Eff You Money (EP.391)

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Animal Spirits Podcast - Episode 391: Eff You Money Summary

Episode Overview In this episode of the Animal Spirits Podcast, hosts Michael Batnick and Ben Carlson discuss various topics related to investing, the stock market, and current economic sentiments. They touch upon the expectations for market performance, predictions about the economy, and delve into the psychology of retail traders.

Transcript

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0:49Welcome 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. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

1:19Welcome to Animal Spirits with Michael and Ben. Ben, how are you? This is my favorite month of the year. between Thanksgiving and Christmas. I think you could make the claim it's the best month of the year. December. For vibes. I don't think you can. It's just, I don't know. I feel like the vibes around the holidays are immaculate. Yeah, they're good. Everyone's in a good mood. People are eating and drinking and gifting and it's slow at work and people are circling back in the end of the year. It's just, it's a great time of the year. Yeah, I'll buy that. I don't know if it's the best month of the year, but it's top 12 for sure.

1:55Okay, Ben, you tweeted. I'm sorry, you sky'd. You blue sky'd. Did you tweet this as well? Are you double dipping? Do you double dipping son of a bitch? I try not to. Occasionally I will to test it out. Is blue sky like where you do like a little bit of like your work? You're like a comic going trying some new material? Yes, that's where I put out the like instead of the draft folder on Twitter. It's like, ah, just put it on blue sky and see what happens because they don't have a draft folder there yet. So I do notice that. So the thing that's really annoying to me about Twitter is I see all these people write a whole paragraph and then they say link in the next tweet.

2:27And that's just annoying. I feel like the links actually do sometimes do better on Blue Sky, which is kind of annoying. Okay. What are you going to do as a content creator? So Ben Skyed, 2021, recession is coming. 2022, 100 % chance of a recession. 2023, we are probably already in a recession. 2024, we have to have a recession eventually, right? 2025. What if we just don't have another recession this decade? And that's not too far off. It kind of feels like that, right? I feel like the recession predictions have completely gone away. Oh, they did. No, they have. I saw Jeffrey Clientop tweeted a chart of the number of countries where economists expect there to be a recession next year hit zero.

3:24Wow. Even around the world? Yeah. Holy cow. Okay. So it's come completely full circle. And we've, you and I have thrown this out there a little bit. Like what if we just don't have one for a while? And now it feels like that's just becoming almost consensus. It is consensus. Yeah. Yeah. No, I don't think, I don't think anybody's expecting recession in 2025. So you and Josh talked to Rick Reeder from BlackRock and he talked about this and Josh has been throwing out this idea, and so has Rick, that it's just the whole economy has changed. And it feels weird saying this, because it feels like permanent plateau-ish.

3:59But what if things just are completely different in our economy? Well, there's no what if. Things are completely different. I guess the question is, what are the implications for that? And I didn't get to, I didn't have a chance to say this, because we only had a limited time with Rick. But just because the business cycle is not going to be prone to booms and busts of the past because of the physical to digital transformation of our economy, the booms and the busts of the inventory buildup, that's over. Definitely does not mean that there can't be recessions or bear markets. I think a great example is Netflix.

4:30Netflix was in a huge recession, right? And that is still, is there any stock that is more consumer staple, less prone to booms and busts? But it was a growth stock. They stopped growing. They had to change their strategy. They got whacked. The stock felt like 75%. So I don't think Rick would say, and I don't want to put words in his mouth, but I'll say that just because I think that the booms and bust cycles are going to be different than the past, I definitely do not think that bear markets are going to go away. Cyclical and secular. Like I 100 % believe that that's still a thing. Just to be very, very clear.

5:02And we just had a bear market not that long ago. But I think the recession thing that this century alone, we've had the fewest recessions. I mean, they're being more and more spread out. And maybe it is just the rolling recession. Like the housing market had a recession. No, it's still in one. It's still in a recession, right. And so they're in the tech industry, the startup industry. Yeah, how quickly we forget because of ChatGPT and the AI hyperscalers that seems like it's been here forever. It hasn't. ChatGPT came in November 2023, and that basically marked the bottom. But those stocks were in a massive recession.

5:33Look at the charts of Amazon and Google and Netflix and Meta. Yeah, Facebook was on 70%. Nvidia was down 66%. It lost two-thirds of its value. So I think the big thing that I am a true believer in of this time is different is these cycles are just going to keep happening faster and faster. So when you get the downturns, they're not going to last as long as they did in the past. That I definitely agree with, that this stuff moves way quicker than it did in the past. Technology is a big reason for it. All right, Barron's had their forecast, which feels a little bit like they're on my corner here.

6:07They stole it from... What's your corner? The fence? No, my corner is taking the probabilities of the past and looking at the fact that usually when we have an up year, it's a big up year. And so I said if I was a Wall Street strategist, I would predict a 20 % gain most years. That would be my target, my baseline target. And then once every four to five years, I would predict a down 10 % to 15 % year. And I'd be right probably more than any other strategist on the street. Fair? No? Yes. Okay. Keep going. And so they also said they're predicting another 20 % year. And they said it's basically AI growth, deregulation, but expect some volatility.

6:49So I looked at, so this would be, that'd be three years in a row of 20 % gains. I looked, we're now, we're on track for, unless we fall out of bed here in Santa Claus rally, doesn't happen. We're looking at two back-to-back years of 25 % gains in the S &P. So last year was 26%. This year so far is like 29%. And I've tried to look back, how many times have we ever had back-to-back 25 % plus-year gains in the S &P, going back in the last 100 years? A stock market three-peat. So it's only happened twice, three times. So the 1930s, the 1950s, and then the 1990s. And the 90s went on a five-year run of 20 % to 30 % gains.

7:25Then I looked at, okay, what happened in the year after these back-to-back 25 % gains? And basically something for everyone. In 1937, the stock market fell 35%. following back-to-back, it was 47, 32, minus 35. 1950s, it was 53 % gain in 1954, biggest gain in history that I could find for the S &P. The next year, after a 53 % gain in 1954, the stock market was up 33%. Can you imagine how many people were ready to call it over at that point? Then the following year, 1956, it was up another 7%. So that was pretty good. Then the 90s, it was plus 33, 97, plus 28, 98, plus 21 and 99. So you have the third year of minus 35, plus seven, plus 21.

8:08So kind of something for everyone. A tepid gain, a crash, and a really good gain again. The sample size is N equals three here. So throw this out the window. But the whole point is, this doesn't happen very often. Last week, we were talking about David Rosenberg throwing in, but not throwing in the towel. So wait, wait, wait. You do your Michael's predictions every year. If you had to stake your claim next year, what would be more likely to you? Another 20 % gain or a down year? You can put some odds on it, too, because I know you're not, Scott. Yeah, I will. I will. All right. I would say they both have plus odds.

8:48So I would say up 20%. Give me, like, plus 180. That sounds like pretty good odds to me. Plus 180? Well, let's convert this. So convert, just for the audience who's not gamblers, convert plus 180 to percentage. So that is, oh, thank you. Thank you, AI. Don't tell me how to do it. Just do it. Convert plus 180, gambling odds. Come on, Gemini, you piece of garbage. All right, so it shows me the answer. See, this is why Google's over. There are times when I look at gambling odds, and it makes me feel like an idiot. I know why they do it that way, but it is kind of hard to comprehend. All right, so while we're doing this, while we're doing this, all right, plus 180, thank you.

9:38Thank you, odds converter. That's a 35 % chance. Okay, so that actually does sound realistic to me. Thank you, I'm a good handicapper. Okay, now for a down year, I would say plus 150. 50? No, that's saying it's too high. 130. Let's go 142. Final answer. All right, that's a 41 % chance. So I think that if I'm Vegas, I'm saying slightly more likely to be down than to be up 20%. Okay. History would say that you're more, there have been more up 20 % years than down years. Yeah, I don't care about history. Okay. I'm just, if I'm playing the probability and I'm an odds maker, that's what I'm going to do.

10:22So, okay. So you're more in the camp of, okay, it'll be if we're up, we're up kind of a muted year. Yeah, I don't, I think another 20 % gain is slightly unlikely, you know, with the caveat that like literally who the hell knows we're guessing. We're just having fun. Just a couple of guys talking sucks. This is why if you're trying to make a year end target, it's basically an impossible thing to do. So here's my prediction for next year. I'm going to say like an air quote prediction, because again, I'm guessing. I'm going to say that the tailwinds, the momentum is strong. It's not just going to fizzle on January 1st because the calendar rolls over.

