in the postseason? He sometimes is inflexible. Okay. Again, he's a defensive. It's hard for him sometimes. Sometimes is inflexible. Okay. Again, he's a defensive. It's hard for him sometimes.

Again, a lot of times the superb defensive coaches have trouble breaking the defensive mindset and coaching the entire, and seeing the entire picture and coaching the entire team. And a lot of them fall into that more than offensive coaches do. It's funny. You know, the public is so fickle.

For years, I had guys call me up and say, you protect Jay Wright. He's your friend. The guy never wins the big one. Well, what happened? He won the big one. Then he won the big one. Then he won the big one.

Andy Reid. They used to kill Andy Reid. Ray Manofilli. Andy came on with me because he hated the guys in Philadelphia. And Andy said, I only do your show because you have a brain. And he hated the guys in Philadelphia because they were so rough on him. They lost big games. They lost title games.

They lost the one Super Bowl he played in. You know what now? Andy Reid stayed around long enough to prove, hey, you get there. You get the right mix. And you win, and you win. And now Andy Reid is one of the all-time geniuses. Yeah. That's what happened. Thibodeau needs a clipboard guy like Teron Liu to draw plays at the end of the game.

He's going to make his own decisions, though. That's the thing. You know what I mean? He's going to. He's going to. He has McBride, who's six feet tall, guarding the SGA. He doesn't see some things he should see. Overall, who's six feet tall, guarding the SGA. He doesn't see some things he should see.

Overall, he's a very good coach. But he has some shortcomings. The guy who... Who doesn't? Well, Spolstra doesn't. Spolstra isn't. He's an incredible coach. Incredible coach. Meaning what?

Like, with the talent he has, what he's able to do with it. Every year. Brilliant. Utterly brilliant. All right, so Mike, before we let you get out of here, I'm curious.

Favorite sports movies? I have a very, first of all, I love movies. So I have a very diverse group. I'm not going to give you the typical, you know, I weepy at Field of Dreams. I don't even like Field of Dreams.

Oh, I'll take. Okay. Now, best one ever, Rocky II. Not one rocky two not one rocky two i'm with you rocky two after rocky two it's a cartoon okay three four five and rocky balboa should be burned wait what do you like about is like godfather two to you like godfather two de niro was unbelievable yeah i liked, but it wasn't as good as one because you couldn't take your eyes off Brando.

Yeah. When Brando was on the screen, people wondered about Brando. He's a weirdo. He's this. Brando was so gifted. Yeah. You couldn't take your eyes off him.

But why was two better than one in the Rocky series the way that some people loved Godfather 2? Because I loved how they beat him up early to the point where even Adrian said no. And he said, Adrian, I never asked you to stop being a woman. Don't ask me to stop being a man. And then she said, win. That's one of my favorite scenes in any movie ever.

When they played at the garden. No, she comes out of a coma. Unbelievable. And says, I want you to do one thing for me. Yeah. Win. Yeah. And that's it. And you she comes out of a coma. Unbelievable. And says, I want you to do one thing for me. Yeah. Win. Yeah. And that's it.

And you knew he was going to win. That's even better than Rocky I. And Rocky I was a classic. Hoosiers is a great movie. I love Hoosiers. I have to watch it again. Okay. Now I'm going to give you

some weird ones. Body and Soul. John Garfield and Lily Palmer, a boxing movie. If you've never seen it, see it about the corruption in boxing. Great movie. And I'm a big John Garfield and Lily Palmer, a boxing movie. If you've never seen it, see it about the corruption in boxing. Great movie.

And I'm a big John Garfield guy. John Garfield, Lily Palmer, Body and Soul, 1939. Okay, now, I'll give you another one. Winning team, Doris Day and Ronald Reagan, Grover Cleveland and Alexander. Watch the last 10 minutes and tell me you aren't cheering your ass off in that room. What sport is it? Baseball.

Go to Cleveland Alexander. Okay. Came back. He was run out of baseball for being a drunk. Came back and struck out Tony Lazeri with the bags full in the seventh inning to stop the last threat and win. That's a true story. He won game two as an old man. He won game two as an old man. He won game six as an old man.

And he went to him in game seven in the bullpen and brought him back. And he struck out Lazeri and finished the game. Is Ronald Reagan- True story. Ronald Reagan is playing him? Ronald Reagan. Oh, wow.

Darcy Day and Ronald Reagan. Oh, wow. Great movie. Okay. And then My All-American, which is a story about Freddie Steinmark, who is a guy who was an overachiever, who went to Texas, started as a sophomore.

He only started two sophomores. Darryl Roy only started two sophomores in his whole life. Tommy Nobis is one of the all-time great linebackers. And Freddie Steinmark. And Freddie Steinmark, as a senior, got bone cancer. And they cut his leg off. And they still have, he died a year later. He still, they have a plaque to him that they touch before every game.

Great movie. It's called My All-American. Came out two years ago. It was done by Angelo, who did The Hoosiers. He did that movie. And then the other one would be Jim Thorpe All-American with Burt Lancaster. Oh, yeah. Another great old movie.

Great. That one I'm aware of. Great old movie. You know what I like one I'm aware of. Great old movie. You know what I like? I love the old ones. I like Uncut Gems. Well, that's a sports gambling movie. That's another genre.

Hey, I love that. I spent one day- Starring Mike Francis. I spent one day with Adam. One day. And, you know, the Safdie brothers said, I got a role for you. Here's what I want you to do.

I want you to go in the kitchen, and I want you to yell at the cook. Just like you yell at the cooler. That's the dumbest bet I've ever heard. I want you to yell at him like you'd yell at the cooler. I said, I got it. No problem. One take.

Mike, did you have fun on the show today? Absolutely, guys. Now, what do you think, Josh? What do you think? What are we rolling with now? NVIDIA? What are we buying? I'm so long NVIDIA. And you, microtechnology.

I've taken a ride on microtechnology. I think you and I are both in NVIDIA for the same period of time. You never left, right? I've been in NVIDIA since it was 23 with some shares, but I bought a lot in the hundreds, and I still haven't sold any. Mike, I got to ask, what's the exit strategy, or is there one? I don't have one for NVIDIA until they tell me, until I see a bad quarter or I see them,

I wake up and they take a hundred points off it. If they do that, I might have it and wait. I haven't done it. And every time it's gone down, it's come back up. And I think unless they have a bad quarter and it doesn't look like they're going to, if somebody catches them and builds a chip that can compete with them,

everything I read on the stuff I can read, layman stuff that I can understand. And I don't understand all of it, but it seems like they still have a moat that is very, very wide. Nobody's even arguing if there's a moat. ASML does. They do. Yeah.

And I owned SMCI for a ride and got out at about 800. Good for you. I got out at about 800. Good for you. I got out. I bought it about 400. I got out about 800. And I hadn't been back in since. I got lucky. I got on the ride because I noticed it was mirroring NVIDIA every day.

