The Compound and Friends - Sip the Kool-Aid

Episode Date: July 2, 2021

On this week's episode of The Compound & Friends, Michael Batnick, Dan McMurtrie, and Downtown Josh Brown discuss: Trillion Dollar Companies Market Expectations Value and Interest Rates Liquidity on the Decline Buffett and Munger The Wedding Boom Follow Michael: theirrelevantinvestor.com Follow Dan: twitter.com/SuperMugatu Follow Josh: thereformedbroker.com This episode is brought to you by Masterworks. Visit masterworks.io/compound to skip the 10,000 person waitlist. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

The correlation between interest rates and the value premium. Right. Ever. It's never happened ever. Well, as you know, you can see I'm long gold. Wait, did he bring a mustache for me too? Now that I'm not wearing a hat, I feel like Beetlejuice. So put your hat on.

No, I can't rock the hat with the turtleneck. Why? Because that's ridiculous. I'm just – I'm glad to know where you draw the line. I'm just saying. I didn't feel how small my head was You can wear a fedora with this outfit Why can't I wear a hat?

You can't I went to The Cellar two weeks ago I told you And the show wasn't great It was on One of the hosts was there, who's a regular, but there was one good line and like, you can't, I mean, as long as you get a few good laughs, it's

a success in my, you know, this one guy came on stage and said, last year was rough for me. I was quarantining in my parents' basement. Then another pandemic hit. How long have they been doing live shows at comedy clubs? I think just a few weeks. I think it's like relatively new. But are any of the big guys coming out yet or no?

Well, I saw a 7 o'clock show, so I knew there wasn't going to be anybody. Chappelle was here a few weeks ago at the stand. They sent an email out, and they said, like, if you want tickets. And within 30 seconds, they were all gone. I saw Chappelle at at foo fighters sing uh radiohead cover it's like the craziest weirdest thing ever dave chapelle was singing dave so dave chapelle and dave grohl co-hosted snl okay in november or something so i guess they made friends so uh in the middle of the Foo Fighters show

they don't really do a lot of covers like they did a Queen cover to let Taylor Hawkins sing a song and then they had like another cover they're like we're going to do one more cover and Dave Chappelle comes out and does Creep and it was like not bad

it was like surprisingly not bad was he smoking a cigarette during the singing? no but he was taking it seriously. It was like surprisingly not bad. Was he smoking a cigarette during the singing? No, but he was taking it seriously. Like he was hitting notes. No, literally, I think he did have a joint. Or a cigarette. The audience loved it. Half the people were like, wait, what's going on now?

And then once he started, they were like, oh, he's really doing this. I can't believe he's actually doing this. Dan, do you like concerts? Oh, yeah. Who doesn't like concerts? Me. Yes, you do. I've been to shows's actually doing this. Dan, do you like concerts? Oh, yeah. Who doesn't like concerts? Me. Yes, you do. I've been to shows that you like.

You're not excited to go to one, but when you go to one, you're into it. No, I thought I liked concerts until the last concert. What happened at the last concert? I saw, were you there? Separately, you were there. Bush and Live at Jones Beach. That was a good show. That was a good show.

But I don't know. I just, I like the idea of it more than I actually like the experience. Bush and Live, that's your, that's what you're going to judge concerts based off of? Nothing against them, but like. Well, for me, that's like exciting because that was like my, my youth. Right. You know? If you went, if you went to the show that I just went to, you would have walked out of there like a different person.

No, because I get self-conscious in big crowds, I think. I don't know what to do with my head. Nobody would be looking at you. I feel like bobbing too much. Well, I know that. I know nobody's actually looking, but... All right. Not a concert guy. I don't hear it.

But you like sporting events. Yeah. I'm calling friends. Episode four. You don't have a drink? Five. You don't need a drink? Not right now. You're good? You sure? Yeah. Okay. I want you to stay hydrated. You can always take a drink? Five. You don't need a drink? Not right now.

You sure? Yeah. Okay. I just want you to stay hydrated. I can always take a break. Okay. Fair enough. The Compounded Friends,

best financial podcast in existence, I think, like conservatively speaking. Michael Batnick is here. John Grayson is here. Duncan's here. And our friend, Dan McMurtry is here.

And if you're a Twitter guy, you definitely know Dan's alter ego, Super Mugatu. And Dan is launching a sub stack. And we're going to talk about that in a little while. We have so much to get into. I won't delay any longer. Let's roll that music. Welcome to The Compound and Friends. All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions

and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. How do hedge funds invest outside the market without touching Bitcoin or meme stocks? They invest in blue chip art, an overlooked asset class that is expected to grow by over $900 billion in the next five years. Contemporary art prices rose 14% per year from 1995 to 2020. So it's no surprise that over half of ultra high net worth investors allocate over 10% of their

portfolio to art. Thanks to masterworks.io, you can invest in multimillion dollar works by artists like Banksy and Warhol for a fraction of the entry price. Both Michael and our guest from week one, Paki McCormick, have already invested in art on the masterworks.io platform. We've partnered with Masterworks to let the Compound and Friends listeners skip their wait list by going to masterworks.io slash compound today.

You know, actually, actually, Dan is SuperMugatu's alter ego. You're really SuperMugatu. Yeah, I can't tell anymore. It depends on how much time you spend on Twitter versus off in a given day. How much of you are one versus the other. It's like

Robert Downey in Tropic Thunder, but much lower stakes. I have no idea who I am anymore. I'm just this Twitter character. I saw that one in theater. All right. I don't want to open the show like reading something, but- Too late. Yeah. Sorry. I'm pre-apologizing. Mark Andreessen did this interview with Noah Smith and they went wide and deep and I thought it was excellent. Andreessen made this really interesting comment on his increasing skepticism that incumbents can adapt. So there was this narrative, I think, that people thought that

all of this new technology, that the IBMs of the world were going to adapt this and be pulled forward. Instead, it seems like the train has left the station and these companies can't catch up. So one of the things he said was, I used to think time would ameliorate this as the world adapts to software, but the pattern seems to be intensifying. A good test for how seriously an incumbent is taking software is the percent of the top 100 executives and managers with computer science degrees. For a typical tech startup, the answer might be 50 to 70%. For a typical incumbent, the answer might be more like five to 7%. This is a huge gap in software knowledge and skill, and you could see it play out every day across many industries. So who does this affect? Like incumbent companies and industries that are now

competing with technology companies where they weren't five years ago? I'm thinking less of a business angle and more of a stock angle and how people view like bucketing companies. Can they catch up? Where do we put money? Dan, how do you view this topic? I just think company culture is a huge issue. It can be a really big weapon or a really big detriment. And when you're talking about pivoting culture, you're ultimately talking about firing a lot of people, stepping on a lot of toes. And you have this issue of the things your existing clients want are not necessarily things your new clients are going to want. There's so many little frictions,

and you have to take a massive hit in the short term. And I just don't think if you're a public company especially, you're in a position to, you just can't take, this isn't like a one-quarter hit. This is like we're going to have bad earnings for three years and then maybe something comes out of it. I just don't know very many companies that can really make that shit andreessen was on patrick o'shaughnessy and he said this is your golden opportunity everything you do now you could say because

of covid like like if you're a if you're a public company and you've been worried about continuity for years and years and years you now have like this very very short window to throw a lot of shit out and start over with a lot of other stuff, make really big investments, and just say because of COVID. And there's probably, I don't know, 100 companies I could think of that are doing some version of that. I don't know how drastically, but I have to believe that we're going to see the results of that in some of the incumbent companies as time goes on. Did you see the – Gavin Baker had a – I don't know if it was a medium or a sub-sec or something, but one of the things he was talking about was in retailers, you had a lot of companies who for years, outside Sherald had said, look, you need to do this omni-channel thing. You need to do e-commerce.

And it was hard at a board letter because you were going to kill the golden goose to maybe get something out of it. Cannibalize your existing business. Yeah, and then they had to do something during COVID just to survive. And the point he made that I think was really smart was all of a sudden the board conversation wasn't, hey, this is going to really hurt, but it might be good. The board conversation was, this is really working. They were getting data back in that customers like this and they actually had hard data they could use to justify this is going to be good for your business.

So one of the things I think is hard is for tech companies, whenever they do a tech thing, there's this positive loop. Customers love it, investors love it, they're getting cheaper money, they're getting more customers. If Berkshire Hathaway launches Berkshire Hathaway Coin, that actually might work, but it would be really weird, right? And so you have this issue of negative feedback versus positive feedback. He made this great point about the companies that started

that positive feedback thing during COVID now kind of have license to really take advantage of exactly that dynamic. I think if you haven't pivoted in the last 18 months and everybody's locked inside, like who's really going to pivot now? Yeah. I think a lot of like the restaurant chains embraced delivery really fast. Right. And delivery apps, even the ones that were hesitant to do so.

Like I'm an investor in Shake Shack. You saw how quickly they said, you know what? We have this chance now to like put a huge investment into drive-thrus, which they don't have. And Wall Street will come along with us. Like if we commit to that and we spend that money, we're not going to see a bigger stock hit than we've already seen anyway. So why not just do it?

Like that's one micro example. But I do think that a lot of companies took advantage of this moment. But back to Andreessen's point, I don't know that you're going to get a non-tech company with that much tech buy-in almost no matter what at the highest levels. I actually was going to go the other way. As you guys are talking, I was thinking that maybe this is more industry-specific, that old tech can't catch up to new tech. You can't catch up to new tech. But a company like Macy's, The Gap, like I don't know why I'm picking two retail companies, but they can quicker adapt to the current environment by adopting tech that wasn't in place at all. Right.

So when you look at the companies that are enabling this, like Shopify is my favorite example. Like this is a company that just come along and say okay now you get it you can't do things the way you were doing them you have to be omni-channel you have to ship you have to enable the kind of logistics that you're competing against to get things to people quickly etc it's the easiest sale in the world and that's why that's the largest stock in Canada today like it makes perfect sense and Maybe the best investments right now are the companies supplying the tools for that. Unfortunately, it's like Amazon.

Back to Google, Amazon, Microsoft. A scrappy startup like Amazon. When you look at stocks, back to the culture thing, is that the last edge? Meaning, I don't know of any metric that can quantify corporate culture. I don't think that exists.

