The Compound and Friends - Why Is It Getting Dumber?

Episode Date: May 27, 2022

On episode 48 of The Compound and Friends, Carleton English, Rishi Khanna, Michael Batnick and Downtown Josh Brown discuss the economic outlook, the state of retail trading, the favorite stocks of hedge funds, new home sales, and much more! This episode is brought to you by our friends at Masterworks. Visit https://masterworks.art/compound to skip the 10,000 person waitlist. See disclaimer at mw-art.co/x. Check out the latest in financial blogger fashion at: https://www.idontshop.com 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/disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

People that just don't commute on Friday, which is the way it is now, I guess. Friday is the new Saturday. Shh. I know. Thursday night is the new Friday night. Thursday night was always Thursday night in New York. So here's the number one thing with podcasts. I mean, not the number one thing.

The number one thing that we really wanted to avoid, because I've seen it a million times now for 10 years. Everybody's like, I'm going to start a podcast. Okay, great. You're likable. It's going to work. Okay. And then they get like the three most famous people they know to do episode one, two, three. Right.

And what do I do in episode four? Yeah. And then by episode 10, it's gone. Yeah. Like it'll sit there forever. It's a podcast that once existed. Bless you. Thanks. Was that a cough? That was's gone. Yeah. Like, it'll sit there forever. It's a podcast that once existed. Bless you. Thanks.

Was that a cough? That was a sneeze, yeah. So I've seen this so many times, and I'm always, like, one of the people that they ask to do the first episode. What's up, guys? Hey, good to see you again. Likewise.

So what I've learned is to say, and I want to do it. Like, I'm not, like, too good to do a friend's podcast, but I always say, put me down for the one-year anniversary. Yeah. I'll do episode 52. What happened?

Did he invite you? Did Richie invite you on his podcast? Did Richie invite you? No. I don't have a podcast. Not yet. Carlton? No, no, I don't have one. I'll do the one year.

But I always, I taught myself, never say no. Everyone has four friends. Yeah. Right. So never say no, but never myself, never say no. Everyone has four friends. Yeah. Right. So never say no, but never be episode two. Yeah. Because it's just like, for what?

I get that. Yeah. The one thing that I think happens with some podcasts too is so many people are like, oh, we need the big guest, the big guest. And they don't have the why for it. Yes. Because you can have a not big name, but who can be really interesting on a topic. Yes. And people think, oh, I need the big name, the big name. It's like topic yes and people think oh i need the big name the big name it's like no you have to like hit the moment what's everyone talking about and who

do you know who can be fun and engaging about it well also if if a podcast is built just for the guest and nobody's into the host right it's done yeah you can't nobody has 52 great guests a year right no the guest has to be i mean the host has to be like the glue. So I think like Joe and Tracy figured this out. It's like one of my favorite odd lots, one of my favorite podcasts. I like them both enough that I almost don't care who they have.

Right, yeah. I trust them that they're not gonna have somebody who doesn't know what they're talking about. Yeah. Last week's episode was amazing. They had Greg Jensen from Bridgewater. Okay. Which, great episode.

But you don't get to that until you've done like, you know, experts in so many other topics that aren't from Bridgewater. And then you get to that. A lot of people are just like, hey, I'm friends with such and such hedge fund manager. I bet I can get him for a podcast. Okay, great. Now what? You did it. manager. I bet I can get him for a podcast. Okay, great. Now what? You did it. Great.

Yeah. Now what are you going to do? Yeah. So anyway, never do the first five episodes of somebody's show. I think a lot of people, when they launch the podcast, the other thing they don't think about is, is my subject matter, if let's say I have no guest, is my subject matter even interesting? Interesting, yeah. I think that's the hardest part what is the purpose of this monologue what is happening here not a monologue just talking

well we win he's just dropping his podcast you can give Howard a few tips for his podcast this is like a free lesson Howard doesn't stop talking to give this the way that's the tip someone should give Howard's podcast is great and if he had no guest and he came on the mic and he was like, I'm going to talk about startups for the next 20 minutes.

Hey, what's Knut's deal? People would listen. Who's Knut? People would just want to hear Howard talk. Who is Knut? He's like producer, like hype man. Knut's Knut. Knut's Knut.

You know, hype man. Like, you know, Canute's Canute. Canute was – Canute's Canute. Canute was like the guy that figured out how to take the StockTwits personalities and give them web shows 10 years ago with the prevailing technology. Oh, really? Yeah. I remember he was – So he's been around – oh, okay.

With like scotch tape and crazy glue. They were doing video shows in 2010. StockTwits TV, right? StockTwits TV. I remember that. Which if they had waited five years for the technology toits TV, right? StockTwits TV. I remember that. Which if they had waited five years for the technology to catch up, it would have been way easier. Yeah. But they invented the video technology.

Do you guys do any video on StockTwits? Not right now. Not like our own direct video. Not right now. What are you waiting for? Just not enough time for me today. Hiring's a bitch. I know the feeling. John, it's good to see you. Good to see you too.

How was South of France? It was great. Really good time. No, was it? Did you see any celebrities? Any movie stars? No, actually not this year. Really? Okay. I was only there for a couple days. And you did not see Top Guard. South of France for a couple days. And he did not see Top Gun.

South of France for a couple days. Like, what good is that, I guess? He was at Cannes. Nice. Oh, wow. He was at the film festival. Wait, wait, hold on. You've been, like, on a Broadway show streak.

Yes, I have. Can you tell us what to see? What was good? Okay, I saw Moulin Rouge before the cast changed. I think it will still be good with the new cast. I saw Company and met Patti Lapone afterwards. What is that show about? I heard about it because she was COVID shaming people. Yeah. Yeah. So someone had their mask below their nose and she starts out like,

hey, can you pull it up? And then the person dares to talk back to Patti Lapone. But no, so the show's about it's gender swap this year. So it used to always be about a 35 year old man. He's the only unmarried one in his group of friends. And he's kind of going through this existential, like, why am I not married? What do I want? Now it's a female in that role. And it doesn't quite have like a clear storyline. It's kind of like vignettes with like different songs.

But that one was awesome to watch. And then last night I saw Macbeth with Daniel Craig. All right. So that's the one that I want to see. But are there a lot of shows left or is it's almost over? Uh, you're going to have to rush to see, I think it ends in June. Who played Hamlet in Macbeth?

Who played Hamlet in Macbeth? I think, I think you did. Yeah. I think. All right. Is Daniel Craig a Broadway actor or it's, I guess, Shakespeare in theater. Is he like. He was.

And the thing is. does he have a gun at any point he's a thespian he has like swords and like daggers it is bloody

it's not a modern update of Macbeth it has I mean it has some modern elements to it but like they text each other

constantly hold up like Lady Macbeth I'm gonna go up and off this guy Lady Macbeth uh the the knife emoji dude did you do it get him while he's asleep i watched uh denzel washington version and i loved it oh yeah that must have been what was that on hbo max i thought it was apple was it apple tv

was it so good all right i don't have to understand anything that they're saying. I mean it helps if you know the story. But like they really do like the full-blown Shakespearean version. But it's black and white and the sets are incredible. It keeps your eye on the screen. In this production, sets are very stripped down. I mean it was the same thing. Great actors who can do the Shakespearean language, which I don't know. My last name is English. That means nothing.

But, I mean, they can talk naturally in it, and you're just kind of immersed in it, and you're like, I'm following this. All right, let's do the whole show in Shakespearean English today. Wow. That's what we're going to do. Let's do it. An iambic pentameter. I was just going to say. What do they do for the witches?

Tis the bottom end. For the witches, though, they're actually over kind of like an Instapot type thing. Okay. But they do some bloody interpretation. I mean, there is a lot of blood on the stage. You know what I was reminded of from the Apple Plus? How many lines from that play are just part of the lexicon that we don't even realize their provenance? I can't off the top of my head think, but there's probably ten, five or ten.

Like, come what may. Well, I mean, we all joke about out damn spot. Oh, my gosh. We do? What's that? She's trying to clean out the blood. She goes crazy. She's part of the murder.

And she sees blood on her hands every night. And she's there scrubbing, going, out damn spot. Wait, this is actually worth looking up. Macbeth, what would we call these? Common phrases? Phrases. Common phrases for 500, Alex. Let's see.

I'll try to find some. There's a lot of stuff. By when there's blood in the streets. Buffett goes deep into Macbeth. All right. Are we ready to rock and roll? Ready to rock and roll.

Look at the timing on this. 3-0-2. Nice. Doug was just playing you off the stage. Good job, Duncan. Coming in. Thank God. We have a big Shakespearean audience.

Oh, my God. We're back. 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. Hi, I'm Josh Brown. Did you know… Did you see this Keith Haring? Yeah, Keith Haring is the real thing. Wait, that's for sale on Masterworks?

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We're back. Look at this. Look at the guests that we have today, Michael. Are you excited? I'm so excited. Are you really excited? Every Thursday. I'm always excited.

Especially for this one. All right. You guys, this is the, what show is this? 40, what did we say? 48th show. So how is it a week? Oh, it's been a year because we took off a few. We took off a few, but we're getting close to the one year mark.

I don't want to say too much more about that. Last week's episode on Friday broke a first day download record. You guys are getting after it. As soon as we drop the show, you guys are downloading it. So we wanted to say thank you. We appreciate it. And keep it going. And thanks for watching on YouTube.

For those that aren't aware, we put the whole show pretty much. Right, John? Almost the whole thing? Yeah, we extended to the whole show now except the build open. Okay. The YouTube URL is youtube.com slash the compound RWM. And that goes up Friday night. So if you're a visual learner like Michael is and you prefer that to the audio version,

we do a really great video version on YouTube. So make sure you're subscribed and you're checking that out. Only people watching this will know that Michael just got up and left the room while you were doing that. I knew I had time. You really didn't have that much time. I stretched. You know what's nice? So for the first Thursday and like four or five Thursdays, the market is not puking into the close. Give it a minute. No. It actually did turn south a little bit.

But Carl Kittany tweeted from Bank of America. Participants will be – this was this morning. He said participants will be watching for another post-lunch rally as the S&P 500 has now closed above the mid-session point for four days, which is crazy. It's the longest streak in two months. Of what? Of us going out higher than we started? Higher than lunch. That's crazy.

It's been two months that we've gone. So four days, we'll take it. I'm going to be honest. That sounds super bearish. No, it doesn't. You got to start somewhere. All right. Listen, we have two amazing friends with us today on The Compound and Friends.

Really excited for the show. Carlton English is back. New fan favorite. Carlton covers Wall Street for Barron's. She previously covered hedge funds and other Wall Street. We wrote a really nice thing for you. Okay, thank you. Well, I'm just going to start crying.

You just sit there and maybe react to it. Okay. She previously covered hedge funds and other Wall Street stories for the New York Post, was a writer at TheStreet.com, and a producer at CNBC. Prior to getting into journalism, we went very far back. Carlton was a client service associate. Who wrote it? Nicole, is this you?

No, Sean wrote it. Sean wrote it? Oh, Sean, thank you. Okay. Carlton first dated Ken Stevenson. You know, my first boyfriend's name was Kevin, not Stevenson. No, I know.

Believe me, I know a lot. Okay. I was five, but okay. We hired a private investigator. We hired a private. Sean maybe went a little bit deeper than we needed him to, but that's, I like the dedication.

And Rishi Khanna is here. Rishi, say hello to everyone. Hey, what's up, all? Okay. Rishi, this time I'm going to address you directly. You are the current CEO of StockTwits. That's correct.

Wait, when you say current, what do you mean? Is this job in jeopardy? No. They're running your stock. They're running your CEOs, I think is what he meant. How long have you been the CEO at StockTwits? Right before COVID started. Good timing.

Almost two and a half years. Okay. And the community exploded during COVID because all of a sudden everyone was trading. Turns out. Okay. Yeah. I mean, we were already grown and we were already pretty large, but yeah, I mean, we definitely experienced. What's the, how big are we talking? How many users do we have? You know, we're over 6 million users. Whoa. Wow. Hundreds of thousands of daily actives and millions of monthlies.

