In short
Animal Spirits Podcast - Episode 306: Bear Market Lessons
Episode Overview In this episode of the Animal Spirits Podcast, hosts Michael Batnick and Ben Carlson explore various topics related to the current market conditions, including the implications of rising mortgage rates, spending behaviors, and the recent takeover of First Republic Bank. They also touch on the psychological toll of concentrated investments and discuss the dichotomy between bear market lessons and consumer spending trends.
---
Key Topics Discussed
- Market Dynamics and Bear Market Lessons
- Discussion on the latest market conditions, including the performance and volatility of stocks.
- The hosts reflect on lessons learned from bear markets, emphasizing the psychological impact of concentrated investment strategies.
- Consumer Behavior and Spending Patterns
- Spending Resilience: Despite economic uncertainties, consumer spending remains robust, with people spending in line with their earning increases.
- High Demand for Junk Food: Companies like McDonald's and other fast-food chains are seeing all-time highs in stock prices, suggesting that consumer habits haven't changed significantly, even in tough economic times.
- Mortgage Rates and Regional Bank Takeover
- First Republic Bank: Discussion of JPMorgan's acquisition of First Republic Bank and its implications for market stability.
- Rising Mortgage Rates: The hosts speak about their first experiences with mortgage rates, highlighting how consumer sentiment might shift with changing rates.
- Market Concentration Debate
- The hosts debate the concentration of stock market performance among a handful of large-cap tech stocks and whether this is a cause for concern.
- They explore historical trends of market concentration and turnover among the largest companies in the S&P 500.
- Psychological Implications of Investments
- Concentration Risk: A case study of an investor who faced severe psychological stress due to concentrated positions in volatile stocks like NVIDIA and Tesla.
- The hosts advocate for diversified portfolios to mitigate emotional stress and financial risk.
- Economic Indicators and Future Outlook
- Discussion around mixed economic signals, including consumer spending outpacing inflation and predictions of a potential recession.
- Insights on how the bond market differs from stock market behavior amid economic shifts.
- Trucking Industry Trends
- The podcast highlights a significant decrease in demand within the trucking industry, contrasting with previous supply chain issues.
- Investing Insights
- Insights from various recent articles and reports about the market, including the importance of staying diversified and being aware of potential market shifts.
---
Key Takeaways
- Psychological Impact of Market Fluctuation: Concentrated investments can lead to significant mental stress, and diversification is essential for peace of mind.
- Consumer Resilience: Consumers continue to spend despite economic pressures, indicating a strong underlying economic sentiment.
- Monitoring Economic Indicators: Investors should keep a close eye on both stock and bond market indicators to gauge future economic conditions.
- Understanding Market Dynamics: Historical analysis shows that market concentration is not new, but the implications of this for future investments should be carefully considered.
---
Closing Thoughts Michael and Ben emphasize the importance of maintaining a balanced perspective on market conditions and personal investments. They highlight the need for investors to be self-aware and to understand their emotional responses to market changes, advocating for diversified approaches to mitigate risks associated with concentrated investments.
Feel free to reach out with feedback, questions, or suggestions for future topics at [animalspiritspod@gmail.com](mailto:animalspiritspod@gmail.com).
Listen to the full episode [here](https://ritholtzwealth.com/podcast-youtube-disclosures/).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00Today's show is brought to you by Simplify Asset Management. Two weeks ago, Ben and I had Paul Kim on the show to talk about their interesting suite of ETFs. diversify your diversifiers was the idea one of them that's kind of interesting is option premium through the VIX right Paul is way better explaining it than us but it's and they understand the VIX term structure better than I ever could that's an interesting one SVOL is the name of that very high distribution because it's using option premium and then the whole idea is that the option positions are trying to mitigate drawdowns, right? When there's an extreme period of volatility, it's kind of like a counter cyclical approach.
0:45Very interesting. If you want to learn more about Simplify ETFs, go to simplify.us. And again, check out our talker book with Paul Kim from a couple of weeks ago called Diversifier, Diversifiers. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion 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.
1:19Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.
1:27Welcome to Animal Spirits with Michael and Ben. This happens once a month or so now where we're kind of in the same room doing a podcast. You and I were across from each other, a little different setup. We're on a, what do we call it? A team building experience. What are we calling this? Conference. You can call it that. Getaway, Austin, Texas. Yes. Well, you know where we're at? We're at like a wellness center. I'm calling it that. That's not what it's called. It looks like that. So it feels like we're at, it feels like we're in the place from, the retreat from Fleischman is in trouble. That's what this feels like.
1:57It's definitely a retreat, compound, something. We're in Austin on the water. It's very pretty. I kind of feel - But we'll be doing this in two weeks. That's right. We're going to be back again in Florida for the conference. I kind of feel like when I travel for work or vacation or whatever, that the stock market, whatever's happening in there is not actually happening. So we looked at the stock market today. Do you do a timestamp? That's your thing. 1024 Central Time. Yes. It screwed me up. I came here and I said, okay, our meeting's at 11 today. And you said, no, we're on Central Time. It's actually at 10 because on my computer, it was still picking up Eastern Time.
2:34So I would have missed the meeting by an hour, our first meeting. So your billion-dollar idea still holds, I think. How do you feel about the stock market when you travel? I just feel like whatever's happening, it's not really happening. I kind of feel like the stock market, when I go somewhere else, the stock market in my brain shuts off. I'm not attuned as much. I'm not paying attention. And so whatever's happening, it's not really happening. Does that make sense? If the stock market falls, but you don't see it fall. Yeah, it's in a time-up. So the stock market is, I don't know, getting killed today because - Regional banks.
3:05Or did someone leak the Fed minutes? Well, regional banks are down 7%, so I'm just going to go out on a limb and guess that that is causing some consternation. I wanted to get in this later, but JP Morgan took over First Republic. And I'm a Chase customer. That's where I do my banking. I logged in yesterday to look at something, and the top of the screen says First Republic customers. It says it right there. No, you're kidding. Let me check it out. But it says continue to use your First Republic stuff. So here's my one take on this whole thing. And the weird thing is, I don't know, it kind of feels like it doesn't matter that much anymore because they're swatting these bank failures away like it's nothing.
3:45Is that like a Minsky moment where three, five, seven years down the line, the ease with which they're putting these fires out is going to make something even worse? Well, for now, the damage from the fires seems to be relatively contained. Yes, but it seems like it's very, I mean, these are, Silicon Valley Bank was what, the 16th biggest one in the country by assets or however you, First Republic is a pretty large bank as well. It seems like putting out these fires has been a relatively simple process. It hasn't required a lot of pain besides, unless you were a customer there and you were worried for a few days.