So that's not a thing that can be arbed away by renaissance. As somebody that's looking bottom-up at companies, is that something that you can quantify ever? And if it is, is anyone trying? Is anyone doing a good job with that? Yeah, people are trying to quantify it in a bunch of different ways. Employee turnover, a bunch of things about executive comp. Average age. Yeah, average age, gender mix. A lot of ESG metrics are attempting to approximate this. But it's really messy because

ESG, for example, has different incentives. And some of them, I think, make a lot of sense in terms of kind of ultra long term. But when you're looking to invest on a three to five year basis, I just still think that all business is still fundamentally human, fundamentally social. And so if you can take the time to understand what, you know, forget that we're talking about stocks. Like look at a company and think about the company like a sports team. Like we pick any sports team you're a fan of. Like every guy at the bar has opinions about how the coaching staff interacts with the players. I saw something about Kawhi Leonard or somebody being angry at a trainer in the room, and that being this whole thing.

So people are willing, and there's an industry of spreading that information around in sports, and clearly people are betting on that. And then you talk about that in companies, and it's a little too abstract, and people don't really care. They want to take it back to numbers. So I think the companies... Well, the employees at most corporations are not nearly as visible

as the head coach and players on an NBA team. It's not like you can observe this from the outside. What about something like Glassdoor? Well, Glassdoor is one thing that we use and other people use. Oh, you do? Yeah, you go look one thing that we use and other people use. Oh, you do? You go look at it. It has a big selection problem. I was going to say, only angry

people post. It's like Yelp reviews. Yeah, it's really good or really bad. It's like Yelp. But you know what's been huge for this, actually, is Clubhouse and Twitter spaces. Because you have a lot of, you know, one, if a company is allowing their engineers to go and brainstorm publicly,

that's a big indicator of company culture. What they're saying... Is it a positive indicator? It depends on the business. Look at Twitter. You have millions of users who are like, please let me search my DMs. I just want to search my DMs.

Think about how many businesses exist around Twitter because we can't do newsletters or search DMs. And people are setting up, think about how many businesses exist around Twitter because we can't do newsletters or search DMs. So all of a sudden you've got Slack and you've got all these other things coming on. And until recently, recently people have been really excited about Twitter because you've had five or six employees at Twitter actually using Twitter. Well, that was the funniest part about Twitter. The whole time it's been a public company, they would add board members and you would look at that, you would look at the person that just got a board seat's Twitter and there were like two tweets.

Or even worse, you'd have management teams when they would, they would clearly tweet in the way somebody does when they like really hate Twitter but have to use it, where it'd be kind of like a filtered marketing message. It'd kind of be like an 8K done over a tweet. There's just a bunch of different things. You have to go talk to a lot of people. You have to spend a lot of time. You have to look at how consistent what people say they're going to do

versus what they actually do. Again, people always want to jump to trading, but if you were thinking about actually starting a business with somebody or if you're obsessed with a sports team, all these other things people do routinely, you're going to take a lot of time to really get a sense for what these people are all about. But with a company, people read a single management slide deck and go, okay, I'm ready to punt some shares. And people can make money that way, but that's not what we do. We have an investment right now where we did the research on it in 2012. So it's just – and we know everybody around the ecosystem.

We know everybody's tells. We know what they like, what they don't like. We know who hates each other. And that stuff matters, especially – last time I was on here, we were talking about Wall Street gets really small. But every other industry is like that too at the top. Like people – some people really don't like each other. Some people really like each other. When we talk to retail investors, individual investors, a lot of times we'll come across situations where they'll have a big stock holding in a local company.

They almost kind of have an edge in those cases because their brother-in-law works there, three people that went to high school works there. They're frequently at events with these people. And I don't just mean like down at the mill. I'm talking about like people in upstate New York who live in a town where there's a giant employer that's a biotech company. I don't know if they have an edge like Alpha, but they don't need to be told when's the right time to sell because they have a very strong sense that things are going great. And Bob's drinking a lot recently. Maybe that's an interesting edge that you almost only can attain by living in a community where there is at least a large presence

of those people that work at that company. I think it's tremendously valuable to go to, if you're really interested in Amazon Web Services, go to the AWS developer event and talk to people and figure out what are people who are actually in this community, what do they care about? We try to do that all the time. It's just, can we go talk to people who actually use this product,

who actually work with these people? And what you're really looking for is, if you go talk to 50 people and they're like, this is the best thing ever, it's changing my company, nothing can replace this product. And the company's at a semi-reasonable valuation, management's aligned, yada, yada, yada. Like there are those really simple kind of Peter Lynch investments out there. I think the trouble and what I'd kind of want to know from you guys is, like, I know a couple people who have that local company they're invested in,

and they invested in it when it was at three times sales or something. And now it's at 40 times sales. And I'm having this conversation, but it's a good business. And I was like, okay, but 40 times sales is so much higher than, remember when you lost money in 2000 and you told me about that? It's so much higher than when it was there. And they're like, but it's still a good company. and you told me about that,

it's so much higher than when it was there. And they're like, but it's still a good company. I do think, you know, you need to just have some reasonable like rails on this stuff right now. What's f***ed up is that actually that hasn't hurt them. Right. That attitude of, well, it's still a good company, I'm going to hold it.

That's actually been a better strategy than many others I can think of. Like I've made money in this stock, therefore I want to keep holding it. That actually has been pretty good. It won't forever, but for the last five years, if you've tried to apply second-level thinking, you've actually cost yourself money.

A lot of money. One of the things that I keep coming back to, maybe I have a very small sample size, but a really good investment thesis in hindsight was, oh, any company could do that. Like if you just dismissed what Netflix was doing, like HBO's would come in, Amazon's would come in,

like there's probably more examples that I'm not thinking of where you're just not giving a company enough credit. Zoom, for example. Right. Right? Like if it sounds so easy, but it's obviously not so easy. I've had to work on that a lot. I think we have one of the biggest examples of that of all time,

which we're going to talk about later, Robinhood, where they came along and said we're commission-free trading. Why can't Schwab do that? Right. So what do you mean you've had trouble with that? This is one of the first few things I'm going to do on my sub stack is talk about this exact topic. Wait, let's plug. What's your sub stack going to be called? It's called Philosophizer now.

It's a bit off of Dodgeball. He's like, oh great, he's a philosophizer. And it's because I'm just going to do Philosopher King hedge fund manager stuff that nobody wants to read. Oh, I love it. Instead of doing it on Twitter, you're going to do it really,

instead of a thread, you're going to do it long form on the sub-stack. And I'm going to thread it too. It's just going to be obnoxious. And I have like a disclaimer, like I'm not verifying any of this. I'm not checking it. I don't even care if it's true.

I might change my mind. I might change my mind a little bit. So sign up for that, guys. Dan's dream of consciousness. Yeah, it's just going to be, you know, man with takes. So do you want to give us a teaser or you want to just save it? Yeah, no. Well, go back to what you're saying.

The competition part. Competition thing. So most of my investments are based on competitive dynamics. I think a company's got expanding advantage or they're going to get beaten down. And I'm looking – when you really boil it down, I'm looking for really, really lopsided fights. Right. And what I realized was like because I was raised by people who – and I think everybody in kind of the 25 to 40 year old bracket at least probably older everybody was raised by somebody that got stung by a past

bust and so i i said this a few weeks ago with howard lindsen on his podcast where you know the first time an elder says you need to be aware of risk valuation blah blah you're like okay you like check the valuation you do the numbers the 50th. You're like, okay. You check the valuation. You do the numbers. The 50th time, you're like, okay, dude, we did this. I've been doing it for five years. This is all – I get it. And actually, I've done a lot more work on the data than you have because I know how to use a computer. And I've looked at 50,000 instances of this, not the three that you got – and then you

actually go back and you decompose how people lost money and you see that it wasn't that they got defrauded. It was that they had a 75 percent position in the fraud. And then always – there's always that little asterisk that people edit out when you actually go do forensic work on why people blew up. And then by the 500th time, you're like, this is dog coin. You buy it and it goes to the moon. Yeah, that's the end of that rainbow. That's where you end up.

That's the end of that rainbow. That's where you end up. Because I think young people are basically at a point where they're just like really tired of hearing the moralizing from people who got punked like six times in a row with the same stuff from a certain perspective. And also like my generations, we're all aware of like what happened to yields and assets. You owned any risk asset since 85. It was layups. Yeah. And you blew up. If you over levered, it did something greedy

or did something dumb. But if you just like owned 30 years and the S&P, you crushed it. So a lot of people's records are really impressive until you, you know, do any benchmarking. And now we're in an era of infinite information. It's much harder. And we're taking a lot of flack from older investors.

And we're kind of like, look, we have to play. It's like poker. Poker got a lot more complicated after it went online. And so like you got to be a lot better of a poker player now than you did in 1990. And so I had that bias from people I learned from to look at – I'd look at some company that was special, Zoom or Robinhood or whatever. And my knee-jerk bias is it's bullshit, it's a fad. Or anybody can just repeat what they're doing.

Right. I have such a strong bias towards it's a fad, right? And then – and I lost a lot of money earlier in my career. Would you then try to fade that thing? Oh, yeah. I'd be like they just broke the backboard on a quarter. It can't get any better than this. Multiple from here to here. You know, I kept trying to call the top on certain things and, you know, in aggregate it's fine. But then I realized after I saw these

things continue to grow and grow and grow, and that's independent of where the stock price is today. You know, it might still be overvalued, but the business is now a really, really, really real thing. If you're seeing a situation where it looks like anyone should be able to do it, and it looks like it's a fad, and yet it doesn't stop, the indicator is that there's something really unique happening there.

Like, and again, going back to sports, like, you see so many athletes that hit, I mean, Steph Curry is probably a great example you know there are points in his career where he was just draining threes and everybody was like that's a cool you know little yeah game you're doing there but that won't last and then you know the entire sport has shifted to a basically a three-point competition right right and so you have to you have to pause yourself at least i've had to really restrain myself and we actually like i write down when i'm first looking at myself. And we actually, like I write down

when I'm first looking at something, if I, you know, I'll just write down, I think this is bullshit. And that actually basically means I need to go actually. When you say bullshit, you mean like, I think there's no edge here. I think this company has no edge here. Right, or I'm like, I think venture capitalists

are playing some scheme where they're going to go acquire non-economic users. Or, you know, there's some other thing happening here that's not, it's's not this is actually special that's my no information bias because i'm just pessimistic and then i actually i you know so now we have like a rule that's up on our whiteboard that says sip the kool-aid which is like go actually talk to people don't go don't go crazy but go talk to people who are actually like using it go talk to people who are using robin hood and like what i think people aren't aware like for example retail investors last year and a half

everybody's like it's gonna end poorly it's gonna end poorly and you know maybe it will it has historically but they're up a lot yeah by just just doing the most obvious thing they can think of you say this company's growing by 50 a year i love it all my friends are using it right i don't give a shit what you think of Square's valuation. It's going up. And the stock price gives them evidence that they're right. Like that affirmation. Right.