Wow. Okay. And you, you, this is not your first gig in the space. Of course, you were the managing director at SS&C Technologies, which I know a lot about. Most people have no idea who they are, but they're pretty important in finance, right? Well, especially in the alternative world, hedge fund world and money management world, right? So I spent most of my career in the hedge fund world. My previous company at SS&C was a company I co-founded called Novus, which was portfolio intelligence for hedge funds and their LPs. And then at SS&C, Bill and Rahul knew me from Novus. And so they brought me in to run a couple of the software departments, their legacy software divisions, where essentially doing all the back office software for pretty much all the hedge funds and private equity VC, family offices.

Now you have a bachelor's in computer science and electrical engineering from Cornell. So do I. I'm an engineer by background, yeah. Okay. How did you find your way to finance first? And then second, how did you find your way to social media finance? So the finance thing is – so I graduated in 99, did my first company. We were actually talking about this a little bit earlier.

Did my first company, which was in music and entertainment, my first startup in college. Had two co-founders brought in. This was dot-com. But back then, we raised the seed round. Dude, 19-year-olds were starting companies then just like they are now. Yeah, we started this company, raised $500,000 in seed money. But dot-com happened, and we were a little early in our space as were many in that. So that, you know, shut down and I'm like, okay, like, you know, I'm an engineer and I love, you know, coding and stuff.

And so that's where I got into actually the world of finance. It wasn't like, oh, hey, I want to go finance. So I was trading in college. I had my E-Trade account and I did okay. But so I went to – John, post his returns on screen, please. I went to – Define did okay.

You got out of Akamai before – I went all cash pretty much three months before. Big Howard Marks reader at the time? Big Howard Marks reader at the time. But with the exception of one position that annoys me still today. Okay. So StockTwits, you – so you're at this point I think you have like a – we're going to talk about this later. You have like a – and so does Carlton.

You guys have like a big responsibility because there are a lot of new market participants. Yeah. And they're reading the stuff that you guys are putting out there. Like in your case, I guess they're reading the stuff that your users are putting out there. And in your case, you're writing about these topics and there are people who it's their third year trading. Yeah. And they don't necessarily understand as much about this as they will someday. Yeah.

But like does that weigh on you at all? Like I hope that people are finding things that are helping them on our platform. Yeah. Please. I tackle it. So you mentioned that you started in wealth management and during the financial crisis, and I call it the era of grown men crying because I was a 24, 25 year old associate sitting in this office with men who are running companies and like they're crying like, oh, my God, I are well off people that were worrying about their health insurance and, you know, these very real things. So when I made the transition to journalism, I realized there is someone reading this. There is a person. It's not a tweet, a headline that's going out into some sort of ether. It's a person reading this,

looking either to know what to do or just to make sense of what's happening so that they can inform things. So the one thing I think about a lot in my writing is it's not going to exactly be for everybody. But, you know, some of my readers may be the third year trader, the first year trader, the kid in college, the person retiring. So you just try to bring as much information as possible. And, you know, just to kind of help people figure out their way through all of this, it's not going to hit everyone equally. But you just try to realize like for some people, it's going to be their 10th time reading a story about this company for others. It's going to be their first time. Cause your stuff is in print in Barron's. So the people reading that have a lot

of money and they worry like by definition, right? Like if you're reading about finance on a Saturday, worry like by definition right like if you're reading about finance on a saturday you have weighty issues on your mind you're not like a stoner you're not like somebody that doesn't care like you really okay so the stuff that you're putting out and you're covering wall street which is even double the responsibility uh okay got it and like so from your standpoint i know you're not directly editing the stream right you have a limited amount of control of what users are saying. But, no, we still, I mean, I think about it a lot, right, especially with the rise of all the new investors. And so, you know, on one hand, we also have our own content, like in the form of our newsletters that we have actually put a lot of work into. We have 1.2 million subscribers to our daily market newsletter.

Wow. You know, and about 35% open rate. So a lot of people actually open it and read it every day. Who's writing that? Well, now it's our good buddy Tom Bruni has come on. Oh, man. Bruni's on? He's on.

He's writing. He writes the daily reads. We love Tom Bruni. Yeah. So he joined us a couple weeks ago. We brought him in full time. And so he's leading that. And we're building out our editorial department.

Hang on. Time out. We've known Bruni for like 10 years. We know him from high school. but he's only like 25. Like not even kidding. That's amazing. We know Bruni from I think before I think he was in college when we met him?

He had to be in college but he might have been 17 for real. For real? He was like a market obsessive I think that met a bunch of people that we know. Our office is right around the corner. You know that. Yeah.

We get in most days of the week and stuff. All right. Well, we'll come by and we'll drop some hyperlinks into Bruni's. No problem. And then, you know, the other side, I think, of education is like the tools and data and stuff. And so, you know, we have a lot of room to like deliver more value and educate and stuff. But, yeah, the user content itself, right? We've got our rules and you want to make it,

but you also don't, I have a philosophy against being too big brotherish and too, you got to let people find their jobs. You guys have a tough job of like where to draw the line because there is some shit. Oh, there's some shit. And it's, you know, like, I don't envy- Do you feel like you're in competition

with some of the other social, like do you, I know it's not Twitter, but maybe like, maybe something that hasn't mattered until two years ago is Reddit. But then all of a sudden that became like the center at least for a little period of time. What's the overlap between Reddit and Stockton?

I was going to ask you, how do you see your job versus what's going on on Reddit? Were you texting with Jay yesterday? Because he asked me the same thing like literally yesterday. Jay Woods? Yeah. He's like,

what do you think about that? About the overlap? Yeah. So there's definitively overlap, right? And what I say about it as an investor is like you go to where you can find information or where you think you can find, you know, edge alpha information asymmetry. And so Reddit became one of those places, the Wall Street bets, you know, phenomena. So I think there's a good amount of overlap. We haven't done a study to officially say like, is it 50%? Is it 30%? Is it 70%? No idea of that like specificity, but clearly there's an overlap in the communities. It's very different forms of communication, right? Kind of the short form conversational, high, high velocity, liquid conversations on StockTwits versus like some of

the longer form stuff. Well, I think people go to, people go to StockTwits for financial commentary. They might happen or stumble upon the, the WallStreetBets section of Reddit. Yeah. Right. And that's also the difference is Reddit is, you know, Reddit, Discord, and Twitter, which are also, you know, heavily like FinTwitty or WallStreetBetty or whatever the terms are we want to use. They are generalist platforms. So there's always going to be like, they have other, you know, gamers or politics or sports or whatever. For us, our opportunity in that I really want us to focus on is we can go really deep in verticalize and help within that site. Like you can connect your portfolios.

We can tell you what's trending. We can share our sentiment data on these things. When are you launching a politics vertical? Stop Twitch for politics? Man, I think we already have that in Twitter. Isn't that what Elon Musk is buying? So let's get into what's going on this week. The week started with JP Morgan.

Was that Monday? That was Monday. It all bleeds together. I know. Yeah, that was Monday like 6 a.m. All right, Carlton. So you wrote JP Morgan's rosy outlook is lifting bank stocks. That was one of the best days for the market of the year this year, at least for

S&P and Dow. So well done. What were they basically saying? It's like, yeah, we see that there are problems, but we're not in a full-blown recession or anything like that yet. Yeah. So there were two things that JP Morgan did on this one. One big takeaway was Diamond's statement on, yeah, there's big storm clouds here. And I mean, we know what they are, inflation, you know, the geopolitical situation. The stuff that we're all consumed with. Yeah, exactly. But he said, those may dissipate. They could change. And we're positioned to navigate through that change. You know, that's not to say everything's going to be great, but just hearing someone in that position say, we see what's coming and we feel confident in being able to handle it. So that, I think, really lifted the broader market.

In the case of JP Morgan, it was them lifting their guidance on net interest income a bit. It was also them saying that they were going to hit one of their profitability targets this year. There had been some questions about that. Because the weird thing is, going into this year, JP Morgan has been an underperforming bank. It's a well-run bank, the whole Fortress balance sheet thing. But they are spending a ton on technology and investors were like, all right, what are we doing here? Like, what are you buying? How much on FinTech have they, like billions?

Billions, north of, I think, 10 billion. And investors are like, okay, when you're doing that type of spending, are you spending to have something cool? Like Mike Mayo, the analyst at Wells Fargo, he's like, are you guys doing Star Wars? Or are we talking about like piping and boring stuff that no one can see and really understand? Well, I think they have to do both.

Like their cybersecurity budget is probably the same size as many countries. That's not that's not a luxury. They have no choice. Right. So we start with that. Zelle, I feel like is very important to them. It's not just luxury. They have no choice, right? So we start with that. Zelle, I feel like, is very important to them. It's not just theirs. Right.

But it's got to require a ton of R&D and maintenance. Yeah, I mean, R&D, maintenance. When you think about Zelle, the payments transfer platform, and how quickly people are able to connect with other people that aren't tied to the same bank, the same institution and the types of checks and balances that have to be there for transactions. It's amazing. Does anybody else on Wall Street? I do. I use Zelle. Yeah.

I ran into a tennis instructor needed us to pay him for something. Yeah. Like he had our rackets restrung and I'm like, are you on Venmo? He's like, no. PayPal. I'm like, are you on Cash App? No. What do you want? He's like, no. PayPal. I'm like, are you on Cash App? No. What are you on?

He's like, Zelle. I'm like- The only person I know on Zelle is my dad. So this surprised me. That was weird to me. JP Morgan's underperforming XLF, the board of financial sector, for the last three years. But over the last year, the spread is massive. So XLF is down 5% over the last year.

JP Morgan's down 18%. That's a lot. It's like a lot, a lot. Is Jamie Dimon like the only person on Wall Street that has that level of, I don't want to say credibility, but influence? I think he is. Could Moynihan have done that to the market on Monday? Probably not. I don't think Moynihan could have done that on the market. DJ? DJ, no, I don't think he's too far removed from the day-to-day transaction data. He'll make you dance though. But there's no consumers there.

Yeah. I mean, well, now there is, but you know what I mean? Not like chess. It's small. I think with Moynihan, you know, when you looked at the beginning of the pandemic, I mean, remember Jamie Dimon was recovering from heart surgery then and Moynihan actually kind of did have to take that role and he did it well, but Dimon, I mean, they're just, they're different personalities. Diamond likes being in front of the camera. He's first team all CEO. What about James Gorman? James Gorman, I mean, again.

He's so quiet versus Diamond. Well, I mean, sort of. I mean, it's, if you're looking at investment banking, no, he's not very quiet at all. If you listen to the analyst calls, he's very brash and stuff. But again, what their business does, it doesn't touch the mom and pop customers so much. I mean, it's wealth management. E-trade a little bit. E-trade a little bit, but that's more recent.

I shouldn't say they haven't made their mark there, but they haven't really branded themselves there. It's wealth management, investment banking, right, for the most part? So this is interesting. So Jamie said, I'm calling them storm clouds because they're storm clouds. They may dissipate. If it was a hurricane, I would tell you that. I think he would. What would the market's reaction have been if he said, brace yourself?

Batten down the hatches. You know, I mean, the thing is, like, if someone's telling you a hurricane's coming and they're saying it's coming in three weeks or, you know, in a few hours, you can prepare. I mean, things are allowed. Markets are allowed to go down. We've seen that. And it doesn't always have toets are allowed to go down. We've seen that. And it doesn't always have to be. We're rolling over. We're rolling over.

I mean. Still 40 minutes left. Still 40 minutes. Fingers crossed. Carlton just gave them permission. So I don't know if I like that. Mel, finish your thought. But I mean, markets do go down.

