Are Stocks Cheap? (EP.312)

23:51So look at this chart I put in here. S &P 500 average returns by unemployment rate. I did 5 % or lower, 5 to 7, 7 to 9, and 9 or higher. And you can see the pattern pretty clearly. If you're below 5%, the returns aren't bad, but they're a little below average. They're much higher. Because when you're in an expansion like this, eventually you've got to contracture. The caveat, yes. And the caveat here is 80 % of the time the unemployment rate is below 7%. So that's the fat pitch like, hey, if you just invest when the unemployment rate is 9 % or higher, you do amazing. That only happens like 5 % or 6 % of the time.

24:23So that doesn't happen very often. But I put this out there just to say like that's the one thing holding me back like, geez, the unemployment rate is still low. I guess the counter would be the labor market is what has kept us here, and that's what's going to keep remaining strong, and that's going to keep us going. Someone else replied to me with one of my own data points and said, sure, Ben, you say low under polymer rate is low returns, but falling inflation leads to way better returns. So I do feel like all of these historical relationships, when you look at this stuff, so I look at this before, when inflation is down year to year, average returns like 14 % and change.

24:57When it's up year over year, it's 5.5%. So much higher returns when inflation is so. But I feel like we've had a lot of these discussions in the last three years of this historical relationship says this always happens. And this one says this happens. And now they're going head to head. Which one is going to win? I feel like we're just going to keep having those things. And that's the problem with having so much data is your outcome-based historical evidence can argue with one another. Well, the pandemic broke everything. And meaning fundamental relationships, you know what has held up very, very well?

25:30A lot of the data points that I've given from people like Ryan Dietrich, price data, meaning when the S &P 500 falls this much, and then this happens, and then that happens, when you get a breadth thrust or whatever, key reversal, and then you're higher 12 months later, 100 % of the time, those data points have held up. They have. Yeah, the price stuff, yeah. When I was talking last week and sort of skirting around the fact where, yes, the bear market is over, but I also hesitate to say new bull market has begun. I was thinking about this. It's a nuanced take. Because if you say we're in a bull market, people might hear that and say, oh, so we're all clear?

26:08Oh, so we're in the clear, so there's something to worry about? And no, that's never the case. You could be in a bull market, but the coast is never clear. There's always something to worry about. And this just goes to the psychological nature of how markets work. Callie Cox had a great post. She said, bull markets rarely feel like bull markets at first. Since 1950, the S &P 500 has bottomed an average of three months before a recession has ended. And if you wait until things feel better, you can miss the beginning of the ball. Great quote. And one of the things that I had asked, that's a great chart that shows, shows when the recession starts and when the SP bottoms, that's good.

26:46One of the things that I've asked over the last year and a half is, could this be the first time that the stock market bottoms before the recession even begins? Right. And it looks like that's at least a possibility or again, Or we might not have one. I'm going to have one. The other thing is, let's say this is a bull market. Most bull markets have corrections along the way. You don't, most, if it's a crash, that's pretty much the end of the bull market, but you're going to get 10, 15, maybe even 20 % bear markets during a bull market. Like if it's a secular bull market, you're going to get cyclical bears within them.

27:20Well, we had one at 15 and 16. We had one in December 18, I think. so there was a few over the last decade it is so funny how how our conversations change though based on the market can you imagine having this conversation last year here's another good one on stock picking though this is from jp morgan one out of four stocks in the russell 3000 has fallen over 75 from 2021 highs one out of four so that's that's the snaps that are still down 80 whatever percent so the index is this was this was as of june 8 so it's probably a stale now was on 12 and there was still 25 % of stocks had fallen 75 % or worse.

27:57I mean, the market is the ultimate arbiter, right? It doesn't mean the prices are right every day, obviously, but we all have opinions on what might happen, what is happening, but the market is indisputable, right? The scoreboard, whatever, we are who we say we are. What am I looking for? It's a scoreboard. It is a scoreboard. They are who we thought they were. yeah uh all right annual annual annual uh peace that's not a Dennis Allen oh god am I getting old it's the Vikings old head coach yeah it's not Dennis Allen who's Dennis Allen what's this guy's coach hold on we're looking it up we they are the Bears they are who they thought they were Dennis Green Dennis Green who's Dennis Allen oh no I'm turning into my dad okay I'm misquoting people's names.