4:20Or an equity holder, or probably bond holder. My question is that there's got to be a moment with which it's like, all right, how many, I mean. Or does JP Morgan just become this behemoth and, I don't know, Jamie Dimon's like the Fed? So I don't know. I'm not thinking about long-term ramifications of these banks going on there because who knows. But at some point, you would think that the market is going to adversely respond to this. I mean, how many more bank failures can we take? I guess the good news is that the kind of stuff that in the early 1900s would have been a full-on calamity and lead to a depression, We've figured that kind of stuff out.
4:59That doesn't happen anymore. That's a good thing. I do think the bad thing is, what are the unintended consequences of that? And I don't know the answer. But that's my whole take on this. People are saying, well, JP Morgan got a good deal. And I don't know. But I don't know about all that stuff. I'm not exactly a forensic accountant for bank balance sheets. But you did read a tweet thread. Yes, it seems weird. All right. So when it comes to the markets, it feels like every few years or few months, we have the same arguments over and over again. Active versus passive. Alternative investments. Is the 60-40 dead?
5:32Is this the top? Is this the bottom? Whatever. We have these same things over and over again. So the argument we're having now, again, is can the stock market hold up with five, four, seven stocks carrying the way? So this is from Mike Sicardi. Always shares some good charts for us. He's showing that big tech, I guess it's seven firms in the big technology. I guess, is NVIDIA one of them now? I don't know. is up 31 % year to date versus like the seven biggest tech firms versus a 3 % gain for the rest of the S &P 500. Another one from JP Morgan shows the top 10 largest companies account for basically like, I don't know.
6:10So the S &P is up 8 % this year, call it, it's like 6 % of the gain. So they show Apple, Microsoft, Amazon, Google, NVIDIA, Tesla, and Google S.B. on here twice because they have two tickers, which is dumb. And always kind of G-O-O-G-L. I am getting tired. I am getting tired of this uh sam roe also had a good take on this and he has some good contribution charts to this and how fam well this is a new one f-a-a-m-g fam fam g here as a dad i gotta put this out there i can't pull i i don't think most people can but saying fam hey fam what's up how's it going fam it's a very it's a it's a i feel like it's a gen x thirst monster who does that yeah i i could never pull it off.
6:54Anyway, so we have these... Although some people can pull it off, like Rosen says, fam, and it doesn't... Okay, yeah. But if you said fam, I would check you. I'm not cool enough for that, that's for sure. I did Sam Rose take on the TKR. Did we figure that out? TKR? He said that these firms are so much more diversified than they ever were in the past. They have multiple business lines and different forms of revenue that we shouldn't think of it as concentrated anymore. Regardless, I wrote about this in 2021. I wrote a piece about like our five stocks really carrying the market. 2020, I wrote a piece about how those, these biggest companies make up 20 % of the S &P.
7:33I'm sure you did one in 2019 and in 2018. This is just an argument with a market cap weighted index that we're always going to have. And the thing is, if you look back, I did this one a long time ago. I should pull up the chart of like the 10 biggest stocks in the S &P and I think I did it every five years going back to 1980. There's plenty of turnover there. So some of these big stocks eventually are going to fall too. GE was the biggest stock forever. almost, or in the top five or top 10. We're doing this again? I just don't think that you should be worried because there's only a handful of stocks carrying the market.
8:03This happens. I think what's notable maybe is the fact that Apple and Microsoft are now, their weight in the S &P is as large as it's been in this run for the top two stocks. Don't you feel good about that though? Those are very high quality businesses. That makes me feel safe, not like we're in danger. I like that. That's a good twist. I guess the, so the implication is that when these stop doing what they're doing, watch Apple. That's, that's the, that's the, the, that's what's under the surface. But you're worried because I'm not saying you, the Royal U are worried because the two of the greatest companies of all time having great returns this year.
8:42That's fine with me. I'm, I'm okay with that. If it was a bunch of junkie companies that were like leading the way, then I'd be worried. How's that? Speaking of the Royal U, yesterday when we sat down at the conference tables, the circle conference tables, there's always notepads, right? Yep. And because I, I don't know, I guess I saw Lebowski the other week. I was just, it just triggered a memory. You know when he's with Jackie Treehorn? Oh, he does the pencil thing? He does the pencil thing over the notepad. That's what I think when I see those notepads. All right. So here's, here's my counter.
9:15Like, yes, the S &P is up 8%. Maybe it'll be up a little less after today. The equal weighted index is up more than 3 % year to date. So it's not like the rest of the market is getting crushed. It's still up a little bit. It's just not up as much. If the S &P was up eight and the S &P equal weight is down six, okay. There are things to worry about, but I don't think this is one of them. Good piece in the Wall Street Journal. I love these profiles. They get me every time. These are like your financial mysteries. You like the mystery book? This is like Ben Katnipp. Yes. So they're looking for the bear market's biggest lessons.
9:51And they interview all these regular people about their lessons. We're doing this again where I get logged out of the Wall Street Journal. Don't tell anyone, but I'm still using your login for this. This is like, I don't share Netflix passwords. I share financial news sites passwords. You're a freeloader. I think I have. Do you have my barons too? And my F2? I don't think you ever gave me your barons. but they interviewed this guy and we talk about concentration a lot. And this guy is a 40 year old accountant. And he said that he put, he had a combined$2 million position in NVIDIA and Tesla and said it just skyrocketed until 2022.
10:27And I think what NVIDIA was down 70 % from the highs, probably Tesla was pretty similar.
10:35So this is part of it. So it says he ended up losing all the money he made since the start of the pandemic, including losses of more than$1 million in his brokerage account, which even ate into his initial investments. He was down. I don't know when he got in. The losses were stressful. At times, he skipped vacations with family to spend time in keeping an eye on his portfolio. I feel like I lost many years of my life. I had so many sleepless nights. Sean, what are you laughing at? Nicole's asking about the pillows. Oh. We have pillows on the table because... It's a very spacious, echoey room.
11:08Yes. So anyway, this is like the stuff about concentrated positions that if you would have just put$10 ,000 in, we talk all the time about how if you're going to be in these greatest performing stocks, you're going to experience massive drawdowns. It's just not worth it. For most people, it really isn't. No, because what you never think about the psychological toll that this shit takes on you. Again, the losses were stressful. At times, he skipped vacations with family to spend time trading and keeping an eye on his portfolio. This is no way to live. But this is my whole thing about the stock market is not functioning while I'm gone.
11:43Like, what can you do if you're down 70 % that you can't put on vacation for a week? Like, I'm going to look harder. Like, what can you actually do if you're in a bad position like that unless you sell it or buy more? Like, skipping a vacation with your family and trying harder and doing more analysis is not going to help you in that situation. So the subtext here is not buy an index fund and do nothing and enjoy your life, although that's certainly a reasonable response. It's diversification. But having concentrated positions is, there's just no way to live. And if you're going to have, say, I want to put some money into this handful of stock, this stock or these five stocks, whatever it is, just figure out a good thing that you, like a sleep at night position, like 20 % of your portfolio, 10, whatever it is, that it's going to have an impact, but it's not going to cause you to skip vacation.
