The Compound and Friends - Shocking Housing Market With Logan Mohtashami, Buy and Hold vs Technicals, Merrill's Recruiting Drive

Episode Date: December 13, 2023

On this episode of TCAF Tuesday, Josh Brown is joined by Logan Mohtashami to discuss the housing market. Then, Josh joins Michael Batnick for an all-new episode of What Are Your Thoughts! Topics include: tech spending, 2024 recession odds, shorting Tesla, financials breaking out, and much more! Thanks to YCharts for sponsoring this episode! Secure a copy of "The Top 23 Charts of 2023" deck and remember, get 20% off your initial YCharts Professional subscription when you start your free YCharts trial and tell them WAYT sent you (new customers only): https://go.ycharts.com/the-top-23-charts-of-2023?utm_source=WAYT Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com 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. Wealthcast Media, 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. So excited to tell you about something that our friends at Y charts have put together. They do their final research piece of the year every December. It's the top charts this year, the top 23 charts of 2023. It is a curated slide deck capturing the essence of the year gone by the highs, the lows, everything that happened, all kinds of market and economic storylines, key visuals. They brought in some other industry thought leaders to add to the mix here. And I think it's something that you're probably going to want to check out. So you can go to the show notes. You can click the link to get your free copy of the top 23 charts of 2023, courtesy of YCharts.

And remember, you get 20% off your initial YCharts professional subscription when you start today. So all you have to do is tell them that you were sent here by What Are Your Thoughts, our YouTube show where we use all these Y charts visuals, and you can save 20%. Okay, tonight's show, good friend of mine, really, really bright and really fun to hang with, Logan Motoshami. Logan is a housing market analyst for Housing Wire. He does a podcast. He's a blogger. He covers the economy, covers what's happening with rentals, new homes, existing homes. And I got to ask him a whole

bunch of fun questions about the year that was and what his outlook is for 2024. So you're gonna have a lot of fun with that conversation. And then immediately following, it's Michael Batnick, it's me, it's what are your thoughts? We talk about buy and hold versus technical analysis. We talk about tech stocks and the amount of CapEx that S&P 500 companies are currently deploying. I want to use the word desperate, but it seems like they are really, I'll say, I think they're desperate for new advisors to join the firm. I think that's fair to say. Talk about financial stocks, all sorts of stuff. So stick around for that. Thank you so much for listening.

We appreciate it. I'll send you to the show right now. 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. Okay, we're here with my pal, Logan Motoshami. Logan is a housing, is it too much if I say housing market genius? It's a lot, right? You know, lead analyst. How about that? Sometimes genius can get crazy out there. Let me give you a real intro. Logan

Motoshami is a lead analyst for HousingWire and is a regular contributor on the HousingWire Daily Podcast. He's been in the mortgage industry for two decades and is the author of a blog called Financial Truth, which you can find at loganmotoshami.com. All right, two things happened this year. The first is that the average rate on a

30-year mortgage went from a low of 6% in February to over 8% in October and actually up from 2.6% in early 2021. At the same time, the ITB, which is the U.S. home construction ETF, these are home builder stocks, ran up 48%. I have always been told that those two things could not or should not happen simultaneously. What the hell went on this year? You know, housing has been very confusing after 2020 in general because of COVID and everything. You said it. But what happened last year, I think if you truly believe that inventory in America is low and it's very hard to increase active listings, which has been a big part of my work for over

10 years now, then there is one sector of the economy that actually would benefit in that situation. It's the builder stocks, right? And for the longest time in the previous expansion, it was like the weakest new home sale cycle ever. And whenever rates went up, builder stocks went down. Here, we had a very unique once in a lifetime situation. Last November, like people were familiar with my work, I said that the entire housing market changed November 9th, 2022. The builder stocks bottomed, and then they started to rally. The builder's confidence index started to rally. And how is that? Well, number one, the 10-year yield started to fall from last year. The builders got that benefit right away.

But active inventory in America for the existing home sales market, which is their biggest competitor, was still low. So then when rates went up again, guess what sector can offer lower rates? The builders could, right? And I think the misunderstanding was people didn't realize the builder's profit margins were much higher this time around than they were in the last decade. So they have what I call the ability to be efficient sellers. Monthly supply went up on them. So they got to move product. They're not the March of Dimes. They're here to make money, right? So they cut prices.

They lowered rates. The existing home sales market, though, isn't very efficient in that. So the builders are telling everyone, they're almost taunting people, hey, come on down, brand new house. You don't have to do anything. We'll offer you lower mortgage rates. And then think about it in this context. We have over 157 million people

working. We have a population of 335 million people. Active inventory, the listings, how we track it, it's a little bit different than the National Association of Realtors. It got down to 240,000 in March of 2022. That's the total national inventory of homes for sale? Single family homes available for sale in March of 2022 got to 240,000. How many months of inventory is that? Is that like three months? For the existing home sales market is about 2.5, 2.6 months. So it wasn't a lot. But what happened when home sales crashed for the existing home sales market, we went from six and a half million down the formula and people just assumed, well, the builders are done.

They're finished. Inventory's going to skyrocket. Home price is going to crash. That's it. That's what I would have assumed. Yeah, that's what everybody would assume. But after 2010, I think one of the things that we don't ever talk about here, not just for the housing market, but in the US economy, qualified mortgage in 2010 changed the game

for everything. People that are buying homes, they get 30-year fixed mortgage, fixed debt costs, their wages rise, they stay in their homes. Their financial profiles look great. And for some reason, we can't get people to believe this, even though the data has shown this for 12 years.

So naturally they think everyone's going to rush to sell their homes and everything. It's not the case. But now that mortgage rates got higher, now the builder's monthly supply spiked up. But people didn't realize that the builder's active available units, like their homes that are ready to be sold, currently right now is 76,000. It's nothing. That's it.

For new homes, 76. It's the whole industry. For the whole industry right there. Those are the whole, that's about, and that's almost back to normal. So the builders don't ever flood a market. I think that was another confusing thing. People thought the monthly supply spiking up to over 10 months meant that millions of homes.

No, it never even got to 200,000 during the housing bubble crash year. So the builders managed their supply and now they could go, wait a second, look at all this excess profit margins we have. Let's lower rates. Existing home market couldn't do that. So they got some buyers to come in. And I think another big- Wait, Logan, can we double click on that?

So the home builders were able to use their profit margins and their balance sheets to lower the mortgage that a buyer of a new home would be able to pay, making that an even more competitive product than the existing home. Advantage, disadvantage. You get a brand new home. Nobody grossed it up by living in it, right? You don't have to renovate it. You don't have to rip walls down. You don't have to rip out carpeting. Okay, great. Plus, you don't want to borrow at 8%. We get it. You shouldn't, you could borrow at X percent. We will, we will, we will help fund that. It's, it's, it's brilliant. Of course these stocks are up. Yeah. And that I think was the,

you know, kind of the missing link in the economic discussion here. But we also have to remember in 2022 new home sales weren't very high. I mean, adjusting to the cancellation rate, we're back like to 1996 level. So it doesn't take much to move the needle. And these stocks were basically, they're always been trading cheap. They got ridiculously cheap. So all of a sudden the builder's confidence started to rise and then everybody's deer in the headlights. You know, wait a second, we're going into a recession. The builders are done. Housing is over risk. And during this entire time, the builder's confidence index started to rise on them. That means single

family permits are growing again. Now all this recession talk that housing leads to the recession, like within three or four months went against them and people just stood there not believing it. And the builder stocks- This is one of the biggest surprises of the year. And I love this because it's such a great example. And there were so many. I'm going to add this to my list, where conventional wisdom just gets completely turned on its head. So on the surface, if you would have asked most people in January, you would have said, all right,

I'm going to spot you this information. Fed funds is going to five and a half percent. You would have said this sector is toast. Toast, over. And I would have, thank God I don't make these guesses for a living. Everyone would have. That's what I would have guessed. Yeah. Everyone would have. Now, what I tried to do last year in 2020 toward the end is say, okay, the housing market dynamics has changed. You guys are just going to have to trust me on this. We're going to track the weekly data. You've been all over this.

You have to go with the builder's confidence. Now, the other thing right now that's even more confusing, the builder's confidence index has been falling recently as mortgage rates have gone up. What is the builder's confidence index? What are the inputs to that? Basically, future sales, business activity, how much does it cost to build the homes? It's a survey. It's a very efficient survey because it isn't tainted by ideologicals like the small business index. But here, it's basically, hey, we're here to make money. This environment is good for us, except now, here's another, hey, we're here to make money. This environment is good for us. Except now, here's another crink into everything.