And that doesn't mean that the economy is suffering. It just means we have a market downturn. So there are ways that we can prepare. You make sure balance sheets are secure. If you're a bank, you kind of tighten lending standards and do things to keep yourself safe. And as long as everyone's aware of what's happening, yeah, you can say, yeah, the next month is going to suck, but we all know that. And then month two is going to be better. Ironically, I think one of the safest places to be invested on the equity side, Ironically, I think one of the safest places to be invested on the equity side if we're going to have a recession is JP Morgan, is Bank of America. I don't know that they're going to forget that 12 years ago, these bank CEOs,

many of them have turned over, but some of them haven't. We're fighting tooth and nail against the things that have given them these fortress balance sheets. They didn't want to do level one, two, three assets. They didn't want to do tier one, tier two capital. They didn't want to be overseen by everyone they're overseen by. But the net result of that is we could have a crisis in the economy that's not necessarily a financial crisis. It doesn't mean the stock market will be OK, but I feel like the deposit banks will. And it's ironic that these guys are in such a position of strength right now. The other thing that I thought was interesting about this, you remember the current expected credit loss framework that went into effect at the beginning

of 2020, which forces banks to kind of post reserves. And CCAR and all of that stuff. Yeah. And in this last downturn, I mean, yes, we did have Fed stimulus, you know, helping there. So I don't want to undermine that. But the fact that banks constantly have to be looking at their balance sheets and reserving for, you know, those for those storm clouds, they don't like it. It's not fun, but it does keep them safer. Sorry, I interrupted. Well, no. I mean, on top of that, because they have all these reserves, I mean, we're going into like an actual interest rate environment where you can make money on.

So, right. So the reserves aren't like just opportunity costs. They actually could become somewhat profitable depending on what the yield curve does. Yeah, at least a creative in some way, right? We also don't have these big deposit institutions out there with proprietary trading desks running around 30 times leverage in the same assets

that their clients are getting crushed in. Right. And that's another huge difference from 12 years ago that I think, or 14 years ago, that I think maybe we'll learn to appreciate. I think we need to now start stress testing the fangs. If we want to get, if we want to get through the current bear market, we might have to get some, some idea of what will happen to iPhone sales. So, all right. But what, what else have you heard this week from wall

street or what else, like, should we be aware? What are you reporting on right now that you think is going to be relevant? Yeah. So what's been going on with retail stocks over the last two weeks? I think you're getting a weird picture of the consumer right now. And I'm still trying to make sense. They want a huge today. Yeah. But I mean, you had Target and Target losing a quarter of its value last week. But then you have Macy's up, you know, 17 percent. Can't figure out the why. I mean, some of it, I think, is the move towards Target losing a quarter of its value last week. But then you have Macy's up 17%. You can't figure out the why? I mean, some of it, I think, is the move towards people are going out. The things that they're buying, they're much more intentional.

Yeah, back to work. Exactly. Back to work. Back to Ann Taylor. Let's go. Let's put something up. And airlines are saying that demand has never been higher, that they're seeing acceleration. Yeah.

So people already bought their lawnmowers. Like, that's done. Home Depot is done. And now we're buying shit. We're doing shit. So people already bought their lawnmowers. That's done. Home Depot is done. And now we're buying shit. We're doing shit. Yeah, airlines I think are well above pre-COVID numbers. We'll see if that lasts. This is like two years worth of pent-up vacationing. We'll see. The thing is, I was talking to

Ben about this. Everyone who's dying to travel, okay, you go on vacation. It's not like you go on 18 vacations. Well, some people do. But I mean, it's also business travel, right? Like business travel is coming back too. I've been on a conference stretch. I mean-

What's the last event you went to? Last week I was in Palm Beach for permissionless. What is that? That doesn't count. Crypto, that doesn't count. I think business travel outside of that. Yeah, business. I mean, yeah. Yeah, as a consumer business, we don't have the same kind of- No, actual business travel outside of that. Business. I mean, it's business.

Yeah, as a consumer business, we don't have the same kind of- No, actual business travel, I think, is going to come to a grinding halt pretty soon. Grinding halt? Absolute business travel. Yeah, I do. I'm kind of better than that. I think that- Why? Because every CEO on every conference call is focused on cash flow and tightening up.

And you know what we have that works really well? Google Meet and Zoom. And I'm already hearing it like anecdotally from people that work in business. And I think it's good. Right. I think like conferences and trade shows, it's like all the power is going to be concentrated

into like the top three, let's say. There's not going to be a need to have a lot of the secondary and tertiary events throughout the course of the year yeah like you know who gets hit by that like no no i'm not trying to upset anybody in our industry for example yeah i used to go to all these like fpa events financial planners association of blank and they were great like i met great people i enjoyed all of it so i would go to the financial planners association of tennessee right. So I would go to the Financial Planners Association of Tennessee. Right.

And then I would go to the one of Central Tennessee. And it's like, wait, what? Right. Or Lower Kansas City. Yeah. Oh, when is the Upper Kansas City? Oh, that's next month. Right.

There are a lot of events that really don't need to be in person or don't need to take place at all. They were an excuse for dues. Hey, we're paying these dues. Why are we paying this? Oh, we're going to have our jamboree. You're going to lose some of that stuff. I think you'll lose some of it, but don't you think people want to get bigger? The big events will get bigger. I mean, well, just even in

the not real world of blockchain, right? I mean, so permissionless this year, first one that they put on, 7,000 people. It was originally supposed to be like 3 000 it's crazy i was talking to the founders i'm friends with them they're like next year they're expecting it to be 18 to 22 000 people tell me where the price of uh bitcoin is i'll tell you whether or not can i tell you something can i tell you something or like all kidding aside yeah i mc'd i mc'd uh what's the the one they do with the marriott marquee, the crypto one?

Consensus? Consensus. Oh, it's in Austin. Literally, I spent three hours – I don't know why I did this. I mean it was fine. I emceed Consensus in 2019. Okay. Okay? I swear to God there were 20 people in the audience.

I don't know what it was in 2021. I bet it was much bigger. It's coming up June 9th. It's in Austin. It's 10 to 12,000. Abigail Johnson's speaking there. I promise you, there were 20 people there. Yeah.

And you know who was on stage? Novogratz, Meltem. Yeah. You know, like the crowd. Yeah. The crypto crowd. Well, I guess Abigail must be going because of the 401k Bitcoin thing, right? Yeah.

For sure. But I'm saying that will ebb and flow based on the asset class. Like anything else. 100%. Like everything else. Because I was at gold mining conferences in 2011. And I'm sure they weren't as packed as the ones in – I'm sure they were more packed than the ones in 2015.

I would assume so. They might be back. I don't know. Tell me about the state of retail trading. What is going on? I mean, people are pulling – I mean, in the markets that we've had over the last, what, five months, retail pulls back, right? I mean, like it's – Are they still there but doing different stuff or are they like not transacting as frequently as they were?

Are they going to Staples or do they not trade that? No, they do not trade – like's a good percentage, that massive rise of new investors that went into the Robinhoods and the Coinbases and stuff, whatever the asset class is. You see a lot of them just, hey, they're going to step away from markets. I believe that asset class that you're referring to is garbage. Fair. It's still an asset class that people invest in and Coinbase has like 79 million accounts. Large cap stocks. Small garbage. Mid-cap memes.

So you see it regardless. And we see it in our user base too and whatnot. There's just a pullback. There's like, hey, everything doesn't go up every day anymore. So I'm going to take a break. I can watch sports. I can watch – I'm going to take a break. I can watch sports. I can watch, you know, I can go to- They'll find new, some of them will find new hobbies

and some of them will stick around long enough to actually educate themselves. Right, and then people learn and like, hey, it's a good introduction, right? That's my take is- It's a good introduction. These people have been nuked. You know, sometimes you gotta eat a little dirt to learn.

Cup of kid. They got, all right, so they got jumped into the gang dirt to learn. Cup of kid. All right. So they got jumped into the gang. Yeah. I would argue they got a 10-year education in 12 months. That's what I would say. Yeah, it's pretty great. If they were paying attention. I would say you just saw the most ebullient, psychotically exuberant market of all time.

And immediately after, I mean, it always is this way. And immediately after, I mean, it always is this way, but like immediately after you have just literally seen like 3,000 stocks lose 80% of their value. Yeah. Like those two things all happen within 12 months. John, throw that chart back up. Yeah. I mean, 12 to 18 months. We got some good numbers here from Goldman Sachs. $72 billion of S&P 500 single stocks was bought by retail investors from January 2019

through February 2022. $72 billion. That's nuts. They also estimate that around 50% of retail positions in NASDAQ 100 single stocks accumulated since January 2019 have been sold.

Wow. Is $72 billion really nuts, though, for that time period? That's a lot of money. I don't know. I don't know. Listen, $500 billion. I don't know. I don't know. Listen, $500 million, I don't know. I feel like it is because

it's like $300 trades. Right. That's why it's a lot of money. These are literally odd lots. $10 trades, $50 trades. Rishi, I wonder if you could corroborate these numbers. You don't have to disclose exactly. All right. Robinhood disclosed

that their monthly active users dropped 10%. John, we have this one? Year over year from Q1, which actually, that sounds not that bad. Oh, no, this is quarter over quarter. But still, that's way better than Coinbase, which trading volume was $177 billion in Q4. $177 billion in Q4. $177 billion in Q4. Mike, pause. So we're saying – what is this?

This is Robinhood. This is monthly active users. But their transaction volume is fairly 50%. So Q1 2020 is 8.6 million? Million. Okay. The peak is Q2 2021, 21.3 million. So this is Robinhood. Now it, 21.3 million.

So this is Robinhood. Now it's down to 16 million. So we're still double where we were before the pandemic started. Yeah. On balance, they have still had massive growth. Even if you pull out the peak of the meme stock mania. Yeah, absolutely. Now, where does the 16 go?

That's a question. Well, Q2, that could get cut in half. I wouldn't be shocked. I don't know that it gets, like, again, this is, we're looking at monthly active users, which is somewhat indicative, but if you have a portfolio, you're going to open and check it. Yeah. Right? It doesn't mean you're trading. If you look at transaction value, which is where they make their money.

Let's look at that for Coinbase. Good point. Yeah. Let's look at that for Coinbase. So retail trading volume at Coinbase last quarter in Q4 was $177 billion. It fell 58% quarter over quarter. What is that, amount of trades? No, yeah, trading volume.

Like actual, not checking your account, not users, volume. $177 billion down to $74 from Q4 to Q1. That's unbelievable. Massive. Yeah. Now imagine you were hiring as though those Q4 numbers were1. That's unbelievable. Massive. Now imagine you were hiring as though those Q4 numbers were going to be the new numbers. Imagine they actually did.

They tripled their headcount. And I mean, listen, that's the right number for them to look at because that's what they generate revenue on. But that is a dollar value. What I'd also be interested in is to see the actual transaction numbers because remember the dollar value

is affected by the price of the asset. So Bitcoin is cut by 50%. So hey, if the transaction, if it's, let's say you- How many trades, not how much was the cumulative dollar amount of the trade. It was also way lower.

But they're not getting paid per transaction. They're getting paid on the dollar amount. So that's why this is the right thing to look at from a revenue and a business model perspective. But from a retail interest

and impact perspective, I think you do have to look at just the raw transaction. So if Bitcoin were to rebound, then you- They'll be back. They'll come back. Look at this chart from Urien Timmer, who was on the show a couple of weeks.

Looking at the call, this is interesting. Looking at the call to put ratio, usually you see the inverse. People look at the put call ratio to see if you're in the market. Now we're looking at the opposite. It's how many calls bought for every put. And naturally it's on the floor.

Nobody's excited. Wait, the blue line is the call to put? Yeah, and- If you're buying calls now, And naturally, it's on the floor. Nobody's excited. Wait, the blue line is the call to put? Yeah. And if you're buying calls now, that's like lottery tickets. I mean, it could work. It could work. So you've got this segment of the market, like the super high active traders. You see people, one more chart, souring on sectors.

It's unusual to see sector ETFs have such big outflows. I think this is probably XLK. If I had to guess, I can't imagine what else this is. You're seeing the biggest monthly outflow ever, and this is primarily dominated by like the SPDR ETFs. What is that? Negative 20? Yeah, like negative 8.29. It's just –

Negative $20 billion. It doesn't happen that often. So you've got this whole segment of the market that's active, that's trading. And then all the way on the other side, the people that actually like dominate the, you know, the, the, this is not trading, but the dollars coming in are the people that just never pull out. Look at, there was an article in the journal talking about target date funds. Yeah. And. The least sensitive to.

Yeah, like 0.9%. 0.9%. That was at Vanguard. You say, oh, well, it's Vanguard. People like it's Vanguard. They're indoctrinated. It's the same thing at T.R. Price. Once you're in a target date fund, you don't f*** around.