So I bought some. And I got lucky with it. Just blind luck. Blind luck. You don't want to sell NVIDIA and be Glenn Taylor. I don't want to sell NVIDIA because I still think there's more upside. Until I see that there's, I have a couple of cores. Like, I never sell Amazon. I don't want to sell Nvidia because I still think there's more upside until I see that there's, I have a couple of cores.

Like I'd never sell Amazon. I always have Amazon. I'm not, I don't own Google. I've actually paired some Apple, which I have to admit, in the last year I paired a little Apple. I've always had Apple. Stock acts like shit right now.

It does. It's too big. It's like moving a battleship. They're not growing. Yeah. And so Amazon's probably going to face the same thing, but they haven't yet. And it seems like they've bought into some AI stuff

and they have an idea. Sports. The one I missed that was easy was Microsoft, and I never bought into it. Mike, we had a guy on last week, manages $50 billion growth equity portfolio. He is 15% Amazon, which is so far overweight, the benchmark. Wow.

And he's saying he thinks it's the best of the giant. It's the best one for this year. And the main reason, the guy running it was the guy who built AWS. Right. They are basically shedding expenses faster than most people give them credit for, like laying off tons of people, cutting costs. And a lot of this AI stuff is going to accrue to their benefit. Hey, it sounds good to me.

And I got lucky with Micron. I saw a thing where it was like 85. And the guy said, hey, I'm telling you, they are going to rock it. And I said, hey, I'll buy something. You know, it was 85. It wasn't bad. So they are going to rock it. And I said, hey, I'll buy something. It was $85. It wasn't bad. So I bought some right before earnings. And it's gone up.

It's like $120-something already. So it's done well. So that's those luckies. I had a real bad one recently. I got MDB beat me up and went down. What is that? Is that Mongo? Mongo, yeah.

You bought it for a joke? No, no. I actually saw it as one of those companies, and I bought it at the wrong time, and then I got out because I got whipsawed on it. Oh, you're in Uber with me. I'm in Uber from the beginning. Don't sell it.

I've never sold Uber. I still have it. I bought it at 23, and I still have it. I haven't sold any shares. I don't give investment advice on the podcast. You gave me Uber. I'm talking directly to Mike. No.

I'm talking directly to Mike. I think that stock's 100 bucks easily. Don't sell it. I haven't sold any shares. I don't give investment advice on the podcast. I'm talking directly to Mike. I think that stock's a hundred bucks easily. Don't sell it. The reason I own that stock is you, Josh, the last time I saw you, I said, Josh, give me a stock. And you said, I love Uber. And it was not the last time we met. It was two times ago. The stock was in the 20s. And you said it's a hundred dollars stock then. Still stock then, you told me, and I've never sold it and it's, what, $78, something like that? I feel like I am the goat at what I do. That's it. Hey. Dude, you are the very best. I would keep you going forever, but we're going to dinner now.

That's it. I'm going to go see Nelson at Hunt & Fish. Let's go. Good to see you guys. Thank you so much for doing this. Good luck. Good to see you. Hey, everybody, make sure you're listening to Mike Francesca's podcast. He is the Pope. He is the goat. Everything you've you. Hey, everybody. Make sure you're listening to Mike Francesa's podcast. He is the pope. He is the goat. Everything you've heard is true, as long as it's the good things.

We look up to you. We idolize you. We appreciate you so much. Thank you. Thank you. And I watch you guys all the time. All right. Hey, everybody.

Do all the listening and the liking and the subscribing, and we will see you soon. Take it easy. All right. Hey, did we get any you soon. Take it easy. All right. Hey, did we get any of that? Can you tape any of that? Okay. Yeah, we got it all. So I did.

I saw this thing came out. Did you get the... All right, gangsters. We're here for an all-new edition of What Are Your Thoughts? I'm your host, downtown Josh Brown. With me as always, my co-host, Michael Batnick. Michael, say hello to the folks. Hello, hello, folks.

If you're new to the show, we're going to tackle the biggest topics in the market right now. We're going to have a lot of fun along the way. And you guys in the live chat, play along by all means. And you never know, you might say something crazy enough to make it on screen. Let me say hello to a few folks really quickly gregory mark is here john

luca what's up uh magnus nice to see you chris hayes justin castelli is here for the first i don't think we've ever seen jc uh jc over here uh for for the. That's pretty cool, right, Mike? Very cool. What's up, Justin? Biff Gravels is here. Jay Luther. Everybody's here. It's an absolute pleasure to join you guys this evening. We love the live version. I want to mention Rocket Money, our sponsor.

Michael, tell the folks about Rocket Money. You know, I've said this before. I'll say it again. My favorite email is large refund detected. That's what I'm talking about. Rocket money. So what do I use it for? I use it to track all of my spending, all of my upcoming subscriptions. What's on tap? How much money do I need in my check account? Because I've got the bills right in front of me. Here it goes. My this, my that, my subscriptions. So I use it for that. And if you

want, you can use it to cancel unwanted subscriptions. It's like a cheat code for your personal finances. Rocket Money has 5 million users and has saved a total of $500 million in canceled subscriptions, saving members up to $740 a year when they use all of the app's features. Stop wasting money on stuff you don't use. I am. Cancel. Cancel. I do.

Unwanted subscriptions. Here's how you do it. Go to rocketmoney.com slash the compound. Excuse me, slash compound. Rocketmoney.com slash compound. Link in the description below. All right. Did you have one of those days where you almost don't even look at the market, but you kind of know how it's doing?

I had one of those days. Explain. I'm like busy doing actual work. I didn't have time to stare at the screen all day. I was on halftime today. I was up to speed by like 1130. And then the afternoon got away from me. I really didn't look until the close. But it's exactly what I expected to see. I feel like it's that kind of market.

That's how in sync you are with the market. You are really feeling the market. I don't think it's that. I think we're just not going anywhere. I just think we're like, we had a huge rally and now we're calming down a little bit. I had a similar thought, not as bombastic a thought as you did that I could predict the market without even looking at the screen. The thought that I had was, hey, you know what? You know what? The market's flat over the last three, four weeks. It's pretty good. That's my point. We went vertical, not vertical. We went like diagonal, like a diagonal vertical. And then we've gone sideways. It not vertical we went like diagonal like a diagonal vertical

and then we've gone sideways it's beautiful well two things have accompanied that sideways action um amazon and alphabet have gone crazy those stocks are those stocks are still ripping wait i didn't know that no apple is not going crazy what are you talking about you are sir you are out of sync with the market amazon and and Alphabet. Did you listen to what I said or did you just assume I said something different? I heard Apple. I apologize. Okay. Alphabet is shaking off this narrative that they missed the boat on AI in a major way.