28:45All right. Annualized inflation prints by month. No, it is Dennis Green. Oh, I said Dennis Allen? Yeah. Damn it. Middle age is here for you, my friend. Annualized inflation prints by month. I did a tweet on this again today. 9.06 % in June. Down, down, down, down, down. 4.05 % in May. It's come down, according to Bespoke, 11 consecutive months, which is now the longest consecutive of decelery months since 1921. Wow. Whenever I post this stuff on Twitter about inflation, someone invariably come back with me with, well, yeah, the rate of change is coming down, but the cumulative inflation is still up there, which I agree with.

29:26We're not going to get 20 % deflation to bring us back to prices of what they were before. Yeah, exactly. And I could argue that's probably not a great, that's a good thing. We're not going to do that. But you also don't have your wages come down, right? People want to have prices go back to where they were. but they want to keep their wages where they are, right? If prices came back 20%, guess what your wages are going to do? They're going to fall that much too, probably. So your wages are also cumulative, and those are up. No, people's salaries don't get cut. Exactly, that's what I'm saying.

29:56Yeah, inflation, but that's one of the reasons that inflation doesn't fall back either to previous levels. Sure, it's cumulative, but so are, yeah, so is what you make. This is another interesting one from Bespoke. Okay, U.S. CPI, the change for the length that it took to rise from 5.3 to 9.1 was 11 months. It's now taken 11 months to fall from 9.1 to 4.9. So it actually fell faster than it rose. That is surprising to me. I would have not believed that. So inflation is falling faster than it rose, over 5%. To go from over 5 to under 5 is quicker on the downside. That's surprising, right? Yeah.

30:35I wouldn't have guessed that. Here's another one. This is kind of interesting. So I plotted on Y charts, the Fed funds rate versus U.S. inflation rate going back to 1950-something. There's probably not much historical relevance to this, but I just think it's interesting now that the inflation rate on a trillion-twelve months is lower than the Fed funds rate right now. So now they can pause? They have to pause, right? Yeah. Everyone thinks. The meeting is tomorrow? One more. I think we, yeah, I think one more. Oh, wait, wait, wait a minute. I thought it was, hold on. When is, when is it? June 14th.

31:11All right. The S &P is now flat since the Fed began raising rates in March 2022, which is kind of crazy. I forgot that, that the S &P went up a little bit more after they started raising rates. Here's a inflation question for you. You go to a restaurant and I'm not talking like a high-end restaurant, a place that has a kid's meal, right? So we're talking mac and cheese, hot dog, PB &J, chicken nuggets. and maybe I'm asking the wrong person here because you live in New York, but how much should a kid's meal cost? Because I have three kids. And so I see this on the, like how much should a kid's meal cost?

31:40Because I only noticed this when I paid a lower amount this weekend. All right, so like chicken fingers and french fries. Yeah, what should that cost? From where? Like a bar. Like a bar. A bar. Like a sit down place that's. I'm sorry, I'm overcomplicating this. I'm sorry, my bad. All right, I'll give you an answer. Chicken fingers and french fries for kids should cost. anywhere between$9 and$13. Okay, see, so I went to a restaurant this weekend that had brunch, and they charged$4 for a kid's meal. And I was like, geez, our bill was so low. A bill for family of five was$40, and it was like a huge pancake helping.

32:17And that made me realize, like, man, we've been paying way more. And I think a kid's meal - $4? What is this, 1973? Well, this is Michigan. I think a fair price is in the$79 range. I think in the$10 to$15 range for a kid's meal, it's crazy. Because most of the time, the mac and cheese is Kraft mac and cheese. Let's be honest. The chicken nuggets are a freezer aisle or something. And then a PB &J or a hot dog or something. So I think anything above$10 is egregious. And I feel like that's where we've been going lately. Because I've noticed it on my restaurant bills. But you're in New York, so you probably think$36 is fair.

32:53Stop it. I also, we don't take the kids out that much. Yeah, we've been doing it a little more. lately. But yeah, I was the only time I noticed was when it was low. And I was like, oh, that that was really low. And my restaurant bill was pretty cheap for once. Duncan, that's a that's a compound survey right there. What's the correct price for a kid's meal? Although I feel like I feel like you gave an appropriate answer. But so did I because I'm telling you, I think from I think where I am nine to 13 is reasonable. That's that's what I was figuring. I was doing the New York inflation there. OK, here's a here's a good one.

33:24Percentage of Americans who believe the US is in a recession. This is going back to from May 31st of 2022. It's been above 50%. It got above 60 at one point. So it's been above 50 % since last May. For over a year, 50 % of people in this survey, I don't know if it's a survey problem, believe we are already in a recession. They may be wrong. That's 50-50. Do you think there's some people who just always think we are, though? I mean, yeah, sure. If you're laid off, you probably think we're in a recession. Yeah, but guess what? 97 % of people who want a job are working right now. This is also an environment where you could very easily make a case for a recession, no recession.