12:30Yeah, I don't know where the number is. It's different for everyone. So 20 % is obviously concentrated. But when you have two stocks that is your entire net worth that are as volatile as Tesla and NVIDIA, I mean, even having all your money in like Coca-Cola or Pepsi would be like irresponsible. For something like this, it's just – Pulling up Ben's investment Excel spreadsheet of my asset allocation, it's probably 80 to 85 % is automated, allocated, diversified. And then 10 to 15 % or whatever is I can make some other bets and take some chances. And that's like my, I'm not worried anymore. And if this other piece goes to zero, man, that would sting, but it's not going to end me and it's not going to cause me to neglect my family.
13:17On the flip side, did you see what Chris Soltis did? Chris Soltis, comma, 50? What? He just kept buying the dips, and he's glad that he did. Oh, okay. That's good. So the title of the piece was what? Like bear market license or something along those lines? Yeah, like biggest bear market license. They found somebody who happened to take advantage of the sell-off. Okay. Larry Summers thinks the bear market is not over, apparently. He says, be careful in equity markets. The bond market is predicting recession, but the equity market is not priced at any yet. he actually says that he would be short large cap stocks here.
13:48And he's like a big name and he always makes headlines. There's no way in a million years that someone in his position who says this actually ever follows through with it. He's an economist. He's just talking. Yes, he's just talking, but he said he'd be short large cap equities. Although I do, you know, it's part of the part of the or one of the things about being away from the screen is like XLE is down 5 % today. Don't know why. I think someone leaked the Fed. Someone knows the Fed's going to come hard. And people keep saying the Fed's going to continue to raise. And I kind of think they might, which is just more good deals for people owning T-bills.
14:27Wait, hold on. But they are going to raise. Right. Well, a couple weeks ago, we kind of thought it's not going to happen, right? They're done raising the bank failure stuff. Right now, I mean, it is all over the place. Right now, there's an 80 % implied probability that they're going to do 25. Yesterday was 93, so it's down a little bit. But they're good to go. But that's how quickly this bank thing is over. Remember, we were talking three or four weeks ago, like, this is going to be deflationary, and the Fed has to stop raising now. It was the March meeting. Yeah. It was the March meeting. Actually, people were pounding the table.
14:58I don't remember exactly what our reaction was. I think I was probably in they should pause. I think I was in they should pause, but they're good to go. Yeah. But that was in March, and here we are in May, and I think they're going to go. They're going to do another 25. I don't know. I don't know. Does it do anything? That's my whole thing. I can look at it both ways. Is it really having an impact? And what's the point of it? Oh, it's having an impact. It's hard to quantify in how long it's. So is it having an impact? It's having a psychological impact, for sure. But it's not having an impact where they want it to, though.
15:30It's having an impact in terms of asset allocation. It's having an impact in the market in some ways. In terms of how it's actually impacting their goals of slowing the economy and causing the labor market to chill out and causing prices to come down. It's not doing what they want it to do. I don't know. Is it? Yeah, probably not. I mean. So Larry Summers said the bond market is predicting a recession. He's probably looking at the inverted yield curve, which is ridiculously inverted. We're going to Plaid now. Get that one? Do I get it? Of course I get that one. Okay. Just checking. So the Wall Street Journal had another one saying junk bonds are not screaming recession.
16:04And I think, would you think junk bonds are the bigger tell than an inverted yield curve since the Fed is the one who's messing with the yield curve? And do you believe junk bonds more than the yield curve now? Absolutely, because the Fed is obviously manipulating the yield curve. But credit spreads for high-yielding bonds and other bonds are controlled by buyers and sellers. It's entirely controlled by the marketplace. And they worry about if you would see the spread between, sorry, junk bonds. Okay. Do another Coke. One more. Yeah. I need that. Grab a Coke. Let me have some diet. I'm a little worried you don't have Coke Zero in here because I'm a convert now.
16:45I don't, I was telling you. How does Coke Zero taste so good? You've been diet Pepsi. So. Your whole life. Well, so I started off Coke when I was young and you drink Coke. You and Josh are both DP guys. Yeah. But then here's my evolution. You realize, okay, if I keep drinking regular Coke, which I did throughout college, my teeth are going to fall out and it's very unhealthy. So I go to Diet Coke and I took a while and I got there. And then I don't like Diet Coke unless I get it from McDonald's because that's the best Diet Coke in the world. Then I go to Diet Pepsi and now I'm a Coke Zero guy because Coke Zero tastes like Coke.
17:15There's zero sugar. I'm sure someone can say like all these fillers or whatever they use are probably bad for me. But is this how people end up getting healthy? Is that? But counterpoint, I saw you running today and I saw you in the gym yesterday. Not to brag. Yes. I was kind of a short little compound so everyone could see. But is this how people eventually get really healthy is that scientists are able to make – it tastes like chocolate cake, but it's actually not bad for you. The snozzberries taste like snozzberries. You know, speaking of not to brag, which we've pounded to death, I really do feel like Verizon stole that from us.
17:45Not that we're the only person to say that, but I'm sure many listeners have seen the commercial. It's borderline egregious. I've got to see this. So they stole them not to brag. Okay. People keep saying we need to make T-shirts for this. Yeah. And I think we do. So, okay, we're talking about junk food. Every once in a while, there comes a blog post that I go, God, I wish I would have wrote this. While we're talking, my eating has been out of control. I feel like I have to get that off my chest. It's been bad. But I'm not gaining weight. So I don't know what to make of that. Well, I feel like the food that I'm consuming, it's got a lag like the weight hikes.
18:19All of a sudden, I'm going to gain 10 pounds overnight. That's what I feel like. Okay, keep working out. Balance. All right, so this is one from Phil Perlman. Prime Cuts newsletter, Phil's the man. He wrote, all this junk food is making all-time highs. And this is, so he wrote about all the crappy stuff we eat. McDonald's, all-time high. Pepsi, all-time high. General Mills, what do they make? General Mills? Bad cereal for you? Yum Brands, which is Taco Bell, Pizza Hut, all-time high. Hershey, all-time high. Just a great take that, like, we always say, like, don't bet against the U.S. consumer.
18:54Like, don't bet against people eating crappy stuff. That is like all his charts in here. Just a great take. Carl Cantini had the same thing, small-time highs, Chipotle, McDonald's, Yum Brands, all these things. What's Mondelez, is that? Mondelez is also consumer packaged goods. So the Ozempic is the new drug that could suppress appetite and make people lose weight. Do you think that there's just something inherently in us that makes us unhealthy in that this is always going to be a problem, no matter what science comes up with. Well, being the scientist that I am, I don't know, that's a weird question to ask me.