Just launched some new AI-related chips. And the stock is defying the pro-Microsoft alphabets in trouble narrative. And Amazon, did it make a new record high today? Or is it on the verge? It's right there. Josh, before, I'm just looking at, so let's see, Amazon, I don't think it's quite, it's a hair away. But Google, with the benefit of hindsight, their AI debacle, air quotes, what a buying opportunity that was. LOL. Exactly. I bought it.

Oh, my God. By the way, it doubled since then. Yeah. Holy moly. So everybody stop crying about Alphabet. Believe me, they'll be fine. They have a printing press in the basement. Who's crying about Alphabet?

People. Many, many people. Last many, many people last, last year. Uh, many people were saying this. All right. Uh, I want to mention Jess Menton, one of, uh, one of my favorite reporters. She's at Bloomberg and, uh, she did a really great piece, five themes to watch this earning season. Earning season starts, uh, Friday. Basically we get a whole bunch of banks, Delta Airlines too. You're going to get BlackRock. You're going to get JP Morgan.

You'll get Citi, all the usual suspects. And then we're like in it. We're back right in the thick of it. So let's pop this first chart. Jessica says profits for the seven biggest growth companies in the S&P 500, you know what they are, are on course to rise 38% in the first quarter. When excluding them, the rest of the index's profits are anticipated to shrink by 2%. So we have quote unquote earnings growth market wide. Just don't look at where it's coming from. Is that a chart

off? Do you think that's like, uh, that's sorta the message here or is that too harsh? What do you think? We know where the earnings are coming from and guess what? So are the listeners and so does the market and everybody involved in the market. So it's not, it's not, what are they going to report this quarter? It's what are they going to say about their future quarters? What is guidance going to look like? Okay. But the good news is you're – by the end of this year, according to Dr. David Kelly, who we've had on the show, that's going to reverse. Those seven companies will only be reporting 15% growth in Q4 of this year.

And the rest of the S&P 500 is expected to post 18% growth. Chart back on. Well, that's exactly right, Josh. If you look beyond the first quarter to the second, third, and fourth, we spoke about this with Meb. One of the reasons why the rally is broadening out is because estimates of future earnings are rising substantially for the rest of the market X the mag seven, as you could see in the blue. Isn't this like such a happy ending? It's wonderful. It's the dude, it's the

happiest ending. It's the happiest ending. Cause it's not like the mag seven are going to go earnings negative. They're just, they're going to trail and you're going to get earnings growth elsewhere. I mean, these are estimates. We don't really know, but like, that's what you want. Would it not be the most wonderful thing if tech perhaps took a pause and the rest of the market took the baton and sent us higher financials, for example? This is literally how I like my movies to end, with a happy ending where I'm running through the airport with a bouquet of flowers right before Sydney Sweeney gets on the plane. She's about to go to Europe for the summer, and then I stop her because I tell her, wait, what we have is really special. Don't do this. And then her throat gets slit.

I'm a horror movie guy. Just disclaimer. We do not actually want that to happen. Okay. Raising expectations. Analysts are, so these are the themes. Are you ready? Ready.

Analysts have been raising their earnings forecasts faster than they are marking them down for previously unloved groups. So basically what you're seeing is seven S&P 500 sectors. John, we have this to black chart. So this is not this quarter. This is for over the next year. Look what's in the lead here, Mike. Healthcare, energy materials are seeing the best earnings per share growth trends from analysts. And tech is somewhere in the middle of the pack. And consumer discretion is year over year negative. I wish I saw this chart before I sold my Bristol-Myers. Yeah, see?

See what happens when you don't pay attention? Chart off. Seven of the 11 sectors in the S&p are poised to see profit growth accelerate over the next year utilities financials and health care are the lead sectors uh that were that we're expecting here's another theme corporate cash and we're going to talk about this later in the show um corporate cash and free cash flow at record high levels, record highs. So for anyone that tells you like, you know, the stock market doesn't make sense, blah, blah, blah.

Well, if free cashflow is at a record high, why wouldn't share prices be at a record high? That wouldn't make any sense to me if, if they weren't aligned. Um, you're going to see, uh, you're going to see buybacks. You're going to see, uh, you're going to see buybacks. You're going to see dividends. You're going to see more, uh, corporate spending, and you're going to see all the things that you would expect to see when cash flows and cash sitting in, in accounts is at record highs. Um, last couple of margins improving. So S and P 500 operating margins, this is key, are expected to improve going forward.

And this is because the gap between rising consumer and producer prices has narrowed significantly. Cost cutting has played a big role there. So operating margins for the first quarter should be at 15% and rising. margins for the first quarter should be at 15% and rising. And then sectors, there are some pretty big differences in the markets. Jessica mentions differing inflation outlooks for S&P sectors has left a gauge of expected one-month correlation in the index of stocks hovering near its lows since 2018. So the whole market doesn't necessarily benefit in lockstep with these trends. And you're seeing some dispersion between the sectors, I think is the salient point there. I don't know. What are your thoughts about this earnings season?

Most important ever? Is it the second one of the row? Most important ever? No, you know what? I think the last one was more important, to be honest. Because we finally had net earnings growth? Kenny, I don't know. They're always important. They're all important. This one in particular though, I feel like don't, I mean, don't you think markets have run so much into it that it's almost like a put up or shut up situation? I don't. I felt that the last time, if you looked at like the rate of change in the 30 days before earnings, last time, stocks had advanced much-

Meaning what? January into mid-February? Biglier, yes. So NVIDIA's gone sideways for a couple of weeks. The S&P's gone sideways for a couple of weeks. The last time they reported, they had gone vertical into the print and digested the news print. Oh, that's a great point, but it's not really NVIDIA's rally right now.

That's not- It's not. is pretty high. Oh, that's a great point, but it's not really NVIDIA's rally right now. That's not. When I go through charts, what I'm seeing is companies like Eaton and Emerson Electric and all sorts of industrials and materials names, they look like they're AI stocks. I mean, these stocks are vertical. Look at ETN. This thing is vertical. Oh, wow. Look at WAB. This is Westinghouse Airbrakes. This company makes parts for locomotives. That's what I see when I do my work.

So that really is very far divorced from the world of NVIDIA. And those are the stocks that have something to prove now, if you think about it. Hey, yeah. I'm curious to hear what the materials say. Like Freeport-McMoran, for example. I know obviously gold is a huge input there, but- Yo, let me give you a stock that will absolutely knock you out. MLM, Martin Marietta Materials. Where do you find these? Dude, I've been doing this for 25 years. But that's not an answer.

That is not an answer. This company makes cement, dude. Relax. I didn't go out in search of it. It's a $40 billion stock. But I'm saying, look at this chart. Looks good. These are the stocks that have something to prove.