Yeah, and where is your target date fund? Wait, 0.9 what? Your 401k, right? Like, I mean, you're not really- 0.9% of savers- Touch their account. In target date funds- Touch their account.

Make trades. Less than 1% of target date fund holders at Vanguard. I mean, how often do you look at your 401k or something? Never. I don't even like- Hourly. Literally never. That's the source of my confidence.

And so a lot of people like waiting for retail capitulation. I just, it just might not be in the cards. Bank of America, last week, during which the S&P 500, during which, I feel like that's a Shakespearean. The S&P fell another 3%. Bank of America security clients were net buyers of US equities for the sixth consecutive week. But they're buying individual stocks now instead of ETFs.

Flows are still, people are still coming in. You posted, or you gave us some trending stuff from StockTwits, what's been going on this week. Let's go through these. You could explain these things to me because I am- I don't even know all the companies. I am very unplugged these days. So there's a ticker symbol S-I-G-A.

Yeah. Which is a smallpox drug or a vaccine maker that popped on monkeypox. Classic monkeypox trade, by the way. I mean, everyone had to know that. Everybody had to go right back to the well. We're the best. Like all of us.

Like the fact that we do shit like this, like stocks are popping on monkeypox. Monkeypox. I mean, you know, stocks are popping on COVID back. Remember the Ebola suits? Yeah. The suits. Or was that COVID suits? There was like hazmat suits.

Rishi, how do people find the ticker and all coalesce around it as the monkeypox stock? You must see that take place how does that work well so i mean uh you know there's always a group of people that are following the stock right and so then they start like hey something's happening they start you know you should hear about the stock that i know they start talking about it and stuff and so for us like hey it starts trending because more they're bringing more and more people into it maybe their community or however they've formed around that stock. There's some stocks I discover.

I'm like, wow, this stock has like 5,000 followers. Remember this? This is February 2020. Amidst coronavirus panic, the stock of this hazmat suit maker is up 88%. I don't remember that one. Was that Lakeland? Oh, was that one? Okay.

Oh, Lakeland? Yeah, Lakeland. I remember that. Remember that? I do remember that, yeah. 88%. I wonder where it is now. So they coalesce and then it starts trending.

When a ticker is trending on StockTwits platform, you guys will surface it in a list of trending tickers. Yeah. You won't say anything about it. You'll let people discover it. Yeah, then they can drill in and see what the conversation is about. So they can click the ticker that's trending and be like, why is this trending? I've never heard of SIGA. Exactly.

Okay, do you have monkeypox? Anyone? Anyone in the room? By the way, of S-I-G-A. Exactly. Okay, do you have monkeypox? Anyone? Anyone in the room? By the way, you can try it. I'm still not sure what monkeypox is. Here's Lakeland,

47 down to 15. I mean, naturally. Buy it. But where was it before? Buy it for monkeypox. That's true. Duncan, do you have a monkeypox take?

I was having this conversation yesterday. GameStop. Should we worry about this? I mean, it looks pretty bad for people that have it. That's not what I want to hear. But I mean,

the transmission seems really low. This thing sucks. Well, no, I want to hear. But I mean the transmission seems really low. This thing sucks. Well, no. I heard that like you barely have the viral load to infect one other person when you're sick with monkeypox, something like that. Whereas COVID is like 10 times or something. Yeah, don't worry about the viral load. All right. So I'm not going to worry about that one.

All right, so I'm not going to worry about that one. Juxtaposition of luxury market, Nordstrom and Toll Brothers versus discounters, Target, Walmart. What's going on there? Well, I mean, we know what's going on, you know, Target, Walmart. Toll Brothers had good things to say. Yeah, they had good things to say, I think, again, for the short. I mean, what happens when mortgage rates hit 8%, 9%, you know? But they're saying they had almost no cancellations, and they're the high end of the market. And that's where – so those guys were up, and there was a lot of positive sentiment on that in Nordstrom as well, whereas we saw what happened to Target and Walmart.

Okay, so we can say that inflation does not affect everybody equally. Yeah, absolutely. Some people – it's a big enough burden that it will change their habits, and some people can just coast right through it. and it will change their habits. And some people can just coast right through it. That's like one of those aspects of economics that you could understand why there's a portion of this country that's just like, fuck you all.

Right? Like, oh great, you made inflation happen again. Like, this is literally going to upend my life. Inflation, gas prices, things like that. Yeah, I mean, when you look at what's happened to gas prices, it's one of those, I mean, when you look at what's happened to gas prices, it's one of those things that maybe last year people didn't really think about their weekly run to the pump.

And now it's like, all right, well, we're not doing the takeout dinner this week because an extra 20 bucks or whatever is going into my gas tank. You saw what they said today? No, what did they say today? They said gasoline demand just hit a new low back to 2013 x the pandemic really pull out 2020 yeah so is that kind of that high prices are the cure for high prices sort of things are averaging over six dollars a a gallon in california five and a half dollars now we found the gas price that makes people stop driving it's five and a half dollars well yeah and i mean when

you're over six dollars i mean depending on where you live, public transportation ticket, whether it's subway or regional rail, depending where you are, I mean, you start doing that math. Right. So a wealthy household, the amount to fill up their gas tank might be less than 1% of their monthly expenditure. Right. A bottom decile household, it could be like half. Heat their home or air condition their home and their gas. That could be half the money they spend. So we apparently reached some number where demand gets destroyed.

GameStop was back this week. Why? Do we have to do this every year? There's going to be a GameStop rally? I think, yeah. I mean, I asked the same question today as well. What's the latest bullshit? It is not clear to me why.

I think, you know, people just- What did GameStop do this week? It's up- It's up a lot. It went from like 100 to 140 or something. It's like 95 to 125. It opened up yesterday at like 88 bucks and it popped to 150 today because why not? It's still a big short position in there that the stock could still do that. yesterday at like 88 bucks and it popped to 150 today. Cause why not? Yeah.

It's still a big short position in there that the stock could still do that. I mean, really? What are they doing? NFT? Well, that's yeah. Where,

uh, you know, a lot of people were talking about, Hey, is this a, you know, just short unwind is, you know,

cause it's just, it has to be, it has to, I mean, it has to be, I am no longer that smart with GameStop and AMC. I don't quite understand. RDBX is a SPAC darling.

Oh, shorts reloaded a little bit. I mean, this is a crazy chart. Holy moly. Remember, there was this whole thing that there were more shares sold short than were outstanding. Because they were being, you know. Yeah. So, obviously, they got wiped out. Right.

Right? Like, they went to zero, the shorts, and they reloaded. All right. Yeah. Who's got the guts to reload a short on that? Not Melvin. So, did you cover that? They wound down?

I wasn't covering that, no. Okay. It was a matter of time, though. Yeah. Okay. It's very rare that you can keep things going. Well. It's just.

Can we have a conversation? Like, so, you know, the fees on those assets were still, like, you could run a perfectly fine business, right? You just can't get over the high watermarks. And, you know, there's the whole- 2% on 10 billion or whatever was left. How much was left? 8 billion?

8 billion, right? It'd be fine. Like, I could run a company with that. But these guys can't- They had the higher watermarks. Yeah, they can't keep your top talent on 2%. Yeah, but there's- I don't know.

The top talent that- The question is, on one hand, hey, it's brave to say that and do that. On the other hand, it's like, is that lazy? Wait, what's brave? What's brave? Because if you're a pension fund investor and it's like, are you going to give your guy this money again the next time around if he's just going to cop out once he's down 50% and not willing to try to work back from i think plotkin made 800 million dollars last year

yeah i mean i get it but that's before taxes and i get it you do like i don't know that's like two hamptons houses for him i don't know but uh i don't really get it that sounds amazing that's amazing to me right but my my point there wasn't that hey he made a lot of money like these guys like a lot of great hedge fund managers make a lot of money or successful hedge fund managers make a lot of money. And they still have debt. Like you think Chase Coleman is going to shut down like after this bad a year? Like he's going to shut down the hedge fund? Did anybody ever in your time covering the hedge fund industry, did anyone ever propose the idea of we would love to pay you a 20% performance fee, but we want to do it on a 36 month, not a 12 month.

Has it never occurred to anybody? Yeah, I've never encountered that. I mean, I know people were starting to get creative on what performance fees should look like, but yeah, 36 months just seems. I will gladly pay you a performance fee, just not on a calendar year. Yeah.

Because in any year, anything can happen. Over three years, if you do really well, you're probably not a schmuck. But I'm sure a lot of them are benchmarked. One year, anything can happen. Over three years, if you do really well, you're probably not a schmuck. But I'm sure a lot of them are benchmarked. One year, you're lucky. I was – no, they're not – hedge funds are not typically benchmarked. Benchmarked. Benchmarked.

So profits are paid not above and beyond what the S&P did? That's nice. So I – for a long time, like our first clients were LPs. And when I started discovering this, like it's essentially a liquidity imbalance in how you get paid and how you're at. And I was like, this payment structure is amazing if you're a hedge fund. It's amazing if you're the payee. It makes no sense, especially if sometimes there's also lockup mismatches and stuff too. So you're still paying the performance fee, but you don't have redemption rights and stuff.

So I had a lot of creative ideas I was trying to do 10 years ago. This was 10, 12 years ago. And everyone just was kind of okay with how it is. It hasn't changed at all. So let's talk about what they're doing. We've got some data from Goldman again showing that hedge funds rotated. But this is interesting. They rotated sharply away from growth.

Look at these flows that we're looking at up here. That's the least shocking thing you could have said. They rotated away from the thing that's under liquidation. Yeah, that's down 80%. Well, it's a little bit surprising. I'll get to that in a second. But here we've got another chart just showing stocks with enterprise value to sales ratios. I'm sorry.

Go back, please. Stocks with enterprise value to sales ratios above 10 times. So we really did get pretty close to 2000. It looked like we had around 25% of the market. And that has since corrected very, very quickly. 25% of the stock market was companies that were trading 10 times enterprise value to sales. That got up to 35 in the dot-com bubble. Right. So that- So we were almost there.

That excess got cleaned up really quick. But the reason why I'm a little bit surprised, not surprised, but this part is interesting. So hedge fund favorites have gotten absolutely annihilated. I was looking through the list of their top 50. Like they own- The hedge fund VIPs. I think they own like 9% of Uber.

They own 25% of Zillow. Like some of these blown up names. But here's the interesting part. Look at the 50 stocks that most frequently appear among the largest 10 holders of hedge funds. It's almost comedy. The top five.

So again, what we're looking at is the 50 stocks that most frequently appear among the largest 10 holders of hedge funds. The top five, literally. Fang. Microsoft, Amazon, Apple, Facebook, Apple. Are you kidding me? That's worth two and 20.

But I mean- Like literally. If you're a larger hedge fund, you almost don't have a choice. I mean, if you're managing several billion dollars, you have to have a place to put it. Your universe of stocks is tiny. I mean, I hear you, but-

Here's the thing. It's a high class problem. I mean, I hear you, but it's a high-class problem. Well, hell yeah. Here's the thing. It also shows the average portfolio weight when the stock ranks among the top 10. It's high. It's like 7, 8, 7, 6. They're like market weight. They set the market. It's active

managers that are setting the market. It's not the indexes. If you're a $30 billion hedge fund, what are the positions you can trade in where you're not going to move more than 20% of the daily volume in order to get into those positions in any meaningful size to drive any meaningful returns? Now, they don't – but they buy the stocks, not the Qs because it would be hard to build people on ETF positions. Right, exactly. So, you know, and depending on how they might have hedging strategies, right? So, more hilarious to me is four new energy stocks entered the basket. So four new stocks entered the VIP list.

What is it? Chevron? Chesapeake. What's VAL? Valero? Valero. Occidental and LNG, Chenier. So the sector now is a 10% weight.

So it's performance chasing just like everybody else. Like, this is a game everybody plays. It's sophisticated performance chasing. It's an extremely sophisticated version of performance chasing. I'm shocked to see Chesapeake

back in the group. I mean, that company is right on. I haven't heard that in a while. Post-bankruptcy, right? Yeah. It was cleaned up? Hopefully.