10:57So I'd see a strong first half of the year. Some sort of VIX spike in the back half of the year. We're up 15 % in the first half. Give most of it back in the second half, and we end up 3 % for the year. 3%, okay. Volatility is a second half story. I think there's – my only prediction is there are going to be a lot of buy the election, sell the inauguration pieces in January. Okay. That's going to be the call. Yeah. All right, so anyway, getting back to what we were talking about, how David Rosenberg didn't throw in the towel, but he did say some things that definitely made— He threw in the towel, but he said he didn't throw in the towel.

11:31Right, right. Definitely some— Listen, I'm throwing the towel in, but I'm going to say I'm not throwing it in. Yeah. Just so we're clear. All right, so not every bear is throwing in the towel. No. John Husband, would you say there has been a lot of bear poster children of the last 15 years, Ben? A long list of them. Would you say that if there's one Mega Bear, see the one, is it Rubini? Is it Hussman? I think Hussman is the one. It's got to be Hussman, right? He literally hasn't changed his tune since probably 2011, I'd say. 2011? All right, so for the audience, who is this John Hussman? So he first came, he rose to prominence following 2008 Crisis because he said there's a crash coming.

12:17Everything's overvalued. And he hedged his portfolio in his mutual fund, which is, which is a stock, was a stock fund that could also hedge was the S &P was on 37 % in 2008. His husband's strategic growth was down 9%. So it had to be one of the best performing funds of the decade, right? Cause it started, when did it start? It started earlier than that. And he did pretty well on the.com bubble as well. Yeah. So he, he, so he had a 10 year track record that was pristine. And billions of dollars flowed in, obviously. Was it six at the height? What was the height? It was five or six billion, yeah.

12:52It was a lot of money. To give you an idea of how long we've been talking about John Hussman for people that might not be familiar with him, our friend Colin Roche tweeted, this is years ago. This bull market still has$300 million left in it. And I don't know if the number is$300 million, but what Colin was showing was the total assets under management of, is it HSGFX? Is that the ticker? Yes. So basically, this bull market won't end until Hussman's assets go to zero. The crazy thing is - When was that? Was that 2015? That was so long ago. Yes. And the crazy thing is, I think most of the money in there is his own that he's made from fees.

13:28I think the majority of the assets in the fund are probably his. It was about$7 billion at the peak. And then he did not get off the bearish train. He started calling it a bubble in like 2010, 2011. I found a piece that he wrote for Business Insider 2012. This is the headline. Hussman, this is one of the worst times to buy stocks in history. And the reason we're saying this is because the Financial Times posted a piece of his that says, new era, same bubbles, and forgotten lessons of history. Yeah, so anyway, yeah. So John Hussman is still saying the same thing. Yes. So he basically has been comparing this to 1929 and 2000 for like 15 years.

14:03And he says, this is in 2012. We presently identify market conditions as being in the most negative 1 % of historical data based on the average expected risk return. And since then, of course, the S &P is up almost 500%. It's up 14 % per year. So I can't believe the Financial Times gave him an op-ed and allowed him to publish this saying like, listen. Well, he has a PhD. So Hussman is. He really does sound. I had an old colleague who in 2014 was telling me, you know what? What if Hussman's right? because he sounds very smart when he's a very intelligent sounding person who is always wrong. By the way, I'm not going to lie.

14:42Again, getting back to the things that we were writing in 2015 that were like taking the other side. I was nervous to take the other side of a PhD. Like he's got models. You know what made me feel good though? What? Jesse Livermore, who used to blog out of Philosophical Economics, who's the smartest investment person alive probably, wrote a critique of John Hussman's chart of estimated future equity returns in 2014. I remember reading that. basically saying these models are form-fitted, it's torturing the data. And I guess the hard part is, the thing that gets me is like the lack of intellectual honesty.

15:11I don't know about him personally, but - People say he's a nice guy for what it's worth. Yeah. He changed the name of his fund from Husband Strategic Growth, which was a stock market fund, to Husband Strategic Market Cycle Fund. Oh boy, come on. He changed his models from a 10-year model to a 12-year model at one point because the 10-year model looked bad. And so instead of changing his mind over the last 15 years, He's dug his heels in and won't just say, you know what? Instead of predicting this is 1929, 2000, all over again, I'm just going to stop making predictions. Yeah, no. Josh would say that he beclowned himself many, many, many times over.

15:42So he's saying the same shit that he's been saying, and maybe he's right, but there's a little story. No, no, no. He can never be right. True. At this point, you can't be right after you've been predicting it for 15 years. So there's a little story of the boy who cried wolf. Ben, you're familiar with this story? Yes. I read the book. I read this book to my five-year-old because Logan told me that he brushed his teeth when in fact I smelled his mouth. He did not brush his teeth. And he's been telling untruths. So I sat him down and I said, come here, come here, son. It's time for a story. And I read him, The Boy Who Cried Wolf.

16:22And the lesson, and when I catch Logan lying, his lips quiver and his eyes well up with tears. Kids are the worst liars. It's the cutest thing ever. And his eyes go to the side. It's just beyond adorable. So, but anyway, here's the lesson from the boy who cried wolf, which we all had that story brought to us many years ago. People don't believe liars even when they're telling the truth. And now I'm not calling John Hussman a liar because I don't know him, but he is the boy who cried wolf. and perhaps this is the time where the wolf does come and eat the sheep. But to Ben's point, he gets no credit for that.

17:05Because had you listened to him in 2012, you would have missed one of the greatest bull markets of all time. And he is the most cited. He is the ultimate bear's bear, right? When Henry Blodger was writing his pieces, he was citing John Husband. When people are bears, they cite the PhD with the model, with the mutual fund, with the track record. And he's digging in his heels. And it really goes to speak about how incredible America is, the land of opportunity, that you can have this sort of performance for so long and be so wrong and do so well for yourself. Yes, it really is unbelievable. The guy's probably made$100 million in fees or something.

17:48And from the life of his fund, his fund started in the year 2000. thousand it's up a grand total of three percent yeah so listen again not to get personal because i don't know this person i don't think that he intended to be wrong obviously i think that he was doing his best but at this point yeah maybe just stop writing op-eds maybe just stop trying to scare people and when you are right there it's an elixir like none other in the in this investment business when you get headlines written about you the person who called the 2008 crisis is calling another one it's very hard to get out of that mindset and i saw so many people in 2008 that called the correction right, the crash right, that never got out of that mindset.

18:26This is why Mr. Barry Ritholtz is a true one of one. He really is. Like, Barry was bearish in 05 and 06 and saw this coming. And then, and he'll be the first. I read some of Barry's housing stuff and I'm like, this guy doesn't know what he's talking about. And he called the housing crash, right? And Barry will be the first one to tell you that this turn was nothing but dumb luck, but he turned. And not only did Barry turn, and again, the time was dumb luck, but it was like three days either before or after the bottom in March 2009. Barry was in the New York Times. It's on record. He's the only bear that I know that didn't get stuck in the mud.

19:03Yeah, and he became well-known because of having – he was bearish on the stock market going into the crisis and then said, all right, I think the stocks are down 60%. Probably got to buy them here. Okay, let's move on from this. Hey, this is a crazy stat of the week from Jeffrey Kleintop. If one stock, NVIDIA, was not part of the S &P 500, Europe's stock market would be outperforming the S &P since the current bull market began. This is October 2022. That blows the face and the mind. Right? Wait a minute. I thought maybe if you would have said, like, oh, take the MAG-7 out and we're even, but Europe would be outperforming ex-NVIDIA.

19:41You sure about that? You sure about that? He's the chief investment strategist at Charles Schwab, so I'm guessing that they checked him a few times on that. Wow. That's one of those stats that just gets you, right? That gets you right in the funny stock market bone. Wow. Also, why stock picking is so difficult. Imagine being an active manager and looking at this stat and going, see? See? See what I'm dealing with here? It's like you trying to pick a car. Too soon, man. By the way, I— I walked into basketball on Sunday morning and one of the older gentlemen goes, so I shouldn't buy an Audi, huh?