On a weekly basis. So what are you going to tell that person? And then they go promote the product. Well, that's the second part of this is not only is what this company is doing, doesn't matter if it's unique. I like this version of it. Right. Which, you know, you could think of 500 examples off the top,

like making yoga pants is not in and of itself a difficult thing for any company to do. But enough people- Yeah, Lulu's another one. That's 100% right. Enough people like the Lulu version of it. Whether or not somebody has a higher quality is not the point.

Chipotle, they're making burritos. What's so special about that? They're making burritos. Yeah. And so when you say there's something else going on here, sometimes that is the reason why the thing is catching fire has nothing to do with its actual service. It might be the ease of using its service, the ease of recommending it to friends. Think of Venmo with PayPal. It's not the only peer-to-peer payment app, but it's the one that people are most likely to pass along almost like a virus to other people. They love it.

There's so many other things. I think in a stock market context, first of all, I can't bring myself to buy half this stuff i just go i have no reason to play that game because i don't get it so i'm just not going to play that game but step outside of the stock market you know if there's if there's a local barbecue spot in your hometown and everybody loves it and you're the one guy who's like it's not that special or is it like you dude yeah you're an one guy who's like, it's not that special. Everybody's like, fuck you, dude. Yeah, you're an asshole. And actually, like, the people- I would be the one saying, eh.

Yeah, I mean, that's fun. But, like, at the same time, I also think there's this huge dynamic of, you know, one of the best ways to build an audience now is to have haters. Like, if you want- You're right, but I hate that. Right.

The people that are doing that... Oh, there's people who have accounts that people just love to check. They don't file a budget. They just hate check them. Yeah. So last week, we were speaking about individual investor expectations, and the survey was probably bunk, whatever. But one thing that is not bunk is that for the last several years, and I would include

myself in this category, financial professionals have expected lower returns, right? I could probably, I probably wrote about expecting lower returns in 2015. Right. That's when I probably first wrote about it. You sounded dumb saying I expect above average returns. So we've had 15% since I said, probably prepare for five to six. Love being, never been more happy to be wrong. Um, but you still have that

and probably even more so now and everybody, every financial professional is probably on the same side of that boat. Now, if you stretch back to like the dot-com bubble, returns haven't been so great

over like a 25-year period. But Teddy Lamont made a good bull case and I don't think this is really on anybody's radar, but he basically said like what happens if it's been just a decade of growth dragging value across the finish line,

right? The big five, we know the names. What if value stocks grab the baton and start running with it? And not only do their earnings start to expand, but their multiples start to expand as well. What if that's like the next phase and we're not in for low returns? Anybody give, want to give the credence or just it's bullshit? I think you've seen like the start of that, but it almost never follows through. Like we just saw six months of that. So it's, it's, it's July 1st. We watched financials, industrials, materials, and energy stocks lead the market, go on an absolute rampage. Even with those gains, they're still pretty tiny relative to the largest growth consumer discretionary in tech names. But I guess if we continue to get double digits growth, which I don't think many people are

expecting, I'm certainly not, is it going to be because Apple and Amazon are going to $3 trillion? We saw Facebook get to a trillion. So what's going to get us if we do get, I mean, what do we think, Dan? I mean, I don't know. It depends. I mean, value is such an amorphous term, right? I guess if you look in the value- Stocks with low price book. Let's just, let's start there. Banks. We're talking about banks. Yeah. I mean, I don't- Asset heavy, low profit margin companies. The issue with all this, they obey the capital cycle. And so, I mean, I don't – Asset-heavy, low-profit margin companies. The issue with all this, they obey the capital cycle. And so, I mean, I think you could have a hell of a run for a couple years, and then they would just invest in more CapEx, and then they would burn themselves out, as they've done for quite a while.

I think the bigger issue is what are you getting in bonds right now? Nothing. what are you getting in bonds right now? Nothing. So if it becomes clear that bonds are not going to return anything and there's just too many assets that need to be invested, if you're going to have a stock that's going to go from, let's say, 3% to 1%, that's a big price move. And so over a long period of time,

your expected returns are going to be poor. But if there's nowhere to go and Google is raising money at zero in Europe and buying back stock in the US with it, why should Google trade over 1% or 2%? Right. You know what people miss? They say there's nowhere for the money to go and all these value stocks will catch a bid because they're still going to out yield and dividends whatever they miss is all the stock issuance that cancels out that scarcity like you can have a situation where you get 80 billion dollars worth of ipos so far this year which we're on pace for a massive record um and all of the money that would have otherwise gone into all of these publicly traded value

stocks finds a new place to go. So it has a choice. Money always has a choice. Okay, question for you guys. What if instead of having, I have this conversation with everybody, everybody's like, you know, either we're going to go on a bull run or the reckoning is finally coming. And what if it's neither what if you keep having these little micro bubble blow-ups and rises and explosions what if you have a meme stock cycle in different pockets of the market

that pretty much never stops and just gaslights everybody and what if the and what if the overall market stays okay right what if you just have madness having that right and what if that have you looked at an electric vehicle stock lately? Honestly, they look apocalyptic other than Tesla. That market cap has vanished in three months. These stocks were the hottest stocks in the market in February, and in June they can't get arrested. That didn't wreck the overall market.

Right. The money went somewhere else. Yeah, that I think is the really scary thing for a lot of people because it's going to kind of – like what if the market doesn't give everybody a really satisfying singular narrative? What if it just gets weird and stressful and every day there's like – because you can see it on Twitter. People are mad. Like people are mad. Traders are mad. That's not new.

No, but – well, no, it's not new. But they just – they're really – How frustrated were the macro guys from 2012 to 2018? Right. It's no different. I'm just asking what if we go into a regime now where nobody gets to be right? We just flop around and we're flat. Except people with very concentrated portfolios that play the guessing game better than anyone else.

But you won't hear about the guys that blow up. But we had that from 2016 to 2018. It was like two and a half years. Right. But we didn't have – I mean I just think there's a potential for a lot more Januaries and Marches and the index just kind of doing not a whole lot. I don't understand why everybody's kind of assuming that because we've had – we had these big moves in every benchmark the last couple years.

Everybody's assuming there has to be another one. I'm like, what if the benchmarks don't really do that much, but you just have a bunch of little things? So here's who wins and loses in that scenario. The losers are professionals because it's frustrating. When you don't have any forward momentum anywhere or you have it and it vanishes and it moves somewhere else and it rotates and it rotates, that's a tough environment. The boomers, I think they're probably a neutral, not a winner or a loser. In that scenario, they're drawing down these assets. They're probably net sellers from now

until eternity, just given their age. Anything they're not passing along to the next generation is a sale for them. I think they're okay. The big winners is your generation. You have 73 million millennials. They're forced savers, which makes them forced investors. They're buying stocks. And they may not feel like winners in the short term if the market's going nowhere, but the more they add to it at this price, the better off they'll be

when it finally does break out to the upside, even if that takes 10 years. And I speak from experience because my formative years in the industry, we had a lost decade. So people would say, just invest, just invest, just invest. It goes nowhere for 10 years. It's, well, it doesn't go nowhere.

It's a rollercoaster that leads nowhere, which is even worse. But I think in that scenario, your generation wins. I don't know why somebody who's 30 years old or even 35 years old is rooting for all-time highs. That makes absolutely no sense to me. They have no choice but to continue to buy. Why would they want to pay the highest prices they can?

So Wellington did this piece, Why Fragility is a New Reality for the Stock Market. And Corey Hofstein and a lot of other people have written about this concept of liquidity cascading and fragility in the markets. And they have a few interesting charts that I want to talk about. One is showing the index liquidity versus the volatility level. And they show two lines, one from 2010 to 2015, one from 2016 to present. And it's saying that for a given level of volatility, the average level of futures liquidity was significantly lower. And it's saying that for a given level of volatility, the average level of futures liquidity was significantly lower. And they're saying that CTAs have a huge, have an enormous impact. I think they sold $500 billion worth of S&P futures during the height of COVID. Wait, can we define liquidity? The paper is calling it a function of the bid-ask spread,

like how much money there is waiting to buy and how much money there is to sell. Like, is that how they're defining liquidity? Yes. Well, so it says- But is it a limit book or is it how much trading volume? Sorry, you're going over my head, but here we go. This is what they said.

The supply of liquidity in the equity market as measured by the average size of the best bid and offer in the market has declined precipitously. In the case of single stocks, liquidity has been declining pretty steadily for the past 10 plus years. So this is something that might have a fairly large impact on the market that most people, meaning people that aren't real professionals, should probably not pay much attention to. We know it does. It's faster crashes,

faster rebounds, because the liquidity dries up when volatility spikes exactly when you don't want it to. And then vice versa, when volatility starts subsiding, liquidity ramps up right back up. Do I have that right? Yeah. So this is a dumb question, but who is this really impacting? I know it's impacting all of us because we're all market participants, but when they say liquidity, like Dan, are you having trouble putting trades on? Is that what they're talking about? Or are they just saying liquidity in the futures market dries up

and markets move faster? What are we talking about here? I mean, what they're talking about is a little bit different. And I don't know that the framing is 100% correct, but I mean, you are overall having more price impact if you're moving your money in and out of the market. If you're average Joe or even if you've got a pretty large personal account, unless you're trying to buy a stock right this absolute second, I think you're fine as long as it's not a really tiny thing.

