Everywhere Millionaires (EP. 481)

14:57Ben Carlson:You know, I didn't even think about this. I looked. We should tell people this. This is a house cleaning moment. We're going on Wednesday afternoon. So our podcast is going to be late next week. So if you're a usual Wednesday morning listener, I don't know when our podcast is going to go up, but I would say late Wednesday.

15:13Michael Batnick:Oh, all right. Well, anyway, this is going to be advisor focused. And the title of the talk is going to be how to talk to your clients about Ray Dalio. Because it's been 15 years of this guy scaring our clients. Honestly, 15 years of us addressing his comments. He's the only one doing it. And he can't stop and he won't stop. And neither will we. It is.

15:36Ben Carlson:Yes. Yeah, and it's fun. And Cullen is very, Cullen comes with data and he knows. So I think it's going to be very interesting. So if you have Future Proof, come check us out.

15:46Michael Batnick:Just 10 seconds for people that don't know who Ray Dalio is. He's probably the most widely known hedge fund manager. He's not like active anymore. He's retired, but still.

15:58Ben Carlson:He's active at Burning Man.

16:00Michael Batnick:That's right. And he's active on the interwebs. He loves telling people that it's 1937 and he's been on this beat for a while. So we're going to give everybody some talking points, how to debunk some of the nonsense. All right.

16:13Ben Carlson:I got a great stat for you from Duality Research that I read this morning. Go ahead. The biggest takeaway is pretty straightforward, doing kind of like a market what's going on. Since June, the S &P 500 is up less than 2%, while forward earnings estimates have jumped 10.7%. Put differently, the market has become roughly 8 % cheaper over the summer while everyone was busy soaking up the sun. Kevin Gordon tweeted this out too.

16:36Michael Batnick:Wait, one thing on that point. Factually right. To me, the valuation multiples are a reflection of investors' moods. Not to me. I mean, that's not very profound. That is what they are, right? They're a reflection of how people feel about the future today.

16:50Ben Carlson:Yes. Earnings are numbers. Dividends are numbers. Cash flows are numbers.

16:53Michael Batnick:Yeah.

16:54Ben Carlson:Valuations are feelings. Yes.

16:55Michael Batnick:So feelings about the future today. And I love that the market has put a governor on forward multiples. I love that there is disbelief because this does set up the wall of worry, which we need. So what did Kevin Gordon say?

17:13Ben Carlson:So, but this is also, I mean, someone would say, well, this is also rates going up and whatever. But he says at the beginning of the year, the estimate for S &P 500 earnings growth in the second quarter was 14.9%. So start of the year, six months in, like it's not that far into the future. Now the blended growth rate is 53%. I don't think we're talking enough about how not only it's like, oh, of course, earnings are higher because of the cash flows and the CapEx and it's all the AI trade. I think there's a lot of people poo-pooing this. No one expected this.

17:44Michael Batnick:Can I poo-poo and un-poo-poo? Yeah. This is not a poo-poo per se, but you know what's annoying? in these numbers are some of the markups from the private companies. So we have to look at operating earnings. But shouldn't that have been easy for people to determine? But hey, they're going to get marked up. Nobody saw operating earnings either. So even if you say, okay, well, there's markups, fine. The operating income for NVIDIA over the last 12 months is higher than Apple. Jeez. Isn't that hard to believe?

18:19Ben Carlson:That's what I'm, that's why, that's how hard this stuff is.

18:22Michael Batnick:So circular or not, it's still something to behold.

18:25Ben Carlson:That's my point. Like, this is really impressive that this is happening, even if we know, okay, fine, it's not going to last forever. But there was not anyone coming into the year saying, we're going to see one of the biggest earnings growth years ever this year. It wasn't on, it wasn't on anyone's list. It wasn't there. No.

18:42Michael Batnick:All right, Ben, last week you spoke something about, like, dividend. And the overall dividend yield on the S &P is like 1 %?

18:50Ben Carlson:Yeah, barely under 1%. One of the lowest. I think someone corrected me that it was technically like three basis points lower in the dot-com bubble, but we're there for lowest dividend yields in history.