20:25I think everyone learned that lesson. I just turned my auto pay on. Someone said you should be looking into the lemon laws in New York. I did. It's too late. Did you really? It's technically a lemon. All right. Good one. Sam Rowe did a 22 eye-catching charts post on the TKR. And did I do it wrong again? Every time. Ticker. All right. And speaking to this time is different. He shows how companies have changed over time. This is from Bank of America. And they show companies have lower leverage now than they did in the 90s and 2000s, which is like leverage has fallen, which is kind of crazy when you think about it because you would think companies would be more highly leveraged now because rates were so low for so long.

21:05They're higher quality. This is based on credits, their credit rating. So B plus or better credit rating is much higher than it was in the early 2000s and the 90s. and they're more asset light. And I think this is the big one for recessions is the asset light thing, right? The fact that we're not dealing with a big CapEx re-spend or whatever, inventory. But also think about how much information and how good these companies are at responding to the changing environment. Think about how quickly the tech companies shifted and pivoted out of a recession. Like because everything's on the cloud and everything's software-based, they could just turn the dial.

21:41Whoop, whoop. Right, Uber just decided, hey, we're not going to lose money anymore and give people cheap rides. We're just going to change. And it was as simple as that, right? And they didn't have to go buy a bunch of stuff to make that change. Okay, talking with, this is from an American living in Europe. Talking with French people, I don't get the same feeling of entrepreneurial spirit as the US. I think there's also a general risk aversion to capital allocation and the stock market is perceived as risky. To some degree, the prioritization of stability leads to lower growth. Only recently have I heard discussion about the S &P 500, perhaps due to the visibility of its outperformance.

22:12When I go back and forth between the US and Europe, Europe seems in a standstill in comparison. The flip side is the European lifestyle actually is great. And the two continents could probably learn something from each other. Yeah, I buy that. I feel like we've heard this from a lot of people overseas. We have a decent overseas audience that basically say, yes, you are right. We don't create businesses like you. We don't innovate like you. But we probably lead a more comfortable lifestyle. I told you what the guy had said to me in Dominican Republic, right? He's like, look at our houses. They're shacks.

22:39And he said, but I have no stress. And that's like etched in my memory of like, man, that's the trade-off. I like stress. I think a lot of people do though in America. I think that's part of what makes our – like people, we love to complain, we love to consume, and we love to be stressed out. Yeah. Right? People love to talk about – you cannot go to a child's game anymore, any of the games I go to, without parents talking about how many other games they've had that day or how many practices they've had and how busy they are. They wear it like a badge of honor, though. They're not really complaining.

23:13They just like to tell people, you know how busy I am? Oh, yeah? How busy I am? Yeah, no. It's the new weather, right? Yes. All right. So a great chart from a still bear. Credit to him. Albert Edwards. I don't know. There's something kind of charming about Albert Edwards. He wears funky shirts. He's got the British accent. Is he not throwing a towel yet? No. Oh, okay. He seems like a happy bear. I don't know. I kind of dig that guy. So he has a chart showing US stocks and profit continue to gain market share in global equities. So he's looking at the profits as a percentage of US global – I'm sorry.

23:46The US percentage – let me try that one a third time. The US as a percentage of global equities in terms of profits, and that's obviously gone up. It was as low as like 40 % in 2010. Now it's 55%. But then he compares it with the market cap, US as a percentage of global equities. And of course, that has even outstripped – that has gone even further still. it's now 70 percent which is what you would expect right i think you would expect the market to like i'm using air quotes like overdo it right you wouldn't expect these to just follow in line right it wouldn't be in line like one would outpace the other but it is interesting if you want to make a bearish case like yes the u.s is swallowing the world look at the profits as a percentage however the market cap is just outdoing even that and so that the crash in the late 1980s to the 90s with Japan and the market cap of the US is something to behold, right?

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24:37Yeah. Look at how fast that happened. Somebody emailed us, Ben. And this one sort of, not sort of, it annoyed me. I'm going to be honest, it annoyed me. It was very nice. Like, thank you for making great content. I love the team dynamic and all that good stuff. Having said that. Having said that. It would be cool if you guys had your own patented fear, greed, gauge, schtick segment and we could track this over time. Michael's attitude slash emotion towards market sentiment is readily apparent in the tone of voice used. I was there for COVID and the fear was palpable. Yeah, were you not? I mean, I was scared in COVID.

25:10That's a scary time. Yeah, were you not scared? Like, in fact, let's run back the tape. I'm pretty positive. In fact, I'm absolutely f***ing positive that I never told anybody to like sell stocks out of fear. Not saying that you said that I said that, but I definitely did not say that. Okay, I'm also listening now and it feels all caps so frothy. I don't like that. Okay, I want to come to your defense on this. Please defend my honor. To your defense, the way that we talk about the markets on this show, it's a coincident, not a leading indicator. Coincident meaning we're trying to gauge. It's concurrent.

25:43Yet, it's a bull market. How should I sound? Right. We're trying to pull together how people feel about the markets right now. And so, yeah, it's coincident. It's not leading like this is what's going to happen and it's going to happen forever. We're trying to gauge how things feel at the moment. But I would like if he provided an example of me sounding all caps so frothy. I don't see that either because I feel like we've really tried to take the other side for the last six months at least or so just to be like, are we sure this isn't, you know, this feels kind of crazy. I think this person is projecting.

26:18It's possible that they're worried or they're being left behind or. Anyway, I responded to this person as I respond to everyone. Please email me back. I'd like to hear some more, please. The other thing, the way that I look at it is Greenspan gave his irrational exuberance speech, I'm going to write a piece on this, in December of 1996. If you read the transcript, it's not as bad. He wasn't like pounding the table saying irrational exuberance. He was just kind of like lightly planting the seed. He wasn't saying like, this is crazy. It's not as bad as history makes it out to be. But I think the stock market fell like three or four percent the next day afterwards because he said this.

26:54But then it was up 100 percent from then to the end of the decade or something. So I do think that while markets seem like they're very speculative and people are going out of their skis a little bit right now, things could always get way crazier. And that's the way that I feel about this stuff is like, yeah, there's frothy parts of the market, but be careful. It could go even more nuts. That's the way I feel. Yeah, who knows? Yeah. All right. Good one from Clementine Investing, which is a good sub stack. So a study from Purdue University analyzed 77 million messages on stock twits to analyze how retail traders form their investment opinions.

27:31This is, I don't, I didn't read through the actual study to know like how much of a leap they're making here, but they said they compared the analysis with how people talked on social media on stock twits with trading data from Robinhood. And they found that Stockbook sentiment does influence Robinhood trading volume, indicating that retail traders follow through in the advice and opinions shared on social media, which I, that makes sense to me, right? But then they look at technical analysis for people who were bullish or bearish based on technical analysis on stock twits. And then they look at this chart here.

28:04So this is retail technical analysis on stocks that were bullish and bearish. And in this piece, they talk about how, no, these charts are not reversed. The stocks identified as the ones with the best technical analysis picture not only underperformed but systematically lost money. The stocks identified as the ones with the most bearish charts systematically gained. After 10 years, retail traders would have lost almost 40 % of their initial investment on their buys and would have gained 30 % had they held on to their sales. Do you think that this is just that the stocks that people are talking more about are probably too stretched?

28:37Wait, hang on. Retail traders have lost almost 40 % of their initial investment on their buys and would have gained about 30 % had they held on to their sales. Right. Based on people talking about charts, saying this chart is bearish, this chart is bullish. It was essentially the opposite. I do understand the fact that people have a tendency to sell too early. So in a bull market, I'm not surprised that the stocks that they sold continued to work. But they're also bearish on those stocks. Well, maybe they're just being labeled bearish when they sell them. True. I agree. It feels like there's some leaps being made here, but this makes sense to me in terms of sentiment, in terms of the stocks that people talk about the most are probably really popular because they've already gone up a lot.

29:29And people probably missed the boat when sentiment really started taking off for these stocks. Yeah. That makes sense to me. I wonder if, yeah, I don't know. It does make sense. But again, I didn't read the article, let's be honest, nor would I be able to understand the contents of the article and debunk any of the models that they made. But I feel like, can you actually measure this? Yeah. But as far as sentiment goes, this actually kind of makes sense to me. Yeah, it does. All right, so let's talk about what's going on inside the market. There's some weird shit happening then. As always. The total return, this is from Sentiment Trader, and I'm going to be speaking a lot more about this on what are your thoughts tonight with Josh.