19:36Is junk food always going to be a problem? Yes. Yeah, because isn't it like engineered to make you feel good and keep it coming? It's addictive, right? Isn't sugar addictive? Right. This episode is brought to you by State Farm. Listening to this podcast, Smart Move. being financially savvy smart move another smart move having state farm help you create a competitive price when you choose to bundle home and auto bundling just another way to save with a personal price plan like a good neighbor state farm is there prices are based on rating plans that vary by state coverage options are selected by the customer availability amount of discounts and savings and eligibility vary by state this episode is brought to you by indeed you're ready to move your business forward.
20:24But first, you need to find the right team. Start your search with Indeed Sponsored Jobs. It can help you reach qualified candidates fast, ensuring your listing is the first one they see. According to Indeed data, sponsored jobs are 90 % more likely to report a hire than non-sponsored jobs. See the results for yourself. Get a$75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply. All right. Did you read the Stanley Druckenmiller piece of FT? Mm-mm. I saw the headlines. Yeah. So also, I subscribed to the FT to read this piece, so I didn't have to steal it from him. Do you have one for that?
21:03I support all of the financial subscriptions publications as well as multiple sub-stackers because I feel like they're giving and I want to give back. All right. So I think Druckenmiller is the most honest portfolio manager there is. I love it that he admits mistakes. Because there's a lot of people out there who just will say something crazy and outlandish and then move on and pretend like they didn't say it. But he says crazy and outlandish stuff occasionally. Like, this is the worst setup for stocks I've ever seen. But then if he's wrong, three months later, he goes, you know what? That's on me.
21:37Hand up. I was wrong. So he says he missed the dollar rally, which I guess this is the kind of stuff he trades as currencies, because I could not bring myself to buy Joe Biden and Jerome Powell. It was probably the biggest miss of my career. and he's talking about, because he always is giving Fed takes and economy takes and how, and I just, I'm just kind of appreciative of the fact that he says, listen, I allowed like politics to get into my process. But the funny thing is like, I think you talk about in your book, what is he, he has that one line where he's like, what did I learn here? Nothing.
22:06Yeah. Right. From the tech boom or whatever. Like he does this stuff and then he admits it, but then he, I don't think he, I don't think you can turn off that politic mind or whatever, because that's the way he's wired. but I just appreciate the fact that he says, you know what, I was wrong here. You know, while we're in self-reflection mode, I feel like I'm very low energy right now. I don't know if that's coming through. Do you feel my low energy? Sean, are you not in your head? Are you a little hungover from the last few days? I haven't been sleeping well. I'm an above-average sleeper. I might be the best that I know.
22:37My head hits the pillow. That doesn't surprise me at all. That I'm a great sleeper? Yes. My head hits the pillow and I'm out in 60 seconds. I'm usually like that too. But for whatever reason, the last two nights, I've seen the clock at 3 o 'clock, which is highly unusual. I sleep better in my own bed. Do I miss my family? That could be it. You know, I remember, I actually did miss my family. And I was thinking about this last night while I was rolling. Duncan says you need to get Michael Mammy by stat. We tried to get him here. They don't have the blenders. I was rolling at 2 o 'clock. Like I remember when I first started at the insurance agency, I don't know why this stuck with me, but it really did.
Read the full transcript
23:17This guy that I was working with for, I guess, who was sort of my sales manager, had three young kids. And I guess at the time I'm like 24 and he was probably 40. And he was telling me about going – that he has to go away and he's like, I hate going away. I miss my kids so much. And I was thinking like, loser. I'm there too. I had this exact conversation with someone yesterday who has kids that are the same age as mine, you know, six to 10 range. And my six-year-old daughter like lost it when I left. And it is, I'm already, because I hear from parents who older kids, because parents who have kids older than you always tell you what's coming next.
23:56This is the worst age. Oh, that's the worst age. And then just wait because when they become teenagers, they're not going to hang out with you anymore. And we're at the stage now where my kids like want to hang out with me. And I'm already like nostalgic for this period and it's not even over yet. Yeah. Because I know it's coming a day when they're going to, Dad, you're a loser. I want to hang out with my friends instead. But now they want to hang out with me, and they want me to watch their sports and their games. Yes, that's the stage I'm at, too. It's tough. But we shorten our trip. We keep our trips pretty short.
24:24Yeah. All right. This was a good one from Carl Cantania again. This is from Apollo. None of the indicators the Enber recession committee normally looks at suggest that we are in a recession at the moment. But it's coming. Okay, so this is the people who always hit us with, well, we had two quarters in a row of contracting. National Bureau of Economic Research, we've covered this before. They're the ones who calls it. I don't know who gave them the title or the billing to do this, but they do. And there's nothing showing a recession, which I think one of us said a couple weeks ago, that there's no signs that we're in a recession right now.
24:59You can say it's coming, but right now there are no signs of a recession. This was a good one. I think I kind of asked this a couple weeks ago. if people are still spending so much money, why isn't like credit card debt off the charts? Why is it still just back on trend? What is filling the gap for people spending so much money on stuff and trips? And the Financial Times said another one. This is from Goldman Sachs. Wait, so what is it? So they said, so look at the real personal consumption. Scroll down to this chart here. It's like off the charts, like pre-trend, the 2002 to 2016 trend, or the 2017 to 2019 trend.
25:36personal consumption on goods is just way off trend. So they basically said the reason is, consumers are broadly spending no more than what they're earning. After stripping out certain misleading imputed costs, Goldman Sachs finds that nominal spending has risen by$3.5 trillion and nominal income by$3.3 trillion. So they're saying that the rise in wages has made up for the increase in spending. And the whole thing is that the people on the bottom end who've gotten the biggest raises spend the most money. but they've seen a commensurate rise in income with the spending. But this is inflation adjusted.
26:12This is inflation adjusted. Yes. So I don't get it. If you're saying that the rise in prices was offset by their rise in wages. This is not prices. This is spending. So the rise in spending has been met by the rise in income. I don't know, man. I was up till three in the morning. It was making my head hurt. It's interesting. It's like, how is this spending so off the charts? Because people are making much more money, and the people who are making more money are the ones who spend it. Right. Well, the lower, the lower court, but I mean also, but obviously like the fiscal stimulus. Yes. Yeah. So that, that's part of the income.
26:45But that gave the boost, but why isn't it, why has it not returned to trend? Because people's wages aren't falling now. Right. That we're at like a new permanent plateau of spending. I don't know. But didn't we say that real wages had fallen behind inflation for like 16 straight months? True. This is just good spending. So maybe the service thing is the component there. Got it. I guess. Right? Kelly Cox from eToro broke GDP down by component. Consumer spending was the biggest boost to growth. Right? So people are still spending money. Here's another one. David Beckworth. U.S. nominal GDP, looking at the pre-pandemic trend.