This looks phenomenally good. I do very deep work in intermarket work. Well, you're a big concrete guy. I know that about you. I always have been. I always have been. Any other thoughts on earning? Oh, we should tell people you and I were spectacular. Did you listen to the podcast with Dion? No, I didn't like my performance. No, we were good, dude. You were cooking. You were cooking. Our friend Dion Raboan of the Wall Street Journal heard on the street. He does Take of the Week podcast for WSJ. It dropped today or yesterday.

Michael and I talked about the financial company earnings that we're about to get in a couple of days. So I think we have a shot of that. Put that up, John. There we go. Isn't there a picture of me with the accompanying article? Because that's really what I was going for here. Do we have that? Look at it.

What do you think somebody said to me for me to make that face, if you had to guess? Should we do a caption contest? Why did they choose that photo? You know what they said? Is that the best picture of me? Sir, your room is not ready. It's great. I'm not 100% sure if that's the best photo of me available,

but that's the one they went with. God bless you. I am excited to see bank earnings because these stocks, I mean, I'm looking at Blackstone on my screen right now. They look so good. Blackstone. Yeah, the alts all look great. Blackstone looks amazing. This looks all-time high imminent.

Aries, KKR. I was looking at those the other day. They all look outstanding. Unbelievable. BlackRock has an interesting storyline going on they were the big winner of the bitcoin sweepstakes i know that's not a huge earnings driver but still like from this is a stock that has not done well in the last year still in a 20% drawdown from the peak of 21 a 20% drawdown city has an interesting storyline they're basically firing everyone they could.

I think they open, they turn the lights on in the morning, look around and fire the first person they see. But the street likes it. Yeah. Citi's not interesting to me. No. JP Morgan, which we're going to talk about in a minute is Friday as well. That stock's at or near an all time high. Pretty much has been all year. Okay. Let's keep moving. You want to talk about, where are you? Let's talk about the shrinking stock market. There was an article in the FT, the global supply of public equity is shrinking at its fastest pace in at least the last 25 years. And the story here is very, very simple. Buybacks are continuing to do what they do, new record highs, but new issuance is just not there. It's just not there. I'm not sure why I haven't really thought a lot about this as an input. One of the dynamics inside of the market is we think about, at least I think about,

Bitcoin as merely supply and demand. When I think about that as an investment thesis, I'm not thinking about the tech. I'm thinking about there are more buyers and sellers, period. And maybe we should start thinking about the stock market in the same way. I love that you're saying that. And I totally agree. The most compelling case for Bitcoin that I've ever read, and I think you'd probably agree with this, came from a stock guy, came from Bill Miller. Correct. And he asked a very interesting question 10 years ago. He said, if the global supply of Bitcoin is only going to grow by 2%, will demand for Bitcoin grow faster or slower than 2%? That was the light bulb for me. Or what? I don't know. I'm making up 2%. No, that was it. That was about it.

That's pretty much, I mean, that explains everything. So now there was room to be bearish and say, well, I think the demand will grow by less then. You could have made that, you know, that would have been a bet to make. It wouldn't have worked out. It would have worked out temporarily a few times. Like you would have felt very smart in 22 and in, in 18, you know, along the way you would have felt smart. I guess I've never viewed the stock market in the same lens, but

maybe it's something to consider. So I have written many, many blog posts on this topic. I, um, I've written ladies and gentlemen, the stock market is shrinking is one title that comes, comes to mind. Um, I have I have covered this story relentlessly. I talked about the relentless bid. Here's the bottom line. Absent another five years like 2021, where every piece of shit on the planet can come public, we are just not going to have enough issuance to satiate the pools of capital that need to put money to work in equity markets. And if you think our IPO situation over the last few years has been bleak,

go look overseas. This is a global phenomenon, to JP Morgan's point. The simple way that people explain inflation is too much money chasing too few goods. There's a similar dynamic in the stock market. 100%. Why do you think valuations are climbing? And it's not just, oh, let's just do a whole bunch of IPOs. Because the buyback thing is at $1.2 trillion every year being pulled out of developed stock markets. A trillion dollars a year worth of equity. Where does it go, you might ask? It goes poof. It literally disappears. They retire those shares and they shrink the amount of shares outstanding. Those shares are not sitting somewhere on the shelf to be brought back out. They would have to do a secondary to reverse this

and they're not. And then what are the sellers on the other side of the buyback do with that money? what are the sellers on the other side of the buyback do with that money? They put it back to the market. Yeah. Plus private equity. So now not only do you have buybacks, not only do you not have enough companies coming public, you have companies being taken over and brought into the, the now many of those will eventually come back.

I think Burger King goes public and private, you know, every other year or something like that. So it's not that you'll never see those equities again, but it's part of this phenomenon. This is a great stat from the article. The number of listed companies in the US has fallen from more than 7,000 to fewer than 4,000 since the year 2000, according to Wilshire. A similar trend has unfolded in Europe and the UK. And Wilshire should know they are tasked with the job of finding 5,000 companies to include in the Wilshire

5,000 index, and they kind of can't, which I find to be hilarious. The article also mentions the average size of an S&P 500 company has gone up sixfold. I forget over what period of time. Well, a large reason of that is because in 2000, when there were 7,000 publicly listed companies, a lot of them were tiny pieces of shit that candidly had no business being publicly traded. Well, so, all right. I'm glad you said that. When people say there were all these missing companies and it used to be 7,000, now it's 4,000. They're not missing. We never needed them. We never needed them. They're low quality. They were not great stocks. They never were going to

be great stocks, but we sold them anyway. Yeah, for sure. We sold them. We made markets in them. We did secondaries for them. We, uh, we did, we did all the things. All right. I want to, I want to spend a little bit of time here. This is important to me. I am a shareholder in JP Morgan, a long-term shareholder. I don't trade to me. I am a shareholder in JP Morgan, a long-term shareholder. I don't trade the stock. My dividends get reinvested. Jamie Dimon did his annual letter to me. Excuse you. Dear shareholder, which is Josh Brown. And I read the whole thing, as I always do. And it took a while. These things are getting bigger. They're long, dude.