A lot of that survey is smaller builders, not the big publicly traded companies that have all this excess power from ours. So when the builder's confidence started to fade and we saw a correction in the builder stocks, everybody said, OK, that's it. It's over 8%. Builders, hey, listen, we have to pay a little bit more to get it done, but we can do this still. And it wasn't like sales collapse in a very big fashion. And all of a sudden rates went down again and the builders, whatever, up 27%, you know, since the lows of October. So if you just look at it in that light,

that the builders have a very unique advantage. In a sense, higher mortgage rates help them because obviously active inventory is low. They have a nice product. They can lower rates. Try getting an existing home seller to give up a lot of their gains to lower mortgage rates. They were never stressed. And I think this is another critical part. The existing home sellers, which is the massive marketplace, they never felt the pressure

to really cut prices or offer discounts. They could just sit there. They could just sit there. Yeah. They could just sit there. I mean, the days on market is 23 days. Well, that's what froze the housing market, the lack of portability of a mortgage. But now we're seeing some innovation around that where the banks are,

I think, facilitating a way that a seller could move a mortgage. Do I have that right? Well, that's always been there. It's just, it's very limited. Like I I'd be surprised if, if we ever get like 5,000 home sales in that it's just, it's not as easy. It's not going to, I don't think it's going to be popular, but here's, here's, this is why the qualified mortgage law comes into play. Most sellers are buyers, right? And everyone has to qualify for their, for their mortgage. So when rates went up so much, so fast, people think it's like a mortgage rate lockdown. It's a total housing costs lockdown because you don't, you can't list your house if you're not buying another one, unless you're qualified. So unlike the 2000, the 2007 period, people forget this inventory was rising for seven years while sales were rising up until 2005. So people think if it's that kind of marketplace,

but after qualified mortgage, you don't tell your wife, Hey, listen, we're going to put our house in the market. We can't buy a house, but we're just going to sell it and then wait. No, I mean, everyone has very low total housing costs. So the, the fact that we haven't dealt with inflation in so long, people forget your house is the best hedge against inflation, not because of the asset value is because of that mortgage pay. Right. So here it is inflation and you're not paying rent and it is, inflation goes up, your wages go up, but that 30-year fixed mortgage that you refinanced in 2012, 2016, and 2020, your house cost is so low that you're chill. I mean, homeowners have been chilled this entire time. You know what I don't hear people doing anymore? I don't hear anyone being like, do you know what I could sell my house for? And no one's

doing that because they know the second question is, okay, well, where are you going to live? Oh, yeah. I have to buy someone else's house. See, people forget about that aspect. You don't sell your home to be homeless. You got to find something else. This is not a liquid marketplace, you know? So it's been in the data for 13 years. A lot of

people just assumed that everyone would rush. Even the Federal Reserve, the Federal Reserve even made this mistake saying in one of their speeches, well, we're not sure why people don't list their homes. Well, 3% to 8%, it's not a functioning marketplace. I mean, mortgage rates range from three and a quarter to 5% for 10 years, right? And all of a sudden we go from three to seven, seven to five, five to eight. Nobody's going to do anything. And that really showed itself on the inventory data today. And even right now, how we track data, single family active listings today, as of this week,

it's 546,000. It's incredible. That's it. That's all the homes that are available for sale. If we want to take the NAR data, I think in regards to the builders, I always say back in 2007, there was 4 million active listings, right? That was before the job loss recession happened. People were filing for foreclosures and bankruptcies in 2005, 6, 7, 8. Then the job loss recession happened. Today, that NAR data of inventory is 1.1 million. So the builders have a lot less competition. They can offer brand

new homes with all the bells and whistles and give you a lower mortgage rate. A very rare, but a huge advantage for them. And they have milked it to perfection. Give them kudos for that. And we're still have people deer in the headlights. Looks like what is going on here? And then I just think you have to like religiously follow housing and know the differences in the last 10 years versus let's say the run up to 2008. So I want to ask you about the realtors and the brokerages and specifically Zillow, which over the last two weeks has had a really nice bounce off the lows. It's actually had a decent year. Most people don't know that

because they're so accustomed to that being a catastrophic stock that they've stopped talking about it. But even like when I look at Opendoor, Redfin, Zillow, Compass. So here's how those stocks did in 2022 versus in 2023. Last year, Redfin was down 88.96%. Redfin is, how would you describe it?

The digital brokerage? Digital brokerage, one-stop shop. Effectively down 90%. You know what it did this year, year-to-date? Plus 90%. Quite a ride. It's 90%,? Plus 90%. Quite a ride. It's 90%, yeah. Yeah, quite a ride.

Zillow last year, negative 50%. This year, plus 41. Quite a ride. Open door last year fell 92%. Almost went to zero. This year, it's up 209%. And then Compass, negative 74 last year, plus 18 this year. Okay.

So we're off the lows. What is going to happen with this industry? I hear there's serious problems related to commission fixing, or maybe those fears are overblown, but there was a lawsuit recently. How are you telling people things are going? I think number one, we're going to have to wait for the rulings. I think it's going to come out in April. Like how much it's going to cost the NAR to sell.

Cause a few, a few of the brokerages actually settled before the lawsuit. So they're kind of like not in the camp where the NAR is. But I think the real question going out is, what does this do for buyers? Well, wait, let's bring people up to speed with what happened, because most people aren't following this as closely as you are.

So in simple terms, what happened? The NAR got sued for, you know, they were accusing them of collusion. Yeah, National Association of Realtors were accused of collusion. Basically, the buyers were being, you know being disproportionately affected by what they had to pay, which the crazy thing is the seller that actually has to pay that. So now the NAR-

The commission to realtors. It's like- The commission, yeah. So now- Everyone gets the same- Except price. Okay. So now the seller cannot, the seller is not obligated to pay the buyer's agent

anymore. This is, this is where this is going. This means that the buyer now has to pay an agent and it's not going to get their, what they pay the agent done by the seller anymore. So this means that the whole dynamic changes. This has actually been in place for, for some times, but now if they make it a national rule, that means anybody looking to buy a house that uses an agent has to pay that agent upfront, or it has to be part of the loan transaction they get. They could put it into the cost.

That changes everything in that regards. But the question is, what happens to those buyer agents? How are they going to charge? Does Zillow and Redfin come in and say, hey, we'll offer a $500 fee or something like that? So there's all these questions about what it's going to look like. But I think it's positive for the seller and it could be negative for the buyer in the sense that they have to now bring the money or that it's going to have to be put into their loan. Why is it positive?

So why is it positive for the sale? Let's say I sell you a house for a million dollars. I have a realtor. You have a realtor. You don't have to pay the, you don't have to pay the real estate agent's commission anymore. I don't have to, but I probably will. You don't have those markets.

You could, you could, you could offer. And, uh, uh, again, any seller has a choice to do anything all the time. It's their choice. You don't have to do anything an agent tells you. But now you don't have to give the buyer's agent 2% commission or 3% or anything like But I pay my own realtor still. But you still pay your own realtor that lists the house. But now you're not part of the, I mean, this was always the case anyway.

There was no rule about it. It's just that sellers just thought, okay, well, we'll offer one or two or 3% commissions to get buyers to come in and the agents work together to get something done. Here, you don't have to do that. So the seller, in a sense, is already going to keep more of its house. Also, I want to add, this could actually help the builders too, because the builders might not be obligated to pay the buyer's agent anymore. Right. So that's more money in their pockets that could, that could

boost their profit margins going out in the future because they don't honestly, one or two percent is 10 or $20,000 of a million dollar house. Yeah. I mean, it's some of these homes, some of these homes. Yeah. It's, it's, it's, it's real money. So, uh, now the question is what about the buyers now? Like, how, how are they going to, like, uh, are they going to offer, they say, listen, we're only going to pay you $2,000. So there's all this confusion about how the buyers agents and buyers are going to get paid or how they're going to do that transaction. That is something we have to wait until all the lawsuits and everything gets settled out and you get some clear, but it definitely, it puts the National Association of Realtors at a financial risk in terms of what, how much they're going to have to pay. And also there's

going to be probably more clarity on how buyers agents gets paid going out in the future. And then the seller gets to keep more of the money. And then the buyer is going to have to figure out a way to get part of the process and pay their agent as part of the negotiation between the seller and the buyer. In a weird way, does this benefit Zillow because the rules are now so unclear that Zillow has an opportunity to clear things up for people? Transparency. When I was first interviewing you on this, just on the stock side, I said, maybe they can just say, Hey, listen, come to us. It's a $500 fee. We'll, we'll, we'll do this. And I, I mean, it's, it's, it's all speculation at this point, but whenever something like this happens, somebody comes in and tries to take the market share.

Right. So I think that's by, by spring of next year, when we get the court rulings on, you know, what's it going to cost, uh, the national association of realtors, or do they settle out? I mean, they could settle this out before it even gets to get, gets to the final number. Then we could see how that plays out. But I'm really curious on what the buyers are going to do and how they're going to pay for the transaction now, because they, it was never something they just, the seller always paid for it. So they were okay. They were just going into the transaction and maybe realtors on individually just decide, I don't want to represent buyers anymore. If it's unclear what my effort is going to be worth. It could, but you need somebody to negotiate the price.

I don't think consumers are versed enough to do that. They can write contracts, everything. So somebody has to represent the buyer in that. Maybe the listing agent becomes a dual agent all the time or something to that nature, but it's just unclear what the final rules are. So until that happens, there's going to be a lot of- Can a real estate broker say, I don't care what the industry does. If you want my help and you do, because I'm the best, I need $1,000 upfront and I need 1% of whatever we end up on. Like, can you do- Any real estate agent could say that. And then the seller can say, listen, I want, I mean, I,

I think this is going to be, some sellers are just going to go, okay, we'll just, we just offer 1%. Yeah. For any buyer out there, any buyer agent out there. So they can, they can do that. And then that's, that's the seller's own choice. I don't think that would stop any transaction deal. I think it's overblown in the sense that people think all hell is going to break loose and nothing's going to get done. I just think that the case became very confusing in the terms that people thought there was like massive collusion, like the sellers and the buyer agents were working together to keep, you know, it doesn't, doesn't necessarily work that way. The seller is always in control.