If you're trading SPY or something, this is not an issue for most people. It's not an issue for most people. In small and mid-caps, which is most of what I invest in, you have to just kind of take your time moving in and out of things because there aren't as many kind of massive prop shops or bank prop desks. There are not people just sitting there waiting with shares to sell them to you. Banks have been pushed out of this activity by regulation. They don't want them having this risk on their books. pushed out of this activity by regulation. They don't want them having this risk on their books. If I want to buy $10 million of a $500 million company, there's not a machine that's holding that much stock

waiting to sell to me. You have to be a little more creative. You have to be a little slower. The other factor here is most people are trading with things like a VWAP algorithm where you're just saying, buy me a little bit throughout the day or over the next few days, something like that. And so if – think about how that affects it. If everybody's just sort of nibbling all the time, then the dealers, why are they going to take all this inventory risk if they know most of their customers are now nibbling instead of taking huge chops? Why are they going to take all this inventory risk if they know most of their customers are now nibbling instead of taking huge chops? There are people that are doing big block trades and stuff like that if you're a big boy and you want to go buy $400 million of Facebook at a given price at a given time.

That is a business, but that's – how many people are doing that? That's 200 investors globally that really do that. So this is just not relevant I think to most people. I think where it's relevant, though, this example. So they're talking about the market-making activity has basically been handed over to, we'll call them hedge funds. I know some of them are proprietary trading shops. Yeah, yeah, whatever. Let's just say hedge funds. And so Citadel is a good example of that.

So basically, this is where the liquidity is now. But the problem is that liquidity is not the same as liquidity used to be, where it's just always there. These algorithms are written to literally turn the machines off right when they're needed the most. So there's less profitability. There's less expected return on a trade when volatility spikes. So they literally stop trading. And that's the prop. That's how it, and the example they give, they think that these strategies sold $500 billion worth of stock during the height of the COVID driven volatility

in March of 2020. Like net sellers of half a trillion dollars worth of stock. That's where it affects the average person because think about how fast that happened. Yeah. And when you're sitting there watching that and you grew up, you're not even a boomer, you're 50 years old and you grew up in a market that used to be human and is now acting like this instantaneously adjusting $500 billion worth of stock. That's a, that's a shock. Like, yeah. You know, to, to most investors. What's the second chart?

Well, I think just on that, what we've done is we basically assume, the way we've worded internally, we assume there are going to be more accidents in the market. Because there's not a guy down at a physical floor who can take $500 billion of inventory off your hands. So I think you've got to assume, and you've seen it the last few years, right? We've had, since 2018, we've had, what, three, four, five months where we've had these massive 20 plus percent swings both ways that recover us immediately. That's not accidental. That's structural in the market. And so, you know, you know, I, then this is not advice for anybody else, but we, we've been keeping a little more

cash, having a little less exposure because one to four times a year, there's a big accident. And I like to have some walking around money to go pick things up that I think are, you know, being forced sold for whatever reason. Isn't that in line with history though? Not like four times a year have a— Yeah, but they're so much quicker. They do seem to be happening more— They're quicker. But when you say—what did you call that?

Accidents. Accidents are going to happen in the market. Oopsies, I think. Yeah, a little oopsie-daisy. An institutional oopsie-daisy. That just made me think of—was this SNL oops I crapped my pants? That's pretty much it, yeah. Josh, you know what I'm talking about here?

I do. What's this chart? Yeah. This is, what's the blue line is estimated equity exposure, and they're showing it drops when realized volatility goes up. So it's like the opposite of what you want. If you're building,

if we were building this structure from scratch, we would build it the opposite of the way it's actually operating. Yeah, last point I want, actually, I don't have this chart with me. All right, whatever.

We don't need to spend too much time here, but Dan, I just wanted to get your take on. Wait, I have a last point on this. Go ahead. I want to say who the is buying the $500 billion worth of securities that these strategies are dumping right at the absolute height of the panic. And I think it's pretty obvious.

It's the dumbest money. And by dumb, I don't mean stupid. I mean the least feeling, thinking, worrying money. Vanguard. I think it's 401k. Me. It's Michael. It's you and me.

And then it's, so. I actually think it's the guys who run zero hedge so they can frame the Fed for buying the stocks. Look at this. This is rolling 24-month volatility of one-month realized S&P 500 volatility. And it is going steadily increasing since whenever this chart starts in the early 90s. So this is where I think the money shot is. This is from the Wellington piece.

We think this is a result of the growing role of systematically oriented trading firms in the market-making ecosystem. Just say Citadel, we all know. By some estimates, as much as 80% of equity market-making is now algorithmically driven. There's no guy with white gloves. It's a software program. These firms recognize risk-adjusted returns, return to being providers of liquidity, fall when volatility rises, leaving them to rapidly withdraw their capital. So my take is the other side of that is mom and pop allocating to 401k. They pay no attention whatsoever to the VIX. It's on autopilot, and that is the counterbalancing force.

I jotted this down. Every two weeks, this money comes into the market. 401k is $6.9 trillion as of Q1 this year. 401k balances are up from $3 trillion 10 years ago. It's 600,000 separate plans, 60 million participants. Over 70% of that money goes directly into stock funds. So retirement plan money is a fifth of the market. So if you say like, all right, we have this thing where systematic strategies are yanking liquidity out, well, this is who's bringing it back in, and I actually think they're benefiting

as a result of not trying to time any of this stuff. What do you think about that? Yeah, I don't think that's controversial. Are they benefiting or are they making their own outcome? Not on purpose. They don't know what they're doing. I don't think there's any thinking. It's just like –

That's right. They don't know what they're doing. Yeah. 3.7% of 401k account holders stopped contributing during 2008, which is the most volatile market of our lifetime. So less than 4% of 401k allocators looked at the volatility and said, stop, which means 96% of people didn't give a shit. And so I think that's how you balance out that lack of liquidity in the market. Just that money coming in every two weeks, regardless of what's going on. It's hard to picture a scenario where people stop doing that. They haven't yet.

It's hard to picture a scenario where people stop doing that. They haven't yet. So Dan, I know you don't like to bucket value growth, but let's just call value statistically cheap companies. We don't need to get into too much here. But value and interest rates and inflation, the story goes that higher interest rates are good for cash flow today, right? We're getting the cash flow today.

Lower interest rates make the value of cash 10 years higher. So it's a very clean story that we're telling ourselves in Acadian. Asset management has this new piece where the TLDR is previously narratives that imply a straightforward causal relationship between interest rates and the performance of equity value strategies are oversimplified. I've always thought this, that it can't just be that easy. I mean, if it was, we would all know what to do all the time. What do you think about the relationship between interest rates, inflation, and stocks? I think it's kind of ridiculous when you look at where the world is right now. Any data we have that's relevant is, what, pre-1985 to what we're actually talking about here. And we're not talking about 50 basis points to 150 basis points

or 100 basis points to 200 basis points. We're talking about like sustained 500, 600, 700 basis point yield. And I think everybody likes to flex their macro 101 stuff, but the world looks so incredibly different. all of this stuff that we've been hedonically adjusting out of cpi we have no idea how this stuff behaves if you actually get to like those high nominal growth rates everybody like kind of has to have an opinion about it but i don't think we have any data it's like right now everybody's worried about inflation time is different no i'm just saying we have no way of knowing huge red flag right uh that's what i'm

saying is yeah um you know those are the most dangerous four words in the world oh yeah have No, I'm just saying we have no way of knowing. Huge red flag. That's what I'm saying. You know those are the most dangerous four words in the world? Oh, yeah. Have you heard this before? Dude, that's genius. Did you make that up? Should I tweet that the next time the market hits an all-time high? Wow. Profound.

But I guess, listen, would higher interest rates impact Shopify's business? No, of course not. But would higher interest rates potentially impact what an investor would pay for that future stream of earnings? It's not an unreasonable conclusion to draw, but I think that like to be so- Okay, okay, wait, wait, wait. Go ahead. The issue is, let's say all of a sudden you're a random business and your cost of capital goes from 6% to 15% or 16% if you're a small business, something like that. Right. Right.

There's this argument about what's going to happen to certain businesses, but then there's just an issue of relative competitive positioning. I think the issue is the big tech companies and stuff like that, if you went to a 5% or 6% or 7% world, they're going to be able to take a bigger, in the scenario where it's because business is doing well, they're going to be able to take a bigger and bigger cut and you're not going to be able to do anything about it. And also, if it's a scenario where we've lost control of interest rates

in some kind of Austrian economics wet dream situation, it's bad for everything, right? And so there's like this really weird small Venn diagram where I think practically that relationship is going to matter. And I don't think we know because you need to know like six other things to know whether- That was the finding in Akkadian's piece is that there are too many other co-variables that you can't point to this one thing. Low rates mean great for growth stocks. High rates mean great for value because there's so much else going on. But I actually do think that there is a story, and so far it feels like it's true.

I'd love to hear what you think. That actually what lower interest rates do is they lead to a spur in just more bountiful capital for venture companies. And I don't think it's coincidence, for example, that we have low interest rates for 10 years, zero interest rates for seven years, and you have the onset of the unicorn era. And you have all these pre-market startups worth billions of dollars. To me, that can't be something that's just happening on a parallel track. It has to be related. There's a lot of money out there. And what that does to value stocks is it gives their disruptors more firepower to come at

them. And that's why value stocks get a lower multiple in low rates. Because think about all the companies coming to kill them, having absolutely no problem accessing capital. The only advantage incumbents have over startups is they have cash flow coming in. So they can fend off competition or they could charge lesser dollars than a startup can. lesser dollars than a startup can. When you neutralize that advantage and you make it so anything Mark Andreessen backs can automatically be a $5 billion valuation and can raise money like that, that's why value stocks are depressed. I mean, that's my story at least. I think that's a really good story. And it told us how we got to now, but it doesn't tell us what

happens on the other side. Did these Shopify in the squares of the world and whoever else, did they build such an advantage that they can now withstand higher rates if they ever come anyway? But when rates went nuts this spring, they did beat up a lot of the recently funded venture-backed stocks on Wall Street. Yeah, but the issue with all these comparisons is we're coming off of a place where things are spacking out at 50 times sales and stuff, right? So where are we measuring that?

And also value's just been a nightmare for a long time. And also a lot of people believe that there's that relationship there. And so a lot of people are making that trade on that relationship and making it happen. That's such a great point. It doesn't matter if it's true. It matters if other people think it's true.

But I think the thing on interest rates is forgetting macroeconomics, look at it from just a personal level. A lot of this is really about trust and almost collusion because a lot of these startups, the pitch they really needed – like if you went to somebody in 1970, unless you were the son of some oil baron or something, and you were like, hey, if you give me $300 million, I can run all of my competitors out of business and I can have a permanent moat in this really valuable vertical. And then from there, I'll launch six other business lines, and I'll dominate, you know, I'll be a trillion-dollar company. And they'll be like, that's really nice. Get out of my office, put down the reefer. It would be insane.