It's too much, right? He wrote about the shrinking stock market. Yeah market yeah they're long i don't think he's writing this whole thing uh how about that i don't think so i think he reads i think he reads it i think he reads it but i think people are contributing sections well of course they are but okay yeah it's all it's too much for honestly it's it's it's like hours and hours and hours of stuff it's too much for honestly it's it's it's like hours and hours and hours of stuff it's too much so do a tiktok all right 20 years since the merger of jp morgan and chase bank and they rehash like basically the current company jp morgan chase is an amalgam of four of the largest, oldest banks in US history. Chemical Bank is included in that, Manufacturers Hanover. But anyway, Jamie Dimon got to his position by virtue of the fact that he was running

the largest bank in the Midwest, Bank One. And there was a merger between JP Morgan and Bank One, and he became the successor to the previous CEO. And so he kind of used this letter to celebrate 20 years and his milestones, which I think is appropriate because he definitely changed everything since sitting in the seat. Did you know this was the number one

market capitalization bank in the world? Yes. You didn't know that. So did you. I think I might've known that, but I'm not sure. Who would you even, who would you even think is number two? I'm not even sure who's number two. Who's the number two bank? Is it Bank of America? It could be Bank of America, or I was thinking it could be something in the UK. I'm not sure. I don't know. I don't know who I would have guessed. Wells Fargo used to be in the conversation. Not anymore. No, I don't think so. Actually, let me fact check that. But the tone of this letter, dude, was super f***ing dark. Yeah. Well, no, it was like half and half. That's why I'm not sure if he wrote all this stuff. You don't think he wrote the intro,

the dear fellow shareholders? Well, first of all, let's put this chart up. This is 20 years of total return, 732, 723.2% total return for shareholders in the Jamie Dimon era. Suffice it to say, this blows away all of the other gigantic money center banks and not by a little bit. So it's really been an epic tenure. Next chart is market cap. JP Morgan chase currently $564.74 billion. I don't know who's the next closest. Are you looking it up right now? Yeah. Bank of America is 300 and Wells is 290. Yeah. So it's not even close. Okay. Let's put this up. This is really the point. JP Morgan Chase has had an incredible run and I continue to hold it and continue to reinvest dividends.

And one of the key reasons why the stock has worked is what you're looking at right here. This is diluted earnings per share and regular earnings and then return on tangible common equity, which we don't have to worry about. Just focus on, if you will, the blue bars. That's $49.6 billion last year. Just one year worth of profit, not revenue. $50 billion profit. There are not many companies producing $50 billion profits in this world. That is absolutely astonishing. That's versus $37 billion the prior

year for context. Let me just read the beginning of this letter. Dear fellow shareholders, across the globe, 2023 was yet another year of significant challenges from the terrible ongoing war and violence in the Middle East and Ukraine to mounting terrorist activity and growing geopolitical tensions, importantly with China. Almost all nations felt the effects last year of global economic uncertainty, including higher energy and food prices, inflation rates, and volatile markets. While all these events and associated instability have serious ramifications on our company, colleagues, clients, and countries where we do business, their consequences on the world at large with the extreme suffering of the Ukrainian people, escalating tragedy in the Middle East, and the potential restructuring of global

order are far more important. And I'll end in a second. As these events unfold, America's global leadership role is being challenged outside by other nations and inside by our polarized electorate. We need to find ways to put aside our differences and work in partnership with other Western nations in the name of democracy. During this time of great crisis, united to protect our essential freedoms. I mean, it is a lot.

That was super depressing. Why did you just do that? And it keeps going. It keeps going. But then he pivots to 2023 was another strong year for JPMorgan Chase with our firm generating record revenue for the sixth consecutive year. So he sets it up that the world is going, not to say going to hell,

that there is crisis everywhere. And there is. The world is a scary place. It always has been. And then he just weirdly pivots to, and we're crushing it. That's the point. Oh, I know the point.

It's a humble brag. He's talking to shareholders and he's like, look, shit is fucked, but look at me, $50 billion in profit. Yes. It's gangster.

Yes. I mean, if you were a shareholder as I am, you would appreciate this more. No, I don't. I don't roll with this tone. Put this up. Tangible book value and average stock price per share. So this is basically another way of showing you tangible book value is very important for banks. No, Josh, you know what? I'm sorry. Hold on. I would appreciate that message if the bank was

hurting and we were in a global recession and it's like, listen, American has always been a beacon of hope. We're going to get through this. These are tough times. But you can't say that and then also say, because he does this shit every year and now it's a six consecutive record year of revenue. I don't like it. I agree. I agree that the tone is very dour as this company basically is lapping every other company. But I think that's the point.

He built a fortress bank. Right, that's what I'm saying. is not the story of this bank. He's deliberately painting this picture of the world as it is. And then as you'll see in a moment, demonstrating why you remain a shareholder of JP Morgan versus some other opportunity. Other stocks might go up more. I think that's a fair point. Okay. Assets entrusted to us by our clients. This goes back to 2005. You could see every year, pretty much with maybe one or two exceptions, that client assets, the light blue goes higher. Wholesale deposits seems fairly steady. And then consumer deposits, it's tiny. It's tiny compared to the asset management. I was surprised by this. Is that at all surprising to you? Yes. Okay. So it's a bank, but a bank with some really big other businesses that

are obviously complementary to banking. Assets under custody, $32.4 trillion, with a T, dollars. This is remarkable. One thing I wanted to mention really quickly, a couple of things I wanted to mention really quickly and get your take on, the threats, one of the big threats that he sees is structurally higher interest rates and inflation. So he's not just like crying wolf to, you know, there's something important here. There seems to be a large number of, this is Jamie, there seems to be a large number of persistent inflationary pressures,

which may likely continue. All of the following factors appear to be inflationary. Ongoing fiscal spending, remilitarization of the world, restructuring of global trade, capital needs in the green economy, higher energy costs, lack of energy infrastructure, et cetera, et cetera. And then he says the deficits today are even larger and occurring in boom times, not as the result of a recession. I remain more concerned about quantitative easing than most and its reversal, which has never been done before at this scale. Then he mentions how sanguine everyone else seems

to be. Equity values are at the high end of the valuation range. Credit spreads are extremely tight. These markets are pricing in a 70% to 80% chance of a soft landing. I believe the odds are a lot lower than that. What do you think? It's a reasonable belief. That's a fact. What he just stated is a fact that the markets are pricing in a soft landing. Credit spreads are extremely tight.

And if we don't get that soft landing, we have a lot farther to fall. We're not on the ground floor anymore, using the analogy that Mark Dow used to give. You can't get hurt jumping out of the first floor of a building. That's not where we are. We're not on the first floor anymore. Then he subtweets all the economists. He says, there seems to be an enormous focus, too much so, on monthly inflation data, sorry, and modest changes to interest rates, but the die may be cast interest rates looking at a year or two, maybe predetermined by all the factors I mentioned above. So like, we're worried about when is the first 25 basis point cut? This guy's saying, dude, we could see 2% or 8% interest rates, depending on things that I, now this is interesting to me.

He is, I would say among the five people on earth who are the most well-placed to make an educated guess about the direction of something like interest rates or inflation. And he has no opinion. He's like, we're ready for a range of two to 8% come what may. Shouldn't that humble every other expert sitting around on Twitter or going on TV with their interest rate prediction? If Jamie Dimon himself, given all the things that he's able to look at and all the people he speaks to, really doesn't feel strongly one direction or the other. Like, shouldn't that be a little bit humbling? Yeah, but technicals. No, seriously.

Yeah, of course. Yeah, but according to my chart, yeah, of course. I thought that was interesting. You pulled out something here about private markets. I did? I don't think this is me. He did speak about private credit, but it wasn't that interesting. No, in previous letters, I have described the diminishing role of public companies in the American financial system.