27:23And look at, obviously this is not adjusting for inflation, but look at how much nominal GDP has risen. Especially considering the fact that it was so much below trend for the 2020 period. I think people just have a lot more money. I think that's it. It's as simple as that. I feel like we've been having the same conversation for a long time. People are waiting for something to happen. We're kind of in the middle part of the whatever, right? The market. Is this like purgatory? Where are we right now? The purgatory market? Sure. I'll buy it. Another one from Apollo. Las Vegas. The occupancy. It's a charge showing Las Vegas occupancy rate.
28:00The occupancy rate for hotels in Las Vegas is not showing signs of weakness in consumer services. All right, here's something that is different. Remember when there was that period, this is the supply chain stuff. Maybe I took out a week too early. Remember when it was like we couldn't find enough truck drivers to move all the stuff around the country? People are complaining like, we got to fill every truck up because this is precious cargo and supply chain stuff. The Wall Street Journal has something saying trucking demand is just falling off a cliff. This is an independent trucker in the piece.
28:29she says, rates she can charge for hauling cargo from dog food to pillows have in some cases fallen faster than the fuel cost. And the low demand for freight has meant fewer diesel-hungry semi-trailers on the road, pushing some fellow truckers to sell their vehicles. Chief economist of a truckers association said that trucking companies with fleets ranging from 200 to 300 vehicles failing at a rate of one per week. Not good. So it's just kind of crazy how that was the thing. Remember we were figuring out how do we speed up the ports? How do we speed up the trucks? And that's just gone now, I guess.
29:04Here's one. Sorry, I wasn't listening. Okay, there was a talk at the conference about being a good, what, active listener? An empathetic listener. And you went up to the guy after the talk and said, yeah, I don't do that. I'm not a good listener. At least you admitted it. Credit to me. Yes. Yeah, at least you admit it. You're kind of like Druck. You know you're wrong. You at least admit it. No, I wish I was a better listener. I think, you know what? I'm not even going to say what I think because people already have enough opinions of me on the YouTube comments. So maybe I'm just going to keep that one close to the vest.
29:40When's the last time you checked the YouTube comments? Last week. Okay. You did? Not good. No, no.
29:48Okay. I don't want to mix it up in there. All right. Another one from the Wall Street Journal. Been really getting a lot of miles out of that subscription lately. They had one on U.S. construction spending. And this is not what you'd expect in a slowdown. It's booming all-time highs. So they break it out between residential and non-residential. Yes. And it looks up only. I mean, residential, that's not, in fairness, residential is coming quite a bit. A little bit. It's still much higher than it was before. All right, but look at this next chart. Home renovation and repair spending. This is a four-quarter average.
30:20That had to fall. And don't you think a lot of— But look what happened here. Yeah, it went crazy. And this would have to fall more, I would think, because home equity lines of credit are 7 % now, 8%. So, okay, just prior to the pandemic, this was$325 billion. It shot up to almost$500, and now it's at like$450. So from$325, even coming off the highs, we're still at$425. That was a massive, massive increase. The next one, U.S. construction employment. This one is crazy to me that construction employment is just blew through all-time highs. And it's, I don't know, rolling over a little bit if we're doing technical analysis here.
31:02But it's still pretty darn high. Did you know that a record – so they talk about like U.S. manufacturing a lot coming down. And I'm sure that narrative is partially maybe true. I don't know. A record of$108 billion was spent building factories last year? That's a lot. I do see - A record? How many of those are Amazon factories? Is that a factory or a warehouse? I guess that's different. Warehouse, I guess. Okay. I think we spoke about home builders last week. Here's a quote from the CEO of Pulte, talking about why new construction is in such a bull market. He's talking about new buyers, so first-time buyers.
31:44They don't have a home to sell, and so they are not hampered by the low interest rate. Ah, okay. That makes sense. it does seem like the only game in town right now. Because my friend, I have a friend who like, for various reasons, is looking to move. And he really can't. It's just impossible to justify going from three and a half to six. I said yesterday at lunch to someone, some bank is going to step up to the plate and say, we're going to allow you to port that mortgage. You're going to take this 3 % mortgage that you have here. And what, just do origination fees? And some sort of, yeah, you're going to pay some sort of fee, but you're going to take that 3 % from your$300 ,000 house and move it to a$500 ,000 house.
32:22And we're going to charge you up a little bit for the fee. Like, I can't believe a bank's not going to do that if rates continue to stay above 5 % or 6%. Yeah, maybe. Also, I just want to mention, button down or button up shirt today for you? This is a button up. Okay, twice in the last month or so. Maybe some button downs would have the... All right, I have to get something off my chest about, I've been in a hotel a couple times last month. The last two hotels I've been at, there's not been an iron or an ironing board. There's been a steamer. I'm team steamers Okay steamers Don't work for shit They do They don't You don't know how to steam They don't do anything You don't know how to steam I need an ironing boards At a hotel It's like Trying to iron on like A gravel road or something But steamers do not work Alright in fairness This was This is This is a This is a This is a Steemers don't work Steemers work If you have a wrinkle Like I try No if you have an aggressive wrinkle Yeah you're gonna need an iron Well if you pack in a suitcase You're gonna get wrinkles Steamer doesn't do anything Learn how to pack I'm sorry.
33:20Steamers are useless. Duncan, make that a, ask steamer versus iron. Are you doing this magic mortgage rate level thing? This is a survey from John Burns Research and Consulting. More than 70 % of prospective homebuyers told the researchers that they were not willing to accept the mortgage rate above 5.5%. And is that like the magic line in the sand? There's no quantitative reason to back that up. but I do feel like if we get into the fives, that is a psychological hurdle for people that would, all right, if I go to three to five, five and a half, that's not terrible. What was your first mortgage rate?
33:58Six and a quarter. Six and a half, maybe? I think mine was five and a half. And I'm pretty sure I was like thrilled. Being a first-time home buyer though, I didn't even like think about it. It was like, that's what the rates are. But I was buying in late 2007 as home prices were crashing and my house price kept going down. They cut the price of an, it was a new build. They cut the price of it three times before I stepped in and like, okay, this is, it makes sense. But yeah, 6.25 or whatever. And it was just prices were way lower. So it didn't, it didn't sting as bad. And then I got to refinance three times.
34:31What do you think, apropos of nothing, this is a hard pivot. What do you think about, uh, Louis Vuitton luggage? Cause there's always somebody with Louis Vuitton luggage at the airport, right? True. I guess I've never really given it much thought. Uh, you're not going to see me with Louis Vuitton luggage. I have an Amazon basics with a compound sticker on it, but yeah, I'm not a big pay up for luggage guy because it always going to end up with a big scratch because they chuck it in there or something. So I don't know why I would want to pay up for, for luggage. And I'm a, unless I'm eating them, I don't want to like kill a cow for a bag.