I want you to clear a, I want you to clear one more of these things up for us. You did a really good piece at a Truth talking about some of the misinformation going on with hedge funds and private equity buying up all the houses in America. So you wrote this, quote, our big Wall Street investor is really buying 44% of homes this year. The answer is no, not even close. Housing inventory is near all-time lows, but big institutional investors like Invitation Homes or BlackRock aren't to blame.

The 44% claim was made in the headline for a Medium article last week, spread like wildfire all over social media. Of course it did. Congress has even jumped on the bandwagon with Democratic lawmakers. Of course they are introducing bills looking to limit or ban hedge funds from buying single family homes.

You can understand why this story would have legs on social media. It's got everything. It's got anti-Wall Street. It's got class warfare. It's got people being wronged. Everyone is in the housing market. So everyone's involved.

You could totally see why this would catch on, right? I've been dealing with this topic for seven, eight years now. And the first thing I say, class warfare works. In this day and age where some guy can make a TikTok video and basically say 44% of all the homes in 2023 were bought by 44%. And it just spread like wildfire. And of course, a lot of people on Twitter and social media say, can you give us a stat? So I've always tried to put the charts up there to give some reality check.

But even if in the previous decade- Where did that number come from? Was it just pulled out of thin air or- The number was 0.4% in Q2. 0.4% to 44%. I mean, see, this is why I say this gets the bat crazy award of the year because it was like 44% in this year, not even the last few years combined this year, 44, which is like over 2 million homes. It's half. It's one out of two homes was bought by a hedge fund. I believe that, you know, so of course, uh, you know, to give everybody some raw numbers from 2011 to 2017, if I take all the pension funds and Wall Street firms put together, they bought 200,000. Okay. Not zero. During that period of time. Not zero. Yeah. Not zero. But during that period of

time, there's over 36 million homes bought. Okay. So it's, it's always a very tiny percentage, but in certain markets, there are more, uh, of course, but you put BlackRock and Blackstone and any headline, and they're going to buy all the homes and nobody's going to own anything. And, you know, I think BlackRock owns maybe 0.02%. Well, they're done, right? Cause they don't, they don't like this. This press is terrible. It's not worth it. They don't make enough money. Yeah. I mean, they're not, we're not even talking big buyers this year. I mean, it's actually fallen off. I think they don't want to be in this business anymore. Do you? this year. I mean, it's actually fallen off in 2020. I think they don't want to be in this business anymore, do you? Well, nobody's really selling, but it's the tiniest percentage of

buyers. I mean, maybe foreign buyers is about roughly 200,000 a year or two. So it's class warfare in its greatest form. Think about it. You can say this and then it'll spread like wildfire. And then you have a congressional bill coming on, which here's the thing. These institutions are buying and renting men out. It's not like they're buying them and hoarding them and not doing anything. There are actually families living in these homes, especially the single family homes. So now, assuming it passes, which I don't think 10 years, you got to kick these people out of the homes, right? So we're pitting renters versus owners. That's why I would say that, that one of the reasons you don't see lawmakers offer, let's say, let's give

tax cuts to all investors to sell, right? Nobody gets to pay any capital gains, put it on the market. You have to boot people out of those homes and no politician really likes that, right? There's going to be videos of, oh, I got to leave my house because some politician thought it was, you're pitting homeowners versus renters. So they are providing a service in a sense that they are giving that shelter for renters where a homeowner can't buy that house anymore, but for a renter, they can. So it's completely blown out of proportion, but think about it in this society, you can lie every single day and get rewarded for

it. And even if you get fact checked, it doesn't matter. So I sort of understand, I know the numbers are fake and it's not an actual threat, but I do understand the animus and like what makes it spread like wildfire. You have a lot of people in this country that are constantly thinking about the accumulation of assets by corporations and concerned that they're going to be locked out of the ability to own anything and forced to rent because of affordability. I'm not saying that is happening. I'm saying it is a legitimate thing to be worried about. You also have some uniquely American ideas about property ownership relative to socialist countries. Germany's home ownership rate is like 39% or excuse me, 49%. So less than

half of Germans own a home. Here in the United States, what are we, 65, 62? Yeah, 66 right now. 66. I think home ownership is part of like the American dream and it's tied up in, you know, how people feel about, you know, how people express themselves, they own their property. So I get like why it's so polarizing, even if the data is fake and the hysteria is overblown. It is. I always say that if you really want to blame someone, blame those avocado toasting, pesky little kids that bought majority of the homes for the last five years. So the problem is that housing inflation got savagely unhealthy here in this country. And this has been in the works for like 10 years. Total active inventory has been

falling slowly for years and years. And here comes the biggest housing demographic patch ever recorded in history. And we simply had too many people chasing too few homes. Which you have been talking about for years. And nobody's going to, everyone's just going to assume that prices have to crash or these people are going to have to sell their homes to do what? I mean, the financial profiles of American homeowners are at the best levels ever recorded in history. We have other countries right now, like Canada's offering like 90 year mortgages because their short-term rates are adjusting and their payments are going up so much. And here in America, we have the 30 year fix. So homeowners are doing exceptionally well, much better than renters.

And now there's, there are people who wanted to buy a house in 2020, 2021, and 2022, and they just got outbid because I think 75.8% of the homes were being, had multiple bids in the early part of 2022. But that time where we talked about, we only had 240,000 single family homes. So we all paid the price as a country for not having enough product available. And we think it's, oh, it's the Fed. Well, the Fed kept rates too low. And once rates go to 4%, 5%, 6%, 7%, home prices will crash and everything. No, it didn't. Different dynamics here. But here, I've always tried to explain that too many people chasing too few homes. And when inflation gets out of hand, oh boy, politicians could come in and blame people. If you were talking to the Biden administration or Congress or like what, I don't know how you get the home builders to build an extra million homes, but that's like kind of what it would take.

And it's not going to happen. So what else, what else can you do? I actually wrote about this in 2021 that, you know that when rates go up, the builders will, they're not going to overbuild anything. The government would actually have to step in on a unbelievable year round basis and make sure production is being built. Now, we had an apartment boom happening where we were producing a lot of five unit properties. Now where rates went up so much so fast, guess what? Construction loans are too high, so a lot of people are killing those projects. If you wanted some kind of policy, is that the government would have to step in and help the production of apartments or duplexes or single-family homes so you don't lose any

grounds every time- Republicans aren't going to love that. They're not going to love that. That's a thing. Politics itself, politics, many blood sucking parasites. It's never going to work because two parties, but you, you'd have to always be consistently building. Like the best way to deal with inflation is always supply. So the growth rate of rents are falling, right? And you know, there's more supply coming on the market. Housing is one of these things where so many people own homes and they're doing really well. And the transaction models are different now after the qualified mortgage. So the only way you could do is build, build, build. And the builders just do not build that many homes efficiently or fast enough. So it's this long process of

constantly building. And whenever rates go up, they slow things down. Uh, and here, you know, after the great financial recession, the building was very slow. You have to remember construction productivity is terrible in America. Like we still build homes with hammers and nails and like we did in the fifties. So it's not like we produce these things very fast. So it just takes time. And we just got caught in a very, very once in a lifetime event where we had too many people chasing too few homes, prices got out of control and people are just sitting here, they're waiting, well, why aren't home prices crashing? Why isn't there more inventory? When you buy that house,

you're in and that 30 year fixed product, your homeowners are not only shielded against inflation, but they're shielded against the Federal Reserve too. So it's just not fair. There's so much frustration out there. And who, oh, Wall Street, they bought, you know, this amount of homes. So it's very easily you could target them and do bills and everything. So it's not coincidence that all of a sudden that bill came up and then spreading like

wildfire, 44% of all the homes bought in 2023 were from wall street. So, uh, it's America today. Last one for you. What do you think of this idea? Obviously one of the, one of the things that seems most unfair and every generation has its version of this, but now you've got millennials who are late 20s to late 30s. That slice, they should have the ability to buy a home for reasons not anyone's fault in particular. They're just, the boomers are living longer. They're not selling.

Why would they sell into this market? Nobody could afford to borrow to buy their house from them. And they have to buy something else anyway. So that's an issue. What if you did a special mortgage federally backed just for the first time buyer who's trying to just get their life started, start a family, start a household? What if you did like a 3% mortgage for that buyer? Would that unlock

some of the freeze in the housing market? Who would be hurt by it? I can't imagine anyone. Like what, what are your, what are your thoughts on some sort of proposal like that? Here's the one issue with something like that. When we, when we talk about majority of sellers or buyers, there is one group of people that do not provide any inventory. It's the first time home buyer. They just buy what's available out there. So a counter to something like that would be that that's a demand side product that will facilitate home prices to keep on growing faster than they should. Why? Because there's more buyers in the available pool?