34:08For example, if you look at like leading economic indicators, that is strongly signaling a recession. Every time that they're going down to the extent that they are right now, we've had a recession every single time. The inverted yield curve, you could say it's never been this inverted without a recession. um however and then i mean again you it's very easy to support arguments that support find data supports your argument ryan dietrich tweeted this heavy truck sales continues to increase before the past seven recessions we saw this decline well before the recession started you want to talk about leading indicators of a recession i'll take this every time yet another clue of recession isn't imminent like we keep hearing so again this chart as i just mentioned i have a truck sales fall before i think the fed broke the yield curve I'm totally, yeah, I agree, I agree.

34:55At this point, like if you say - That's why Cam Harvey said that. If you say the stock market or the yield curve predicted a recession, and let's say it happens in like 12 months, I feel like statute of limitations, sorry. You didn't predict anything. You were way ahead of it. All right, Stephen Ratner, incredible chart. Real construction spending. This is manufacturing. This chart sort of resembles the S &P in that it's up and to the right with dips around economic pullbacks. But - And then it went parabolic. I mean, unbelievable. So this is back to the thing of, this is whatever, economic growth remaining high, like nominal GDP at five or 6 % and inflation remaining at three with all the government spending.

35:40So this is, it shows that the CHIPs Act and the Bipartisan Infrastructure Bill going into effect. Joey Politano did one of US manufacturing construction spending. Look at that one. That's also up and to the right. This thing is, and it's a huge increase in computer, electrical, electronic spending. I don't know. I feel like probably not many people are paying attention to the amount of spending that is still going on, even though the money supply stuff is falling. Crazy. But here's another one. Here's another other side. This is from, who is this? Don Miami. the logistics manager index hit an all-time low down to 47.3 in May, highlighting a quiet implosion of activity occurring in the freight sector as the economy slows down.

36:26Does that just mean that people aren't buying as much stuff though? I don't know. Just mixed messages. Again, easy to find evidence supporting whatever you would like to support. I think the economy, everything continues to be not homogenous. Different areas of the economy are humming and other areas are in trouble. And I tend to lean on the stock market for guidance, even though it's not always right. All right. I love stats like this that disprove dystopic or pessimistic people. So Jim Patoukas put this out. I think it's from this book, The American Dream is Not Dead, which I'm going to read just from reading these statistics.

37:03What did you call him? I know it's a tough name to say, but how do you pronounce it? Jim Pathusik? Pathoukas? Is that right? So I grew up with a lot of Greeks. Not a lot, but a few. It's Pathoukas. All right. And this is not even a hard name to pronounce. You should see some of them. They get really six syllables deep. Then you start having trouble. All right. Wages for the typical workers are up by a third on a real basis since 1990. 73 % of Americans in their 40s have higher incomes than their parents did at the same age. Among kids raised in the bottom 20%, 86 % have higher incomes than their parents.

37:40Wow. The stagnating blah, blah, blah, things are getting worse is anecdotal at best. It does not follow the data. I saw a great – I'm not like a big motivational guy, but I saw a great Instagram post. It was Barbara Corcoran talking about how she doesn't like to bet on rich kids. and she likes to bet on people that came up tough because – She wants like a chip on his shoulder. Yeah, just – and you can't simulate hard times. So this is phenomenal news. Honestly, that's a great soundbite, but I feel like if you look at most big organizations, how do they hire? Which school did you go to? What was your GPA?

38:21Unfortunately, that's stuff people look at. But she's not talking about corporations. She's talking about founders. Okay. Yeah, that makes sense. Well, that's a great stat. I love it. Say that one more time for the people in back. Good stuff. Which one? I'll say it. Among kids raised in the bottom 20%, 86 % have higher incomes than their parents. Yeah. That's a great... I wouldn't have predicted that. America. All right. This is a great thread. I spoke about things returning to normal. This is really what I'm talking about. Maybe the labor market. This is from Preston Mui. M-U-I. I don't know if I said that right, but...

38:58Quit rates are back to normal. Can we just do a little pact here? First names only going forward. Well, Preston M. Preston M. Okay. Okay. Quit rates are back to normal. Series of charts here. Job switching rates are back to normal. Remember people were switching because that was the easiest way to get an increase. The job switcher premium is back to normal. That is the percentage point difference between three-month moving average of 12-month median wage growth of job switchers and stayers. So there was charts that we showed, which is wage growth with job stayers and job switchers. And the spread was gigantic.