30:10The total return for value stocks has declined for 10 consecutive days. Since 1926, this has happened fewer than 10 times. So very rare. Over the past 50 years, it has preceded double-digit one-year rallies in value stocks. So there's some funky shit happening inside the market. Ben, I don't know if you're aware of what's going on. But there are three sectors that are actually crashing relative to the market. So if you divide this by the S &P, and it's XLA. So it's energy, it's materials, and it's healthcare. and they're all violently crashing compared to the market. This morning, Axel E is down another 1.4%.

30:48And this definitely has me not feeling too bullish. Counterpoint, energy is like 3 % of the stock market now. It doesn't matter. Is that fair to say? So oil has gone nowhere for 15 years. Is it safe to say that energy doesn't matter as much as it used to? That's a fact. Nevertheless, healthcare. This has been the worst sector. Energy had a little comeback in the early 2020s, but I don't know, for the last 12 years or so, energy has just been a terrible place to have money. I'm just saying, as a person who looks at what I consider to be like a weight of the evidence approach within the stock market, I look at a lot of different things.

31:32Whoa, whoa, whoa. The JC Peretz approach. That was very CNBC of you. How did you say that again? No, that's JC. Oh, okay. I look at a lot of different things, and I don't like that these three sectors that are not insignificant, I know energy is a small sector, I know materials is a small sector. It is insignificant, though. Don't you think? No, I don't think that. That's why I'm saying I don't think that. I understand that energy, isolate energy, it's a small sector, it's a small slice of the overall stock market, I get it. But I don't like that these three sectors are full out, I don't want to say full out crashing, because I don't want to be hyperbolic.

32:07But I don't know how else to describe it. Look at XLE divided by SPY. It is crashing. And it's not just XLE. Look at materials doing the same thing. And look at healthcare doing the same thing. So earlier in 2024, in fact, for most of the year, in 2023 as well, Josh and I were saying, like, listen, I'm not concerned about concentration because it's not as if the rest of the market is falling out of bed. It's not like SPY was going up and RSP was rolling over. So RSP, the equal weight, has been down, has closed lower than the open for like 12 straight days. I'm having Matt Charkid do some work on this.

32:43So listen, is it like, I'm not trying to... Under the surface, things don't look very good to you right now. That's all I'm saying. All right. That's all I'm saying. Okay. I mean, it feels like we could use a quick little washout just to slap everyone on the wrist again, correct? Yeah, people are getting too bullish. And apparently, I'm getting all caps so frothy, so. Okay, well, here's some more froth for you. Torsten Slock gave his economic outlook for 2025. 2025 economic outlook, firing on all cylinders. He's basically saying, boom, this is, we're not slowing down for anyone right now. This bus is, keep going.

33:18So he talks about how, he said, what happened to long and variable lags? Fed starts hiking, look at economic growth. Didn't impact it basically at all. Keeps remaining strong. Fed hikes have not slowed down the consumer. Personal consumption expenditures relative to GDP has been rising for the past three quarters. Corporate profits are near all-time highs as a share of GDP. Ben, you're right. There's a lot. And Torsten's right. There's a lot of reasons to be bullish. People aren't bullish for no reason, okay? Everyone's not an idiot. And I would say to all of you people listening who think they're so smart and they're going to fade this, you might be right.

33:51But also understand that if you look at the historical data, everyone being bullish is not a sell signal. It's just not. Everyone being bearish is a buy signal. They're opposite but not equal. Yes, most of the time, the trend, you want to ride it. If you're a contrarian all the time, you're going to be wrong most of the time. There are times when being a contrarian can be very, very beneficial to you. It doesn't happen that often. So I understand that it feels like everyone's bullish, and therefore you should be cautious. And I get that, and we will see. But if you look historically, these bull markets can last for a long time.

34:27And how many times, Ben, have I used the quote from the money game over the last 10 years about people want to know what time it is. Everyone's at a party and everyone wants to leave early and people are saying what time it is, but the clock has no hands. How many times have I used that quote for people that are like worried that the bull market is getting longer than the tooth? We've been in the eighth inning for like 12 years now, according to most people. All right. Good email on wage leverage. Ben mentioned 25 % increase in wages. Isn't there a lot of leverage with an increase in wages versus discretionary investments?

34:55Example, when my wife started working part time. Fourth child started school. Oh, man. That's a great feeling when all your kids are out of daycare. She'd compare how little it was versus my full-time fairly high salary, not to brag. As a percentage of total, it was small, but it was huge for discretionary at that point of our lives after all necessities were covered. So even if it's only 10 % of total income, it could more than double our leftover income. So that makes sense to me where you already have everything covered. And think about it. So Mike Sicardi tweeted this one from Bank of America.

35:26after-tax wages have grown significantly for lower households. We've talked about this, but the highest percentage gain is in lower households. And to me, those increases, obviously some of that is eaten up by inflation, but a lot of that is just going straight to spending. It's all being spent. Yes. All right, inflation chart crime time. I've seen this a lot. This is from Deutsche Bank. They show 1970s inflation. You have a little bit about inflation early, then it goes down, then it goes up, then it crashes, and it goes back up. And a lot of people are saying, hey, we're following the same path.

35:57And I think this is a chart crime. Not quite a felony, definitely a misdemeanor. Is that fair? Because look at the axis. The axis is way more truncated for the 70s than it is today. And I had chart kid Matt do this for me. Look at the next one. It's sure it's kind of following the same path as the 1974 to 1982. Well, you know what, Ben? Like, they don't need to cheat because the proper one that Matt created still looks pretty good. Yeah, it kind of follows it. And I've talked about this. You can find it on my blog where I said how all the ways this isn't like the 70s. But if your reasoning for inflation heating up again is because the chart from the 70s looks like the chart from today, that's not a good reason.

36:37You wrote about this a long time ago where you picked two random lines that fit each other, right? And they were completely different. It was Altria and the Dow, I think. Yeah. That was a long time ago. Just line on top of line. It's really easy to form fit two lines if you really want to. But that doesn't mean, and inflation could rise, but it's not going to rise because there's lines like this. Yeah. All right. Good news of the week. Obesity is falling. This is from Bloomberg. Ben, I like when you speak like a reporter. Like you've got like your pen in your hand. Let me do the papers together, you know.

37:09The number of obese Americans has been steadily climbing for years, and the country's average BMI has been creeping up along with it. But in 2023, something changed. Obesity levels fell to 43.96 % from 44.1%. Okay, I didn't realize it was that small of a decline. If you have to go to two decimal places. Okay, so they say it's a small. There's 70 fewer fatter Americans. This is great. Okay, it's a small decline, but a meaningful one. The biggest change occurred in the South, according to analysis, which has the highest concentration of prescriptions written for the drugs of Ozempic and these other things.

37:41Just anecdotally, I'm hearing a lot more people that I know, like friend of friend or family member or whatever, using this. Do you have any of this or not? Like, oh man, that person lost a lot. Oh, yeah, yeah. What happened? And someone will go, well, it's Ozempic. But so what? They lost weight. I don't judge. I feel like a lot of people are judgy about that. And if it's going to help us become a healthier country, I'm all for it as long as the side effects aren't too good. And it sounds like… I saw somebody recently. I wasn't trying to do it. I was like, you look amazing. But how is that? I mean, why is that rude?

38:12Is that rude? No, right? No, of course not. They looked amazing. People love to hear it. Yeah. That's the whole point, no? Yes. And I continue to think that if this, the pros and the cons, the pros totally outweigh the cons here. If we can get people healthier with this, we should be handing this stuff out like candy on Halloween. I'm not a doctor. If you are a doctor, please don't email us about muscle loss. I don't care. I just, it's good. No? The one thing I've heard from a lot of people saying that like one of the reasons you don't eat a lot is because you're nauseous a little bit on the drug, which makes sense.

38:44Like you don't want to eat when you're nauseous. Hey, listen, trade-offs, right? Yes. Life is full of trade-offs. um okay we got an email homes michael's neighborhood what's that we talked about it last week but it got cut out because you were in like the worst internet ever in las vegas oh what were we talking about i can't remember by the way we got an email about speaking of my neighbor we got an email about uh somebody said they feel like they're paying like sprinkler insurance i've a sprinkler there's like sprinkler inflation yes because we talked about this last A lot of people said we need like an inflation gauge of sprinkler shutoffs.