And yeah, more buyers in the available pool. The way I talk about this, because I've had this question before, there's a reason why active inventory has been falling for many years. And guess who's been buying for many, many years? The first-time homebuyer. Millennials have been buying since 2013. If we provide a product just for them, then it really, the supply and demand imbalances could stay low for longer and prices can still get out of control. I mean, to me, it's that the Fed overhiked, rates got out of control. They would need, you know, when rates come back down, you get more first-time homebuyers, but a product like that, the counter to that is that that would keep inventory abnormally lower than it should be. Now, what if

I said, I understand that being the negative. The positive is we don't have an army of 28 year olds who want to overthrow the government and stop believing in capitalism and stop marching in the streets for Marxist causes. Like what if I say the good outweighs the bad and we should just do it to shut these people up? I don't know. I think I got you. I mean, I understand the frustration because not a lot of people know this. Over 90% of first-time homebuyers finance their mortgage. And when you take it ages 58 and on, it's less than 50%. So the boomers are killing it again. Yeah, they're killing it again because those pesky kids, they're not being bidding against them anymore. So I totally get the frustration. That's my whole thing. We're not complicated people. We rent,

we date, we get married. Three and a half years after marriage, we have kids. We typically buy single family homes. This is why I say it's a savagely unhealthy home market. So we hear where it is, this big, huge demographic passion. Even if there's a home out there available, they've got 10 other people going against them. I think for something like that, I think that the product might have to be that you only sell a home to a first-time homebuyer and you get the benefit for that seller. That's interesting. So the seller gets the benefit of a low mortgage rate if they sell to a first-time home buyer, right? Because there's two pieces to the equation,

right? The seller has to sell you that house and then buy another house. So they have to have the ability to profit as well. That's why if you offer 3%- So you have all these boomers like hanging out outside a Chipotle, like, Hey, want to buy a house? All right. I got it. Hey man, I want to tell people how they can listen to, uh, how, how people could listen to your show. What's, what's your podcast called? Housing wire daily, uh, top 10 Apple business podcasts. If you go there, we were twice a week, Thursdays and Mondays.

There's a YouTube page. Now just go to housing wire. You could see that Sarah Wheeler and my, we try to give up all the live freshest housing data and economic data because things are crazy. Nothing moves slow anymore and try to keep people as informed as possible. If you want to nerd out 24 seven, Logan and my Instagram page, I do, my stories are all just about economic data out there. So our job is just to try to connect the dots and take the confusion out of housing because trust me, it's crazy out there. Nothing makes sense. So you got to guide people. Be the detective, not the troll, as I always say. So that's our job and we have a lot of fun doing it. Logan, I think you're the best at that in the world.

We appreciate you so much. Thanks for all the insight over the years and we'll be checking in with you throughout 2024, I hope. So thanks for coming on today. We appreciate it. Definitely. Thank you so much. All right.

Take it easy. All right, all right. Happy Tuesday. We made it. Very happy Tuesday. Weeks are flying fast. Hey, did you see this? John, give me that thing from the New York Post. You see Jeff Bezos just bought two houses worth $147 million.

He's going to knock them both down. Dude, you used to be able to buy a house like that for $90 million. Things have gotten so expensive. Wait, put that back up. I don't even know what's going on here. This is one of two houses in a place called Indian Creek Island. Dude, in the 1950s,

you could buy a house like that on one and a half salaries. It's unbelievable. Chart off. He's the third richest man in the world, and listen to me. I'm so ahead of my time. You are not. He's moving to Miami. He's moving to me. I'm so ahead of my time. You are not. He's moving to Miami. He's moving to Miami.

You act like you live in Miami or something. I almost do. They put the swimming pool in. They took 400-foot-long steel walls of a swimming pool. They put them on a crane, and they dropped them onto the seventh floor rooftop. And I was so excited. I couldn't sleep. The audience doesn't know what you're talking about.

I'm moving to Florida. Not tomorrow, not next year, but someday and forever. All right. Hey, you know, you know what time of the year it is?

It's like people are like stopping working already. Is it getting earlier and earlier every year? That's all I do. You know, I do that thing, though, where people email me and I'm like, oh, I'm not adding anything to my calendar until January. But I mean it. I'm not lying. I'm really not. I'm not doing new shit.

If we didn't book this shit, it's not happening. It's enough. All right. Shout out to all my gangsters and gangstarettes. Little quick roll call. Dave Wilson's here. Giancarlo, Cliff, Roger, Mitch, Dr. Horton. Thank God you're here.

Saad Malik, Derek, Wilson, Dan McIntyre. Sean's here. Everyone's here. Really excited to see you all. Thank you guys so much for coming. We have a sponsor for tonight's show. Michael, tell us who the sponsor is. It's YCharts.

You know, Ben and I did a webinar with Rushi and the team at YCharts, and he was dropping, like, all sorts of zingers and takes. And I was like, yo, save it for the show. Save it for Animal Spirits. But he was really giving it to him. So we went over some of the biggest teams in 2023. I think they've got, no, I think they've got a deck out, like the 2023 most important charts of 2023. Don't pay attention to that really chubby looking picture of me in the bottom screen. Nobody looked at that. Yeah, where'd they get that from?

So YCharts- You look way better than that. YCharts is critical to my daily workflow. I've got it up all day, every day. And if you are a listener and a new subscriber to YCharts, tell them we sent you, boom, 20% off. There's a link below the show. For those of you watching on YouTube or listening on podcasts, click the link and you can get the 23 best charts of 2023. Okay. Shout out to Y charts. We love you guys. Thank you so much for sponsoring the show. Buy and hold was the easiest. I shouldn't easy as wrong. Buy and hold in hindsight was the best strategy for 2023. This is a Bloomberg article that's sure to trigger people who don't like being told that their life's work is worthless.

But this is just a look at – That was aggressive. Well, no. I mean that's how people feel. You say like this easier strategy than whatever the hell you're doing did better. It's triggering. People get really pissed off, and I get it. I would too.

Okay. Let's start with the chart I guess to explain to people what we're talking about. So Bloomberg did a back test individually of all these different standalone technical strategies or factors, I guess you would call them more accurately. And most technicians don't live and die by any one of these in particular. So if you got triggered by me saying this, maybe ease back for a second and let me explain what the reporters are doing here. So they looked at all these things and they basically concluded that, look, in 2023, the low of the stock market happened on January 5th. We've been higher every day since the year started

and the high is basically right now. So they say while charting tools are rarely used in isolation, their lousy performance highlights the pain for anyone who heeded selling signals, whether driven by technical or fundamental factors. Amid the Fed's most aggressive tightening cycle in decades, three quarters of profit contraction, and a collapse in multiple regional banks. Those who bailed from the market have missed a $7 trillion stock rally. Michael, what are your thoughts? I have lots of thoughts. First thought is, yes, risk management looks dumb in a bull market with the benefit of hindsight. And when I say risk management, anytime you lightened up on stocks and the market goes higher, you look

foolish in hindsight. Number two, these signals, unlike a buy and hold strategy, cannot be quantified. Put that chart back on. Show me the textbook where it says what MACD buy and sell signals are. Show me where it says this is how you use RSI. The thing about technical analysis is that it's an art, not a science. You can't quantify these. Everybody uses it differently. And so I think that this is a load of bullshit. Now, do I think that a lot of technical analysis is absolutely a load of bullshit. Yes, I do. But I think this article is dumb. They're saying going by charting indicators, the market has run too far. So they're like, they give you this whole like a preamble about how these technical

factors weren't helpful this year. And then they tell you the S&P 500 is 14 day relative strength index or RSI trigger to sell signal in November, the same month when an alarm was flagged by Bollinger bands this week, the moving average convergence divergence indicator, better known as Mac D also flashed red. Listen, I don't know.

This shit doesn't work, but you should be concerned. Yeah, this doesn't work, but, but sell everything. I don't know any, any you should be concerned. Yeah. This doesn't work, but sell everything. I don't know any technicians that use a single indicator, right? They build a composite of signals, and it's the way to the evidence approach. It's not one thing.

So yeah, this is utter nonsense. Now, go ahead. Bloomberg tracks technical indicators, and its backtesting model goes along the S&P 500 when an indicator signals a buy and holds until a sell is generated. At that time, the index is sold, a short position is established, and kept until a buy is triggered. As things stand now, seven of the 22 chart-based trading models are losing money this year. All have done worse than simple buy and hold. So they're just saying that they have these rules-based strategies in their database. They have written actual rules. Moving average is obvious. They're probably going long when you're

above and short when you're below. But to your point, I don't know any technicians who have like a doctrinaire approach where they just like put in a model and then go skiing. Like most technicians are using these indicators to just give them color on which direction things are going. They're not saying like, oh, here, just put this tool in place. You don't have to think at all. I don't know anyone that does that.

I don't always follow this advice that I'm about to say, but I think the best way for non-market professionals, people who aren't at their screens all day, the best way for them to use technical analysis is just to avoid stocks that are going down. Just avoid stocks that are in downtrends. Individual holdings. Yeah. Yeah. Individual holdings. I'm not talking about the indexes.

So yeah, listen, this was a tough year for risk managers because anytime it looked like the market was about to break down, it shoved it in your face. And so that's the nature. I mean, how did these indicators do in 2022? I'm sure they did much better when the market didn't fall. Some of them definitely did better than buy and hold. We know definitively. But again, just because that happened, that doesn't mean that they're the right strategy

for the next year. And now we know for a fact that they weren't. So I think, look, technical analysis, I think there's too much of an onus on technical analysis versus other disciplines. Other disciplines, like a fundamental analyst does all this research, looks at the balance sheet, the income statement meets with management, does channel checks, looks at the product, blah, blah, blah, blah, blah. And then the stock declines for 90 days.

It just happens to be a tough quarter for the company, for the sector, for the overall market, whatever. Nobody says, oh, that doesn't work. Like, like getting to know a tough quarter for the company, for the sector, for the overall market, whatever, nobody says, oh, that doesn't work. Like getting to know a company. Well, because it's serious business because they're reading the balance sheet. Thank you for your service. You learn it in business school. Thank you for your service. Everything that you've just done is baked into the price of the stock. Thank you. Right. So by the same, but the other side of the coin is if you're doing this technically and a signal triggers and it shouldn't have or you're led astray by something technical, oh, that shit doesn't work. Okay.