39:32Basically, if you switch jobs, you got paid. And then remember the great, was it the great resignation we spoke about a lot? Remember that, by the way? Yeah. Self-employed workers. Everyone was going to start a business, went vertical. That does not come all the way back. So this stuff all makes sense when you consider like the people who were kind of on the fence, like should I leave, should I not leave? Oh, wait, I can make more money. At a certain point, that had to run its course. So that part of the economy is healing. However, Nick Bunker tweeted this, and there's a lot of other people sharing this chart.

40:04The Atlanta Fed's wage growth tracker continues to very, very gradually slow down, coming in at 6%. But it's still really high. And this is still a big driver of inflation and spending. This is not coming down. So this is a good news. So that means wage growth right now is higher than inflation over the past 12 months. Right now it's good, yeah. Yeah, but you would expect this to come down. Yes, maybe just on a lag, but that's a good thing. Grubhub laying off 15 % of staff. Have any problems with them? I feel like that's the kind of company that you'd have some qualms with. Oh, believe you me.

40:43Mr. No Pet Peeve. No, I was saying I don't have personal pet peeves, but can I give you an update on, And yeah, dude, I tried to order. I actually thought about ordering. I use Seamless, which I think is owned by Grubhub. And I just can't do it. Like, I'm sorry. The fees, the service, the service fees and the delivery. It's just like, no, I'm not spending$64 for two salads. Sorry. Call me crazy. All right. So last week, that pet peeve that I had, just a reminder for people that might have missed last episode, somebody emailed me, introducing me. And I don't know why. There was like six people on the thread.

41:23And I forgot to get back to them. That was on me, hand up. And so they emailed me again and they were trying to pitch me something, right? Which is fine. They were trying to pitch me something. And so they responded, hey, Michael, just following up. And they CC'd everybody again. I was like, come on. I feel like you're like telling on me. It's not email etiquette. So I responded. I'm so sorry. Happy to chat. Whatever. Guess what? Ghosted. It ghosted you? Ghosted. Now, I thought about sending another follow-up like, oh, so I guess you don't want to talk. So then you trumped them by CCing everyone else again.

42:01No, I didn't CC everyone. I just responded. I know. But I took the high road. I took the high road. Here's a controversial take. Maybe controversial, but I want to get your thoughts on this. Speaking of emails, I want to call it a pet peeve, but let's just say I don't like this. Okay. It's not a pet peeve, but I don't like it. When somebody wants to talk with you and they throw out a date in like two or three weeks, guess what, buddy? I'm not impressed. Oh, you're so busy. No, no, no. Oh, right, right. Yeah. Right. Like I'm not impressed. It's actually, I'm the opposite. It's a big turnoff. Yesterday I got an email, a shout out to Chris at meow.

42:36Brandon wanted to set this up to see some of their newest products. And he responded, Hey, Michael have any time later to take today to chat? You're damn right. I do. Yeah. I do have time to chat. So I actually let him know that I really appreciated the same day invite. That impresses me. That's a man of action. You know, when I do the two or three weeks in the future, when I just, and I just don't care. Most of the time. It's incredibly rude, but that impresses me. I don't think, oh, this guy must have nothing to do because he could talk today. No, I think that guy's a man of action. He's a busy man.

43:10He gets shit done. I like it. Next week for more of Michael's email pet peeves. No, but I just think people think that they're signaling something like positive I get it. Nobody's impressed with your schedule. Okay. So all the crypto stuff about like the, I don't know, it sounds like the SEC is basically going to destroy everything but Bitcoin and Ethereum. I saw Robinhood is taking like Solana off the platform and Polygon. Isn't this just, isn't the end game just that Ethereum and Bitcoin are the only two left standing, more or less? Could be. Will Clemente tweeted, Bitcoin's market cap is the largest percentage of cryptos total since April 21.

43:46on. So, yeah. How does this always happen? Before the SEC lawsuit against Coinbase was formally announced, from unusual whales, yesterday someone opened new Coinbase$50 weekly puts for$107 ,000. They were 90 % out of the money and expired in four days. These positions are up nearly 2 ,572%. They turned 100K into millions. How does this happen all the time without people getting in trouble. It is surprising that if you can see these trades happen, that they can't just flag them. Oh, you know why? Because they're not on chain. Yeah, if they're on the blockchain. I don't know. Ben, last week we spoke about a chart, an incredible chart of global VC capital rates for crypto firms, slow, vertical crash.