39:19And here's the thing. Oh, actually, I think I have my bill right here, actually. One of the reasons mine is so small, though, is because we have like 20 houses in our neighborhood and we all come together. Oh, man. What a boomer. Look at all those paper bills you have. You formed a union? Well, no, we have an association. So an association. So no, my wife, we, listen, we still got papers and my wife said, you gotta, you gotta go through all these papers. So I got one right here. Okay, here we go. Jimmy's sprinklers. Uh, what did I say it was? Nine. Yeah. Okay. 85 bucks plus tax,$92. Okay. So ours is like 50, maybe 60.

39:57So yours is a lot more than ours, but we, again, we, we bring it all together and they do it all in one day. But, but Jimmy stands by his work. I love how it's called Jimmy's sprinklers. Yeah. By the way, uh, speaking of boomers. So there was a guy, you know, we've been speaking about things that are going to die with our parental generation. There was a guy on the flight home from Vegas who was reading a newspaper, a physical newspaper. Why? That's a move. And speaking of airports, Ben, you mentioned it's fun to run an airport. I'm here to tell you it's not fun. So on the way home, my flight was delayed and I was doing some shopping for the kids, looking in the stores.

40:37And all of a sudden, I look at my phone, And I'm like, like I completely lost track of time. My flight was boarding. That doesn't sound like you at all. Yeah, because my flight was delayed and I just, whatever. So I, so I, so I started sprinting. It was horrendous. I get, I was sweaty for the flight. It was the sweaty part. That's the worst is getting, sitting down in your seat and being all sweaty and trying to turn the air thing up as high as you can. Yeah. So it was, it was the opposite of fun. Okay. I'm sorry. I get, I think it's a little exhilarating just to push that boundary of. Okay. All right.

41:09So we got an email about Christmas lights. Would like to downsize and sell our now non-decorated for Christmas home right next to the high school, but there's nothing for us to buy. Plus, my husband has a shop in the basement and the condo isn't going to do it. I wish we could simplify, but we were stuck and the nice young family who should be in our house are stuck too. It's a multi-generational issue. Oh, this is the one saying that older people are – that makes a lot of sense to me. that, I guess that's a good point, is where are these baby boomers going to go? Is that the point? There's nothing for us to buy.

41:45Yeah, there's no inventory. Yeah. That, yes. I thought we got another email about Christmas lights. Didn't somebody say that? Okay, here's one. I'm an ER doctor, and I'd like to make a counterpoint to Ben's position about hanging Christmas lights. Just like every July 4th, we see patients with missing fingers after home fireworks go wrong. Every Christmas, we see multiple traumas from falls off ladders and roofs while hanging Christmas lights. Yeah, not worth it, Ben. Just pay for it. okay, but I don't go high though. I don't go way up on the roof. I'm not doing the Clark Griswold. I'm doing trees and I barely, I have like a five foot ladder that I get on.

42:13So I don't go up top. So that's, that is fair. And a lot of people did say also, the other counterpoint is it's very expensive to have someone else hang your lights. But I guess you're, I don't know. Again, I live living life in the edge, running through the airport. I don't mind it. All right. All right. Car dealership guy. Car dealership guy tweeted, odometer fraud is shooting up. according to the latest data from Carfax, 2.14 million cars may have had odometer rollbacks in 2024. How do you do that? Up 18 % since 2021. Just like in Ferris Bueller. Yeah, just do it backwards. The reasons, he said, technology has made rolling back an odometer easier than ever and is often done to dodge at least mileage fees or artificially inflated cars value.

42:51It takes seconds to do and costs the next buyer an average of$4 ,000 in lost value. Bottom line, if a mileage car deal seems too good to be true, it just might be. Did I speak about the, what was that bullshit fee at the dealership, the, I forget what they call it, where it's like$600 if you don't get another lease with the car. Oh, yeah. This is something I wanted to talk to you about, though. How many miles do you get on your wife's lease? Because that, to me, seems like the biggest reason why you guys should buy a car and not lease, because if she's putting a million miles a year on, then leasing doesn't make sense for you at all.

43:19Well, this is going to be her last year driving to Brooklyn. I'm putting my foot down. It's too much. Okay, that is a lot. Okay, this is from the Wall Street Journal. The week, CEOs bent the knee to Trump. So they say companies abandoned him after the January 6th riot. Now they're rushing to curry favor of the president-elect as he prepares to return to the White House. Oh, shut up, Duncan. What?

43:41Duncan's on our Slack group. Hashtag homeowner problems. Hashtag must be nice. Yeah, Duncan, you don't have to worry about hanging lights because you rent. So they say Trump had this get-together. I think this was at the Stock Exchange, where executives from Visa and Facebook and Goldman Sachs and Charles Schwab and Citadel, a big aerospace magnate was there, Bill Ackman. And he said already Zuckerberg has donated a million dollars. Bezos has donated a million dollars to his inauguration. And it's basically this article is basically saying like, yeah, you guys moaned and stuff, but you fell in line.

44:16And this got me thinking about FU money, right? Because I feel like at a certain point of escape velocity, when you are super duper rich, you no longer have the ability to have FU money because you have stakeholders and shareholders and charities and whatever, hangers on. There's a certain level of wealth where you don't have FU money anymore. So I want to think with you, what is the true FU money of your good place? Because remember on Succession, Cousin Greg said, hey, if everything falls through, at least I'm going to get$5 million. and Tom and Connor basically like, whoa, whoa, whoa, five million bucks, that's the worst level of wealth because five million, you can't retire, but it's not worth it to work.

45:01It's a nightmare. So I have a true level of FU money in mind. And when I say FU, I mean like flying under the radar, not as much social pressure, but you're in a really, really good space for a, so what is your number here? Where the money doesn't consume you or your life okay i think i have it what is it no i'm not gonna tell you how much money i have but i think i currently have it oh no i'm saying what is the number though where you could say like that is the sweet spot yeah so i don't know we'll get into this but i think it's a mindset and i think it's it's very much path dependent yeah true true okay but i need a number okay so i have a number of mine so the number 10 million dollars this is i've dealt with hundreds or thousands of investors from all shapes and sizes and once you get past a certain point there's so much stress that comes with the money and you feel like it's a responsibility and you're worried about heirs and family members.

45:53And then what you're saying is there is a level and it's different for everyone. And maybe it's 10, probably not 10, maybe it's 20, maybe it's 50 where the money becomes more of a liability than an asset. Yes. Yeah. Yes. And I think 10 is from my experience is about the sweet spot in terms of being able to be very happy with a large amount of money, but not enough money where it's going to cause you other outside stresses. So to be clear, I think that if any rich person looked at my bank account and my assets, they'd laugh and they'd call me poor. But I'm saying that, like, I think coming from a place with not a lot of money and being able to, like, make more money than you thought you ever would and pay your bills and provide for your family.

46:33Like, to me, that's FU money, even if it's not, like, you know, what people think of when they think of FU money. Being grateful is a big part of it. I remember my brother, when he got his first job out of college, and I asked him, I said, like, how much are you making? you know which was a not something you ask people but he said i make enough to go out on the weekends in the bars with my friends and go on like one nice vacation yeah so how much more do you need i was uh i was at a conference recently and somebody did ask me what my number was and i was so taken aback i was like what do you mean like like he's like you know like what's like your number to like i don't know i guess retire i'm not sure what he was asking exactly it was like i don't really i don't really think like that i don't know what's yours and he said and he said 100.

47:14I was like, 100? What? Jeez. Yeah, I don't really think that way either. I'm with you. I'm at a way better place in my life at age 40, how long I'm at? 43 than I ever thought I would be. I'm not motivated to see dollars stack up. I'm much more motivated to live my life and spend the money and enjoy it and give some of it away if I can and all that good stuff. Speaking of money, I was trying to teach Kobe a lesson. We converted my attic into a play area. We don't have a basement or any real place for the kids to play. When they come over, they're all up in our business. Do most New York homes not have basements?

47:55Is that right? No, I think most of the homes in my town do have a basement. The style house that I have does not have a basement. We just finished and it's great. The kids are upstairs. They're having fun. It's their own space. It's quiet downstairs. Robin and I could like breathe a little bit. So I was trying to tell Kobe that the attic costs a lot of money. And I said, cause he's like at the point in time, he's seven years old where he's like resisting math homework and stuff. And I said, and I'm trying to teach him that the reason why you have to do well in math and school is because you need to get, you need to get into a good college and get a good job.