Nothing works all the time. Nothing works all the time. We know. Are you a child? Yeah, we know. Oh, it doesn't work 100% of the time. It's garbage. I mean this is – but I did want to post this funny chart because I love it.

Come on. Just leave this up for a second. Lumbar support. So these are not actual technical terms, but doldrums is funny. Declination. uptalk, there's a bathtub pattern in there. They have red and green candles, which they say equals Christmas. No, this is funny. It's funny.

But listen, here's what I want to say about technical analysis, working or not working. To your point, nothing works all the time. Beating the market is extraordinarily difficult, whatever discipline you're using. If there was no validity to technical analysis, if the market was just purely a random walk, which by the way, most people listening should assume that the market is a random walk. And when I say most people, myself included, you should assume that the market follows a random walk, but it doesn't because if it did, then Renaissance Technologies would not have extracted however many billions of dollars worth of profits that they've done from the market

over the years just by, yeah, exactly, just by following- Extracting the alpha. Not, I'm not saying just by following, but they had an early discovery, which was that up days are more likely to be followed by up days and down days by down days and vice versa. And now obviously it's much more sophisticated than that, but there is some validity to technical analysis as much as we like to poke fun and charts like that. It's not all voodoo nonsense. It's just not. A lot of it is, but it's not all. You know, it's based on the actual buying and selling of other people, which doesn't mean

every time a pattern appears, it's going to mean something for the future. And it certainly doesn't guarantee you anything just because you're observing the same trend that someone else is. It's a tool and the person utilizing the tool could be really good, really bad, or somewhere in between yeah and i think i think that's any tool any any prism through which you want to view the markets is going to have uh practitioners who are better than others uh at utilizing it right i think that's i think that's really uh uh we don't have to say more about it yeah okay nope we said it all all right why is everyone in the chat asking us questions about tommy devito and whatito. What's his story? I know, he does the Italian thing with the hand.

It's great. His agent's name is Cutlets. What's going on? Vincenzo Cutlets. No, I don't know what his agent's name is. Johnny Cutlets or something? It's like Lanzani all over again. I don't know why I said Lanzani.

We've got the Saints next week. They've got the 27th ranked pass defense. So maybe the magic continues for another week, but he'll come back to earth. It reminds me of like Gardner Minshew or... There's been a few of these. Who was the Irish guy who was on the Jets? No, Fitzmagic was actually good. Fitzmagic.

No, I mean, it's fun to watch. I hope it continues. I'll take it. I would rather be losing games, but so it goes. Okay. From Daily Chartbook. This chart comes from Crescat Capital. The S&P 500 tech companies, including Amazon and Alphabet, collectively allocate a higher

annual capital expenditure than the combined spending of the energy and material sector combined. Unbelievable. I wonder what the CapEx is beyond equipment, like beyond like servers and stuff. It's like people, right? Can that be classified as a CapEx? No, people is not CapEx.

Let's see. Like not in any way? No. So it's like facilities and servers and cloud stuff. And like they're not, I guess they have to, I guess the build out of the cloud is a lot of where this CapEx is going and then semis and semi equipment.

So I'm on Y charts. They show it right here. CapEx for the last 12 months. Oh my God. Amazon. Throttle number. Just what's the last 12 months? I don't know.

50 billion? Yeah. Good guess. $54 billion. Yeah. $54 billion. Unbelievable. Alphabet.

30 billion. 29 billion. Just an incredible amount of money that these companies are spending and and their spending has actually been chastened like they were spending way more and then they all had like activists and and shareholders yelling at them on twitter and they they've kind of like been tamping down on all the spending. Amazon said last year it was never going to spend like that again, the way it did during the pandemic. So like this is like a I mean, you could see that in the chart chart back on. This is what is what is the what is the Y axis here?

That is annual cap. Annual cap X. Listen, I should have- Just publicly traded tech. I should have included these charts in the doc. Amazon spending is well off its highs. Meta is well off its highs. Apple's remarkably been pretty flat for the last 10 years. Google's a little bit off its highs. But anyway, we spend, rightfully so, a lot of time talking about these companies and it's hard not to. They're everywhere, right?

They dominate. Like the idea that Amazon, not that they dominate, but they're having a huge impact on movies, the entertainment industry, TV. Soon it's going to be sports. Was making that piece of shit Lord of the Rings show, CapEx.

How does that get? Is that R&D? We already did that. so it's going to be live sports soon uh netflix just announced this uh nadal versus alcarez uh so they're going they're going in that direction too and of course uh of course this is not to mention anything they're doing in ai right they're they're not asleep at the wheel there. Google is going to be dominating AI along with the other giants. And payments, like payments, they're dominating everything. So Mark Rubenstein had a fantastic post over the weekend about the push button, PayPal, ShopPay, Apple. Like inside the online register where you're like,

the online register where you're like inside the screen where you're paying all those buttons now. Yeah. So now there's five buttons. I just want to read a piece, a snippet from Mark's post and Mark's sub stack or whatever his blog is called, Net Interest, and it's fantastic. Yeah, yeah. Shout out to Mark Rubenstein, by the way. We haven't talked to him in a minute. He's talking about adoption was initially slow.

Mark Rubenstein, by the way. We haven't talked to him in a minute. He's talking about adoption was initially slow. In 2017, the Wall Street Journal reported that only 13%- They're talking about Apple Pay, which launched in 2016 or 17. In 2017, the Wall Street Journal reported that only 13% of the 680 million iPhone users had used Apple Pay. Unlike PayPal, Apple Pay was designed for the offline world and growth was hampered by a requirement to build out the relevant infrastructure. But as that happened, usage picked up. In 2014, when it was introduced, okay, only 3% of retailers in the US had the infrastructure to accept contactless payment. That number is now 90%. Holy shit. And Visa reports that 40% of US transactions are now contactless.

Just like put the card chip on the screen. Boom, the phone down, up from 5% in 2020. The proportion of iPhone users currently using Apple Pay has risen to 75%. It's a wrap. It's a wrap. So chart on, please. This is Apple Pay versus- Wait, there are 1.2 billion iPhones and 75% of iPhone users are paying with their with their phone. So look at the lead, look at the lead that PayPal had on Apple. So again, chart off, please look at me. We're talking about tech spending, tech spending. So entertainment and media payments, sports, payments sports ai like what security i mean there is no their prestige worldwide every one of these companies it's crazy there's no there's no precedent in the historical data i know that

there's always been innovation i know that i'm not naive but there's never been this sort of these sort of companies and i think people people, people discount that. Oh, the top 10 companies, do you not know history? The top, there's always disruption. And yes, it's true. And I'm not going to like bet my life that this trend will continue forever, that Amazon will never be disrupted, but is it possible that this time is different? Are you not at least open-minded to that? Okay. So I had this debate. I think I was on TV just explaining like these – what's different about these companies versus prior companies that dominated the indices is that they don't respect the walls between industries. They don't give a shit. Amazon is happy to sell pharmaceuticals.

Try to stop them. Try to stop – whatever you think you can do to stop them, it won't work. And they will be the pharmacist. And they don't care that they also do groceries. And they also own the rights to Thursday Night Football. And they also own all of the logistics for themselves and for third-party e-commerce companies. The argument, oh, they own Whole Foods.

The arguments of like, oh, anytime a company gets this big in its industry, they're in every industry. Now, somebody stuck that up my ass and said, okay, well, consider late 90s General Electric making jet engines and paying Jennifer Aniston to be on Friends. And they had a bank. And they had – all right. They had energy. They had – they were making MRI machines. And they had a bank. And they had, all right, they had energy. They were making MRI machines. Okay, that's fair. There have been other conglomerates

that have gotten way outside their lanes. I just feel like this is different. I feel strongly that this is very different. So I'm not saying go all in on Mag7. Yes, you are. Just own it. But if there was a triple-levered MAG7 ETF, I would be all in. Okay.

Now I'm only teasing, obviously. What else? Can I talk a little bit more shit on this? The more interesting conversation is who's going to be in the Magnificent Ten? So I had dinner, not to brag, I had dinner with Francesa last night and Joe Terranova, and we're talking about that next layer of tech stocks. They're not in the Mag7,

but they have a platform and a dominance that conceivably you could picture them eventually getting into that realm. There's not a lot of them. Salesforce is on that list. It's already a Dow component. It's kind of well on its way. I don't know of the next three Salesforce's. It's like if you're a large scale organization dealing with customers, you probably work with Salesforce. So there's a few of those. I have Uber on my list. Uber's $130 billion market cap. I think it could 10X in 10 years. Not the market cap, the stock price,

because they could buy in a lot of shares. But they have that same dominance to me, mobility. So we talk about Amazon, not only their own e-commerce, but now they're fulfilling everyone else's. Uber is the mobility. Like if you want to move people or freight, or you want to deliver alcohol, or you want to deliver fast food or groceries, anything that has to move, Uber has the platform. And they have, I don't know,

between 50 and 80% market share, depending on the business they're in. So like, I'm trying to think of what is the next MAG-8, MAG-9, MAG-10, not trying to think of which of the MAG-7 is going to get knocked off its perch. I don't think that's the profitable game to be playing right now. I don't know if this is not in it. I don't even think – is Netflix in the MAG-7? No. No, it's, it's, no, it's Tesla, Microsoft, Alphabet, Apple, Amazon, NVIDIA. Who's seven?