At least the balance sheet was cleaned up, I should say. We were looking – Josh and I were looking at this today. So Apple, Amazon, Facebook, Microsoft, Google, and Tesla. The stocks got so much bigger from where they were pre-pandemic to today. So I was sharing a chart. The drawdowns from those six stocks percentage-wise was around 27%, 28% in COVID. Okay. Today, it's around 30%.

So basically the same percentage-wise. It's a $3.5 trillion market cap drawdown versus $1.5 trillion back then. That's how much they've grown since the pre-pandemic. So the stock prices have come down the same amount, but the dollar amount is triple. So, yeah. So the S&P is, I think, 20% or so above pre-pandemic highs. These stocks are still like 40% above. Yeah.

And I'm using market cap and even buying back shares. So it's probably even more than that. Yep. So I think that like where these stocks go, that's where the market will go. Can I ask you a question? Like how valid do we feel? Like the S&P 500, right? Why do we pay?

I know why we pay attention to it. Is JC getting that bullshit in your brain? Yeah. No, I haven't talked to him. I haven't talked to him. Why the S&P 500? I don't know because it's the S&P 500. All right, go ahead.

No, I get what you're saying. But like shouldn't it be like the S&P 500 and the S&P 495 or something? Oh, is that what you're saying? Yeah. What I'm saying is like you just really need to watch those five stocks. Yeah. They're very important. There's like 10 stocks that effectively decide the direction of the index.

Right. But within the index, there could be huge dispersion. And energy is a really good example of that. Like it literally spent 10 years shrinking in terms of its size in the index. So much so. It went from one to five, by the way, recently. Right. So much so that it went up 40% and is still under 5% of the index.

Of the index, yeah. What's interesting though is that like these five big names, five, six, whatever, are like 40% of the queues. But I think prior to this, it was very difficult to foresee these names being in a 30% drawdown, basically all of them, not Apple. At the same time. With the S&P 500 outperforming so much. So the S&P was down 18 while the Nasdaq was down 30. Yeah. You would have been like,

well, what else would keep the S&P up? Yeah. Energy? Okay. Well, no, it actually did. Yeah. Well, right. You had enough healthcare stocks and consumer staples

that were big enough and energy that were big enough to like keep us from being down 40%. Yeah. Yeah. And I guess maybe I'm more, like the Qs are probably the more exposed, right, on this one. Russell values, like the Russell Lodge Carp value is barely down. Sam Rowe would answer your question by saying, why are we even calling it the S&P 500? Amazon is like 20 companies.

Yeah. Alphabet is like 50 companies. Yeah. So it's almost more like the S&P 700. We just have a lot of businesses consolidated under a few tickets. Under a single ticket, right? Yeah. Did you see the Schwab Modern Wealth Survey? I did. What'd you think about, what'd you think overall before we get into some of the specifics? I thought this was really interesting, the way they phrased the questions. What'd you think? So I definitely was wondering

what was going on with that whole thing on the average net worth to make someone feel happy and feel healthy and that it's actually decreased. And I'm just wondering if there's like just this kind of change in, if you're not going to work that much, there's certain things you don't need to do. I know we were talking about gas prices a few minutes ago, but a lot of people aren't commuting five days a week like they used to. A lot of people aren't wearing suits and going to the dry cleaners as often,

you know, all of that stuff. So I think people in some ways are finding that they can get by with less, but I almost never expected to see the number go down. The number of the average net worth of people or the number that they think is high net worth? The number that they think is high net worth. The number that they think that they need to be happy. Like that went down like 30 net worth. The number that they think they need to be happy.

Like that went down like 30%. What's the number that they said they need to be happy? Wait, this is shocking. Needed for right here. So 1.75 in 2020, and now it's 1.1. Wait, what is the meaning of this? I've never, this is so. I've never seen anything like it before.

Right. So, I mean, is this telling us something like, hey, we appreciate life more? Are we enlightened? Are we enlightened? I don't think so. I don't think so. I don't think so. We are not.

We are not. Let's tell the listeners who aren't seeing this what we're talking about. So Schwab talked to 1,000 people. The survey was conducted by Logical Research February 1st to February 16th among a national sample of 1,000 Americans. In 2021. Yeah. That's important. In February of 21.

Age 21 to 75 years old. And they tried to like balance the sample among demographic variables, blah, blah, blah. Okay. So what they're saying here is that in order to be wealthy in 2020, Americans said you need $2.6 million. And in 2021, they said actually $1.9 million would be okay.

Needed for financial happiness, you only need $1.75 million. And in 2021, they said, nope, actually more like $1.1 million. What is the meaning of this? I think it's exactly what we just said. They're not doing as much in 2021. This year, it might be different. Yeah. I think it's because it costs money to work.

It really does. Yeah. To eat two meals a day out of the house is a big difference, especially in New York. Yeah. And also, I mean, you just think of the hassle things. You know, you come home from work. Do you want to cook? Maybe not.

Are you hiring a babysitter? The things that we pay for out of convenience because you're working, you know, 50, 60 hours a week. Add a commute onto it. That could be 70, 80. But now you can do those things yourself. Maybe you're not paying to have your laundry done because you're working from home some days. You can do it yourself. I do a lot less dry cleaning.

No more dry cleaning. I was about to say that. A lot less. I apologize every time I go to my dry cleaner. Sorry, I haven't been here in a while. During the pandemic, I was looking for things in my apartment. Like, do I need a jacket that needs a button sewn on it? I felt so bad.

But I hope my wine store person says thank you more often. It's a true story. I did TV from New Jersey this week. Went to CNBC. Oh, yeah. So that's back now. So I'm going once a week. You just started going right now? I just started going two weeks ago. Went to CNBC. Oh, yeah. So that's back now. So I'm going once a week. You just started going right now?

I just started going two weeks ago. No way. Okay. Yeah. So they're having like one or two of us on set out of five. Okay. It's great. I love seeing everybody.

It's cool. But they destroy my shirts. We do makeup. Oh, yeah. So I went back to the dry cleaner with a white shirt with the inside of the collar look like Donald Trump used the shirt as like a face cloth. Okay. So it's literally circus peanut orange.

Yep. The whole inside. I guess what happens is I guess you sweat and makeup runs. Okay, fine. So this guy's like, you're back. My dry cleaner. So this guy is like, you're back, my dry cleaner, because he remembers three years ago me bringing in shirts in where he'd be like, dude, you should throw this out. You could pay me to clean this, but forget it. Right, but really just throw it away.

And actually Jim Cramer told me his trick was he just goes to TJ Maxx, buys packages of shirts. He never expects to be able to wear them twice. Yeah. So anyway, I'm the idiot that I am. I custom made shirts at Brooks Brothers and then I wipe them with orange paint and then I end up having to throw them out. That stuff does not come out. So the dry cleaners are like a dry cleaning bill. Not that it's a big bill, but it's very representative of people not needing as much money anymore because they're like doing the same thing. Did Americans just become simpler in 2020, 2021?

Like just in terms of- I think we became simpler. Like, you know, definitely not enlightened or anything. Not enlightened. I've always been a basic bitch. Yeah, I think so. I just need my tequila. I really don't, I don't need that much.

Yeah, I 100% think so, right? I just need a boat. And you don't need to show, like you're not meeting up with people. So you're not, you know, kind of keeping up with the Joneses, so to say, and showing off in this and that.

I'm not satisfied with your answer about we're eating less outside food. So our need for financial happiness went down 60% or 40% or whatever it is. So there's more to it? Yeah, I'm not sure what it is, but. Okay. This is like a big deal, I think.

After the pandemic, the best describes my attitude about my lifestyle. We'll go back to living and spending the same as before COVID-19, 47%. We'll live a quieter life and save more money than before COVID-19, 29%. Wait, say that one more time, say that one more time. We'll live a quieter life and save more money than before.

Yeah. 29%. I really do think that this is- Hold on. Yeah. Will make up for lost time and splurge more. 70%. No, 24%.

That's it? How does your math add up? That's the smallest. Yeah, we said 47. No, no, no. I didn't know that this was adding up to 100. I thought each was its own individual question. When I say percent-

Oh, I see. All right. Don't give me that percent. You're talking points. You're talking points. Okay. I think that there's before COVID and after COVID. It was such a watershed moment for everyone.

And a lot of people are like really, truly re-evaluated. Are we after COVID yet? What's important? Like, where are we? We're so after COVID. I think so. When was that? When was that line?

For me, it's the day I got it. When you got the vaccine. No, the day I got COVID. I finally got it in December. Everybody's COVID ended. Not the day they got it. When you got the vaccine. No, the day I got COVID. I finally got it in December. Everybody's COVID ended the day they – not the day they got it. The day they got over getting it. And then all of a sudden, no big deal. Actually, when you got it, I avoided it.

I haven't gotten it yet. Any minute. I know. I'm like – You know who's getting it right now? The people that avoided it. Yes. I've been hearing that a lot.

Thank God. Thank God they're not being rushed to the hospital. Yeah. We're a little bit smarter about how to deal with it. Maybe it's lessened in intensity too. I don't know. Don't listen to my science things. It's definitely ripping through New York again.

It is. I mean, the numbers are definitely there. My daughter's class, there was like five cases. I know a hundred people that have gotten in the last two weeks. Yeah, it's nuts. It was like Omicron, like December. But they're not like calling everybody they know. They're just like sitting at home.

Does your construction worker have it? Maybe. Thank you, Duncan. Maybe. All right. So you know what's a joke? Like people say to ignore the noise. Like give me a break. It's so loud. It's incredibly noisy. Jason Gebfer from Synthmetrader has this kick-ass chart showing

the daily number of news articles mentioning bear market. And I'm guilty of this. They're spiking, obviously, right? That's just what we do. I feel personally attacked right now. You guys did your first bear market cover, not this past week or was this past week?

No, I don't think it was this past week. I think it was two weeks ago. But you had the claw. We did, yeah. So it's not just the bear jumping over the ball on a skateboard. Not the cartoons. It was a bear claw ripping through the – No, it was like ripping through the page.

It was – You guys like really did it, did it. Yeah. I was so bullish today. So you can't ignore the noise. But – We found the bottom. There is like literally – we were just talking about this.

There's no reason to open your 401k account ever. Right? You know it's bad. Yeah. What are we looking at? What are we trying to accomplish? Daily number of news articles mentioning bear market. We just did this. No, but hold on. It hit

4,000 and it looks like... Daily. Daily. Daily. I wish we could... 4,000 articles a day. It would have been nice to have that back to like 08 to see what it's like kind of relative. Oh yeah, that's a good point. Who did the big bear market feature for you guys? Who wrote it?

I should know this off the top of my head and I don't. Don't worry, we'll not edit this out. Was it Randall Forsythe? No, I don't think it was Randall. Was it Jack? He has his column. Jack how? I don't think. No, he has his streetwise column. Okay, what's the cover this weekend?

Was it Santoli? You want to share with us? He's no longer there. I don't know if I can share. I mean – No, you can't. Yeah, I can't. You literally can't. I can't.

I mean I know what it is, but I don't think I can share it right now. Oh, you know what's coming up? You should not share it. That's exciting. Please don't do that. It's going to be a good one though. He's going to drop it right on top. Yeah.

I know. I'm sure it will be a good one. I never miss an issue. And can I do a plug? I want you to. Okay, so we have our weekly Barron's Roundtable TV show. Okay, I'll be there. What night?

It's actually mornings now, so Saturday morning at 10 a.m. and 11.30 a.m. on Fox Business. But we will have a segment where we're discussing the cover with the editors on it. I watch you guys. I love it. Oh, thank you. Because Jack Ot editors on it. Okay. I watch you guys. I love it. Oh, thank you. Because Jack Otter is great and obviously you're great. Thank you. Who else is on it?