44:34And Booker Capital had a great take on this. He said, look at this chart of VC capital rates for crypto firms. This is genuinely so f***ing awesome and sick and good for society. This should be celebrated. Market realized crypto is literally worthless, stopped funding it, capital deployed elsewhere, God bless America. So I am not of the crypto is completely worthless camp. However, the point that he just made about the dynamism, and you spoke earlier last week about VCs being the herd mentality, that's a great point. This is capitalism. Yeah. Once they realized it wasn't happening, we're moving on.

45:09Justin, my friend Justin Pertano had another, had a different take on this that I thought was interesting. So he shared this chart, the one that we're talking about. Then he shared another chart showing USVCs are on track to close 2023 with 73 % less capital committed than 2022. And then he ends up with the meme. I guess this is from the office, even though I don't watch the office. I know this is from the office. Corporate needs you to find the differences between this picture and this picture. They're the same picture. So Justin, and say like, yeah, crypto funding dried up because every funding dried up, which is a fair point.

45:42That makes sense. Fair point. Yeah. You read the Marc Andreessen thing about AI? I did. I didn't necessarily, I think I went in there with an open mind, slightly biased against what he was about to say and damn it, he won. He beat me. He's a lot smarter than I am. You know why? He's been balder for longer. Here's the part I liked. You have a better shaped head though. I'll give you that much. Every child will have an AI tutor that is infinitely patient, infinitely compassionate, infinitely knowledgeable, infinitely helpful. Every person will have an AI assistant, coach, mentor, trainer, advisor, therapist that is infinitely patient, infinitely compassionate, infinitely knowledgeable, and infinitely helpful.

46:21The AI assistant will be present through all of life's opportunities and challenges, maximizing every person's outcomes. This is, I hope this is what we get. I've been saying, this is all I want out of AI. I want my own personal assistant on AI. So if this happens, great. I want it for you. I'll be happy. I think you're going to get it. But here's the thing. And here's the thing, here's what AI, I've been thinking lately about, this is kind of like the contrarian, like go against the grain thing. The stuff AI won't change. Most of the stuff that makes me happy in life, AI is not gonna touch. Like I get a lot of enjoyment out of being outside, on the water, beaches, pools, playing with my kids, playgrounds, experiences.

46:57AI is gonna change nothing about that. AI is like, I enjoy going for a jog or walk outside, going in the, like all that stuff. AI is gonna do nothing to touch that. So like the most, maybe it'll help at work, but for most of the stuff in my life, AI is not going to have a meaningful change at all. Yeah, I think I mostly agree with that. For the stuff that makes me happy. One thing that I'm very much looking forward to, and I don't know if this is a 2030, 2040, 20 never. I feel like this will happen. Being able to virtually attend a sports game. Like what if you could sit courtside at the garden and not only watch a game from courtside, but to be able to like look around and have like an immersive experience.

47:39Well, that's the Apple ski goggles. That's what you're going to get from that, right? Yeah, yeah. Like that really excited me. Imagine being on an airplane, being able to watch a movie as if it's on a hundred foot screen on an airplane. Speaking of on an airplane, Ben. I get it. I'm sorry, but if I do, I'm never wearing it in public because you look an idiot. You go like this. Well, no, you're not going to be wearing it on the sidewalk, I don't think. But on an airplane, So, uh, our travel has increased. I don't know if it's permanent or, or what, but I got a new credit card cause I want access to the lounges.

48:14Cause I'm going to Los Angeles in a few weeks and then I'm shutting it down for a little bit. Actually, Robin and I are taking one flight over the summer, but then that's it for me. And I was thinking as I applied for this new credit card, you know, when they, they go over all your financial information, imagine, not your, they ask you your income. Imagine like Ken Griffin. I'm guessing he has somebody to do this for him. But imagine somebody, like an athlete, like, what's your annual income? 3.7 billion. I think you're approved. Yeah, you're good. You know what the APR is on an Amex? And I guess probably every card.

48:5119, 20? 27. 27? So wait, which card gives you the lounge access? Because I probably have one of them. I just don't know about it. No, you don't. So there's one special. How do you know I don't? I got a new Amex recently. Which one do you have? I don't know if it's platinum or gold or silver. Oh, you have the platinum? I think I get the platinum. Is that Delta Lounge Access for me? I think it is. I believe so. So there's JFK Terminal 5. I tried to get it one time and I was shoe-shooting. I was quite not embarrassed, but I wanted access. So I got the Reserve card, I believe. I don't know. I just don't care enough to go in the lounges because I'm never there early enough to sit in them.