Google. Did we say Google? No, we did Alphabet. Meta. Yeah. So Netflix, Netflix is, is got to be there. Fine. No, it's a candidate. It's not there. Market cap. It's not there. It's a candidate. It's a candidate. I don't know what else. I mean, if, listen, if, if, if Netflix ends up buying half the NBA season and they start doing things physically, they start building theme parks, who could count them out? Wait, where's the line for inclusion? What market cap are you talking about? Are we talking about a trillion dollars? What are you talking about uh i think tesla is 750 billion let's call that the line okay is that fair i mean the the rest the rest of a trillion do i have that right yeah are we sure yeah invidia is not a trillion invidia is maybe 800 maybe i'm wrong i thought it was a trillion uh anyway this would would be interesting. Yeah, what are the next three together?

Anyway, we could do a whole show on that. Let's put a pin in that. Yeah, no, NVIDIA is 1.17 trillion. Okay, next topic. Charlie Munger's conversation with John Collison for the Invest Like the Best podcast. So good. There was like a little bit of an aside

where he was talking about the risks to big brands because of the house brands at places like Costco have just changed the way people think about consumer products. So he's talking about like Colgate and Palmolive and Procter and Gamble and those brands are now at risk because the consumer is happy with Kirkland, you know, for a lot of categories, not for every category. And I was thinking about that. I was thinking about wealth management and brokerage and Merrill Lynch. Like when I started in the business, it was mother Merrill and the people that worked there were really proud of it. And the people who had started their career there, especially in research, wore that like a badge of honor. And I still know really great people who are at Merrill Lynch, so I'm not denigrating the company itself. But just the brand finds itself in a really weird spot. When they reported Q3 earnings, I think they were probably the weakest among the wealth management businesses,

like compared to Morgan Stanley. It almost looks like they're standing still. And I don't really know what changes that. This is a piece, I don't know where this was published, but this is Mason Broswell, I know, and Miriam Rosen. They're saying, looking to reinvigorate its veteran broker recruiting efforts, Merrill Lynch is offering top producing advisors and teams market-leading deals worth as much as 400% of their annual revenue to join. Think about that. 400% to move to Merrill Lynch.

And as crazy as that number sounds, I don't know one advisor who would take it. What do you think? No, right? No. Do you know any? Can you think of any? We know you and I, between the two of us,

we probably know a thousand advisors. Can you think of one who would be like, yeah, that's worth it. I'll take it. Yeah. You can. Yeah. I can't think of any. But it's not, it's not. Are they at Wells Fargo?

It's not a lot. It's not a lot. That's a, that's a, that's a lot of money. It's a, it's, I mean, it's really a lot of money, but, oh, it's advisor hub is the publication. So basically like everyone else, they're trying to recruit. But what is the story they have to tell? It's not even called Merrill Lynch anymore. It's Bank of America Securities.

And they killed the Merrill brand. So what is the story that they're telling for why you would pick up all your clients and walk, walk back into the cage. They just told you, they just told you it's 400%. There it is. But then what,

but then what? That's it. So you, all right, so you get the 400%. Your wife buys a bigger house with it. Now what? Now you're at Merrill Lynch or now you're,

you're a bank of America. I mean, it's, it just seems like, it's, it seems like a really, really tough situation. I don't know how they can change the perception, but I talk to Merrill advisors.

I mean, honestly, people complain about every firm, like UBS, blah, blah, blah. But I've never talked to a Merrill advisor who's like, this is awesome, I want to stay here forever. I don't know. Have you legacy brands like once tarnished or really, are there any turnaround stories of a hundred year old brands losing the magic and then getting it back in what, in our industry, just in general? I mean, I'm sure there are, but.

It's fine. Do you need another one? In our industry, I can't think of any. I could think of brands that have stumbled and then have like picked themselves back up, but not brands that have really transformed. Not in finance, it's too hard. And I honestly think the Merrill brand could be rejuvenated,

but they're not doing that. It's Bank of America Securities, and they're like, here, Merrill stopped reporting its broker headcount several years ago, adhering to an industry-wide pattern. So they're not focused on headcount. They want quality advisors, which does make sense.

You know what has not slowed down at all? We've discussed rolling recessions in real estate, obviously, and tech and other areas of the market. Advisor recruiting is still as ferociously competitive as it's ever been. More than ever. Before tonight's show, we got word that one of the advisors that we were talking to who were fans of,

just the offers that these people are getting are tough to compete with. Yeah. And in most cases, not worth it. They have 11,000 brokers, according to the article. Bank of America has 19,130 total. Who has 11,000 brokers, according to the article. Bank of America has 19,130 total. Who has 11,000? There's like 11,000 Merrill brokers that work in a Merrill branch, according to the article.

But that includes Merrill brokers, private bankers, and then also consumer bank-based Merrill Edge brokers. I was saying, how do you think i don't hear about that too much anymore anyway no all right tough uh listen man it's a it's it's tough to make the case for why people should come if you're the client of somebody who's getting 400 on their trailing one year production like I feel like you should have to disclose that to your client. If you're an advisor and like you're being paid that much, you can't call the client and be like,

oh yeah, this is what's good for you. That's why we're moving. I wonder if there's strings attached, like fine print, you know, like assuming you do- Yeah, you stay until you die. And you do this business with the bank and you sell this and that. All right.

Speaking of banks, let's talk about them. They're doing the thing. They are doing the thing. And I don't think really anybody is prepared for a world where banks break out, but they're doing it. And I, uh, let's just run through some charts. What do you think? Okay.

John, if you'd please. Show me what you got. Well, this is my chart that I stole from JC. Do you have any? Do I have any? I have tons of charts. We can talk about JC's first. I will do mine.

Okay. So this is the S&P 500 equal weight financials. You see that, and this is a three-year, these are three-year weekly charts that we're going to be looking at. You see that March was up. Yeah, you see that March, that big giant red, right? So that's the flush from the regional banks.

And- Do you remember that week? I kind of do. I, well, dude, yeah. It was not that long ago. It was terrifying. So they have digested all of that and they're on the March higher. All right.

Next, we're going to move to the cap weighted, which looks significantly better. And this looks pretty mean. It looks ready to run. It is running. This is the XLF weighted by like traditional weighted by market cap. So this is basically JP Morgan. Berkshire. Berkshire.

Yeah. Visa. Speaking of which. What's not to love. Speaking of which. There's Visa. I? Speaking of which, there's Visa. I don't know what I'm high. Not a bank. No, it's a financial.

Next one. It's a tech stock. Oh, f**k off. It's a financial. It's literally the XLK. I don't care. I don't care. MasterCard.

I will f**k off, but it is not a financial. Keep going. MasterCard either. Hold on. No, no, no, no. Chart off. Got to look at this jackass. Is Google not a financial. Keep going. MasterCard either. Hold on. No, no, no, no. Chart off. Got to look at this jackass. Is Google not a tech stock?

Google is a communication services stock. Is Google not a tech stock? Listen, I'm just telling you what Sam Stolval told the world, and you have to abide by it. I don't know why it is the way it is. The dude abides. But it is the way it is. Charts back on, please.

Okay. Berkshire Hathaway. Berkshire. Yeah. the buy it's the way it is charts back on please okay uh berkshire hathaway yeah couple of couple couple of couple of 90 year olds uh beating the shit out of ai stocks this year what's not to love r.i.p charlie and uh look at this thing man let's keep it moving they got success and they got succession squared away progressive i haven't looked at this stock in a million years beast beast i think we have one more insurance company in here. Allstate.

I mean, does that look like it's about to? It looks like it's going to go. Yeah. All right. Keep it rolling. S&P Global. I like that. What is this?

This is S&P Global, like the index provider? Yep. I don't see myself buying that. Next chart. Blackstone. Blackstone. A couple of hours. So i'm in the worst one i'm in um i mean this this broke that carlisle group which is a piece of shit look at this nasty downtrend from the end of uh end of 2020 right broke it yeah next one blackrock's looking a little bit better struggling against the headwinds from the Federal Reserve, obviously, as everybody else is. But it's looking pretty good. Charles Schwab, mad I sold this one. No, no, no. It's fine. Look at this downtrend this thing is locked in.

You would buy this chart? This looks like textbook lower lows coming. Perhaps. I don't see lower lows. If this rolls back into the mid 40s, I'm definitely buying it. Next chart. Capital one. Breaking a downtrend. Not great. No, I like this a lot. I like this a lot. This is pure consumer exposure and looks pretty good. I think that's the last one. So anyway, my point is that the banks haven't led in a long time. People forget what it's like to be in a market where banks lead. And maybe we get it in 2024. Banks are not, they're not a small portion of the, I'm going to tell you the best, the best charts you showed me. We're not even in the index. Number one, number two, this happens every year, once a year. They never follow through. They

always roll over. Sounds bullish to me. I mean, just look at individual names. They're in the same trading range for 15 years. And the best charts you showed me were technically not financial. So I'll show you your- 13% of the S&P 500. Yeah. Not nothing. No, I know. I know. Can you imagine if these stocks were good over the last 10 years? Second biggest sector in the S&P 500.