Ben Levison. So he is our markets editor. And then Jack Howe who does Streetwise. So two great reporters and great writers. And Jack's a great editor and you do your thing phenomenally. Thank you. Okay. You seem to have a lot of fun with them. No, it's – You guys are guys are like a crew we are and the shame of it is we're still taping from

home that should change soon but um it was so funny because i joined barons in january of 2020 the show i think had been for like two months beforehand so i was just getting to know the guys i didn't know them and just as we're like eight weeks into taping together and you're finally like okay i got this rapport i'm a little bit used to this tv thing lockdown happened so then we had to know them. And just as we're like eight weeks into taping together and you're finally like, okay, I got this rapport. I'm a little bit used to this TV thing. Lockdown happened. So then we had to learn how to do TV from home. And I mean, you know, this definitely is a totally different skill set where you can't interject and you can't be free talking because you can't always see the person the same way, or there's a delay. And that's the worst part of having a coat, the same way or there's a delay and that's the worst part of having a coat having somebody in the cast with you on a show and you're not with them you kind of don't know when they're about

to finish talking yeah which leads to awkward pauses in between yeah or you'll start talking and they're not interruptions yeah and the delays just the delays with guests just murder the whole vibe and there's also just when you have a natural in-person rapport, you can throw a quick aside comment where you're not breaking up somebody's train of thought, but it just quickly adds. And you can't do that when you're in boxes because then you actually are interrupting the person. You know the other thing I can't do? I can't physically intimidate a guest anymore either. Oh, yeah. I can't almost lean closer to them while they're talking or any of that stuff.

So that doesn't – this whole format doesn't work well for me. Carlton, I wanted to ask you about this. This company is new to me, but they've raised a ton of money, like hundreds of millions of dollars I think. There was an article in The Wall Street Journal called The Airbnb of Wall Street. Do you know about this? I did see the article, yeah. I'm still trying to wrap my head around it to be honest. Do you guys understand what – I'm trying to wrap my head around what this company is doing.

So I really don't know what it is. Capitolis. Let's read this. Okay. So I think this is the lead. In the same way Airbnb turned vacant homes into vacation rentals, Capitolis is turning the unused capital of investing giants like BlackRock into assets that banks can use to facilitate all kinds of transactions. So the first reaction is like – Like flash loan?

The first reaction is like, wait a minute. Is this – what? Remember when we were talking about the beginning of the conversation where we said, hey, like banks are more like fortressed up. Now we're going the other way. Now I feel like, hey, this has started to be like, all right, because you guys have to have all these capital reserves, let's mess with that in a structured swap that shit. We want to democratize. Structured swap kind of way or something. Here it is. Yeah, you have the capital.

Right. So the new idea resembles an old one. You're not supposed to use it. Exactly. Banks have long sliced up and sold their big corporate loans to other banks and investors.

Capitalists figured out how to use this syndication concept to turn all kinds of banking products, foreign exchange swaps and lines of credit, to name a few, into a kind of fixed income security or loan they can sell to investors. I don't know that we need this.

Hold on. Hold on. Hold on. Hold on. The firm has raised some $60 billion from investors for the banks to use in the past two years and reduced trillions of dollars in trading positions. But wait, the $60 billion is not investments into the company. It's just-

Right, from the- Yeah, yeah. So everyone's in this. Sequoia, Andreessen Horowitz, SVB, State Street, Citi, JP Morgan, Spark, Andreessen Horowitz. What is Carlton? What are they talking about? How does this work?

What does that mean? This is the stuff that makes me nervous because when you go through these things and I actually am trying to draw a map of, okay, I's, okay, I understand the capital lets it's on the bank sheet. You hear the CEOs, every earnings call saying we could have done this, but damn regulations make us do, you know, I, that part, I understand. I understand it's there and it should be used.

4 trillion in total reserves held by us depository institutions. So here's what it is. They say, for example, Citigroup, who's an investor, Citigroup owns a basket of equities tied to its clients' trades. Okay. Right. Capitolis using investor money essentially mirrors those trades entering into a derivative contract to take the risk off the bank's balance sheet. Oh, boy. Citigroup is now freed up to do more trading and the investors get a fixed payout. Yeah.

Yeah. Okay. Yeah. I'm not saying this is going to cause a financial crisis, but just in case you might as well just file for unemployment right now. Yeah. If you're listening to this. Because when you're trying to just map out, I mean, and I do this exercise, you know,

where you're like, okay, here's where the money is. Here's where it went. Here's where it went. We're mirroring things. And suddenly I have a web and I don't know who owns what. This sounds very 080. It sounds very 080. Yeah. It's an insurance product, but it's not insurance. Remember that? On capital reserves. I feel like those three words should not typically go together. That's all I'm going to do. I feel like there should just be kind of like this grab bag of like financial terminology. And it's just going to say. I feel like there should just be kind of like this grab bag

of like financial terminology and it's just going to be the next product where it's, you know, like MBS derivative and it's just like every few years someone just kind of

picks three and they're like, yeah, let's just... This is like AIG has entered the chat. Did somebody say derivatives tied to total reserves

at U.S. depository institutions? Sign us up. I don't know about this. Come on. What are you doing? Well, the guy Gil Mandelsis, he looks like a badass. Gil Mandelsis was a bar owner in Israel. See, what are you guys worried about?

And a banker before launching another Wall Street startup he eventually sold. I don't know what you guys are worried about. This all sounds like something that we need, especially on Main Street. Like Main Street is clamoring for a way for large U.S. depository institutions to unlock money that's supposed to be set aside for safekeeping. All I have to ask is when does Wells Fargo get fined? When does C City blow up? Does anybody think it's dope that the Wall Street Journal

included pictures of him playing tennis? I was going to say something about that. Yeah. I feel like that's the picture we want to view in the Wall Street Journal. On screen.

Oh, you got it on screen? I got it here. Oh, Carlton. Carlton printed it out. I know. I'm like the oldest millennial. Did you guys have Kinkos? That's not tennis.

That's racquetball. Is he wearing- No, it's tennis. It's indoor. Oh, is he wearing Timberlands? I can't see the- What color shoes are those? They just look like orange sneakers.

But he's gone like, you know, one-handed backhand looks like. No, zoom into the tennis picture. That's incredible. I mean, just give him the money. I don't even know why- Well, and his partner is Tom Glosser, right? He was the former CEO of Thomson Reuters.

Is that true? Yeah. Okay. I can't wait for the bailout. Forget everything I said. That sounds great. You know what? That'll come public.

It'll be like the biggest deal of the year in 2024 or whatever. Well, it'll be SPAC. It'll SPAC. We'll SPAC it up. SPAC it up. Redbox was the recent SPAC

that you said was trending on your platform. Redbox. The video thing? Why you said was trending on your platform. Redbox, the video thing? Why? Right? Why? What's going on? I mean, they had some good numbers.

The stock's up 125% this week. Who are the— Like, I just want to know who's the guy that's still— That's America. RDBX. That's America. Like, DVDs and— Dude, that's America.

Seriously, I'm not even f***ing kidding. I'm not a DVD player. Dude, people walk— And they're at every 7-Eleven. People walk into Walmart and buy a Taylor Swift CD today. There are more vinyl sales than there are CD sales. But I'm just saying, there are things that are still going on that are unimaginable. It blows my mind.

That's why when I saw that, I was like, how is this trending? That sounds very elitist, but truly, that's what a lot of America is. People have stockbrokers. I heard a story about somebody whose broker pitched them a stock the other day. I thought it was a joke. Somebody did say yesterday to me. They're like, yeah, I called up my broker. And I was like, wait, you're calling your broker?

Did you call an 800 number? No, I called my guy. His name is John. So John calls you and does stock trades for you? I heard that four times in the last two weeks too from friends, which I never hear from. Okay. So things are still going on that are unimaginable in this world um all right we're gonna do new home sales this is via eduardani we don't have to spend a lot of time on this i think this is

the definition of stagflation during april new home sales this is registered when contracts are signed dropped 16.6 percent month over month and the month's supply of new homes jumped to nine from 6.9 in March. I think at the low, we were at two months worth of inventory. So now we're back up to nine. That was Monday. Today, we heard about pending home sales, which is basically after contract, but before close. So this is like a very accurate read on the existing homes.

90% of the home sales market is existing, right? So that captures a lot. We basically saw a fall off the cliff down 3.9% from last month to April, from March to April. So this is all mortgage rates. We have this chart. Wait, why is this a stagflation?

Because prices are still high. Prices are still high. Transactions are falling off a cliff, but prices remain stubbornly high. That's the definition of stagflation to me.

But something has to give. Prices can't stay high if the buyers melt away to this extent month after month. Yeah, so stagflation is not a week. It's got to stay here, right? You can't say something is stagflation for three days. after month. Yeah, so stagflation is not a week. It's got to stay here, right?

You can't say something's stagflation for three days. I think we've been in stagflation for a few months. No, for a few months. I think the one difference here is though, I mean, you know, houses are like, you know, they're not like a liquid asset that you're buying all the time unless you're, you know, BlackRock or whatever. Home prices are not going to crash. You know, I don't think they're going to crash.

They might pull back. There's definitely a supply-demand issue. Because the other side with housing is, hey, we know we need more houses. And so you see that dip in the chart after the mortgage crisis 12 years ago. So we didn't build a lot of houses. And so that's why we're having our supply-demand issue right now. The National Association of Realtors Chief Economist Lawrence Yoon says 9% decline in prices is what they expect. Yeah, that sounds about right.

That doesn't seem unreasonable. This is one of the worst charts ever. This is home buyer mortgage payments. This is 2020. This is 2021. This is 2022. Up 43%. This is killing people.

A year ago, you could have gotten a 2.8. How could prices not fall? How? Home prices? It takes time. No, they can. They're not going to crash. They could fall 5%, 10%.

Sure. I think they have to. They have to. Yeah. In some markets, they can crash more. I mean, come down more than that. Like, for instance, does anybody actually want to live in Boise? Or was that just like a fever dream from the pandemic where prices were?

No, I'm not even dissing Boise, Idaho. I'm saying markets like that that went up 100% in price. Right, yeah. Does anybody really still want to be there once the pandemic is over? The problem is it's going to be new sales because sellers would have moved already. They would have already hit the bid, right? And so they're going to be less motivated to sell.

Buyers still have to buy because it's demographics. So I think it'll put a higher floor under prices. But you just made it so that a mortgage is so expensive that it materially changes how much you could afford to pay. And by the way, mortgages are not going to get cheaper anytime soon. So I think that's the other thing, right?

I mean, we're at what, 5.5? 5.5. Financial crisis, they will. What I mean, though, is in the next as the rates keep going up, we'll hit 6%, 7%, 8% mortgage rates. Whoa, whoa, whoa. And 5% is low historically. What did you just say? Right.

5% is very low historically. What did you just say? How high are they going to go? 6%, 7%, 8% is not unreasonable. You think so? For a mortgage? Absolutely. Wow.

8% you'll crash a house. My parents' mortgage in the 80s was like 11%, 12%. No, it's not the 80s anymore. I get it. I know. I know. I know. Like 2.3% is not normal. No. Yeah. 8% you'll crash the mortgage market everywhere except in the 80s was like 11.5%. No, it's not the 80s anymore. I get it. I know. I know. I know. Like 2.3% is not normal.

No. Yeah. 8%, you'll crash the mortgage market everywhere except Manhattan. So we actually just got the biggest drop in mortgage rates since April 2020. This week. I think it went down to 5.1. I don't know where it was. Was it 5.5?

5.25. Dude, 8% mortgage rates will do some serious damage. 6 to 8. 6 to 8. That's my window. Revise it lower. Revise it lower. Five and a quarter. Dude, 8% mortgage rates will do some serious damage. Six to eight. Six to eight. That's my win, though. Revise it lower. Revise it lower. Revise it lower.

Try to sell beforehand. Because what I say on this podcast is going to move markets. Totally. NFTs. Why is it getting dumber? Dumber? Go off, queen. Go off.

Wait, we were talking about stepping. Yeah, we were talking about stepping yeah we were talking about stepping why is it getting dumber who says it's getting dumber it's so dumb no no well the story that we're talking

about what's the dumbest part now well okay so you had this actor Seth Green right who had this whole NFT that he was going to build a show about

and I guess what he's saying is in a phishing scam he lost the NFT so because so no show no show what No show. What?