48:36So I was like, so daddy did really well in school. Daddy got good grades. Liar, liar, liar, pants on fire. Daddy got into a good college, and daddy has a good job. And he said, you have a job? And I said, what do you mean? What do you think I do every day? I work. And he goes, you don't. And he's not trying to be funny. He's like, you don't work. You go on your laptop. And I'm like, no, I have a job. And he's like, what's your job? And I said, I run a business. And he goes, he looked at me like that. He goes, the Compound Brothers?

49:11it is funny so i feel like uh being able to do the basics and then some yeah i feel like i have f you money even though it's the not not the f you money for real i i that's a good way to put it so stewart butterfield said this on a podcast number years ago i wrote a blog post it was like the three levels of wealth or i'm not stressed about debt level one level two is i don't care what things cost in restaurants and level three is i don't care what a vacation costs that to me is like Like going on a vacation and not being stressed about what it costs. That's F-you money. What more do you need? Yeah.

49:42Right? Like what more do you need? If you could take your families on vacations and yeah, you might not have the second house or the third house for that matter, but like who gives an F? Yes. But there is, not to belabor the point, but there definitely is a level. Like there is a level where you cross over and the money becomes a liability or a source of stress. Yes. That's what I'm talking about. And I think for a lot of those big CEOs, it's, and the one example people always give me as the guy who actually did it is the guy who sold MySpace like$400 million. It's like MySpace Tom. And all he did was basically travel the world and give his money away.

50:18And he's happier than ever. He doesn't do anything else. He might invest in some startups or something, but he just, he sounds like he has the coolest life. And he decided. So that's, that's the outlier. I have a friend who like knows some rich people. And he said he has like three friends that have had like$100 million exits. And they all say it became like an existential crisis for them. Like their life was destroyed by the money. I'm sure. Okay, Wayback Machine chart of the week. I just pulled this up. This is interesting, talking about frothiness. Is that a you chart or a me chart? That's a me chart.

50:49Number of trading days between all-time highs, and this must have been in 2023 because it was almost 500 days between all-time highs from 2022. Hard to believe. It doesn't feel like it now, but we had a pretty prolonged bear market. I'm saying people forget yeah it was so it was almost 500 days between all time highs what's the line from old school people don't forget Greg was it Greg but people do forget there's no Greg in old school sorry no not old school I'm sorry super bad it's like one of those scenes in the beginning oh yes the kid who peed his pants or cracked his pants or whatever yeah soccer Greg

51:28speaking of comedies so meet the parents did$330 million at the box office. I was thinking about this because they think they did a rewatchable and they were talking about the box office. And then Meet the Fockers did$517 million. 2004, shit. I remember I saw that movie in Florida. Meet the Fockers, it wasn't great, but it wasn't bad. It was kind of funny. The last one was unnecessary. So Little Fockers, which was a disaster, even that did$311 million. So these movies used to really slap at the box office. So it's more than a billion dollars between the three of those. Yeah. At the box. And I'm sure the DVD sales for meet the parents was ungodly high.

52:04Forget about it. So they're doing it. They're, they're bringing it back. They're running it back. I'll, I'll see the next one. There's no way it's going to be good though. Well, I'll still see it. So Ben, you moved to YouTube TV just in time for them to jack up your prices. How do you feel? Damned. If you do damned, if you don't, there's no, that's a few money. See, I don't even care. Yeah. I, I don't know. I like YouTube TV, but I'm still paying for all the streamers. I don't know. It's now$83 a month. Yeah. So this is the Uber model too, where they made it really, really low at the launch. Yeah.

52:36And now they're increasing it. All right. I own the stock. I like it. Because they can. Here's what I don't like. We're just out of ideas. We beat the super movie, the superhero movie themed to death. Craven came out this weekend, Craven the Hunter. By the way, young Michael loved Craven the Hunter when he was on Spider-Man. Big fan of that character. I have no idea what that is. Nobody wanted to see it. It bombed. So they beat that to death. Now we're going to beat to death the remake. So Austin Butler has been cast as Patrick Bateman in American Psycho. Do we need to see another American Psycho?

53:11I mean, I'm going to see it, but. Here's a take that will get me off of the finance world. I didn't think American, I don't like American Psycho. It doesn't do it for me. I know people love that character and the memes and I don't like the movie. I understand. It's like not everybody's cup of tea. I get that. I just wonder how many people have actually seen the movie. It's not that good of a movie. Oh, it's a good movie. I like it quite a bit. I mean, he's good in it. I didn't think the movie was good. Okay. So, Ben, I had been mentioning like IMAX should do more releases. Like this is what we should – we should go back to this as well.

53:47It's more – like I'd see Goodfellas at IMAX. Not that Goodfellas is an IMAX movie. Especially since there are obviously lulls in movie times. in the, like, there are only certain movies that come out that are big enough to fill the theaters, right? So they re-released Interstellar, right, Ben, to 320 screens. And it did 3.5 million domestically and 3.75 million globally. The 10-day domestic re-release total now stands at an extraordinary 10.8 million, the highest grossing IMAX re-release of all time. We're going to see more of this, and I'm here for it. So in McConaughey's book, he talked about, remember the part where he cries because he's basically saying goodbye to his family or his daughter.

54:25Yeah. And in the ship, he says that he did that in one take. So he got, he went over to the corner. He didn't talk to anyone. He went to his dark place and he walked over to Nolan. He said, let's roll. And he did it in one take. Incredible. You know, we've spoken about this. That movie did not, was not that well received when it came out. People's yeah. It's got a long tail, I guess. People love it. I skipped it. I watched it on a freaking airplane. Yeah. I own the movie again. I don't think it's one of no one's best, but I think that's okay to say.

54:56All right, I got a question for you. Go ahead. We did the running thing. Wait, do you want to read this person's story about running through you? No, we got – just shout out to Andrew who had a – He has a funny story about running through the airport. Yeah, had a similar experience to me. Okay, so I asked you this the other day. I went to get a haircut, get my ears lowered, as they say. That's a dad joke. And I think we were on a – filling a podcast and I said, hey, when's the last time you got a haircut? And I thought about it and I said, wait, did you go into your last time sitting at the barber chair and think this is it?

55:23This is the last time I'm getting my haircut ever. Or did it just sort of happen? No. Like, did you walk in and say, this is the last haircut I'm ever getting. Make it good. No. So my last haircut, I'll tell you what year it was. It was 2013. It was before my wedding. But I don't remember the actual haircut. But I do remember for years, I hated getting my hair cut because my barber, who had a wicked sense of humor, would always show me the back of my head as if I didn't know what was happening. Ah, the mirror in the back. That is tough. So you have to see the, yeah. Because otherwise, it's out of sight, out of mind.

55:56It was horrible. I don't know if I've ever told a story in the podcast, but I was so anxious about losing my hair. Like, obviously, I was like very young, so I always wore a hat. And it was like very much something that was like a big part of my life. And it was awful. And I wanted to shave my head for a while. And my Robin didn't want to let me because she's like, just like, I don't want you to like shave your head before the wedding. Like what? No. So I had been thinking about this for years and I finally grabbed the, get the courage to do it. It wasn't courage. Let's be honest. It was, it was forced.

56:28And I'm like, I'm going to be by myself. I'm going to do it. so I take the clipper to my head and I do it and it was such a relief a weight lifted because I didn't know what was underneath there I didn't know what I was going to look like I'd never seen myself bald before so I didn't know if I had any red spots or blotches or whatever so I FaceTime Robin and I'm like not so bad and she goes okay cool gotta go bye and I was like that's it? that's it? She did not care at all. Yeah. That's tough. At that age, I feel for you. I was like 20 when it started to go. It was not great. All right. This is one of my favorite emails in a while from Larry.

57:14Hey, guys. My name is Larry. Hey, what? What was that? What did you just say? Sorry. Hey, guys. My name is Larry. I've been listening to the show since the beginning. Love you guys, but really feel compelled to send an email. This week was different. The first roughly 30 minutes of the show, this is last week. We had a lot of people saying this is one of our best shows because of your storytelling. We're different. During Michael's stories about the Audi fiasco, the Rosenberg electric story, and Oscar Robertson quote, Michael seemed incredibly relatable. As a Midwest public servant, I'm wired to assume that no one in the vicinity of NYC is a man of the people, a la Duncan and Sean.