Let's look at, has JC looked at European financials? So whatever bad you could say about US banks, these have been worse over the last 15 years. But this is the last couple of years and a new 52 week highs are not bearish and they now have positive interest rates in Europe for the first time in a generation. And believe it or not, banks make money when rates are high or not lower. And I think if you don't have, uh, an imminent Russian invasion of Lithuania, these things probably break out. an imminent Russian invasion of Lithuania. These things probably break out. No, they are breaking out. EUFN, which is the one that I look at, it's just like the basket.

Let's see what this thing is up year to date. I think that's what I just, isn't that what I just showed you? Is that what? I showed you the index that that's based on maybe. I'm looking at the year to date numbers. So HSBC is at a 52-week high, as is UBS. EUFN is up 23% year-to-date. Hand up, who owns European financials? I don't.

Banco Santander? Which would you even buy? Credit Lyonnais? If I was going to buy them, I'd just buy the index. All right, let's keep it moving. HSBC up 35% year-to-date. Yeah, these charts look good. We should address CPI because one of the main reasons why the banks have been acting so well is yield curve steepening. The potential for yield curve steepening, the potential for overnight rates to be cut at some point in 24 while intermediate term interest rates remain higher for longer.

That would represent a nice opportunity for banks to traditionally make money, to make money the traditional way, lending and borrowing at short rates and lending at long. CPI continues to moderate. Today was as Goldilocks as Goldilocks gets. I think the headline number was 3.1% in November. I understand that core is 4%, which is still high relative to the Fed stated target of 2%. But still, directionally, most of the important components are not going up and many are going down. And that's what you kind of want to see. Gasoline fell hard.

What else was in here that jumped out at you? Used cars have been falling all year, which is a good thing. That's obviously what supply chain related big time, right? Remember the disaster. Clothing prices, clothing prices down in November. Yeah. I heard you use cars.

I'm with you. Airlines, airline tickets, alcohol. I think airline was down 10% year over year, something like that. So now listen, not everything's going down. Like to be sure. Medical care is up. Dude, not everything is going down. So is it heading in

the right direction? Yes. Was today's report in and of itself enough for the Fed to say mission accomplished? I don't think so. They never say that. I know they're not going to, but like if you're looking over Powell's shoulder, as he's reading the report, and of course he has these numbers ahead of time, but it's good. On balance, it's good, but it's not done yet. Chart on.

Core inflation. This takes out food and takes out energy. Some economists jokingly refer to it as the inflation report minus inflation. But even still, this is exactly what you would want to see. So you're effectively at 3% on CPI and 4% on core CPI, and both are dropping. Well, one other caveat that you can't talk about inflation coming down without mentioning that it's not because the economy is rolling over. Yeah.

Well, that's pretty remarkable. It's pretty remarkable. There was a lot of belief that that was the only way to get inflation to 2%. of belief that that was the only way to get inflation to 2%. And I mean, we're still not there yet, but it appears that the Fed has been able to thread the needle. Or maybe, as David Kelly told us last week, it was going to happen anyway, with or without their involvement. Inflation doesn't remain at 8% for no reason. So maybe just enough time passes that it happens either way. Yeah. I don't know. Yeah. Yeah. The fed threat of the needle is a bit, is a bit much, right? Giving them a lot of credit, right? They were driving a hundred miles an hour,

slammed on the needle, slammed, slammed on the brakes and managed to avoid a crash. Congratulations. AJ Luther says they fettered the needle. Very good, sir. Well done. Pretty good. Okay. Back to you. It's me.

Short Tesla. Done. Tony Sakonagi has been bearish Tesla for three years. He had a $60 price target in the year 2020. Then the stock went to, where did it go? 400. He raised his target to 150. Remains

bearish. He's offsides by about 150% so far. He thinks that... See, fundamental analysis is total bullshit. It doesn't work. He doesn't hate, this is not like I hate Elon Musk.

This is none of that. He's not accusing them of fraud. He's just making the very rational observation that Tesla could have flat earnings growth next year and be forced to do a lot more discounting and auto sales are going to fall and the business just gets harder. And that's all he's, that's all he it's, it's, wait, it's, it's, I think 90 times earnings with, and he, and his earnings estimate is flat.

That's not a great, that's not a great moment to buy a stock historically. It sounds like he's bearish because Tesla is like a victim of their own success. He says they already own 20% of the luxury market. They already own, how much of the EV market is it? 70%? 60. So his point is there's saturation there. How much more can they possibly get? Now, but you go through the history of people shorting Tesla, it's not great. I was going to say, it's better to be an analyst with a sell call on Tesla than it is to be short Tesla with your own money. John, you have that chart with the short interest, percent of shares outstanding short. So look at this. So over the last 10 years, Tesla's up 2,400%. And at certain points over that period, you had a quarter of the

shares outstanding were sold short. And so- This trade has literally retired people. Yeah. So I think most of the short sellers have learned their lesson. I don't know, maybe just like- Sakonagi's a sell side analyst at Bernstein. Now you could say he has reputation risk. Nakanagi's a sell-side analyst at Bernstein. Now, you could say he has reputation risk. You know what? If you don't have money on the line, it's not the same risk. So he's an analyst with a sell call.

It's rational. A lot of the bulls are really excited about full self-driving, and they think that Tesla will have it first. And it's very conceivable that they will. The idea that they're going to command $10,000 in auto because they have full self-driving for a long period of time, that's what Tony is taking issue with. He's saying like, in the automobile industry, you don't get to keep a technological innovation to yourself and be able to charge that much of a premium for very long. They will all have full self-driving and maybe that'll be worth $2,000 a car, not 10.

What if they can't get there in time? Remember that chart that we were looking at showing how much of the market cap these companies are spending? I don't know if it was an R&D or what, but Ford and General Motors, I mean, I don't know if they're running out of time, it's hyperbolic, but they're struggling to get into this business. Like, it's not going well for them. And I like this from Saganaki because you don't see this a lot. Whether or not he's right or wrong, like, it's always either, like, buy or hold if you're bearish. Like, you don't really get sell reports like this.

So credit to him for saying he's not going to go long. You don't really get sell reports like this. So credit to him for saying he's not going to go long. All right, quote, we believe that Tesla will disappoint on both units and revenues and earnings per share in 2024. Proud of those units. We are notably below consensus. He projects 2024 earnings of $2.59. The stock's $2.44 right now. So it's about 90 times 24 estimates according to Sakonagi.

The Wall Street consensus is at $3.87. So it's about 90 times 24 estimates, according to Sakonagi. The Wall Street consensus is at $3.87. So Wall Street has Tesla earning like a buck and a quarter more than he does. I mean, that's a big... Now, this is the part that I wanted to get your thoughts on. The hole, hole is the wrong word, the gap between the bulls and the bears on this stock is literally epic. How crazy is it? This is 10 years of this already.

And it's still that much of a battleground. It hasn't moderated at all. Listen to this. Sakonagi, oh, sorry. Tesla stock isn't in the low 100s anymore, which gives us pause about adding positions. Barron's wrote bullishly about it earlier this year. But we wouldn't short it. Wait, what did they say? I hope a newspaper wouldn't short a stock. Oh, the top target prices on Wall Street average $350 a share. The low price targets average $100

a share. That $250 bull bear spread is more than 100% of the current price. The bull bear spread for Apple for comparison is about 50%. So the spread is bigger than the share price. I mean, this is like, I mean, it's the potential outcomes, the paths of Tesla's could take. They're wide. They're very wide. So he's not getting into like Elon Musk reputation risk, which also has been a widowmaker trade. Like that's not even the issue. Oh, here's the point that I want to make. He could be right on the fundamental story and the earnings per share

and still get the price wrong. Like that's happened a million times, right? You can nail the fundamentals and still get the price wrong. Like that, that's happened a million times, right? You can nail the fundamentals and still get the price wrong. Wildly wrong. Do we have a picture of this Cybertruck thing? We might not. Ugh.

A piece of shit. If you, I saw a meme, I saw a meme like you pull up to a red light and a group of teenagers starts laughing at you. You have spent $100,000 out of your bank account. You still don't feel any better. Like being the driver of one of these. That sounds about right.

I can picture it being cool for like three days. That's gross. And then it's like, I can't believe this thing is sitting in my driveway. Yeah. The good news is they won't make any money on them anyway. So they almost don't even want to sell them. I think everyone they sell is probably at a loss. All right. Let's talk about

credit spreads. We spoke about this last week. I said, if I had to just track one indicator, and I don't, but if I did, don't tell me your opinions. Just show me credit spreads. And Nicholas and Jessica over at DataTrack tweeted, BBB US corporate bonds are trading like the probability of a 2024 recession is nearly zero. This market is extremely sensitive to fears of an economic slowdown. So this is reassuring. By the way, I know the VIX is not a long-term indicator by any stretch of the imagination. But we had a 12 handle today, lowest level since-

12 VIX. Since January 2020. Could you explain this chart for people that don't follow credit spreads? Yeah. So this is showing you the difference from which this index of sub-investment grade bonds trades at versus treasuries. So it's the yield of BBB corporate bonds, which are high yield junk bonds, minus the yield on the same maturity, but as a treasury. Yeah. So again-

And it's tiny at this point. It's a very, very small spread. This market and this chart, like literally every other market out there is not all knowing or all seeing or always right. But if there was actually legitimate fears of a recession, then these bondholders would demand a greater premium over treasuries. And they're not. Now, that could turn on the blink of an eye. But all is equal. That's what you'd like to say. Um, if those start to blow out, it could be a, it could be a head fake. So it's like, you see this example chart back on, you see this example of this credit spread in the moment. I guess this is mid-2022,

in the moment, you could say, uh-oh, it's blowing out. I know we don't like to do percentage of percentage, but it did double. I mean, from the end of 21 to the middle of 22, but that's not really a blowout. Like a blowout, you almost have to know it when you see it. 2020. Yeah, 2020. I'll never see that one again.