49:28What's the point? I got the Reserve. Yeah, the Reserve. Well, no, that's a fair point. But now I might change my habits. So again, for my next trip, I might arrive instead of an hour and a half early, maybe I arrive two hours early. Enjoy some of the perks. I'm a man of the people. We don't have a lounge at the Grand Rapids Airport. So you get in the flyover states. All right, Lance Lambert. Wait, wait, hold on. Sorry. Let's say, I just want to say one more point about the AI thing that stuck out to me. Okay. Because in the post, Andreessen dissected the common arguments for why AI won't do what the people said it's going to do.

50:07I thought his social media stuff about this is going to make things worse. I didn't agree with that argument. That was the only part that I said, get out of here. Not buying what you're selling. No. All right. AI, if allowed to develop and proliferate throughout the economy, may cause the most dramatic and sustained economic boom of all time with correspondingly record job and wage growth. the exact opposite of the fear, and here's why. The core mistake of the automation kills jobs doomers keep making is called the lump of labor fallacy. This fallacy is the incorrect notion that there is a fixed amount of labor to be done in the economy at any given time, and either machines do it or people do it, and if machines do it, there'll be no work for people to do.

50:45That's a very common belief that people have, that there's a finite amount of jobs. Andreessen says the lump of labor fallacy flows naturally from naive intuition, but naive intuition here is wrong. When technology is applied to production, we get productivity growth, an increase in output generated by a reduction in inputs. The result is lower prices for goods and services. As prices for goods and services fall, we pay less for them, meaning that we now have extra spending power with which to buy other things. This increases demand in the economy, which drives the creation of new production, including new products and new industries, which then creates new jobs for the people who were replaced by machines in prior jobs.

51:21The result is a larger economy with higher material prosperity, more industries, more products, more jobs. I think this is directionally right. Now, obviously - I agree with this. It's very complicated. People will definitely be displaced. But if we look at the pie instead of just the parts of the pie, I do believe it will grow for these reasons. I really do. We have a dynamic economy. I totally agree with this, that it's not just that there's a fixed level of jobs and if robots take some, that they're all of a sudden gone. We create new jobs. Last take on thoughts from the Apple headset thing.

51:52Ski goggles. Ski goggles. they're gonna why don't they just buy disney yeah i agree i i'd be fine with that it makes sense the apple tv plus thing is so niche and i agree do it all right lance lambert home prices are probably going to rise this year so far national home price growth in 2023 looks like well a normal year home prices are so we we had a minor fall home prices are basically rising again and through 2023, they're up. They fell in 2022. Mike Zaccardi, who always provides us good charts for this show. For the first time since 2014, boomers are buying more homes than millennials. 40 % of boomers between July 2021 and 2022 were buying houses, and millennials are only 28%.

52:37Duncan is saying that Sapphire – sorry to cut you right off. Sapphire Reserve gives you priority pass lounge access. Yes, but not to the lounge that I'm referring to in JFK Terminal 5. I got the priority pass card. They sent it to me. I have no idea where those places are. What is that? The priority pass? I don't know. They give you a card that allows you access, but I've never been in an airport that actually has one or it's in the wrong terminal. I'm sorry. The lounge stuff is overrated. I think the boomers are the reason. It's not overrated. You're just salty because you don't have one in Grand Rapids.

53:08It's properly rated. Because I get to the airport like five minutes before my flight's going to take off. I don't have to sit there for an hour and a half. Because you live in Grand Rapids. That's a luxury. True. As the official May housing data trickles in, this is from Rick Palacios, the divergence between new home and resale market is even more glaring. May new home sales are up 18 % year over year. And I guess Zillow actually said existing home sales down 18 % year over year. Look at Pulte, DR Horton, Toll Brothers, Lenar. We've been talking about this. All at new all-time highs. All these, NVR I think is too, the home builders.

53:42Just a weird, weird market that seemingly would not make sense. But I think home builders are really the only game in town right now since existing homes fell off a cliff. Robin sent me a home yesterday in our town that I can't remember what the price was,$850, whatever, for like a really, a house that should. Fixer Upper. Like a real, not a big house, old, you know. Yeah, it's crazy. There's just still no supply. Yeah. But I think now that home builders know this, for a while they were offering incentives, I think now they know this and they're jacking prices up. And it's going to be more expensive to buy from them too.