35:07Is that fair? Sure. What are your thoughts? I don't know. I just, I mean, I feel like I have, I don't know. It triggers like something. Right? All right, let's go to Great Quarter, guys. All right. It's been a long time coming. We're very excited about this. I am a paying customer. Do you pay? Did you pay? Of course I did. What do you think? Come on. You paid for Quarter? Yeah, I signed up for the, yeah, right when they sent it to us. Desktop. So Quarter is on desktop now. We've got a promo code for listeners. Which is something they've always wanted to work on, but you and I immediately, like, this has to be a desktop.
35:41I need desktop. So the promo code is Animal Spirits, one word. I think you get 20 % off. But it's only if you pay for the full year, which I don't know how much is it. I paid for the full year. I thought the deal was you get 20 % off for signing up, and then you get an extra 10 % for using Animal Spirits. Do I have that wrong? I don't know. I mean, you don't listen very well, but put it in and see what you get. It'll be a grab bag. You get what you get, and you don't get upset. We're Investors in Quarter, just a full disclosure. there. But, but, but, but the pro so yesterday, yesterday I was, uh, I was here in the, in the, the bungalow, I guess.
36:20And I got a ping on my phone and alert JP Morgan chase MNA announcement live conference call. Boom. Tuned in. That's good. Someone also, someone mentioned, uh, well, I can remember the company, but they said in the first two lines of this report, we mentioned this and this and this and I immediately went on to quarter sent the transcription myself so I could pull that part out of it. Was it for Franklin? Oh that's it. Yes. Franklin Templeton. So and they said this is and I pulled up quarter and I sent myself a transcript because I wanted to read it. It's very cool. It's nice. All right. I guess I want to listen to Spotify.
36:59Did you listen to any calls last week? No. I have to say I've never I've never been a Spotify user. So it's interesting that you mentioned that. So I was an Overcast guy. I'm a Spotify shareholder. It's not very expensive. But I use Apple Music because I have all the Apple stuff. Okay. So I use Amazon Music, but I'm pretty sure that either with Amazon or with Spotify, you could only do like five fast forwards in an hour. So it's almost jet ski season. So I listened to 90s alternative tunes on my jet ski. Offspring, for example, bands like that. Really? Okay. I dialed it back to the 90s. I turn it back.
37:43But you could only – so anyway, I ended up paying for Spotify. So now I'm going to be unlimited. But anyway, the point is that – look at these charts. I mean just the monthly active users up and to the right. It's mostly still premium subscribers. The ad supported margins. It's just, it's such, ads are just a tough business. Yes. And that's probably in a bear market right now. Well, look at this next chart. So they show gross profit by segment and gross margin by segment. And it's basically, the ad is like just the tip. So they were asked a few times about AI and copying artists. And I can't remember what they said.
38:21I think it was probably along the lines. I'm like, listen, super early, fluid situation, moving fast. Everyone seems to be on board that this AI stuff is like. That seems like eventually there has to be some sort of deal reached where there's a specific way to do it, and there's a revenue share there. If you create it, then you pay whatever the number is. You know what? There's going to be a bull market in lawyers. Yeah. Right? Because if you are trying to monetize off of somebody else's brand, that's not going to be a thing. I would bet on Taylor Swift over AI Taylor Swift. She'd be the one that would be able to handle this, I would assume.
38:56We mentioned Chipotle earlier at an all-time high. They are just crushing it with price increases, I guess. Total revenue up 17 % year over year. Comp sales, credit to them, up 11%. That's a lot. That is a lot. In-restaurant sales increased 23%. Digital sales represented 40 % of food and beverage revenue. They did this all without Michael Badnick eating there anymore. Credit to them. So a lot of this was, yeah, no, I got Chipotle one time last quarter after a Nick game. I love how you think about your life in terms of quarters too. Like it's a. But no, but the business is booming. It's not just price increases, although that's obviously a certain part of it.
39:40So there was, so I went to the Nick game on Sunday afternoon and there's a lot of kids in the crowd on a Sunday afternoon. and I am a welcoming home fan for away fans. I don't give them a hard time. I'm not a heckler. I'm not a jerk. You know? What do you mean? What do you? I'm just, yeah. So, but there was a guy five rows behind us who was such a jerk. He was heckling the whole crowd. That's a gutsy thing to do if you're an away fan. Yeah, he was just, it wasn't funny. every single time that the Knicks fouled the Heat, he would scream play by the rules. Every single time. That's kind of weird because it's not really breaking the rules.
40:28You're following the rule. They just called a foul on it. Yeah, no, that's the rule book. The rules is a foul. Yeah, it's called. It's not illegal. So anyway, one time we got an N1 and he said something and I just turned around and I said, I don't know, I screamed something at him. I think I might have cursed. I just there was a line that he went too far and I just couldn't help myself and there was a guy behind me with his like four year old five year old son and I said sorry that's on me and he goes it's okay and I'm a huge fan of your work see this is why the show Beef seems so realistic to me about people reaching their and I don't know it does seem like since a pandemic people have that breaking point where they're just they're willing to just lose it I'm not a yeller I don't yell at people But that's why that show Beef resonated.
41:18I didn't finish it yet, but just losing it and reaching your breaking point, I feel like people get to that way sooner now than they used to. I mean, I gave this guy like two quarters. He had just some nerve. Chutzpah, if you will. All right, this is kind of nuts from Amazon. I did not listen to the call, but revenue from ads products grew 21 % in the first quarter from the same time last year to$9.5 billion, which is a lot of money. their ads are now growing faster than AWS. AWS is about twice as large. But from Axios, Amazon's share is expected to grow to 12.5 % this year, up from 11.7 % in 2022.
41:56Amazon seems like the most natural ad platform. Makes sense. It's like, yeah, it's like Google. You put something in and the first one's an ad and the second one is... The stock is acting like pretty trashy. Until Bezos comes back. Now we're talking. Right? It's up on the day. Now we're talking. Anyway, check out. Oh, one more thing. One more thing. We spoke about this last week or two weeks ago about the Amex call, about how much millennials are spending. But I just want to read from the call. We acquired 3.4 million new cards during the quarter. Demand from millennial and Gen Z consumers continue to fuel its growth, accounting for more than 60 % of all new consumer account acquisitions in the quarter.
42:46Millennial and Gen Z customers also continue to be our fastest growing U.S. cohort in terms of spending, growing 28 % from a year earlier. I'm sorry that this upsets people. Things are okay. Things are always scary. I'm not saying things will always be okay, but a lot of the angst that we rightly felt over the last 18 to 24 months has not come to fruition yet. And it's always yet, yet, yet. I get it. Just wait. Just wait. I know. But like, if we just pause and just reflect on where we came from and what things are compared to what things could have been, not bad. People are still outspending money, right?