So he's talking about 7,300 US public companies, now 4,300. The same thing we were just talking about. Oh, there it is. AI. He mentions they've been using AI for a decade. The same thing we were just talking about. Oh, there it is. AI. He mentions they've been using AI for a decade. They have 2,000 AI and machine learning experts and data scientists in-house. They have 400 AI use cases in production from marketing to fraud to risk.

Not that they're doing fraud. They're trying to prevent fraud. They have a new position, chief data and analytics officer, who sits on the operating committee and reports directly to Jamie Dimon himself. That's interesting to me. So they're all in. I like this quote. While we do not know the full effect or the precise rate at which AI will change our business or how it will affect society at large, we are completely convinced the consequences will be extraordinary and possibly as transformational as some of the major technological innovations of the past several hundred years. Yeah. He's comparing it to computing, the internet, steam power. Okay. The First Republic Bank stuff was interesting. The purchase of First Republic

Bank was not something that we would have done for ourselves, just for ourselves. The regulators relied on us to step forward. The acquisition of a major company entails a lot of complexity. So he gets into the numbers. They recorded an accounting gain of $3 billion on the purchase of First Republic. We told the world we expected to add $500 million to earnings annually. We now believe we'll be closer to $2 billion. Not really a humble brag, an actual brag. But we could have just bought those assets. We didn't have to buy the bank. True. Also- The time spent, he mentioned. Yeah.

7,600 employees at JP Morgan were shifted to focus on this acquisition. So if you attach- They could have been working on other stuff. If you attach a salary hours to, I mean, that's the expense. That's a lot of- 100%. Also, they had 165 computer systems to put together and consolidate. Yeah, it's a lot. It was a lot.

Yes. All right. One other thing I wanted to do with this, the market-making business. So he was very passionate here. He's talking about this idea that market-making and capital markets activity, it's not hedge fund gambling. It's not speculation. There is obviously some speculation involved, but everybody wins with deep, wide markets. And there's a reason the United States has the deepest, widest markets, and we are the envy of the world, which facilitates every capitalist activity under the sun and benefits everyone. So this is Jamie. JPMorgan Chase spends $700 million per year in extensive research coverage of 5,200 companies in 83 countries. That's their

analysts. Our market making is backed by 7 billion in support expenses, 2 billion in technology spend alone. JP Morgan deploys 70 billion in capital to maintain the market's franchise. This capital supports 500 billion in securities. So people that do stress tests or they think these banks are just like gambling, the stress tests are bullshit. And Jamie explains why. Over the last 10 years, the firm's market-making business has never had a quarterly loss and has lost money on only 30 trading days. Think about that. Same as you, right?

Same record. 30 days over 10 years, they've lost money. Every other day, it's been profitable. I didn't about that. Same as you, right? Same record. 30 days over 10 years, they've lost money. Every other day, it's been profitable. I didn't know that. These lost days represent only 1% of total trading days. The average loss on those days was 90 million, which might as well be zero. Well, to your point, they're providing liquidity. These are not hedge fund type bets. When markets completely collapsed during the pandemic from March 2nd through March 31st, 2020, the stock market fell 16% and bond spreads gapped dramatically. JP Morgan's market making activities made money every day prior to the Fed's major interventions,

which stabilized the markets. During that entire month, we lost money on only two days, but made $2.5 billion in markets revenue for the month. In the worst quarter ever in the markets, following the 2008 failure of Lehman Brothers, we lost $1.7 billion, but made $5.6 billion in markets revenue for the full year. The firm as a whole did not lose money in any quarter that year. So I thought that was helpful for the discussion about whether or not it's good to have large banks. I think the debate over is it good or not is kind of over. You don't hear a lot of people screaming to break up big banks anymore.

It's like, look, we need these things. True. They serve a purpose. They do what they're designed to do. And I think that that section of the letter really explained that well. All right. I don't have anything else on this. What would you rate this on the scale of a zero to Buffett as a, as a shareholder letter? I know you don't like the

negativity at the, at the top, but I mean, I read it. Okay. So what is that a five? No, it's fine. It's just not, there's not necessarily my cup of tea. That's all. Okay. You wanted more optimism. Yeah. Things are like, Instead of focusing on the downside risks that always exist. What's that? You'll see. No, but for real, come on. This guy is a leader in our country. Instead of focusing on the downside risks that are ever present, why not focus on the silver line and that, hey, despite all these challenges, not just JP Morgan, we all made it through. The economy's doing okay, despite this, despite that.

Instead of focusing on the negative, which whatever, I know he's a risk manager. That's what I would say. What if his mindset is nobody needs me to cheerlead? The S&P went up 25% last year. It's up 10% this year. Maybe what's needed right now is sobriety. It's not cheerleading. It was a lot. It was very, very much skewed. Well, that's your next president is sobriety. It's not cheerleading. It was a lot. It was very, very much skewed.

Well, that's your next president. So be respectful. Good. I hope so. I would love that. You're up. All right. It is very common, not just in 2024, but always that when the market is hitting an all-time

high, we have casual conversations with friends. What do I do here? What do you think? I can't put money to work here, right? You can't buy now. What I'm talking about is this tendency for people to fear all-time highs. And I do mean fear. People are afraid to put money to work at all-time highs. And I completely understand that feeling. So what I want to do is show you not a feeling, but actual data, facts. You might not like it, but these are the facts as they lie. Chart on, please. This chart shows the one-year, three-year, and five-year annualized forward performance for the S&P 500 if you invested at an all-time high or any other day. And what you notice is

that not only do stocks not do... Okay. What you notice is that stocks actually do better on a go-forward basis at all-time highs. Not always, but on average, that's what you see. So I honestly don't even care if these results were the other way. If you did a little bit worse at an all-time high, I still would have had the same message. This is nothing to fear. I was going to say, there's not a ton of daylight between these numbers. And even if they were reversed, that's still a great chart. Well, well, true. But like the, the, that three-year spread is pretty big. And when you do a cumulative version of that, it's a lot. Put the chart back up. Do you think if you asked most people on the street, are you better off buying the stock

market at an all-time high versus not at an all-time high on any random day? Would you be better off three years later? Do you think most of them would have answered anywhere in the vicinity of what the chart is saying? 90% of people, and I'm making that number up, if you know nothing about the stock market, you've heard the phrase buy low, sell high. And so therefore, nobody would say,

oh yeah, buying at all-time high is a great strategy because people think that they're going to get rugged. And that's not the way the market works. Almost all the time, the COVID notwithstanding, which is obviously an exogenous event, markets don't crash from an all-time high because all-time highs happen only when things are going well. So bad things happen in bear markets. That's when you should be scared. What do you think is behind? All right. So for the people listening and not watching, if you bought the stock market

at an all-time high at any time since 1970, the forward one-year return is 9.43%. Three-year return is 10.5. Five-year is 9.6. In all three cases, that is a higher forward return than if you had bought on any random day. cases that is a higher forward return than if you had bought on any random day. What do you think explains this phenomenon that actually it's better to be buying all-time highs than any other time? Momentum and trend following, what we spoke with Meb about. Yeah. Say more.