54:25Are these stocks up like 70 % on the year? I don't know that much, but they're definitely outperforming the market. So Pulte, for example, is up 61 % year to date. Unbelievable. They're definitely outperforming. It's freaking June. Yeah, not bad. All right, Ben. the other day so I posted on Instagram a box of my AirPods and I said we meet again. I lost these. I lost my AirPods. What number are you on? I just got some new ones too. I'm on number four I believe. Honestly I feel like eight. I don't even know. Okay. I've got some cheaper ones to get me through as well. You know what I got? Somebody on Instagram told me to get this.

55:07So I had this case. I've had this case. But now sir I've got a clip. I've got a clip. To clip it? You lose the case itself? I lose it all. I've lost individual buds. I've lost them both. I've lost the case. That's not going to solve your problems. You're going to lose the case with the carabiner, and that's not going to help you. With the what? What word did you just use? The carabiner. That's the hook thing. That's a great word. So anyway, listen, I'm trying to clip. Not to brag, but I've done some high ropes courses in my day. Ah, okay. Oh, that's what this is. So yeah, I tend to lose them in the Uber.

55:40That's where they go to die. Okay. So you're going to hook it to your belt loop? Total dad move. No, not a belt loop. Come on, that's crazy. What are you going to hook it to then? Book bag. By the way, is book bag a dated word? Yes. Because – A lot of people also said you calling a grill a barbecue was total New York thing. Okay. So two things. Book bag is an old thing, I guess, because when I say, Kobe, get your book bag, he goes, what? Like your backpack. Yeah. Backpack. Barbecue. Yeah. I do call it a barbecue. I guess it's a grill. I, I, I got a lot of feedback on that. So thank you everyone.

56:18I knew that water wasn't the right thing to do. And to be clear, I didn't dump like a bucket, you know, cause I, in my back mind, I was like, wait, you shouldn't pour water. It sounds like everyone thought you had a grease fire. I think that's what it was. So I took the tryout and it was loaded. So I got baking soda or baking powder. Is that the same thing? Yeah. So I got that. Cause that's what you're supposed to use to put out a fire. I cleaned the grill. Lesson learned. Thank you, everybody. What was I going to say? I was speaking of things that are old phrases that we don't say anymore. And to think about how great capitalism is.

56:53I was watching Happy People, which I thought I liked that movie, but - Happy people or funny people? Funny people. Oh my God. I really am turning into my dad. This is awful. This is horrendous. It was 45 minutes too long, but I like this is horrendous i'm i'm upset but anyway they referred to tvs as we all did and funny people is from 2009 so not a million years ago they called them flat screen tvs remember yeah got a new flat screen tv that was the thing you know we call flat screen tvs now tvs yeah that's true i did yeah i did like that one um oh the reason why i brought up these airpods same day delivery?

57:34I ordered these in the morning. They were there in the afternoon from Amazon. How is it even possible? I get that. It's like magic. Honestly, I was like, they came in the room and I was like, what? So, okay. Netflix, check out this chart from the Wall Street Journal. According to streaming company Antenna, Netflix amassed more new subscriptions in the US between May 25th and 28th, shortly after Netflix notified users of the limits than in any other four-day period since Antenna began compiling such data in 2019. How crazy is that? This is when they took the password sharing away? Yeah. That makes sense.

58:11People are hooked. They can't give it up. No, the stock has been doing great. And it's funny. Upgrades are nonsense unless it's about your stock. Upgrades are silly unless it's about your stock, then you feel good. So for example, I saw this morning, Bank of America on Netflix. If we assume slightly over 60 % of password borrowers in the US are converted, we estimate password sharing could represent a$2 billion incremental annualized revenue opportunity, ups our price target from 410 to 490. The stock is at 430. I'm like, yes. However, this is the dumbest upgrade ever. Well, that's not true, but this is a silly upgrade.

58:51Here's why. Why would they assume slightly over 60 %? Isn't that such a random? Yeah. Right? Why not assume? It worked well with their discounted cash flow analysis spreadsheet. Why not assume 20 %? 60 is a weirdly high number. And not just 60, slightly over 60. Okay. All right. One more thing in terms of like oldism and how good kids have it these days. So it's on Instagram. Before Google, someone would tell you this dude was Marilyn Manson and you just had to accept it. This is a picture of – is this a kid from the Wonder Years? Yeah, Paul, right? from one of yours. But so true, right? This is like a rumor.