43:28Not bad. Here's a not good one. This is from CNBC share. I think this is from Sean. Share of total net worth held by the top 1 % in the u.s we talked about this in the pandemic and we said unfortunately the pandemic is going to make inequality worse yeah and it appears it has this was 25 percent in the top one percent of net worth uh in the early 2000s now it's up to more than 30 just roughly 32 percent or so not a great trend and i don't really know what unless you just increase taxes on the wealthy to an unbelievable level. I don't know what stops this. Because it's not like all of a sudden the stock market is going to hinder them.
44:10Are the top 1 % going to get to 50 %? I don't really want to talk about this. I know. It's not good. Here's something for you. So the stock market is down 1 % to 2%. Bitcoin's up 2 % today. Are people looking at it again as an anti-system play? I mean, for today it is. Gold is also up 2%. So I think... I mean, this bank stuff, I'm not trying to minimize this. This is concerning. I'd minimize it. I don't think it's a thing. I think it's a thing, again, maybe down the road, but the Fed and the FDIC. When you say you don't think it's a thing. I don't think it's like a systemic. Regional banks are at a 52-week low.
44:51They're down 7 % today. So are you saying it's a stock market thing? It's not a real-world thing? I think if you're a regional bank shareholder, Shareholder, you should be concerned because I think we talked like the concentration is just going to get bigger. JP Morgan and all these big banks are going to get bigger. I think maybe that's a slow realization is like, I don't know, maybe it doesn't make sense. So I did see someone on Twitter. What, to have so many banks? Yeah, I think someone on Twitter also said like maybe we shouldn't let anyone in California have a bank. Like I kind of like that one.
45:20I just think the big ones are going to continue to get bigger. And whether that's people finally getting over the inertia of moving their accounts. but don't you think all the biggest business accounts now are going to say what matters more to me like having the best rates or feeling the safest with my money and I think people are going to come to the realization of yeah I get worse rates there but I feel I don't have to worry about it. I don't know this whole like how do people feel about banking is a very I don't know how to comment on how people in the country feel about their local bank. I mean obviously people that pay attention to our podcast are probably more concerned about their bank than non-financially centric people, just normal people.
46:02I don't know if normal people are concerned about their regional bank. But is the stock market powerful enough to put all these banks into trouble to the point of, OK, the equity is effectively worthless. Like, this bank has to be moved somewhere else, or someone else has to take them over, whatever it is. I just think the consolidation thing, that's going to be the story for a while now. Well, so the consolidation thing, how does that immediately impact consumers? or depositors, I should say. That's the thing. I don't think depositors are going to be impacted. I think it's going to be more of the shuffling of owners.
46:35Oh, they will be impacted. Whether it's worse customer service, higher rates, harder access to credit, they will be impacted. Okay, yeah, that's true. Just the banks, yeah, worse yields. Or if the banks continue to - But are we realizing that these banks are offering unbelievable rates to get new customers? No, I'm not talking about – forget about the California banks. If the regional banks get taken over and they still stay where they are under a different banner, maybe it's not so bad. I don't know. I don't know. It's bad for the equity. Netflix is still the king. I bought more stock, by the way, for what it's worth.
47:16Netflix accounts for between 7 % and 8 % of TV viewing every month. No other service besides YouTube tops 4%. People spend more time watching Netflix. This is from a Lucas Shaw at Bloomberg. People spend more time watching Netflix every month than Hulu, Disney, Plus, and HBO Max combined. That's nuts, no? That is a little nuts. You mentioned how beef is higher quality. Sorry, last thing. Netflix accounts for between 70 % to 80 % of the top 10 most-watched shows in the US every week. That's wild. So someone told us, watch The Diplomat. I watched, my wife and I were watching The Recruit on Netflix, which is a CIA one.
47:52I put on, I watched one episode of Diplomat last night after we, like, back to my room. Wasn't quite ready to go to bed yet. It was good. They're, like, they're both entertaining shows, but they don't feel as weighty as, like, an HBO show. Like, it's more like, it's just kind of like. The stakes are lower. The lower stakes. That's what it's like. They're entertaining, but the stakes don't feel as high. Like, when I'm watching Succession, it feels like there's high stakes. Well, there's HBO quality, and then there's more or less. I mean, Apple's got some good stuff. I'm a diversified TV viewer, though.
48:21I like having both options. Sometimes I don't need to be so keyed in. Yeah, totally. I'm a little excited for the Citadel on Amazon Prime. I don't know what that one is. Okay. It looks like CIA espionage, maybe. I don't know. Action? Okay. The espionage guy. All right. uh oh i got i went to a i got a we're getting to random thoughts here went to a stand-up show on friday in grand rapids they stand up in grand rapids it's a surprise right place called dr grins right the laugh factory those places all have weird names but there was the guy chad daniels is a guy's name he's a midwestern comedian i never heard of my my brother-in-law and my sister are big fans of his he's funny and he says listen here's the center line for politics i'm one step to the left of this line, but now what I'm going to do is I'm going to make fun of this side over here and this side over here.
49:20And he did, and when he made fun of this side, people got really quiet and mad. And it was funny, but watching people who, at a stand-up comedy show, you mentioned before hiring, I think before we hire someone, we need to take them out for a drink or go out for dinner or something, get to really know the person. I feel like another test on that realm would be taking someone to a stand-up show and seeing if they laugh. Like there's people at a standup show with their arms folded, not laughing. And that's fine if the person's not funny. But I see people like that and I think I wouldn't want to hang out with that person.
49:52Yeah. Who can't laugh or laugh at themselves or their – anyway. That's a good observation. Did you see the new Mulaney standup special? No, I didn't watch it yet. Good? I have not watched it either, but I'm going to. Okay. The other thing I realized is that they had the MC, the opener, and the headliner, right? Mm-hmm. it's funny to notice the difference because you think this person's funny they're funny the mc like set up a joke and then botched the the landing of the plane he he messed up how he said it and then he tried to come back to it but you could tell he missed it same thing with the the opener he set up this joke and he said wait a minute and he kind of backtracked he said wait a minute yeah you could tell he like in his head he's like i i messed up the words and then the guy who was the headliner didn't miss a beat on anything.
50:36And he, he nailed every line, every punchline, you know, just, and it's interesting just to see the difference, but just like misplacing two words here or there can totally ruin a joke. And the person who's an actual pro has been doing this for so long, like never misses that. It's, it's interesting to, I saw a Norm clip, uh, with Seinfeld and comedies and cars. And it was like the, the, uh, Cosby hypocrisy line. Do you have, you know what I'm talking about? I don't remember. Okay. But just anyway, Your point about professional comedians versus everyone else, huge gap. You could just see it on display.