57:41Michael broke that bias this week. I'm a 40-year-old fireman stuck in Cleveland, Ohio area. I know who, what, the people are. Michael, you are a man of the people. Thank you, Larry. Thank you, Larry. It's been settled. Larry the fireman in Cleveland settled it. That was one of my favorite emails ever. So thank you, Larry. That email meant a lot to me. All right. Ben, there was an article that was forwarded to us by many of our listeners. When middle age arrives in your 20s was from the Wall Street Journal. And they did this cool thing where they said, how old is middle age to you? And they say, see how your opinion compares to other Wall Street Journal readers in your age group.

58:15So they asked you two questions. What ages do you consider to be the start and end of middle age? And how old are you? So I put the dial at 48 to 60. That was my answer. And I'm, of course, 39 years old. You think 60 is middle age? I say that's the end of middle age. No, 50 is the end of middle age. After 50, it's over. You're old? 50 is a new chapter in your life. I'm not saying it's old, old, but middle age is 40s. That's middle age. You are, I can't wait to see you move these goalposts. Sorry. After 50, you're old. No. When I'm 50, I'm going to be old. You're almost 50. I know, and now I'm going to be old.

58:58I've accepted this fact. It's part of life. So, on average, readers think middle age is between 42.7 and 61. 60 is like when people start to retire. Ben, you're not a man of the people. I am. On average, readers think middle age is between 43 and 61. See? You're out of touch. That's because people are out of touch with their own life. Middle age is typically defined as ages 40 to 60. See? It's settled. but about 20 % of younger people ages 25 to 30. How many people live to 120? That's not how it's measured. It's not literal. Okay. 20 % of younger people ages 25 to 34 feel middle-aged. The average 25-year-old says middle-age starts around 37 and ends around 53.

59:39Conversely, the average 65-year-old says it starts at 46 and ends at 62. See, the older you are, obviously the later you think middle-age starts. This is my favorite quote from the article. I still feel like I'm 27. Exactly. See, so when you're 60, you'll feel 40. Here's my favorite quote from the article. The things I care about have changed, says Young, who is more comfortable with people who are 35 to 40. He also thinks he looks five years older because his hair is thin and he has a bald spot. So you know the line from Black Swan author – oh, Talib, I was drawing a blank. He says, don't tell me what you think.

1:00:14Show me your portfolio. Same thing. Don't tell me how old you are. Just show me your hair. I'll tell you if you're middle-aged or not. whether you like it or not, right? What's this email about New Yorkers? I didn't put this one in here. Okay, I don't necessarily disagree, Duncan, but who are the New Yorkers you're talking about? Duncan, if you want to jump back in here, you're more than welcome. The ones who moved here less than a year ago from Iowa or the one who have been here their entire lives. There's an old joke about New Yorkers versus Angelenos that goes, oh, Chris loves to say this. People from LA are nice but not kind, whereas New Yorkers are kind but not nice.

1:00:50The example often used is that if you have a flat tire in LA, people will stop and tell you how sorry they are for you and wish you the best. Send a healing thought but will not help you with the tire. In New York, we'll call you an idiot for how you're driving and question how dumb you have to get a flat in the first place while fixing the flat for you. I think that's about right. All right, I see. It is funny to me that - Duncan, your silence speaks volumes. The East versus West Coast thing as far as that goes. The Midwest people are never involved in these conversations, I guess for good reason.

1:01:17Yeah. Ben, here's a great email. Somebody wants car advice from us, which is kind of hilarious given my experiences with the automotive industry. All right, here's a scenario. My son is turning 16 next month and will be able to get his driver's license. My wife and I both drive modest vehicles that are paid off. She has a 2017 Honda Pilot and I have a 2015 Jeep Grand Cherokee. Both cars have been good to us and look as though they have room to run. My dilemma is this. Do I give our son my 2015 Jeep and purchase something for myself or purchase something for him? I plan on putting$10 ,000 down on either purchase for me or try and find something that my son that's worth$10 ,000 and cross fingers will ask the car.

1:01:58What would Michael or Ben do? First of all, that sounds like way too much money to put down for a car. Yeah, I don't put that much down, but cars cost$34 ,000 now. But if you put down that much money and you get into an accident or the car's total, that money's gone. So I prefer to roll into the lease or the monthly payments, but I would get yourself a new car. Yes. Kids get the hand-me-downs. Definitely. You do not get the kid a new car and you drive the old one. No, no, no. Kid drives the old one. They're going to run it in the ground anyway. Kids destroy cars. There's going to be trash on the floor.

1:02:32You get the new car. We've said this before, but my first car was a 1998 gold Buick Regal, which was a hand-me-down for my mother. Not a cool car. That's okay. But it worked. Ben, what was your first car? Was it a Civic? 1998 Honda Accord. Manual. I had to learn how to drive a stick shift, which was the first time I drove to high school. I stalled it out like six times on the way to school. Could you still do it? Oh, yeah. It's up in the memory bank. It's like riding a bike. And once you got used to it, it was kind of fun. It felt like you were driving a race car. Because back then, you didn't have the cell phone and stuff to deal with.

1:03:06So you could actually, I can't imagine anyone would want a manual drive today. I had a friend in high school that drove a stick shift, and it was very much like a... You couldn't tell, but like, bro, you're going to make me throw up. And I think the reason that... Eventually, the clutch just goes. So it doesn't make sense to have one to drive for a long time. Were you a smooth driver, or were you like my friend? No, I figured out. I could shift pretty easily. I had a smooth shift, yes. We spoke recently about the number of CFA charterholders going off a cliff. conversely in 2024 a total of 10 ,437 candidates took the cfp exam setting a new high for the annual number of cfp exam takers and this makes a lot of sense to me and i'm guessing it does to you as well yes i wrote a piece about this like five years ago someone asked for advice do i do mba do i do cfp do i do cfa and i said cfp there's going to be more need for financial advice in the next two to three decades than ever in history.

1:04:03There's going to be more need for CFPs in the years ahead if that's what you're thinking about. Yep. It makes sense. All right, Ben, I've got a bone to pick with my custodian, and I won't name names. I transferred money. I pulled money from my custodian into my brokerage account from my bank on November 25th. Okay. And I see that the money, only half of it has settled. So I call him to figure out what's going on. And they say that there's been a lot of fraud lately from TikTok. And so they're making money settle longer. So I said, okay, well, it's November 25th is when I put the money in. When will it settle?

1:04:43December 18th. And I said, you got to be kidding me. I know what's going on here. I know exactly what's going on here. You're trying to make money off of this spread from what you're going to pay me on the money and what the money is going to earn, what you can earn on the money. I don't like this. I don't like this one bit. That's a long time. That's absurd. Give me a break. What year is it? So they said, if you pushed money from your bank, from your bank to your account, it would settle in two days or whatever it is. So I'm annoyed. What else was there? Yeah, I'm just annoyed. I don't like it.

1:05:16Blockchain fixes this. You know the funny thing is about crypto? I feel like no one ever talks of the blockchain anymore. Yeah. Right? Remember, it was cool in the early days to say, like, listen, I'm more bullish on blockchain than now on Bitcoin. That was like a really smart, sounding thing to say. That was the playboy. I read the articles. Yes, but I feel like you don't really hear about blockchain technology as much anymore. Oh, here's what I was going to finish with. So I'm like, well, I can't trade because it says you have zero available to trade. He said, you can call it and place the trades.

1:05:47Come on. Like the 1980s. Come on. All right, Ben. Recommendations. What do you got? All right. So did you see this movie Carry On on Netflix, this new movie? I started and fell asleep immediately. Any good? Okay. So it just came out on Friday. That's one of the great things I love about streaming. It's easy to complain about how cable is today and streaming, but going on a Friday night, seeing there's a new movie and just going, oh, yes. Yeah, no, excuse me. Who complains? I know people do, but streaming is wonderful. Stop. Stop it right now. So it's that Taron Edgerton guy who you've probably seen in The Kingsman and a bunch of other stuff.

1:06:17And then Jason Bateman plays the bad guy. I'm not going to lie. Jason Bateman is a bad guy when he's like beating him up in the bathroom. It's not that believable. And I'm going to offer a bunch of nitpicks here. Then I'm going to give my review. So it's way over the top. It's a ridiculous plot. A lot of the stuff doesn't make any sense, and I loved it. Okay. Okay? It was one of those movies where, like, what would you do in that situation kind of movies, right? Like, we're going to hold this person hostage if you don't let this drag through TSA. Does it take place in the airport or on the airplane?