59:33Whenever somebody said something, you just had to either believe them or say, I don't believe you. Arguments just never got solved. Arguments never got solved. So this is embarrassing, Ben, as we transition into recommendations. On Sunday morning, I was up at 10 to six, which is too early. I don't know why I was up, but I was up. And I threw on Amazon and I saw that Creed 3, is now available for streaming on Amazon Prime. But I said, ah, can't put it on. Too early. Robin's going to wake up. And you know what I did? I know this is like not a discovery, but it's new to me. I threw my AirPods. Actually, my Bose headphones, to be specific.

1:00:16Connected to your TV. And it was, I can't believe, where have I been? How come you didn't tell me about this? How often do you actually, are you actually in an environment where you need to do that though? When I watched a thousand times. No, when I watched TV either when Robin sleeping. Okay. No, it's not bad. So I watched Creed three. I watched two weekends, two movies this weekend, both entirely predictable plots that were very enjoyable to me. So Creed three, I enjoyed it quite a bit. Obviously I think it's good to that. Sam, a huge Rocky guy. After Creed one. Okay. We're not on the same page with a, with a lot of movies, but that's fine.

1:00:56I'm a huge Rocky Stan. I am too but after like 12 of them I'm sorry no you're not I gave up I gave up on Rocky after number 5 with Tommy Morrison that one for me never happened and then remember there was the one where he was like 60 years old and got back in the ring to fight again I mean some of them were pretty bad agreed Rocky Balboa didn't happen after Rocky 4 alright contrarian I'm gonna zag here I liked Rocky 5 oh whoa that's like the worst movie take that's worse than Sean's movie take of having I know Black Mass in his top 10 I've never, ever, ever heard anybody say I like Rocky V. In fact, I've only heard people say that movie is horrendous.

1:01:33Guess what? It was awful. Guess what? I liked it. Never should have been made. Sorry, not sorry. So anyway, yeah, Creed III was very, you know, it was how they all go. And I enjoyed every one of them. I also saw another movie that Robin was watching with me and sort of laughing at me. And this is why you're watching this. It was The Pope's Exorcist with a little guy named Russell Crowe. And all - Seriously? All demon movies go the same way. All exorcism movies go the exact same way, right? There's a house or a castle, kids possessed, call the exorcist, exorcist comes in, gets the demon, blah, blah.

1:02:11Stuff goes weird, yeah. Very formulaic. I'm a formulaic guy, right? Okay, so was it a great movie? No. Did I like it? Yeah, I did. And lastly, here's my - Your bar's pretty low if you like Rocky V. True. True. Uh, this I genuinely enjoyed. As I said last week or a couple of weeks ago, I love Arnold. Who doesn't feel like we all love Arnold. He's the most American man ever, even though he's not American, just represents everything about hard work and discipline and executing and no excuses and going after your dreams and all that good stuff. There was a three-part documentary on him on Netflix.

1:02:50It started as like Arnold, the bodybuilder actor, then part three politician. very revealing uh and i just love that man okay i don't really have any recommendations i've been we've been finishing up spring sports and i've been outside and so i only have one take for this week on recommendations uh roman had one at the end of succession the very last scene of his and then i re-watched the new the bond the re-watchable is on the casino royale which is wait wait i'm sorry i lost it roman had one a martini i'm getting so and then bond is drinking a bunch of martinis. My take is martinis are so overrated, but the glass is so cool that people think they're awesome.

1:03:31If you had a martini in a regular glass, you'd think this is gross. Why am I drinking this? But because it's in such a cool glass, like if you had another kind of drink that was in a martini glass, you'd think this is a really cool drink. So you're not wrong. You're not wrong. Although I mean, I like martinis because I like vodka. Although I know some people do gin martinis, but there is something to the glass. It's not just for effect. the way that like the, the liquid comes out of the drink. Come on. No, no, no, no, no. This is a hard one. Got in your head. No way, dude. If you drink vodka out of just a paper cup, uh, it's, it's the look you're talking yourself into this.

1:04:09It's the look of the glass. I don't know. I think it's, it breathes more. If you just, no, it's not. No, I think it's just, no, I think there's functionality to it. It delivers a better sip. How about that? Yeah. Because you can gulp it down in one sip. That's why. Eh, Fine. Maybe my mind is playing tricks on me. The martini glass is like one of the best PR things in history. That's all I'm saying. So I think that it's functional, but you might be right. Maybe they gaslighted me. Could be. Oh, I'll pat myself on the back a little. I had a good call last week. Universal and Illumination are close to signing a deal to make a Legend of Zelda movie.

1:04:46If you remember last week, that was my prediction. Thank you very much. Nailed it. What else, Ben? Anything else? No. send us an email, annalspeerispod at gmail.com. See you next time.

1:05:03That was a very warm birthday sign-off of you.