Stocks don't hit all-time highs for no reason. They do so because earnings are getting better and confidence is improving. And therefore, people, not only are earnings going higher, but generally speaking, people are willing to ascribe a higher amount to those earnings. So the multiple is rising too. And that just tends to persist for psychological reasons that are probably beyond me, where the people are just slow to discount good news. I don't really know exactly why trends persist, but they do. Well, I was going to say, like, a portion of this is fundamental,

but then a portion is behavioral. Because bull markets usually end at a higher-than-average multiple to earnings. Not always. In fact, I think the top in 07, I think the S&P might have been trading at 17 times earnings. This is why people tell you valuation is not going to predict a bear market. But generally speaking, if you look at the end of most bull markets throughout history, valuations are higher, of course, than where they started, which is usually in the basement.

So some portion of this is earnings growth and improving fundamentals. But then there is a behavioral component, which speaks to what you're talking about, which is increasing confidence as things continue to get better. So how about this? Here's this for a thought exercise. For much of the last decade, we've been doing nothing but ATHing with periods of crisis. So if you don't like investing in 2013 or 2014 or 2017, do you think that you would prefer to invest? Or 19. Do you think that you would prefer to invest when the pullback or the crisis does happen? What are you out of your mind? No, I don't want to buy all of them highs. I'll buy the panic

instead. No, you won't. Yeah. In people's imagination imagination that's what they think they're gonna do but that's the moment where they're they're researching cds right at their bank on the internet because that's when they're least likely uh to be buying yeah so i think we i think we know that let's uh let's talk about this hilarious uh headline of an article big so big cash problem yeah it's a high class problem the largest tech uh this is dan gallagher at the journal the largest tech companies in the world are also the richest apple amazon microsoft google facebook now collectively sit on a little more than 570 billion in cash short-term and long-term investments that's more than double the collective pile of the next five richest non-financial companies in the S&P. This is mostly attributable to business models that

sell widely used products and services without the sky-high fixed costs common to other industries. Apple, Microsoft, and Alphabet each produced more than $100 billion in cash from operations last year. In comparison, ExxonMobil's operating cash flow was a little past $55 billion for the same period. So these companies are wildly profitable after all these years, and now they're 10 times the size that they used to be. And yeah, $ 570 billion in cash sitting with five or six or

seven companies is wild to me. And they don't know what to do with it. Well, they're earning 5%. And guess what? It's not as if these companies aren't reinvesting. The R&D, I think we've done this in the past. The R&D from the Mag 7 is an enormous part of the overall market. It's huge. That's how profitable they are. I don't know if it's $30 billion that Amazon is spending or $70 billion. I mean, it's a tremendous number. Yeah, we've done this before where we've put up charts showing Apple's growth of dividends, of buybacks, but then also R&D and CapEx, and all the lines are moving up. It's not like one is taking the place of the other. What exactly is the problem here?

So research and development, let's see, just for Amazon. Well, Amazon's an interesting case because a lot of their business, a lot of their revenue is not technology per se. Selling groceries is not really tech. So it's probably the outlier to these others. Dude, Google over the last 12 months, 45 billion in R&D, 45 billion. Apple, 30 billion. I was going to say a lot of these companies over the last, let's say 10 years, they kind of got carte blanche in terms of what they were doing with, with cash from operations in these R and D departments. Like alphabet had like this whole

other bets segment, which they like adults, they walled it off from everything else. And they reported it separately. They didn't't tell you exactly where the money was going, but you knew Waymo was in there. You knew quantum computing was in there. And they were doing other Charlie and the Chocolate Factory-esque stuff that was out of view. Meanwhile, 97% of the business was advertising. But they've gotten more disciplined there. And a lot of these companies have cut spending and gotten more disciplined there, and a lot of these companies have cut spending and gotten more

disciplined. You remember Meta with the Metaverse. So Meta's done $39 billion. Their spending over the last 12 months has flattened out a little bit. In the AI era, though, all these earnings coming to NVIDIA are coming from these companies. Yep, yep, yep.

This is interesting. They can't do acquisitions. Amazon, Adobe, and Intel. Yeah, Biden's FTC. I mean, she's a... Lena Kahn is very serious about enforcement and willing to be very creative about bringing suits, whether you like it or not. That's the regime.

Amazon, Adobe, and Intel have had to spike acquisition attempts over the past year because of resistance from global regulators. It took Microsoft two full years to buy Activision Blizzard. Two years. And that's not even a tech company. They were buying a video game manufacturer. In comparison, when they bought LinkedIn in 2016, it took six months. They do on Xbox, though. So it's gotten harder.

It's gotten harder. Well, Xbox, they didn't buy. They started. No, I'm saying they own it. Right. But I guess my point is, it's not like Microsoft was trying to buy another software company. Look at this guy. There he is.

That's my AI expert. Okay, anything else? Whose jersey is that? Danny Dimes. Oh, very nice. That's all right. Anyway, I feel very bad for them. They have too much cash.

They don't know how to spend it. We'll keep monitoring that situation. You're up next. Okay, this is, we spoke briefly at the cold open with Meb. I think it was, yeah, with about Steve Cohen and the four-day work week. So check out this chart from Axios. The average workday sign-off time.

And this goes back to the first quarter of 21. They show Monday through Thursday and they separate out Friday. And this is going in the direction of down, meaning people are clocking out earlier, particularly on Fridays. Friday is the new Saturday. I've been saying that since before

the pandemic, though. I've been a Friday slacker my whole life. But this is true. That's one-way train. There's no bottom. Yeah. So for people that work in our industry, it's not going to be that way, but I do think that what do you mean? The markets are open. If you like, if you work on wall street and, and you need to do something, you need to be there to do it. Like it's not the same as a lawyer who says, you know what, actually, I'd rather do this on Sunday night. I'm not doing it on Friday morning.

Or an advertising executive who says, I don't take Friday meetings. That is a very real phenomenon happening in the real economy right now. And you know who it's great for? Everyone that caters to white collar people on their free time. So restaurants, we talked about golf courses the other day. Literally everybody loves this. The only people who don't love this are people who call a 1-800 number to get something done and don't get an answer on a fact. And non-white collar workers that don't have luxury. Yeah, it sucks. Sucks. And this is a thing that culturally I think is going to be problematic the longer it goes on for.

longer it goes on for. Because if you're in the service industry and you're not white collar, you're the person who gets to watch all their friends do whatever they want on a Friday. Yeah, that's awesome. And you pick the wrong vocation. Yeah, yeah. So it's not universally great. I know a lot of people love it, but I'm sure there's going to be a huge backlash to this if we don't build the robots fast enough. All right, we're going to wrap up. I'm going to make the case.