This is effectively, I mean, this tracks very closely with the VIX, right? It's extremely tranquil. We could all agree. Yeah. What are these other? Oh, I wanted to look at semis really quickly. You're not going to have a recession if this is what the semi stocks are doing. It's really, really tough. Unless this market is so completely ridiculous and bonkers. This, in my view, so we're looking at the VanEck SMH. This is at a new record high.

And this is with two of the better components not even doing that great. Well, two of the bigger components. NVIDIA hasn't done anything. The entire sector, find a semi-stock that doesn't look awesome right now. It's really hard. Lisa Su, the CEO of AMD, which is a stock that you and I both own. She was talking the other day about her prior expectations for growth over the next decade. And I think it was like 40% a year for some of their chips. And now she's saying it's more like 70%. So the growth that we're seeing, that we're likely to continue to see, is not something that probably happens in a recession.

Now, would the AI boom continue if there were a recession? Like would a recession knock this off track? Or is it in its own little silo? What's crazy is that it was born in a recession. It was a tech sector recession in 2022. No doubt. And OpenAI gave birth to ChatGPT in this recession. And OpenAI gave birth to ChatGPT in this recession. They launched consumer AI in a tech crash.

It's effectively a crash for tech. Like, it's remarkable how that played out. Sean notes the SMH is up 53% over the last 12 months. Let's do this last chart. Percentage of semi-stocks at 52-week highs. 32% of the index are at 52-week highs. Let's look at the percentage of semi-stocks with an RSI above 70. These would be overbought.

It's about half the index, 48% or so. The whole sector is going crazy. And the reason I bring this up now, I think these are better economic indicator, at least a global economic indicator than anything we used to look at in the stock market. I think these are more meaningful. These are the new transports because we are moving data and information as much, if not more, than we're moving physical goods. So for me, this is an economic indicator that's probably better than a lot of the ones that we used to use. Stock market-based economic indicator. So to Josh's credit, you said that's so many of the new transports like literally eight years ago at this point or something. You said that a long time ago.

And semis are going berserk. NVIDIA is by far the biggest holding of SMH, Shatavanek, at 18% of the fund. And NVIDIA, the stock, has done obviously remarkably well over the last 12 months, but it's gone sideways the past couple of weeks. And the second largest holding is Taiwan Semi, which has had a nice run, but that's not at all-time high. So there's a lot of things that are participating. It's not just one or two names. Let me read this to you. Sean did this for me today.

The SMH is up 65% year-to-date. Through October 31st, it was up 37% year to date. Think about that. Um, say one more time. The SMH was up 37% year to date on Halloween. Now it's up 65% year to date. Wow. Okay. All right. This is the last decade. 23rd, the SMH, the semi-index ETF. Ready? 2013 plus 33%, 2014, 30%, flat 2015, literally zero. 2016 up 36, 2017 up 38, 2018 minus nine, 2019 plus 64%, 2020 plus 56 2021 plus 42 last year negative 34 this year plus another 64 so i mean uh sean says going back 10 years versus the magnificent seven the smh has a total return return of 736%, which beats Meta and beats Alphabet. Those are up 434% and 384% respectively. The other five MAG7 names beat the SMH. But still, this is an index beating five of the top seven stocks in the world. Dude, people are afraid to make money. People are so afraid to lose money

that they're afraid to make money. When you look afraid to lose money that they're afraid to make money. When you look at those numbers that you just mentioned, you could have said in 2015, I can't buy it. I can't buy it now. I just can't buy it now. You could have said that every single year for the last decade. And of course, you couldn't know how this is going to turn out, but it is really difficult. So I'm sympathetic. It's hard to buy winners. So we talked about- It's not just in the United States. This is a global phenomenon. There's a stock in Europe. There's only two large semi producers in Europe. One is ASML, which does the laser lithography. They have patents. They're like the best in the world. The other is ST Micro, I think. Look at a chart of ASML. It doesn't look anything like Europe. It looks like the semis.

This is a global phenomenon. Taiwan, I mean- Josh, if I had to give my money to, if there were two technicians, and of course nothing works all the time, it's going to, you know, whatever, whatever. And one of them was a bottom fisher who was patient and had a process

and didn't just catch falling night, but waited for a higher low, you know, or there was just a person who was like, no, no, no, no. F all that.

I just buy winners. I just buy stocks that are going, that are trending higher. And my self-discipline is X, Y, Z. Most technicians do the latter. I,

yes, they do. I'd give my money to the latter person 10 out of 10 times. It's really difficult to pull the trigger on something that's up 80% over the last 12 months. And those are the winners. The biggest, it's the biggest buy signal on earth on something that's up 80% over the last 12 months. And those are the winners. That's the biggest buy signal on earth. It's the biggest buy signal.

And nobody wants to buy those. Because it sounds so stupid. I missed it. I'm a donkey. I can't buy it now. Because buy low, sell high is permanently ingrained. It's buy low, sell high. Those are the four.

Sounds like it makes sense. Those are the four most dangerous words in investing. Buy low, sell high. Dude, that's a take. No, for real. No, I don't think so. Yes. I'll debate.

Let's put a pin in that one too. Duncan, I hope you remember all these things we're putting pins in. Lots of pins. I want to debate that with you, but I have to think about it first. Okay. Let's do make the case and then I have a mystery chart for you. What are you pitching tonight? So I think we did a good job earlier in the year

or the market did a good job doing what we hoped it would have done with the argument of it's just seven stocks. And we said, yeah, that would be concerning if the rest of the market were rolling over. Yeah, it was not true. If the rest of the market were rolling over. Yeah, it was not true. If the rest of the market were rolling over, we would have been saying something different.

We would have said, yeah, this is a pretty textbook top. That's not what happened. The market was doing, it wasn't doing great. There was a big gap, but the RRSP was doing fine. And now the RRSP is up 9%. And I'm talking about the equal weighted index. The Dow is up 12.5%. The Russell 2000 is up 9%.

So I'm going to make the case that into 2024, the rest of the market catches up. Charts, please. So this is the gap that I'm talking about. The S&P, as we all know, is kicking the shit out of the equal weight, although 9% not so bad. Next chart, please. Almost the whole year. I like this.

I'm getting constructive on the rest of the market. Looks good. You think this is going to break out? This is the equal weight? I do. I'm getting constructive on the rest of the market looks good you think this is going to break out this is the equal weight I do I do so if it does

there are no triple tops if it does it'll only be because pharmaceutical biotech pharmaceuticals finance industrials

are going to have a great first quarter it's the only way it's going to happen energy the only sector only sectors that haven't gone up a lot that are really big. Energy's not big enough.

RRSP, dude. RRSP. No, I know, but forget that. I'm just thinking about the overall market. No, I can't forget that. I'm making the case. It's RRSP. Equal weight.

Pull the trigger. Pull the trigger. I have a mystery chart for you, and I think you're in this trade, so I had to make it a little bit harder than we normally do. Chart on. This is maybe too...

This is a sub-industry index ETF. So this is publicly traded. I think we're showing it to you with a 50-day moving average. Is this KRI? Look at you. Look at you. I don't own this anymore. Reveal. Reveal.

All right, but look at you. You did that without the prices. Do you realize that? What do you mean? No, I don't need the price. I know the patterns, bro. Look at March. Look at March 2023.

You're like Coco the gorilla. You know the shapes. I know the patterns, bro. Look at March. Look at March 2023. You're like Coco the gorilla. You know the shapes. I know that high or low. I want to show you one more thing with this. Go ahead. This is Ari Wald. To your point, this is Russell 2000

in the top pane. The bottom pane is the regional banks. If this catches fire, it's probably because a lot of other areas of the market are doing well. He says, oh, looking ahead, a breakout above KRE's July peak would likely lift the Russell 2000 higher and in turn catalyze the bull cycle long awaited broad-based breakaway. In summary, our analysis indicates the next leg of the advance is underway and should carry the S&P 500 to a new cycle high. He's seeing more breadth, more participation. I'm in that camp and people are not ready for financials to break out. From your lips to God's ears. If you're right, everyone listening and watching

is going to be pretty happy. All right, we're going to wrap up here. Thank you guys so much for watching. Thanks to all of you out in podcast land listening. We appreciate you. Guys, smash that like button before we go. That number's looking awfully low. If you're listening on the app, give us a review.

Take you 10 seconds. Where's the koala bear? I don't know. But hey, everybody. Did you know that tomorrow is Wednesday, which means another all-new edition of my favorite podcast, Animal Spirits with Michael and Ben, followed by Ask the Compound on Thursday, Ben and Duncan,

and then another all-new edition of the Compound and Friends to end the week. We appreciate you rocking with us. We'll see you soon. Good night. Whether you're just getting started as an investor or you're managing a multimillion dollar portfolio, Ritholtz Wealth Management has the solution for you. It all starts with building the right financial plan to speak with a certified financial planner today. Thank you. on your favorite podcasting app. If you love investing podcasts, check out as and may not be used in connection with an offer to sell or solicitation of an offer

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