But now, you know, there's all these different relationships. So one is, yeah, interest rates are low, but there's also precedent that that's actually possible. Yeah, now there's proof of concept. Right, and so people are willing to trust and in a sense collude and build these long-term capital commitments, and it's becoming self-fulfilling.

On the flip side, the question is why are interest rates up in a given world? If interest rates are up because people are fearful that the value of the dollar is falling or something else is falling, it's because there's a real lack of trust. And the reason some businesses do well in that environment, particularly banks-

So I don't think you're saying trust. I think you're saying belief. There's a bull market. I call it credulousness. There's a bull market in belief that some kid with an idea is worth giving millions of dollars to. And like to your point, that's now happening on an industrial scale that we've never seen before. But I just can't divorce that being the case right now with how cheap it is and how much money there is available. If you can trust an 18-year-old with a ton of money or you can just get 16%, it's a different question if you can trust an 18-year-old or 1%.

The other thing is there's all these other benefits. You invest in a startup and then people put it on their LinkedIn investor and blah, blah, blah. They put it on their Twitter. They're constantly pumping the product. Then they get access to other deals. They get invited. They get jobs.

I mean, you have people who – Stop making fun of Packy. You know, we've got a lot of people, and it's like it's a viable path. Dude, you're going – you're a Substack guy now. You're going to have – in your bio, you're going to have three startups that you've invested in like overnight. That's like part – that's part of what you get walking in the door at substack right i mean just get excited yeah they're gonna give me one share and like good enough put it in the bio yeah got one only fan share you know something like that um yeah no i mean it's just it's just a different i really don't think i do not think this time is different in the sense that like prices prices are still gonna do what prices

are gonna do and you're probably gonna take a beating if you're just long some crazy stuff. And I can't get myself to buy it, so I'm going to say that to protect my own ego. But I don't think any of this data in the past is remotely comparable. And the biggest reason is the internet. Go back to like 1950 or before. We got like a handful of telegraph lines and phone lines people were using to communicate. Everybody's worried about supply chains right now. When we got a bazillion undersea cables, everybody's – when CNN is globally broadcasting the concern about supply chains, people know there's a problem with the supply chain.

Everybody globally is worried about supply chains. That would have been an edge 15 years ago for somebody. Well, I mean you you can read about Soros and Robinson, some of these guys. One of their edges was they had a faster phone. That was a legitimate thing. There will be blood. Remember the montage

where he's running around Texas, I guess Texas, meeting investor groups. My name is Daniel Plainview. I've traveled across the state to be with you tonight. Just imagine that guy on Twitter. Now it's a tweet to an S1. We're coming public in two weeks.

I'm not allowed to talk about it. But that guy has spent six months building a persona on a social media app, and now he's coming public. That's a huge difference right from any other time period yeah yeah so for and so forget like this is my issue is let's say let's say uh the value interest rate thing turns out to be true and interest rates go up because growth is up and value companies start doing well what's gonna happen is certain people are gonna realize wait a minute let's just take over one of these value companies and start doing that stuff with the value company.

And it's just going to be the same thing. And so it's going to be a trade, but I just don't see this glorious 2000 to 2003 trade happening. And then again, I don't really trade commodities in any way, so I don't have a view there at all. I'm glad you said that, though. I actually think it's not even about value. It's industry. Right. So rising rates, there is a direct correlation between the profits at financial companies that are –

That makes a lot of sense. That are borrowing and lending, and the steeper rates get, the more money they make, that's like not a story. That's actually the truth. And it would make sense that multiples would go up for that group because investors like when profits are rising. So it's not really value versus growth. It's like what segments of the economy? And I think if you threw out that whole value

versus growth debate and just said, is it more favorable to be a consumer luxury brand right now or to be a company bending metal into soup cans? Like it's a more reasonable debate. Yeah, and the prices we're starting from. And the starting price, which ultimately should have some impact on the ending valuation or the ending profit. I think doing industry-level analysis on this stuff makes way more sense to me than what the multiple screen says thing. And I really don't know what to make of that heads or tails on just like let's say value, let's say value. You know that's true because of the way international markets had been correlated with value.

What's his name? There's a guy on Twitter who always has like great work on how like the different country valuations are entirely explained by sectors. Yeah. Who does that? Lawrence Hampton does. Yeah. So it's great stuff.

That's and that's so, that's so intuitive. Like just start, Just start there. Instead of trying to worry about why is, for example, why is England under or outperforming? What is in the English stock market? It's such a better approach.

I think the same thing with growth and value. When you see value outperform growth for six months and you see a huge rally in German and French stocks relative to US stocks, it's an industry story. It's not because there's some weird correlation. It's a perfectly logical correlation. Or it's a currency thing or something. It's just these things are really, really complicated.

And so anytime somebody wants to take it to value versus growth, the answer is it depends. It's complicated. It's situational. Price. is growth. You know, the answer is it depends. It's complicated. It's situational price that, you know, so Dan, you, uh, worshiped at the altar of Buffett among her. And I know that Suze Candy is your favorite example of all time. Um, did you, did you watch last night or was it this morning? When was it? I gotta be honest. I didn't even know whatever that was, was happening. People just started sending me Buffett stuff all at the same time. And I was like, why are people texting me? Let's set this up for people.

Tuesday night, Warren Buffett and Charlie Munger, who are 112 and 117, respectively, sat down with Becky Quick and did an hour special. I don't know. Like a, I mean, Becky's greaty's great and you know she always has great discussions with them the two sound bites that came out was that charlie munger is kind of cool with communist china and he likes that they squashed jack ma and made him disappear and what was the other thing that he said i i don't know you didn't even watch it no that's amazing that you didn't even watch it that's how far you've that's how far away you've come from and you didn't see you saw clips of it

i was at a dinner and my phone started exploding and i had i first when i saw was charlie is a communist and the second text was charlie really understands china and i was like what and i was like i'm i'm gonna opt out of this. He was calling people swingers, Charlie. I don't know what he's referring to. It went on for a long time. So the question is like, what do they have to teach us at this point? We've read and maybe squeezed all the juice that we can. But there are still timeless investing lessons,

even if they're not directly applicable to today's market. And they will still say some stuff that even if you're just relearning what you already know, like I think that can be valuable. So for example, John hit this clip. I thought, I thought, I saw somebody tweet this. I thought this was a good one. All the early businesses that we owned together have disappeared. They didn't disappear. They failed. They failed, yeah.

Right. But we took so much out of them before they failed that it still worked out fine for us. So 10KDiver tweeted, he said, a wonderful nugget of investing wisdom. All businesses eventually die. The essence of investing is to buy businesses that give us back so much in dividends before they die that we get our purchase price back plus a decent return. So you're saying that there is still – the question was not is there anything we can learn from Buffett and Munger, anything new.

Is there anything more – Those are different questions. Well, I don't – but I don't – That's what I'm – No, I get it. I get it. Listen, eventually, I don't think – I think it's really healthy to graduate from your mentors, right?

Like to say like, holy shit, I've learned so much from this person and I've spent so much time dissecting their brain that there's nothing more I can learn. But if this were 2016, you would not have missed that and you would have watched it live and you would have tweeted on it. Yeah. It's 2021. So you have graduated the School of Buffett and Munger. So you're answering my question basically. Yeah, but that's not a bad thing. There's no knock on them. I the school of Buffett and Munger. So you're answering my question basically. Yeah, but that's not a bad thing. There's no knock on them.

I don't think it's a bad thing either. What are you laughing at? They've given more to the world in terms of like investing knowledge than any two people, any other two people alive other than maybe Bogle. What do you think? But the question is like from this point forward, is there anything new? Well, because they're repeating themselves. They're not going to say

anything that you're like, holy shit, that is enlightening. I mean, I think you need to publicly challenge them for the throne. Like that's,

this is like a Clubber Lang situation. You need to go get up in their face at a- Michael has graduated from Charlie Munger to Pomp. Stop.

So he's got, he's got new mentors now. I mean, I don't know how you, how you say anything negative against their their are they both in their 90s now oh yeah no you're not if you if you they're the goats if you trash the goats right i mean they they they are so past hall of fame that they could they could right now start actively attempting to destroy their reputation and track record, and it would still be the number one ever. Right.

It would still not work. They could start buying AMC tomorrow, and the hagiography would not be any different. Right. I mean, it'd be really, really hard for them to botch it at this point. Actually, that would be their greatest achievement. If they could manage to ruin Berkshire from now –

In a two-year timeframe. In the next two years, that would be their greatest achievement. It would almost be like – have you ever seen the Buddhist guys that do the sand sculptures and then they sweep it away at the end just to do that with Berkshire? That would be the greatest artistic achievement in financial history. Well, there are people that think the bull case in Berkshire is that when one or both of them go – and knock on wood, let's hope that doesn't happen anytime soon. But when one or both of them go, then all of a sudden it becomes a sum of the parts story.

The conglomerate starts to literally sweep itself away in the form of spinoffs or any other divestitures that they've really just not been willing to do for a long time. How's that going to happen? An activist comes in? No. Maybe that's in the last will and testament for the company. No way. You don't think there's instructions? If you are going to dismantle this company to return more cash to shareholders. They wrote a smart contract. That's not going to happen.

It's an EC20, yeah. This is on the chain. I just hope it's like a Thor's hammer situation where like only the worthy one can wield it. All right. If you ask 100 people, professionals or civilians, I don't care. What happens to Berkshire stock the day one of them retire let's just say let's say it retires okay what happens to the stock do you think 100 people would say it goes down yeah but I think no change uh what if it goes up yeah I'm yeah that's what I was thinking I'm not

saying it will but wouldn't that I'm a shareholder Berkshire shareholder, like every other basic – I just – I think – here's what I'll say. I think that whenever that happens, you're going to see some stuff that is so shameless. It makes crypto look – What do you mean? The takes? No. Well, yeah, the takes are going to be – I might have to turn off my computer.

I'm not going to use the internet for like a week. My take is going to be some like gross like I love you. Yeah, I mean like what else can you say? You already know. But you know there's going to be somebody who's going to wait. You know, it's like again in Tropic Thunder, it's like when they're like we're going to wait an appropriate amount of time, preferably

before the end of the fiscal year. Did you watch Tropic Thunder last night or this morning? I just have like an encyclopedic comedy movie script. It's one of my favorites. So, I mean, you're going to see people, they're going to wait like, you know, two weeks. And then they're going to buy a massive position, try to go activist, try to break it up. You never do that.