1:06:44All in the airport. A little bit airplane at the end. Okay. And it's over the top. The plot is ridiculous. A lot of the stuff would never happen, and it was very entertaining. Two thumbs up for a sit-at-home movie. I enjoyed it. And it's a movie set around the holidays that didn't need to be set around the holidays. And I think that just gives you a 10 % premium. It happened on Christmas Eve. And Christmas wasn't in the plot at all, but they played Christmas music. And it's like, oh, that made it better. I love it. All right. I watched Gattaca. And I actually asked you, I think the reason I watched Gattaca is because some idiot on Twitter tweeted about how you shouldn't have kids anymore until they figure out how to genetically auto them and make them perfect, which is something only a young person would say.

1:07:23So I watched Gattaca. And I hadn't seen it probably since college. And this is a movie I watched a lot in high school and college. Did we discuss this on the show last week or was it off the show? Off the show. Okay. And it's Jude Law. It's Ethan Hawke and Uma Thurman. And I think Alan Arkin is in it. And a lot of movies from the past about the future don't age well. But this is a movie from 1997 about the future. And it ages so well. This movie is like, dare I say, almost like a masterpiece. It is so good. It's such a good movie. and the guy who wrote and directed this did Gattaca and Trubin show back-to-back years.

1:07:58What a run. Andrew Nichol, I think he hasn't done much since then. And also, since Jude Law was in this, Jude Law and Hugh Grant, both amazing on Smart List in recent months. Hugh Grant might have been my favorite podcast over the last like six months. The guy's hilarious. One more. You asked me for, what's my peak Ryan Reynolds? I've got it. And I, because I feel like you're a Ryan Reynolds hater. That's not true. Right now, it's just friends. That's peak Ryan Reynolds because he's funny. He's arrogant. He's over the top. Oh, that's a good one. It is a good one. It's just friends. That's peak Ryan Reynolds in all his glory.

1:08:32Yeah. And it's a holiday movie, so you can watch it right now. I'm almost certain I saw Van Wilder in the theater. I am not a Ryan Reynolds hater. I don't think Van Wilder aged very well, but I loved it in college. Okay. All right. I've got a lot of recs this week. Where do I begin? I spoke about Blink twice last week, right? Yes, I looked for it. It's not out yet, or I couldn't find it. Okay. So Christian Slater's in Blink Twice. And I thought about this because Christian Slater is in the new Dexter, which I saw the trailer for. It's just, it's too much for me. I rewatched, like, the new Dexter season last year.

1:09:08I think I'm out. Okay, I only saw three seasons of Dexter. I stopped before the good one. But my point is this. You're, like, sort of, like, what happened to Christian Slater? He had, like, this really great career trajectory, and then I don't know if it was drugs or whatever. 80s and 90s. He was huge. Yeah. But he looks great. Still looks kind of the same, right? He aged incredibly well. So credit to him. I saw Smile 2 maybe two weeks ago. I forgot to mention it. I'm good with those movies. I don't need to see a Smile 3 even though I will see Smile 3. It might be too scary. Okay. You're not a Smile guy, right?

1:09:44I don't know what it's about. Okay. It doesn't matter what it's about. It's terrifying. it gets me in the scare area. It is just a very scary movie. I watch it with my hands in front of my eyes. All the scary movies you watch, you still get scared. Very scared. Have you started watching the new Ray Romano, Lisa Kudrow, Dennis Leary show? No. Oh, Dennis Leary's in it too? Owen Wilson as well? I'm a big Dennis Leary fan. Okay, I'll put that on my list. And you love Ray Romano, right? Who doesn't love Ray Romano? It's called No Good Deed. It's going on my list. I'm a big Ray Romano fan. Not exactly sure where it's going, but it's Robin and I are enjoying it.

1:10:23Okay. On the airplane, on the way home I watched a movie called Blood Simple. Have you ever heard of this movie? Is that Jeff Daniels one? No. Take a look on the doc. Okay. So that is that guy. He's the dad from Clueless. I don't know his actual name. He's in Aliens. What's Aliens 4 called? He's the guy from what was the Scott Bakula show back in the day? I can't remember it. What's Aliens 4 called. I'm not drawing a blank. Oh, Resurrection. Yeah, he's in Resurrection. Anyway, and it's young Francis McDormand. So this is the Coen brothers' first movie. Oh, really? I've never heard of it. Me either.

1:11:01From 1984. And it's f***ing great. And you could very much see early signs of, like, these guys are good. It was from 1984. And it's very much one of their movies. I'm shocked. I don't know how I never heard of it. Is that Dean Stockton? Is that how that guy is? Is that his name? I don't know. He's like the prototypical that guy. Quantum Leap, that's the show. Okay. Ben, here's the difference between The Jackal. What's that show called? Day of the Jackal. Day of the Jackal on Peacock and The Agency. So I only saw one episode of the Day of the Jackal, and I'll watch it because it's good enough.

1:11:37They talk to the audience. They're giving you, it's basically subtitles. You know when you watch a show, like Robin watches Law & Order, and you close your eyes and it sounds like they're reading from a script and it's like, what? So the Day of the Jackal, it's more for the common man. I agree. Going back and forth between the agency and Day of the Jackal, you realize like, oh, the agency is way better. Yeah, so there's a scene with Day of the Jackal where he has like, he shoots it from like 3 ,600 yards and they're like very explaining to the audience, like, how could he have done that? The previous record is, you know what I mean?

1:12:08Yeah. Whereas the agency is just very sophisticated. Doesn't do any like of that. They don't hold your hand. Yeah, they don't hold your hand, exactly. They respect the audience. Okay, lastly. Having said that, I'm still kind of in the day of the jackal. It's entertaining still. Yeah, yeah, it's fun. But it's not as good. I'm all in on Landman. It started out cheesy and silly, but I suggest you get on board. It's a good show. Okay. For whatever reason, I'm still finishing Yellowstone, and the last season has been pretty tough. Okay, well, I don't know why you're doing that. Stop watching that and start watching Landman.

1:12:43Your pot committed? You're way easier at just letting it rip. I had to just finish just to know what happened, but I wish I didn't. You know the scene in Curb where Larry says that he's loyal, he goes down with the ship, he hates some of his best friends? Yeah, yeah. That's like you with TV shows. Okay, a lot of people did mention that. Some of your stories last week were very Curb-like. You did sound very Larry David-esque in some way. I did have a Larry David-ish-esque moment. Robin and I went to Peter Luger for our anniversary, and I saw a fan of the show. And she was like, that's it? You're not going to like – I was like, what do you mean that's it?

1:13:20What do you want me to say? I said, thank you so very much for listening. It was tight quarters. He was passing by. What, are we going to like stop him and like tell me about his life? What are you doing here? What does she want from you? Exactly. Okay. She's like, this is how you treat your fans? I was like, what do you mean? I say, if I'm at the airport, I'm much nicer. I'm much friendlier. You and I say, hey, where are you going? How are you doing? Not a man of the people. It's off the table. Back off. Just not good at small talk. Not in those situations. Yeah, I agree. What else are you going to say?

1:13:53All right. We will be here for the next two weeks, right? We've figured out, we've made it in our schedule work. I think the Wednesdays are Christmas and New Year's, but there will be a new episode. We will be here. Listen, the listeners show up for us and we show up for them. Yeah, Michael will be here with his Steve Jobs Christmas sweatshirt on again. This is Mikey Francese. It's Mike Francesa. Come on. It looks like Steve Jobs. It looks like you have a Steve Jobs sweatshirt on. It kind of does, but this is the Pope. This is the goat. Okay. Animal Spirits at the compoundnews.com. We love the emails.

1:14:22Michael probably responds to 75 % of them, and I'll do 25%. 95. That's okay. Anyway, send us an email. Thanks to Duncan and Tima, as always. See you next time.

1:14:39Don't go.

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On episode 391 of Animal Spirits, Michael Batnick and Ben Carlson discuss: the prospects for another 20% year in the stock market in 2025, the U.S. economy is firing on all cylinders, no one is predicting a recession anymore, Hussman is still predicting a crash, why retail traders underperform, chart crimes, when money becomes a liability, when middle age hits, and more!

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