Which I think you made this point, maybe. But it's like this whole kind of crypto, you know, decentralized finance generation. Oh, it's great. You know, we can all interact with each other, blah, blah, blah. I but like when the shit hits the fan, like I like having a person I can call and yell at and say fix this and it might take a while but it gets fixed give me back my ape yeah no so i mean like my serious commentary anymore i know it's not right to the show i know it's not stolen it's hilarious it was tricked yeah yeah but it's not illegal well and the code is the law well but like this is the serious and this is

the point you're making too in the serious conversation around like whether it's NFTs or crypto and stuff is, you know, in the early adopter crowd, you know, which I have a lot of friends and I'm very familiar with it. All billionaires. There's a lot of like, hey, decentralization, self-custodied wallets. I'm like that's like putting your money under a mattress. Yeah. And like we have banks for a reason because if I screw shit up I can call the bank there's recourse through government and contract law

and stuff like that whatever it might be right you don't really have that so that's why I mean I think there's a lot of really interesting things around the technology and underlying protocols and stuff like that but expecting people to put like you know lots of money and life savings and stuff, and they

have to remember these 12 to 24 words and not lose that piece of paper. Dude, do you remember the movie Heat? I love that movie. Okay. The Rush? So what they're trying to do is steal bearer bonds. That's what that big gunfight in the street is about. Yeah.

The bearer bond, whoever has the piece of paper and hands it in gets paid on the spot. Because it doesn't matter, right? Because it's not registered in anybody's name. That was the same with Die Hard 1. But stealing a bearer bond is still illegal. Yeah. In this f***ing world, we finally invented a type of investment where if somebody steals it, it actually becomes their property and not yours. So long as the blockchain records that they now own it.

That's insane to me that people think that's an improvement on the current financial system. And you can improve on that. I mean, do you see my point of view? Yeah, I'm looking at heat quotes. So just... Love that movie.

But like, so don't dabble in decentralization if then you're going to go and cry and say you need an authority figure to sort things out. Pick a lane. Pick a lane. And I agree with that, right? And that's where I think there are interesting opportunities just from a technology and protocol perspective. Like there are things that can be enabled better in our current financial system. We're built on decades and decades and layers and layers. There's cruft in there.

CNBC did a segment this morning with people who had their virtual land stolen. Oh, yeah. I was making breakfast while I watched it. I thought I was smoking crack. Their virtual land. No, man. One of my groups, like a friend of a friend of mine. Their virtual land was stolen.

Like Metaverse land? A friend of a friend had $2 million stolen yesterday. $2 million worth of virtual land? Yeah, yesterday. I almost feel like, I don't want to say that. I don't want to say that. But I thought it was hallucinating. It was a very sophisticated social engineering phishing scam.

So this girl's like a personal trainer girl. This woman is a personal trainer, and she wanted to own property in the virtual, maybe decentral end or something. Yeah. Next adjacent to Snoop Dogg, which I don't. Okay. All right.

I understand like in real geographical terms, how one thing is next to another in virtual terms. I don't understand why somebody just can't say, oh no, this isn't actually next to it. It's we put this now, but fine. Yeah. All right. I understand. So she clicked on the wrong link and lost it,

and it was worth millions of dollars. And she's like, this is crazy. I'm like, no, you're crazy, because look what you just did. But apparently I'm crazy for thinking that she's crazy. Josh, Josh, Josh, don't let yourself get attached to anything you are not willing to walk out on in 30 seconds flat. Okay. Well done.

I got to re-watch that movie. Robert De Niro said to Val Kilmer. Yeah. I used to own that DVD. Did you see about Adam Neumann's new crypto project? Oh my God. Carbon. Flow carbon.

Oh, actually, I didn't hate it. I read about it. It made sense to me. He brought in 32 million from VCs, including Andreessen Horowitz. So that has a utility, though, that project. That makes sense to me. It's carbon credits.

He brought in 32 million in equity $38 million in a token sale. I don't know. It just seems like I'm going to wait a little bit longer before I give him that. Somebody had a great line like, what are the odds that he's a thief two times? But the tokens represent actual carbon credits that people do need to trade. Corporations need to transact. And maybe this is a better way to transact than through lawyers. And there are a number of

climate change token projects out there and stuff that are doing things around this space. So I get it. This is more of a person credibility thing right now. I'm on episode five of We Crashed, and it's freaking fascinating. He doesn't need any money from us, and we don't want to give him any.

Wait till you get to the IPO part. I'm almost there, yeah. Oh, yeah. No, it's a good series. You watched it too? Oh, I had to. I haven't seen it yet. I did not watch it.

I heard it's good. Everyone says it's great. Yeah, no, it's great. And I mean, I think the weird thing is, you know, we were all very familiar with what happened. I covered it a bit. And when you're watching it, having that knowledge, and and then you're like i wonder what it's like for people who kind of were aware of it right and are seeing this stuff for the first time right i was only vaguely aware of it until they filed their s1 and then i did like blew up i did a lot

of content on it yeah i like i wrote about a lot i was tweeting about it and you had a great sorry go on but no tell me you were about to compliment me about it. And you had a great – sorry, go on. No, tell me. You were about to compliment me. No, I remember you had a great point as the IPO was falling apart. You did a video where you're like, never forget that Wall Street was trying to sell this to you. For $47 billion. Yeah.

Oof, oof, oof. And they had to have – they knew. That went a little viral. A week before the whole thing unraveled, I don't want to say it's Morgan Stanley, could be JP Morgan, whoever was the lead, they priced this IPO

with a valuation of $47 billion, which by 2021 terms actually sounds tame. That sounds cute. If this were 21, that might've been $100 billion IPO. I don't know. Because they had revenue.

It was not a fake company. You know what blew it up? In their S1, elevate the world's consciousness sent red flags all over the country all over the universe it's like wait what is this bullshit

and there was some excessive like you know the private jet stories excessive corporate governance him selling weed to the company yeah

no buying buildings he would buy a building and rent it back to the company and then have the company lease it from him. Since he's front running the real estate. I mean, whoa. Why not?

I guess. So if he wasn't doing all of that shit, it probably would have come public. But then there was this parallel track of like the personal stories. Yeah. Right. Which I think Business Insider probably was all over those. Where it's like, wait, what do you mean there's like a bong on the plane? Isn't he going public?

Yeah. Not that I'm opposed to weed, but like now? Yeah. And I think there was a plane that was like kind of filthy and trashed afterwards. He had like a crew. Yeah. That they would just go on like vacations. What if I told you I think that stock's going to make a comeback?

And I think it's the perfect real estate play for the post-pandemic reopening of corporate whatever. I would buy that. I mean, I don't know where the stock is at or the company's financial system. It's a $4 stock and they have a new CEO. It's ripping. What's his name, the CEO? Steve Ballmer.

Dude, this guy's legit. I think he was like a real estate professional. How new is this? Oh, the guy from General Growth. Lock Me Mothrani. W-E is the ticker. I'm not pitching. Listeners, please don't buy this stock.

I'm begging you. I looked at their last earnings report, and they beat on like every metric. They're still losing money. This guy has cleaned up the balance sheet by like half. He's gotten rid of half their debt yeah their long-term leases i think there's like a real turnaround story uh you know carlton like i'm just throwing it out there right now you could you could cover it if you want i i don't own it i have no position look i mean to your point though i mean it it was a business it just wasn't a business that deserved a $47 billion value.

I mean, it's realistic. That's right. You know? So they're still losing a ton of money, but less than they were supposed to. And we're paying them, right? We have people in WeWorks. I know we still do. But we must.

We must. We must. Well, I mean, like, here's another question for you, like, just along this line, like the Ubers and the WeWorks, right? Like, these businesses that their big pitch was always, hey, we're going to be able to make money at scale. Yeah. When is Uber big enough? They're still losing, what, $400 million a quarter?

They made money. I mean, I haven't looked at their latest, like last quarter or whatever. They had a profitable fourth quarter, and they'll probably have another profitable fourth quarter this year. But so what? When does the company start? Okay, great. And Uber had to have a lot cleaned up too, right? But at some point,

does everyone in the world have to use it? Is that the only way? They make more money doing food delivery than the rides business. Yo, look at this. This is Uber. Last quarter lost $6 billion. They made money for two quarters.

Out of the 20 quarters they've been public, it looks like they lost more. Yeah, what's operating cash flow over the last eight quarters? You had your shot. You had your shot. You had a decade. Listen, I'm a fan of Uber as a product. They're pitching now. They're pitching Uber Freight is going to be the next hot thing.

Oh, yeah, Buffett's going to buy them. No, where they're looking at the inefficiencies in the trucking market. But there's a couple of those. Long haul railroad and they're like, we're probably going to be better at this than the company that was founded in 1890. Yeah. In fairness, they have the strong data. Or it's just going to cost us $10 billion, but we're going to be really good at it. So another five years of losses.

And we'll make eight back. I promise. Another five years of losses but we're gonna yeah so that's not happening we're gonna dominate that part is over could be alright we are

gonna do favorites and let you guys get out of here no yeah I know I know but we're gonna all come back and do this very soon um

podcasts business breakdowns have you ever heard an episode of business breakdowns I'm not I have not, no. I have not, no.

You are going to love this. Okay. Patrick O'Shaughnessy, Colossus Media. Yeah. I guess he hired, I got to ask him about this. They have a team. They have a team. A whole squad.

So he's not doing every episode now. He doesn't do business breakdowns. Did he do this one? No. He has a guy that used to work at Goldman Sachs interview Mark Rubenstein. Matt Russell. He's the CEO, by the way. Okay.

He's great. I never even heard of this kid. He's great. Business breakdowns is every episode. They look at a big, famous company and they break down. How does this company make money? Where did it come from? That's awesome.

They've done a lot of them. So the last episode was Goldman Sachs. They look at the 150 year history of Goldman Sachs and Mark Rubenstein is the guest. He's like my favorite writer about financial services. Substack. He's got a Beatles accent too, right? He's got like the Beatles accent. He's got like a Liverpudlian

British accent and he knows Goldman Sachs inside and out. It's a one hour episode. You will love it. Is it a new podcast or has it been around a while it's been around probably a year or two okay who else have they done

what are the other business breakdowns Twitter Shopify Exxon I mean they've done they've done like a lot anyway

public companies all public companies no they did Stripe I think but mostly public they're great what they do is they find the right person for the episode

who can really go deep it's not a generalist it's good so the Goldman Sachsen was cool and Rubenstein gets into like the cyclicality of the CEO and he's like

in one era it's Lloyd Blankfein who comes from trading. The prior era it was somebody who came from the banking side. But are they always bald? Always bald.

This is a pre-req. You can't have that much stress and keep your hair. Yeah. You can't be the CEO of Goldman and have a full head of hair. I don't believe so. It's impossible. Jamie Dimon has a nice headwrap. You can't have that much stress and keep your hair. You can't be the CEO of Goldman and have a full head of hair. I don't believe so. It's impossible. Jamie Dimon has a nice head of hair.

He deals with consumers. He does blood rituals. Keep up. We know this. Yeah, has to. Alright, the other one. What the hell is this? Remember Brandy? I literally just watched this last night. I love her. I swear to God. I love her now. Alright, Brandy was a literally just – Like the R&B singer. I watched this last night. I love her. Swear to God. I love her now.

All right. Brandy was a best-selling like – 98? Huge. R&B. Late 90s R&B singer. Like number one hits. Yeah. Huge.

The Boy Is Mine. Yeah, that's big. That's big. Yeah. Her brother is Ray J. Yeah. Which we know what he's famous for. And then she kind of like – I don't want to say she disappeared, but like that was

her moment and it's not her moment anymore. So Jack Harlow is like a 14-year-old rapper, and they asked him a question about Ray J, like, did you know that that's Brandy's brother? Well, they were doing that thing where he had to listen to a song and name who the artist is.

They were giving him clues, and it's like Ray J's sister. They were giving him a culture test, basically. Yeah, pretty much. And he failed because he didn't know who Brandy was. Who the hell is Jack Harlow? He knew who Brandy was. He didn't know that Ray J and Brandy were related. He's like a white Drake basically.

I don't even know what Drake is. Brandy just popped in. I got options. So he has a new album out now, but he's got like a couple of big hit songs, but he's very young and he kind of dropped the ball. Like he should have known. I feel like he should have known. He should have known that Brandy and Ray J are related.