You could name, there are like five guys. So, I think nobody would be shocked if they tried to forcibly take the reins of Berkshire via some public campaign. Ackman is going to raise a $700 billion SPAC to buy Berkshire. At least 50 percent odds. I think – all right. I'm pretty certain that we'll see a couple of people. I'll actually be disappointed if Bill doesn't take a shot at it. Take a shot at what though?

Like put me on the board? Something like that. I understand the Berkshire approach better than anyone. If he does not become involved in Berkshire, I will be legitimately shot. Don't you think that he's already got the letter ready to go? He already wrote it. He probably wrote it five years ago. He's probably already sent it.

Wait, what about what's his name, the guy that's teaching hedge fund courses now? Wasn't he like the self-proclaimed biggest Berkshire acolyte? Whitney Tilson. Does Whitney Tilson throw his hat in the ring? He's making like a lot of money. I'm sure he's doing fine. I think he might make less money running Berkshire from what I hear. I think he's killing it.

Were you surprised that they did this one-hour interview out of the middle of nowhere for seemingly no reason and not have a bombshell to drop? for seemingly no reason and not have a bombshell to drop because I thought that the reason they were doing this was to announce one of them was going to step down from whatever they're doing. I really have never known them to do anything without a reason. Usually you've got to wait a minute, and then you see why they did what they did. So I hope that they're both in good health.

Two things happened in the last month that make me feel that maybe they just wanted some positive press on their own terms. The first is the leak of all the billionaire's tax records and the reopening of that societal wound. And the second is whatever the hell, and I don't even really understand it, is going on with Bill Gates, who is synonymous with Warren Buffett in the public eye. Is it a coincidence that they just randomly did a TV special? I think addressing, uh, I, you know, he didn't address either by the way. Right. But I think when you have an issue like that, you just want to disappear. And I don't know that many people tied Buffett to that.

It's nothing to do with it in real life, but it's his best friend. Right. I mean, I don't know. I mean, I don't know why they did it. Maybe they just said, Hey, I want to say some stuff. Actually, you said, can we learn anything from them? Charlie tweeted that he loves Zoom. I'm sorry.

He didn't tweet it. He said that he loves Zoom. My brain almost just broke. I mean, I think, no, but I mean, I did see that part. But I mean, honestly, Charlie might have said. He loves Zoom's valuation or he loves the technology? Okay. Here it goes. Here's a quote. I have fallen in love with zoom i think zoom is here to stay it just adds so much convenience so he's bullish on i mean it's a hot take charlie might have woken

up and said wouldn't it be hilarious if i went on tv and said i love zoom and then hey warren come do this with me i mean i could see him doing that. All right. Let's move on. We wish nothing but the best for Buffett and Munger. We love these guys. I want to talk about weddings. The wedding boom is on. Let me pull one quote from this.

I'm the least surprised at this one. I want to get your take. Weddings are making a huge comeback and couples are panic booking. That sounds like something that would happen in my house. Basically, what they're saying is my business from last June was a lot of silence. Now we're right back into it. They go to all these brides, all of these wedding planners, all of these venues, and people are jumping over each other to make sure they get their date on the calendar.

Are you surprised by this? The speed of it? How quickly it, the switch flipped or not really? Who's surprised by, who is surprised by this? I don't know. I think there are people that said small weddings are the new normal and we may never see a 400 person wedding ever again, et cetera. That flies until, you know,

your significant other's best friend has a big wedding, and then you need to have a big wedding, and then all of their other friends need a big wedding. Yeah, we'll be right back into the swing of things. Duncan's getting married. I mean, it's a pecking order thing. Duncan, are you having a massive wedding? No, no, it's not massive.

Where is your wedding taking place? I heard it's far away from here. It's Wilmington, North Carolina not massive. Where is your wedding taking place? I heard it's far away from here. It's Wilmington, North Carolina. Okay. When is it? It's October 10th. Is it at a smaller venue than it otherwise would have been pre-COVID or not necessarily? No, no.

Basically, the moving target has been how many people we can have there. But yeah, it didn't factor into where we were going to have it. We didn't know if we were actually going to be able to have it for a while. We thought we might end up canceling, but yeah. Okay. Do you want to practice your vows with us now? No, thanks.

So I'm throwing a bar mitzvah in February, and we almost canceled it two months ago because we were hearing like venues would make kids wear masks and et cetera. And now it seems like there's no more restrictions and we're just going to like, we're just going to do it. And you guys are going to come and no, but it's going to be the same amount of people. We started planning in 2017,

same place, same place, same amount of people, literally nothing's changed. And we literally were on the verge of canceling it like a couple of months ago so i was a little surprised at my own willingness to be like let's do this and now people are like well what if this winter is really bad oh come on all right so i'll lose the deposit i mean i'll lose the deposit what am i gonna

what if i'm gonna have doctors on on site what do you want me to say to that what are you gonna do about the zombies what are you gonna do right what are you gonna do Am I going to – what if? I'm going to have doctors on site. What do you want me to say to that? What are you going to do about the zombies? What are you going to do – right. What are you going to do about the zombies? Look, everybody's just hammered right now. I mean I don't know if you guys have tried to get any actual work done in the last like three weeks. But since – beginning of June, it kind of stopped off and then now it's getting ridiculous. Dude, I'm drunk right now.

Right. Nobody is doing anything. Like everybody got their shots. There was like a two-week like, I'm drunk right now. Right. Nobody is doing anything. Like, everybody got their shots. There was like a two-week, like, okay, this is cool. I think that depends on who you're dealing with. I mean, I'm, you know, some CEOs of companies who are like, we're supposed to have a meeting. Hey, can we do it at the bar?

I'm like, really? Yeah. I mean, last weekend I- I'll call you from my boat I got from somebody. I had a barbecue last weekend, and normally, you know, I go, hey, I'm going to grill some stuff. Maybe 25%, 50% of the people I'm texting can come. Everyone came. We had like 50 people on this roof that I was not supposed to have 50 people on.

And just anybody wants to go out and do anything right now, I think they're like, a bar mitzvah, bat mitzvah, I don't care. Chuck E. Cheese, let's go. They have a bar. Peoplevah, bat mitzvah, I don't care. Chuck E. Cheese, let's go. They have a bar. People just want to get out there. I mean, I was talking to some people who work at some of the online dating companies, and they were just laughing. They were like, dude, you have never seen the data we're seeing right now. People are so aggressive.

Yeah. I mean, and they said, we even have data where women are being the net aggressors in certain circumstances. What does that mean? They're messaging more people than the average male on the platform is? They're like the rate at which they're swiping yes is way up. And then they're initiating conversations. They're like, women don't initiate conversations. It never happens. And now women are initiating conversations. And also they look at like relative response time and things like that on different sites. And so some of them are saying the women are initiating conversations. And also they look at like relative response time and things like that on different sites. And so some of them are saying the women are now responding within like 30 seconds of receiving a message.

And normally their like response time last year was like four hours. You know, it's funny. I bet the best, the best like a metric or if you had to just capture one visual to see like what was the pandemic outside of like foot traffic, subway, air travel, it would be probably dating sites. Right. Like if you just thought, if you were an alien, you just saw the data, you'd be like, what the hell happened on planet earth. So are you just killing it right now? Like, is this, is this,

is this the summer of Dan? Well, you know, not sadly, but I, I, I started dating somebody right before COVID and we were, we were, you know, you got lucky. Yeah. She and I were getting to know each other. It was going really well. And then the world ended and we had to you know. Then you got lucky. Yeah, she and I were getting to know each other. It was going really well. And then the world ended and we had to make the call of, so are we basically going to move in together or is this going to end? And we decided to basically move in together. I'd never moved in with a woman before.

And, you know, I went from living with – This dude's crazy. He started this sentence with sadly. We could edit this. Yeah, please cut that out because I do not want to be able to sleep. Duncan, do not edit. Do not edit. But I went from living with multiple guys to in frat house situations to briefly living on my own to now living with a woman.

So there's plants in my apartment now. There's a kombucha jar. Multiple toothbrushes. It smells good. There's like this living thing that's producing kombucha, and I think it's vile. And then, yeah, there's multiple toothbrushes. The smells good. There's like this living thing that's producing kombucha and I think it's vile. And then, yeah, there's multiple toothbrushes. The towels are clean. Probably not after this podcast. Have you seen Prometheus? That started

with kombucha. That's, yeah, that's what it looks like to me. I'm like, this thing is going to get out of here. It's going to wrap around your neck. Chris drinks that shit wherever he goes. Grab your face out. It's gross. Everywhere we go with our partner, Chris, like every city. Duncan, you drink kombucha.

I could have guessed that. I've had it. He's dabbled. Everywhere we go with Chris, if he sees it somewhere, like at a WeWork, like a random WeWork in Austin, we're throwing a meeting there. If there's kombucha, you can't find it for 20 minutes.

We're going long. Let's just go quick on Unroboted because their S1 dropped. And to me, the craziest thing, and there's so much in here, was their revenue in 2019 was $270 million in 2019. In 2020, it was 960. That's sick. I mean, this is their average users, total revenue. I mean, when we're talking about Robinhood, I remember a time saying,

what are they, $10 billion in assets? So what are they, 80? It's 80. Okay, so they just settled a $70 million fine, the largest ever penalty exacted by FINRA, which is the broker-dealer regulatory authority. And how much was it? $70 million.

Their Q1 payment for order flow was a lot. What's 330 million. Yeah. They net come out ahead, I guess, um, really maybe five hours worth of negative headlines. And now they've cleared the decks.

The S one comes out the day after they pay this fine, man, the settlement, whatever it is. This, this was a good one from the FINRA, uh, press release. The firm relied on algorithms known at Robinhood

as option account approval bots to approve customers for options trading with only limited oversight by firm principals. Those bots often approved customers to trade options based on inconsistent or illogical information. True, all true. They did that. They didn't give a shit.

They didn't confirm or deny. They just paid the fine. Okay, because they did that. They didn't give a shit. They didn't confirm or deny. They just paid the fine. Okay. Because they did that. We know that. Of course they did. Anecdotally, we know most of the people talking about trading options are like 13 years old. And I don't know.