Do you know what the best performing stock is in the Russell 1000 this year? No idea? Okay. It's a company called Applovin, APP. This stock just hit the Russo list of the best stocks in the market that Sean and I keep. It got in because it broke above $25 billion in market cap. This is a company that went public in 2021. 21, 21.

Sean, pull this up. Excuse me, John. This is the share price. You can see that this stock went crazy in 21 with a lot of new tech companies. Then it got absolutely annihilated through 2022 in the tech bear market. And now it's ripping all the way back. Next chart. This is total return price. The stock is up 91 and a half percent year to date. Again- Wait, did you say what this company does? Not yet.

This is the absolute best performing large cap stock in the United States of America this year. Okay, and you're making the case now because? Technicals. Pull it up. Stock is, I think, buyable here. And I would be utilizing the support of the 50-day moving average. And you can see that it struggled a little bit at the end of 23 with that 50-day and ultimately resolved higher. From my perspective, that's where you manage risk. Let me show you. But I would probably not buy it right the second. Next chart. This is price versus relative strength.

This is 76 relative strength. Like let it cool off. I feel like I can get this thing in the low 70s. So I don't own it yet. And of course, I don't give advice to anyone on the show. I'm strictly speaking for myself. But I feel like if I can get this thing to cool off a little bit,

I can use that trailing. I can use a trailing stop with that rising 50-day moving average. Here's what's going on with this thing. Full-year earnings per share expected to be $3.12, which is a 27% jump year over year on $4.48 billion in revenue. This company has an AI ad platform. They help people build apps. And then using this AI advertising, they make tons of money in the process. So all sorts of apps are being powered by this company's technology. And they're harvesting the profits from the ad business on these apps. And it's a very unique business. And there aren't a lot of companies that operate in this space.

This company is like the 400-pound gorilla in app advertising. Operating margins hit 28% last quarter, which is the highest in company history. So as revenue grows, operating margins are expanding. And these are the types of stocks that end up on the 52-week high list. So just one to keep an eye on, I guess. I'm not in it, but people should be aware of this company because they are tearing it up. Any thoughts? I like the website. I'm bullish on the website. The stock looks tremendous, but i'm a gaps get filled guy and there's a big fat gap after the last earnings report down at like 48 bucks yeah i don't know if

it gets there but yeah but so if you're if you're trailing it with stopped that's not your concern fair you know what i mean define define your if you can get into this thing if this thing cools off and you can get it in the low 70s, and the trailing stop would be about 60, I mean, this is a company with massive growth that's just now being discovered. It's not in the S&P 500 yet. If I've learned anything, well, the stock's up 94% of the last three months. I know, it's small. It's 25 billion. But any time, like the most bullish words are, I missed it.

I agree. I agree. And that's why this exercise is important, that we look at the biggest winners in the market. And when you do that and you look at these share price charts, it's like, oh God, I can't buy it now. Yep. Those are the ones that I say that.

You're right. And then I regret it. Always. Always. So what do you do in the presence of a situation like that? You keep it small. Listen, listen. You keep the position size small.

Sometimes you just miss things. Or sometimes you just miss it. It's okay. You're not going to get every stock. So I just can't buy a stock that's doubled in three months. I just can't do it. I'm sorry. It's not me.

Because you're a bitch. That's all right. It's fine. It's fine. All right. Did you know that I bought a mystery chart today? I did. Okay.

John, chart on, please. My first question, really my only question to you is, Josh. I know it. Okay. But before you know it, do you buy this? You don't know it, by the way, but do you buy this or sell this? Uh, I wait for the, I wait for the retest, but I want to see low volume retest of that January high low volume. Like that matters. Do you buy this? Uh, I don't do it. I don't. Yes. Okay. Thank you. All right. What do you think this is?

Dude, I don't. Yes. Okay, thank you. All right, what do you think this is? I have no idea. I'm sorry I called you a bitch. I know I'm sorry I called you a bitch, though. I'm not insulted. That's okay.

My feelings are not hurt. Chart off. Okay, it is. I'll give you a clue. It's a sector ETF. Can I have one more? I have 11 guesses. that might or might not be a sector that is US-based. What?

How could a sector not be US-based? It's a sector that's a- You mean it's a sector, but it's an international stock market sector? Perhaps. Yes. Yes, that's what I mean. Is it Chinese internet? No, it's the other one. There's really only two foreign sectors that we ever, ever, ever, ever talk about. One is Chinese internet stocks. The other is- European banks. Yes. Let me see it. Is it EUFN? Bang. I almost

knew it. I had no idea. I had no idea. Wait, put that back up. Remember I said I would buy it. That's very funny. I would not buy it. Not a chance, not a chance in hell. I hope it, I hope it triples. I hope it triples. JC will kill me, but I will not buy it. I really might buy these things. I really might. I dare you. I really might. Oh, when I say that, that's when you know it's going up.

Well, these are even on my radar. I was reading Mark Rubenstein's post over the weekend. I thought, maybe, maybe. Miss me with that European bank shit. I'm not doing that ever. All right. Hey, guys. Hey, everybody. I'm not doing that ever. All right. Hey, guys. Hey, everybody.

Thank you so much for watching and listening. I wanted to remind you, tomorrow is a Wednesday, which means all new Animal Spirits with Michael and Ben. Wait a minute. Go ahead. Where are we going to be in a couple of weeks? Oh, we're going to be in L.A. Hey, guys. If you're in California and you don't have your ticket yet for April 30th,

I don't know what to tell you. We are bringing two special guests, live recording of The Compound and Friends and there's networking, there's food, there's drink, there's music. It's going to be off the chain and we want to see you guys there.

There's a link in the show description. Thank you for reminding me, Michael. Also wanted to mention Ask the Compound featuring Duncan and Ben. That's Thursday. Jill on Money this Saturday. And yes, an all-new Compound and Friends with Michael and I on Friday. So we got a full slate for you. Thank you so much for rocking with us.

Talk to you soon. with a certified financial planner today, visit ritholtzwealth.com. Don't forget to check us out at youtube.com slash the compound RWM. Make sure to leave a rating and review on your favorite podcasting app. If you love investing podcasts, check out Michael and Ben every Wednesday morning on Animal Spirits. Thanks for listening.

Ritholtz Wealth Management is a registered investment advisor. morning on Animal Spirits. Thanks for listening. connection with an offer to sell or solicitation of an offer to buy or hold an interest in any security or investment product. Past performance is no guarantee of future results. Investing involves risk and possible loss of principal capital. No advice may be rendered by Ritholtz Wealth Management unless a client service agreement is in place.