No, I don't even think he knew who Brandy was. It's bad. It was bad. He's six foot three. Now he's a child. He's six foot three. He's a child. He was like three months when that, like when.

He wasn't even. He was born in 98. Yeah. No, I'm saying I'm giving him a pass on age yeah on age I get it

yeah right but the better part is what Brandy did so Brandy like took his his I think he's the number one

song in the country right now it's called First Class yeah it's okay she basically hijacked his beat and like

barred him into the Stone Age like her she rapped yeah she rapped over his beat and made his song like five times hotter than it was. And she's not even a rapper. And I'm like, wait, when did Brandy become a rapper? It was amazing. By the way, she clowned him on Twitter first before she even did.

She's like, I'm going to drop bars. At 43, I'm going to drop bars. I know you're not a rap guy, but like this is worth it. It was amazing. I was just very, as a 90s kid, I was like, yeah, you tell this kid what's up. This is how we did it. If you get outbarred by an R&B singer from the 90s, I feel like you have to retire. At 14?

Is that how old he is? No, he's like 24. He's a kid, though. Yeah. But I feel like he has to go. He's going to live with this forever. It was amazing. I don't know if it's going to be that detrimental.

He's probably going to tweet it out and be like, this is so cool. What else can you do? Anyway, I thought that was hot. It was so cool. All right, Michael, favorites. I watched the George Carlin documentary. Did you watch it yet?

No spoilers. Okay. Holy moly. The George Carlin documentary? Yeah, it's too modern. Oh, wow. Is it HBO? Apatow did it hbo it was so

incredibly well done like one of the best documentaries i've ever seen yeah and also obviously obviously obviously like holy shit what a life yeah um and a ton about him i didn't know in his earlier years i he was literally unrecognizable and all the different variations of his career and the end got a little bit very, very, very dark. And then it's funny. I was thinking like, oh, he's kind of like Tim Dillon. And then as I read the New York Post article, they mentioned that he's – So he's my favorite comic ever and I understand that like Pryor has the crown or maybe Dangerfield or Eddie Murphy.

It's subjective. He could be your favorite. I really think it's Carlin is the one. And I always think about, like I always think about when shit happens, what would Carlin think about this? Trump in particular and COVID. I would just,

I think the world missed out on Carlin's take. On COVID, he would have said, he would have said, thank God. The earth is shaking you people off finally he hated people he loved people individually yeah so that was a big that was a big part that he loved people but he hated groups of people i can't believe he died in 2008 i can't believe it's been so long i can't believe it's been so long it so if you watch some of carlin's older stuff like early 80s during the reagan administration i mean there were parts of his

bits that you could have just ripped out and put into 2016 20 it was bizarre they did that on the dock yeah and it was it was it gave you chills because it's like yeah yeah he was telling stories about like how he was raised on like the lower east side of manhattan or something in like the 1920s or 30s he's talking talking about like, he's like, here's why you're sick all the time. Hand sanitizers. Yep. Bottled water.

He's like, we were tempered in shit. We literally were swimming in sewage and it was good for us. He was really, he was really the best. He was truly like one of a kind. I'm going to watch it this weekend. Yeah.

No, I didn't know about that. Carlton, have you brought us a favorite today? Well, I mean, I've been on the Broadway kick, as you guys pointed out. So I saw Moulin Rouge twice. I saw For Colored Girls on Tuesday night. I saw Macbeth. I say see everything.

So is this like a new thing for you or have you always been really into theater? I've always been into theater. It was kind of funny so being a journalist i'll do a quick minute of real talk you start out you don't make a lot of money right right so you know starting out i lived in new york and it was like oh there's all this cool stuff to do and i can't do any of it 2020 i would say 2019 2020 is when i kind of started to round that curve of like oh good i can like do stuff and then we were locked down for everything was closed. Yeah. So there's definitely some revenge spending happening.

It's Broadway back. It's back, right? Oh, yeah. Big way. I mean, the theaters are packed. You walk out after a show. You don't have to wear masks in there. You do have to wear masks.

You do have to wear masks still. Okay. Yeah. I think through June maybe. I'm okay with that. But no, I mean, it's the buzz. I mean, it's just, it's really, really cool. So I would say do Broadway shows.

I did Hadestown. I did Springsteen. I did a bunch since the pandemic ended, just it's really really cool so I would say do Broadway shows I did Hadestown I did Springsteen I did a bunch since the pandemic ended or didn't really end it's just great to be back in a theater I'm not like a huge

Broadway person but I loved just being back in a theater and seeing people act I love it too like because I don't have talent

but I mean yes you do yes you do I'm not going to sing but like you know it's like oh no I'm saying you have talent but i mean i like you do yes you do i if we're not i'm not going to sing but like you know it's like oh no i'm saying you have talent yeah maybe not broadway talent okay but it's just it's cool to be around that and like you even though it's not what i do it's like you feel inspired after seeing like people it's also so important for tourism yeah yeah i i always find

it amazing like people like remembering these lines and these cues like whether it's broadway whether it's like movies and stuff i'm like wow like you gotta remember all this oh you know what i think is amazing you have to do seven shows a week or whatever eight eight yeah right because i would lose my i would lose my mind doing the same show eight times a week for six weeks and they're so physical like because i'm into dance and like so like moulin rouge especially is a very physical show where i'm like that's a three hours you're on yeah you're dancing you're moving you're doing jumps you're running from this part of the stage that side you're singing your heart out and i mean i know how i feel after like a 45 minute hit workout you know i wonder if they do like you

know the whole you know ice buckets and stuff they do like they do right yeah they like those kinds of things um like what's it the cupping thing you know like the whole ice buckets and stuff. They do, right? They must for those kinds of things. Like, what's it? The cupping thing? You know, like all that weird stuff. One day someone's going to explain that. We don't talk about perverted stuff like that on the show. What's the next hot show that's coming along? Or what's the next thing on your list that you want to do?

So the one that's getting a lot of buzz this season is A Strange Loop. So I'll probably see that. And then I might have to take a pause for my budget after seeing it. Who's in that? So I'll be honest. I don't know big names but it's just a great story of kind of like a marginalized person who wanted to be in Broadway

creating a show and it's just big on the Tony list which I think Tony's are in two, three. It's a Broadway show about Broadway shows? Yeah. Okay, I'm into it. Okay, you got a favorite for us? I got a favorite you know, I'm a hip hop kid. Did you have fun today? I had a lot of fun today. We loved having you.

This was great, man. We're going to have you back. We'll do this again. What are you doing tomorrow? I'm working most of the day. All right, come here after. But Pusha T's new album. Okay.

It's almost try. I could talk about that for two hours. I don't think Mike wants to sit through it. Yeah, we can do that on our own. Pusha T? Pusha T's new album. I'm a huge Pusha T fan. So am I.

And I feel like he's a little too hardcore, so he's underrated just because he's a little more hardcore. I mean, Kendrick's album was beautiful as well. What's your favorite aspect of Pusha's new record? The vibes. I'm still listening to it. I listened to it a couple times yesterday because I was just catching up.

It's been out for like three, four weeks, right? But I just think he still tells a story. It's been out for like three, four weeks, right? But like, I just think like, you know, he still tells a story. Like it's not necessarily a single story, but- It's a story about cocaine. Right, like the album, like, you know, it's an album still, right? Like you can, and just like,

I like albums if it's well done and you can just listen to it front to back. So half the record was produced by Pharrell. Yeah. And the other half by Kanye. And you could tell which song is whose. Really? Yes.

Oh, yeah. You could very much tell. He has Jay-Z on a track, which is like rare. Neck and wrist, yeah. Did he have Neil Young pop on? Neil Young does not appear at all. But he's kind of settled into a very specific role in hip hop. Yeah.

He's the Joker. He's the joker. He's like the villain that is smiling the whole time. And a lot of rappers are very afraid of him because he's like one of the real guys. And he will – He can still talk about the stuff that he raps about. And he will go after you like in a very pronounced way as Drake learned. I think he's – I think he's wrapped into the villain

and he's a great villain. He's great, yeah. I mean, I've loved him since the clips too. Co-signing that, that favorite. All right, we're going to get out of here.

Duncan, are we announcing anything? Anything else that we have to get to? Yeah, future proof. Should we talk about future proof for one second? Probably.

Do you know about this? Yeah, September 11th through the 14th. Are you coming? Wow, new of a date. I'm just waiting to see like school schedules and all that stuff.

Yeah, I don't know if I can make it either. School? Kids school. Start. Not his schedule. Not my kids schedule. All right.

Future Proof is the world's first and largest wealth festival. So it's not a conference. It's not a conference. It's a festival. If you call it a conference, we deregister you. But it's going to conference. It's not a conference. If you call it a conference, we deregister you.

But it's going to be the South by Southwest for wealth and finance. So we're expecting 3,000 attendees. It is outdoors, the entire thing. Huntington Beach, right? Joshua Tree. There are four hotels in the city of Huntington Beach, California. We rented them all out. Nice.

They're all taken. Yeah. So you can get a room there as part of our block. Outkast is performing. I don't know if I don't know if that I don't know if that's meaningful to anybody. Push a T. No push a T. You got my boy Mick coming.

Mick is coming who is like one of the most famous DJs in the world. He plays like. I was with him last week at Permissionless. Oh, he played Permissionless. Yeah. Okay, did he tear the place apart? We had a good time. It was tequila and us

behind the booth. Dude, not only is Mick DJing, but we're putting him on stage to event entrepreneurship. He's great. He's got major sponsors, global companies backing him. Yeah.

Fitz and the Tantrums are playing. I know I'm spending a lot of time speaking about the music. Yeah. But it's a festival. It's not a conference. However, we are going to have some really big names in financial advisory, wealth management, investing, fintech. We're going to litter the stage with great speakers and performers.

And it's going to be dope. Who covers that band at Barron's? Jack Otter. You should switch with him. Well, Wall Street will be, Goldman Sachs has a management sponsor. Who else is sponsoring? Stage 3. Everybody. We're having some big podcasts there too.

Dude, Duncan and John are going to be doing live podcast production for some of the big shows. You should do a podcast from like the outside. You know how they do like Super Bowl stuff? Just sit outside at a round table? Will you school him on what we're doing? It's not going to be great for audio quality probably.

Shut up, Duncan. You'll figure it out. People don't realize the set you guys got here. We have the podcast stage. That's awesome. And it's going to be video and audio. There's going to be seagulls in the background. Oh, that's so cool. It's on the beach. Like I'm not even joking around be video and audio in the background. It's on the beach.

Like I'm not even joking around. It's literally on the sand. Like you will have the podcast dude. It's a half a mile of beachfront.

We're calling it the boardwalk and that's that's where all the events are. So this is great. You will be barefoot. Sandals and seaweed sandals and seaweed.

Last time I was Huntington Beach was a wedding and a virtual land. No, I'm kidding. All right. You guys are awesome. We had the best Michael and I. Last time I was at Huntington Beach was a wedding. And virtual land. No, I'm kidding. All right. You guys are awesome. We had the best.

Michael and I had the best time. This is great. We're so glad that we could do a live show and having amazing guests to hang out with is like the whole point. So thank you guys for coming. Thank you for having us. Let's just tell listeners where they can follow you guys and we'll exit. What's the best place to follow your stuff besides Barron's? Besides Barron's, their Twitter and Instagram handles are Carlton English.

And when is your show on TV? My show is on Saturday mornings on Fox Business at 10 with a re-airing at 1130 and also on Sundays. Okay. Don't miss Carlton English. What is it called? Barron's Roundtable. Don't miss Carlton English on the Barron's Roundtable show. Okay.

And I know your StockTwits handle. Yeah. Okay. My StockTwits and Twitter handle are the same. Okay. R-K-H-A-N-N-A. Okay. Awesome.

And what time is your show on Fox Business? You know, I'm right in between. You're almost there? Yeah. I'm working my way there. All right. Thank you for coming and thank you for all the great work you're doing at StockTwits. We appreciate it. Thanks, man. And keep crushing it. All right, guys, we're going to

take you out of here. Make sure to like and subscribe, like and subscribe. We'll see you next time. Let's go. Let's go. I was like, bust up the turntables. Let's do this.