I do love the 12-year-old TikTokers who are wrongly explaining. Oh, it's amazing. Some of the best content of the pandemic. I did delete TikTok. I downloaded it to try it. And I was like, I'm going to watch five minutes. And then two hours went by and I was like, nope, this stuff is crack. Cannot have it.

Yeah, no, it's, it's, it, that was some of the most entertaining content to come out during the pandemic was people who placed their first trades, walking you through them placing their second trade. Right. Like a wise expert. As an expert. This change is nothing. The fine.

Everybody's aware that Robinhood basically was a break everything, move fast, break things company. Nobody seems to really care. I think probably doesn't change the valuation it'll get when it goes public. No way. This also blew my face off. For the quarter ending in March, 17% of their revenue was from crypto. Quarter ending December, it was only 4%.

It went from 4% of revenue in December, quarter ending December, to 17%. And they literally, this was a real risk disclosure in their 3 million pages. Quote, if demand for transactions in Dogecoin declines, it is not replaced by new demand for cryptocurrencies available for trading on our platform. Our business, financial condition, and result of operations could be adversely affected. How much are they scalping on a Dogecoin if it's $0.29? All of it. Well, the whole $0.29. I'm going to read the whole last one. This is just really good.

I might need a scotch beforehand. It's long, but there's gold in there. Actually, there were so many people downloading it that most of the images weren't even loading for me, and I refreshed multiple times. Robinhood plans to allocate between 20% and 35% of its IPO shares to its retail customers. That I like.

I love that. Is there anything not to like about that? I mean... You could give it to Paul Tudor Jones, but he's going to flip it. If you give it to your fans, they're going to hold it. If we accept the situation as it is, yeah, it's probably the right thing to do.

Well, what do you mean? The situation as what is? I mean, I just... I mean, just as a hot take. Right, there's a whole... He's like a volcano. Right, there's a whole – This is a hot take. Right. There's a whole – He's like a volcano. Right. There's a whole bunch of stuff here that's scary as an onlooker. The mic is yours. But – Scare us.

Starting with what? I mean that – They're disclosing that their Dogecoin revenues are material. They were a third of their crypto revenues with Dogecoin. Right. Which is hilarious. Wow. I mean –

That's high revenue business. It is. It's very high revenue business. It's just – look, I think relative to the other things, people are – I just don't want to offend like 5 million people here. I just – I think – You're being very careful. Yeah, Robinhood – no, because I've, you know, I think. You're being very careful. Right, yeah. Robinhood. No, because I've touched this particular hot stove before.

I'm not going to have the crypto people after me again. How about this? It's different this time. Well, you don't hate. Do you like when Coinbase came out, were you like vociferously anti-Coinbase or not really? No, I'm just like, it's not for me. I'm not against it. I'm for me. I'm not against it. I'm not long.

I'm not short. I probably won't be long or short Robin Hood. And I think that, you know, I do think it's good given, you know, and part of this is like I'm friends with, you know, Bill Brewster, who had that family member that, you know, tragically committed suicide due to the disclosure issue. And so, you know, I've seen like when this stuff goes wrong, tragically committed suicide due to the disclosure issue. And so I've seen when this stuff goes wrong,

it's not an oopsie-daisy to me, and these fines are pathetic and a joke. I mean, it's like in the FINRA statement, which is preposterous, they're like the $70 million fine, and then one line down, it's like 7 million or x million uh x million customers you know were wrong in some way and it's like what you just said is that the the cost of of violating a customer is like 10 or 15 bucks a customer well if this were a different company besides robin hood it would have been put out of business right in a different time or the ceo would have been they would have

cut his head off right but i think think Robinhood has so many private shareholders that actually you would be doing harm to those shareholders if you got rid of Vlad. Like if that were the settlement that would, because I think a lot of the reason for the success of the company is him. This is insane. Between January 2018 and December 2020,

Robinhood failed to report to FINRA tens of thousands of written customer complaints. Yeah, nobody else could have done that. Right. I mean, this is the issue, is we're in a regulatory environment where the number of violations are so large that the idea of even beginning to enforce laws is, like, kind of

preposterous. Because it's, like, one, it's kind of like, you know, when people say, like, if you owe the bank a million dollars, they own you. It's your problem. Right. If you owe them a hundred million dollars, they own you. It's your problem. Right. If you owe them $100 million, it's the bank's problem. Right. It's that but for regulatory violations. Like I think when you go back to Uber and Airbnb, there were elements of the business model that were technically illegal and it was okay.

And they kind of got away with it at scale. And like it doesn't really hurt anybody in that case. anybody in that case but now we're at a point where you've got decabillion dollar companies that are coming public that are just flagrantly succeeding via blatantly disregarding regulations and it's now happened to such a scale at so many we're talking tens of thousands of instances a day dudes you know what happened to wells fargo stock the day they paid the biggest settlement ever the last biggest settlement ever. On the moon. The stock went moon. Right.

So it's not new. Because it's the shareholders' money paying these settlements. What Robin has done is it's created an environment where you've never seen so many investors with so much money move so quickly from stock to stock that it is literally affecting the dynamics, not of the stock market, but of markets in the stock market, of stocks in the stock market. Yeah, I just find the whole situation generally gross. I'll just say that. And so if you accept, like, setting that aside, I think it's good for people who want to participate that to have a fair shake at the stock.

So how many shares are you buying on the IPO? Well, wait a minute, wait a minute. $80 billion in assets. I don't know, what's the revenue? $970 million. So $1 billion in revenue. Where do the revenue? $970 million. So $1 billion in revenue. Where do they open this thing? 40 times sales?

It's a $40 billion company out of the chute? It's going to be insane. It's going to be insane. Last thing on this before we move on. I think $60 or $70 billion. Last thing on this before we move on. People that are about to invest in this, I don't mean trade the stock.

H-O-O-D is the proposed ticker. People who are thinking of investing in Robinhood post IPO, my personal opinion, go look at all the IPOs of online broker dealers from the late 90s, early 2000s. I understand there were differences. Those were not great stocks. Like none of them long, E-Trade was not great. First of all, most of them have been merged away. No disrespect. I really want to hear why that's a good comparison.

It's a brokerage business, primarily stock market, with a snazzier technology interface. It's no different than DLJ Direct being spun out of Donaldson, Lufk, and Genret and just being like, we have a fucking website. Look how exciting we are. That novelty wore off for the 10 stocks I can think of off the top of my head.

Like none of them went on to become extremely successful. This could be the one that changes that. I'm just- I'm with you. I'm with you, by the way. I don't just- People should understand it. Anyone else could do this.

So what I'm saying is what we said at the beginning, which is invest. Buy it immediately. Soapbox, what's something that you think everyone should be paying more attention to or less? I'm using this to just throw out a trillion-dollar idea for asset management. You could shoot it down in two seconds and we could move on. What if we had crossovers? Think of whoever is the best technology investor you know of. What if they-

Warren Buffett. So Warren Buffett. No, let's say, what if Cathie Wood could go to a billion dollar mutual fund, let's say, and they have 100 million of that billion invested in tech? What if they had a guest star, Cathie Woods doing the tech portion within our fund? Oh, they do that already.

No, I know there are amalgamated managers and sub-advisors, but what if it were celebrity managers who have just killed it? Didn't Matthew Ball just launch an ETF with those guys? I feel like we're getting there, right? So this has already happened? That was this week. Matthew Ball launched the Roundhill Metaverse ETF

it's not like a guest star of a sleeve but he's kind of like the guest star this is like crossovers in in comic books right

or like my favorite episodes of Scooby-Doo were when like Batman showed up right it's like wait what like

what's going on here what if you what if you have a fund where they just announce like for the what if Jeff Bezos was picking the stocks, something like that? And they tell you the timeframe. They go, yeah.

They go for the next 36 months. He's going to be moonlighting for the next year. For the next 36 months, Elon Musk is going to be doing all the space-related stocks in our fund. You're telling me like that wouldn't be a crazy money raiser. It would. And then they were like he's out after three years so if you want exposure to this celebrity manager

in the portfolio think about the possibilities of doing that with I don't mean like non-financial celebrities but relatively well known like Bill Miller's doing the crypto in this fund right? I don't know. That would kill it I mean you have to figure out how to make the

compliance work, but it would kill it. I'm going to call, like, Jan Van Eck and pitch this to him tomorrow. I'm going to pitch this to a couple of people. Here's my thing. Research affiliates did a piece, I'm just going to guess it's like 13,000 words, telling you

why cap-weighted indexes are dumb. And the TLDR is that the rebalance, uh, into Tesla and out of AIV cost investors. Hold on, wait for a drum roll. You guys sitting down 41 basis points. What's AIV. I don't know. It doesn't matter. That's the stock that S and P kicked out to make room for Tesla? So what are we doing here? Who cares? Wait, they're saying- John, scroll down. Just keep scrolling.

How long is this piece? It's 20 minutes of read time to tell you that, I mean, we spent so much time talking about the inclusions. And I understand how companies run up and then they come back down to earth. But at the end of the day, this does cost investors 41 whole basis points. Who gives a shit and if they own tesla it made them 4x on their money there we go it's over isn't that isn't like the point though that you know with any of these a cap would whatever if if you like

who is reading a 20-minute read quantitative analysis? I just don't understand where the customer is. Where the customer – I mean Michael is with a couple of people. But like if an equal-weighted version of this is going to get you to stick to your investment plan, then you probably should just do it, right? But like who is the market for people who actually care about equal-weighted versus cap-weighted versus whatever? It's like the three of us, Corey, larry suedro yeah nick majuli i don't know i probably know them all o'shaughnessy it's like six people it's not a deep i'll give you both o'shaughnessy's i'll throw those two in okay for free all right so let's not spend any more time on that what's your uh what's your soapbox dan i think everybody needs to spend

less time thinking about anything that's my my big thing i love this too many takes can you can you expound on this take i really don't think i have anything to add i just think there's too many takes and i think you know nothing that's happening right now is that impactful everybody should go see their family are you are you practicing this no so i am yeah i have been now for 13 months yeah you've been off the Twitter. I canceled myself 13 months ago and my life improved like markedly. I now have a six pack in the fridge. Now my relationship with people in the real world is better.