51:09It's really interesting. It's like NBA versus middle school. Yes. And even when he was riffing, you could hear – you know when a car goes by with a loud stereo, you could hear it. You could hear it through the walls of this comedy place. It's like – And the guy goes – in the middle of a joke, he goes, wait. We all just witnessed the coolest guy in the entire world just drive by. Even his riffing stuff was good. Okay. I don't got my very much recommendations this week. I mentioned The Recruit and The Diplomat. I'll keep going with The Diplomat. It was okay. Duplicity on stars. Excuse me? Julia Roberts, Clive Owen.
51:43You appreciate this because the - What happened to Clive Owen? It was good. This might be the last good Julia Roberts movie. She might be in the Tom Hanks realm of when's her last really good movie. It's kind of like a - You pay for stars? It's with my cable package. Okay. Yeah, I'm still getting cable. Trust me. It's in my bundle. 2009. Ooh, March 20th, right near the bottom. It's like a con artist espionage kind of, corporate espionage kind of thing. Not a bad movie. Good cast, too. Paul Giamatti's in it. The audience gave it a 37. Really? I remember people not liking it. I enjoyed it. It's got a good little twist ending, and it's also about finding a cure for baldness.
52:28Okay, you know what? I'm in on Clive Owen. very in on Clive Owen I don't know where he is now but come back to us I thought it was an underrated not like a great movie but underrated movie alright what do I've got so Josh and I had DK Metcalf on the podcast last week it's on YouTube if you want to watch or podcast if you want to listen and he mentioned something about movies and I had to open that door and I said what movies do you like to go see and he said I go see horror movies by myself and I was just like my man. Kindred spirits. I gave him a pound and Joe's advisor sent me that picture and he said he called us like horror freaks or something like that.
53:13So I said I emailed him. I said tell DK that I saw Evil Dead this weekend with a bunch of 16 year olds. Is that what it is? You're seeing the horror movies? Younger? It's always teenagers. So I was genuinely like frightened to go see Evil Dead because the trailer looks - I think it's funny with all the horror movies you've seen that you still like get worked up or scared about them. Oh yeah. How are you not just like even handed and like I've seen everything? Well, because I get scared. I mean, I do this sometimes. I do. I get scared. But Evil Dead was, it was good. It was not, it was not, it was scary but not as terrifying as I feared.
53:52So, it was a buy the rumor, sell the news type thing. But it was a good movie. Fun movie. All right, here's some notes I've got. So I'm listening to a podcast with Adam Neiman and Sean Fennessy on the big picture. They're talking about Boa's Afraid. Is that the name of the movie? What? Boa's Afraid. I've never heard of that one. Okay. So Boa's Afraid is a movie by the guy who directed Midsommar and Hereditary. Okay. Another. Sean, top 10? Top 15. Top 15. I like both of those movies quite a bit. I don't know if I'm going to see Boa's Afraid. How about this? I'm not seeing Bo's Afraid. It's three hours.
54:29I'm not doing it. But I loved, I really enjoyed listening to them talk about the movie, such as the power of podcasts, that I listened to these guys for an hour talk about a movie that I have no interest in seeing. It felt like you didn't need to see it probably, right? What's that? Probably felt like you didn't need to see it because they explained it all. Yeah, I probably will watch it eventually. I'm not going to go see it in the theater, but win for podcasts. All right. What was I watching on the airplane? Scent of a Woman. I don't know if that's Philip Seymour Hoffman's first role, but you could already tell that he was going to be throwing 95 miles an hour.
55:09He had a bunch of good side gigs in the 90s. So Scent of a Woman is Al Pacino, one for best actor. It's about 90 minutes too long. It's actually a perfect airplane movie because it's like two hours and 40 minutes or something. There's no reason for it whatsoever. It's ridiculous. You're not going to watch it on the couch. But Al Pacino deservedly won the Oscar for it. And it's got the ultimate that guy in that movie, James Reborn. Is he the dad from Meet the Parents? The in-law's dad, right? Yes. He was a big shot. Yeah, I like that guy. Right? He is the ultimate that guy. So I'm glad that I watched that.
55:46That's been on my list for like – you know, my grandpa liked that movie. Poppy is what I called him. That's how old that movie was. Yeah. It's been a long time since I saw it, but I loved. It's not worth revisiting, but Pacino was incredible. Okay. I watched Reservoir Dogs, a movie that I've probably seen. I've seen a lot of times, maybe 10, maybe more. And I was just, this sort of blew my mind. So there's a scene with Buscemi and Harvey Keitel, where they're just going back and forth, where Tim Roth is on the ground bleeding out, and they're like, who's the rat? I've been a while since I saw that movie.
56:22It is just incredible. Incredible. So I don't know when Reservoir Dogs came out. 96? Well, Pulp Fiction was 94. 92. So I think that was – Reservoir Dogs was before Pulp Fiction. I think it was Tarantino's first movie. Like first movie that he directed. I'm not 100 % positive, but I think so. Anyway, Harvey Keitel and Al Pacino are both 83 years old. Really? And Jack, who was at the Lakers game, came out. He's 86. And this is how old Reservoir Dogs is. Do you know when Chris Penn died? Take a guess. I didn't know he was dead. You didn't know when Chris Penn died? I guess I... Dude, 2006. Trying to say we're old?
57:07Yeah. Okay. I remember that. I remember that very well. Be like, oh shit. Because he was a young man when he died. 2006. Oh my God, it was 17 years ago. We're old. I'm tired. All right. I miss my kids. Let's call it. Animalspiritspod at gmail.com. Listen, I will step, I'll be back in form next week. I'll be back. Maybe it's because you have the button down shirt on. I'm just not myself. I think it's slowed you down. Animalspiritspod at gmail.com. We'll see you next time.
57:50Next up is a little song from CarMax about selling a car your way. You want to sell those wheels. You want to get a CarMax instant offer. So fast. Want to take a sec to think about it. Or like a month. Want to keep tabs on that instant offer. With OfferWise. Wanna have CarMax pick it up from your driveway? You wanna get it done to it? You wanna do it all? So, wanna drive? CarMax. Pickup not available everywhere. Restrictions and fee may apply.
From the publisher
On today's show, we discuss never shorting junk food, a purgatory market, why spending isn't slowing down, our first mortgage rates, the First Republic takeover, and much more! This episode is sponsored by Simplify. Learn more about Simplify ETFs at: https://www.simplify.us/etfs/svol-simplify-volatility-premium-etfFind complete shownotes on our blogs...
Ben Carlson’s A Wealth of Common Sense
Michael Batnick’s The Irrelevant Investor
Feel free to shoot us an email at animalspiritspod@gmail.com with any feedback, questions, recommendations, or ideas for future topics of conversation.
Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com
Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.
Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information.
Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here:
https://ritholtzwealth.com/podcast-youtube-disclosures/
Learn more about your ad choices. Visit megaphone.fm/adchoices