I'm not preoccupied by what some asshole thinks about something somewhere else. I don't follow politics at all. I can't, I don't even know who the president is right now. Apparently there was, apparently there was some sort of a kerfuffle over the ballots i don't even know who like i i'm practicing what you're saying and i agree my so my big thing the last year you know a lot of my friends had family members that got sick or passed away or

you know things like you know every kind of either went through some stuff or new people that went through real shit in real life real stuff right yeah and i'm listening to these people you know talk when you know they might be on their deathbed or they're they're near it and i'm listening to their stories about their life and they're you know tell you one story and it's like okay me and my friends we went hiking and then it immediately started raining and the tent was fucking ripped and and it's just da. And it's just this – everything goes wrong. And they're laughing their ass off while it's happening, right? And they're just like, oh my gosh. And it was – we were such idiots and then da, da, da, da.

Even if something bad happened to them. And then there's these other stories and the other stories are like, well, I met this girl and I thought we were really in love. And I thought it was maybe special but I maybe had this job opportunity and then this other thing happened. This other thing happened. I never really did anything with it. I maybe had this job opportunity and then this other thing happened, this other thing happened. I never really did anything with it and I tried to go back. It was really complicated and I'm listening to how they're telling it and the pain in the voice and the pain in the whole thing is that they spent a huge amount of their life

just kind of considering all these situations. They didn't do anything. Regret. It's regret, but the regret is wasting time and kind of contemplation of these like middling or bad decisions versus like the other ones where we went and we did a thing. It didn't turn well, but we just went and did things.

And so what I'm really trying to do, and I'm not good at it yet, is try to basically force rank my life where I'm like, what are the actual five or, you know, what are the five things that I actually want to do? And what's amazing is if you actually say, these are the five things I want to do.

I want to spend time with my family. I want to get in better shape. I want to read. I want whatever it is. You know, I want to drink a six pack every day. I mean, you can have whatever it is. But if you actually just set out to do the five things you care about, there's no time left in the day, right?

You can't stay out your phone if you're going to do that each day. No way. And you're just, the phone is designed to just eat your eat your mind and so i'm trying to that's the profit center is getting you to keep looking at it right so i'm trying to just deliberately like i didn't know about the warren and munger thing because i just closed my media off at different points of the day and like i have times where I'm trying to make sure that I'm only going to Twitter or something like that if I'm going to use it as a tool or if I've already allocated time for it.

But I'm trying to make sure it's not like something like – You put your – his calendar. Dan's Twitter. Dan's Twitter time. I literally have Twitter time on my calendar. What color on Google Calendar do you make that? I think it's purple. Fuchsia?

Yeah. And – What is Dan's Twitter time? Because I'll put my hottest shit up then there yeah i mean it's usually like four o'clock like i'll go in there for 20 minutes after the market closes or something you know what's the ultimate don't waste your time with this clubhouse way way more so than twitter i really don't like this idea of people trying to make really important industry moving conversations imprompt. I think it's really kind of in a philosophical – it's like kind of violent because they're like, oh, you have a family?

Fuck you. Listen now because wait until you hear – You will do what Andresen Horowitz tells you to do. When? Right. When we tell you to do it. And I really don't like that model and I thought it was really flagrant how they were attempting to kind of like, they were really trying to force it a few weeks ago, or a few months ago.

And I just found it kind of gross. And so I'm a pass on that. I've done a couple spaces when my friend's doing them, but... Mike and Ben do spaces. They do it, though, very deliberately for their fans, for Animal Spirits. Yeah, we're not trying to break any earth-shattering news. We're talking about...

You're scheduling it, though. We're talking about my Rogaine experience. No, but you're not like randomly like any uh earth shattering news we're talking about we're talking about scheduling it though we're talking about my rogaine experience no but you're not like randomly like oh shit here we come like you're telling people this is when we do it yeah right so i think i think that's the right way to do that yeah i so you know anyway my my soapbox is like i think people need to just you know figure out what you actually care about do those things don't care about some of this stuff the rest of the stuff it doesn't help you actually care about. Do those things. Don't care about it. The rest of the stuff, it doesn't help you to care about it. And most of the time somebody is like – somebody tells you they care about something. It's like, really?

What did you do about it? And they're like, well, I support this. I'm like, really? In what way? In what way? Besides the tweet. Oh, you attacked people you don't know and you have no context about because you support that. Well, I'm like, you know, several of the people that you follow had six charity events in the last three months you went to none of them but how do you support it again like just all this like nonsense

of people like you know people just need to kind of you know not even shut up but just like go actually do stuff right now you're allowed out of your house for the first time whatever go do things go see your family go have a good time. Go on a bad date. Do whatever you gotta do. Don't waste your time just sitting around. Stop paying attention to everyone's opinions. I'm with you on it. Let's keep moving. We're gonna go to... We're gonna end. Best things you read,

watched, listened to, etc. I'm gonna pitch The Wolfgang Puck Doc on Disney+, which just popped up last week. Did you guys get a chance to watch it yet? I saw a bit of it. I love him, by the way. He's fantastic. Michael, you will love this.

Why? Because it's a- He's a man. Yeah, dude. It's an entrepreneur story. It's like, it's about launching something that no one else has launched before. It's not like he was the ninth celebrity chef. They invented the term.

It made no sense either. That was ridiculous. Chefs. They invented the term. It made no sense either. That was ridiculous. Chefs were thought of as cooks. It's like the only other thing I've heard of it that's like it is like Arnold, like the Bill Burr bit about Arnold Schwarzenegger where he's like, I'm going to go to America and be a bodybuilder. Right. There was no such thing. Right. And he made it happen.

But here's what I really loved. The footage that they're showing while he's talking about launching Spago and everything is like late 80s, early 90s Hollywood. This is just before the internet. And I think it's the end of when there were actual famous people who like had lives that you didn't know about. Like when you saw Tom Hanks pop up, like footage of him in a tuxedo, like he didn't tweet two hours before that he just ate Chipotle. Right. Like they really seem like bigger stars. Yeah.

Even now looking at that archival footage in the doc. So I loved all that stuff. Oh, this is the best quote from it. Wolfgang Puck's mentor said, you're going to have many opportunities, but opportunities are just like trains in a train station. You have to grab and hop on one and hopefully it takes you in the right direction. I thought that was a really good way of thinking about all of the decisions

that you have to make. You just hope that you're grabbing the one that's going, which I think we all agree Wolfgang Puck did. All right, that's all I got on that. Mr. Bannock. Okay, Dan, you go first. I'm actually going to think of one while you go. we all agree Wolfgang Puck did. All right, that's all I got on that. Batnik. Mr. Batnik. Okay.

Dan, you go first. All right. I'm actually going to think of one while you go. Yeah, I got three. One, I finally got around to watching Ted Lasso, which everybody was saying to watch during quarantine, and I just saw a poster, and I was like, I don't get it. And then I finally watched it, and I was like,

this is the greatest thing I've seen in years. It's on Apple TV. Yeah, it's the first optimistic piece of media I've seen in a long time and it was one of the things you watch and you're like you know I'm from Virginia and I'm like how did I forget all this stuff like did New York just beat this out of me um and what not being cynical about everything that you come across just yeah and he just he just he's basically just nice to the point where he melts people's cynicism with just continued good person-ness. It's Jason Sudeikis. Why is he from there?

Well, he spent a period of his life in Oklahoma, which is where the character is from, so the accent is pretty good. The premise is it's an American football coach who gets hired to go coach an English soccer team. football coach who gets hired to go coach an English soccer team. And basically everybody is a brutally cynical, normal 2021 person. Right. And he just believes in everybody and is really positive. And that doesn't sound that attractive, but it's,

it's just done so well. It's like something like Forrest Gump or something like that. Yeah. For the modern, for the stare. And then the, the nonical aspect is spot on. Like, he's just nice. I watch it. He's like Duncan when you think about it. Yeah, he's just, yeah, exactly.

He's just nice and it was- You know that's your, don't laugh. You know that's your rap, right? Like the nicest person in the firm. He's like, I got a mean side, you'll see. It was nice to watch. I'm glad you feel that way. No, like that's the rap on you.

All right, what do you got? I think that, do you watch Dave? Oh, yeah, but the first episode was weird. The second of season one? Of season two. Oh, okay. So I really think he's a genius. He is.

I really do. I think he's like Larry David, but 30 years younger. He might be too smart. Not just to see just so funny and such. I mean, the rapping stuff, he's talented, whatever. But just the way that he writes the show, the way that the first episode came full circle at the end, and with each of the subsequent episodes,

and episode three is the craziest shit I've ever seen. Oh, I haven't seen two or three. I won't spoil it. You still haven't given me your Hulu password. I'll do it tonight. I'm still waiting on that. I'm just blown away by him, and it's cool to watch somebody so talented. Him and then the other thing I was going to say was that the Bo Burnham special on Netflix Inside, Dave and Bo Burnham are both like this, I guess, new generation where they can play every instrument, write all kinds of music, do the marketing, do the graphics, do the digital, do the marketing, do the...

And they can do it off the top of their head, and they can write it. I mean, these people are so insanely talented. I want to know what lab they made them in so I can get remade in one. I mean, it's crazy how talented these people are, and so both those shows are fantastic. Necessity is the mother of invention.

Like, the guy Bo Burnham basically had to do it that way. So if you have something that you're dying to get out there and there's no mechanism to get it out there, like you will find a way. I mean, I just tweeted. This guy made like 15 studio grade music videos and some insanely good songs.

In fairness, your tweets were pretty spicy. That's true. They were pretty caliente. All right, we're going to wrap up there. We appreciate Dan coming by. And I got to tell you, I think like of all the people that I've met on financial media over the years, like you're definitely one of the more thoughtful, funnier, et cetera. All the compliments I could drop here. Mustachier.

Thanks, guys. One of the most mustachey people I've ever met. We want to send you guys to ironshop.com if you want official Compound and Friends merchandise. You've got Animal Spirit stuff up there, too, I think is the most popular, actually. Is the new whale shirt killing it on the orders? I'm actually not sure. I've seen it sell a lot, but I'm not sure what's the most popular. All right.

We'll check that out. Guys, watch clips from this podcast and others at our YouTube channel. It's youtube.com slash the compound RWM. And if you love investing podcasts, good news. In addition to the compound and friends, you have a new episode of Animal Spirits every week. So, all right. Thanks, guys. We will talk to you next time.

Was that fun? That was fun. All right. We got to get a picture. 100%. And turtlenecks. We can't be like looking like we know it's weird and we're in turtlenecks. Thanks again to our sponsor, Masterworks.

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