19:00Michael Batnick:So another way to look at this, I thought this was very interesting. Rob Anderson from Ned Davis Research. Less than 5 % of S &P 500 stocks yield more than the 10-year treasury. The fewest since May 2007. All right, May 2007, not the greatest time to invest, but that sentence aside, the post-GFC period was unusual because all of these stocks got crushed and the dividend yields got pushed higher. But look at 1980 through 2000. It looks the same as it does today. This is not an aberration of history. The post-GFC period was abnormal, you could say.

19:42Ben Carlson:Well, and also interest rates were much higher back then, obviously. Oh, you're right. Well, yeah, that is. That's part of it. But still, rates are much higher today too. Yeah, and you're right. This is not like some signal that, oh my gosh, this is crazy. Unless government bond yields come way down, this is the new normal. Like companies don't pay out dividends anymore because it doesn't make as much sense.

20:03Michael Batnick:So to me, I'm not necessarily looking at, well, maybe I am a little bit. Stocks are, I mean, this is just a fact. Stocks are, all else equal, relatively less attractive compared to bonds than they have been for a long time, which is awesome news. Weren't people upset that 80-20 was the new 60-40, that people were being pushed further out on the risk curve? That's over. It's good. Hey, guess what? I had a little thought that I wasn't sure if I was going to share with you or the audience, but inside my brain over the weekend, Ben, I thought to myself, should I own some bonds? bonds in my 401k. So obviously I've been a hundred percent stocks since forever, because that's what you do is a long-term risk taker with a long, long-term horizon.

20:55Michael Batnick:You own stocks. But the thought did cross my brain. I don't know. Should I be 80, 20? And then if, because A, you're getting paid, there's reward in the bonds. And if there is a big stock market pullback over the future, well, now I could take advantage of it by shifting back. And if there's not, I don't care. It's still great.

21:23Ben Carlson:I asked the compound last week. There was a middle-aged guy. I think it was mid-40s. He said, listen, I dutifully sat through the dot-com bubble blowing up and the 2008 financial crisis. And I became a machine. I dollar cost averaged. He said, but now if I see a big swing in the market, I'm losing like more than my salary in that situation. I'm getting, because I have way more money. So he's like, help me try to come up with a psychology of investing in middle age. And I think what you're trying to figure out is like, is it like, is taking some money off the table, not market timing, but is it, is I managing risk a little bit better here?

21:58Ben Carlson:Because I'm so far ahead of where I would have been if stocks hadn't done so well. that maybe like, I shouldn't look the gift horse in the mouth here. I should take the 5 % for bonds.

22:10Michael Batnick:Yeah. So it's not making a stock market call. It's just being prudent. There's an alternative

22:16Ben Carlson:and it's paying you pretty damn well. Right. And most investors still don't care. Now, Bank of America had this chart. This one was kind of flying around social media a little bit. Negative long run return are great entry points. So they look at the last time you had long-term treasury, so they say 15 plus years, and they did the rolling 10-year annualized returns when they were low or negative. And it was saying in December 1959 is the last time that these 10-year returns for bonds were negative on a nominal basis. And they got close in September of 1981. And those would have been way, way worse if you would have included inflation.

22:50Ben Carlson:Now it's saying like, these are the lowest ones ever. Is this a good buying opportunity? It's kind of funny because on this chart, I hate to be a stickler here. 1981 was obviously the greatest bond buying opportunity in history. There will never be a better time to buy bonds than there was in the early 1980s. I don't know what would have to happen for that to come back again. I don't know how AI would cause 20 % short-term threat rates or whatever. It's never happening again. 1959 was kind of a terrible time to buy bonds because high inflation was coming. In the 1960s, you got negative 1 % real returns in bonds because inflation was so much higher.

23:25Ben Carlson:I get this. I don't love this chart. I understand what the show is. People like charts like this, though. Yeah, yeah. Right now is just like back then. And I think people love that format. They do. But this is not, I wouldn't say, this is not a pound-the-table generational buying opportunity in bonds. This is a best buying opportunity for bonds in 20 years. Yeah. That, you have to, I mean.

23:48Michael Batnick:Yeah, and not the same thing.

23:50Ben Carlson:Right. Do you want to talk about Rich Dad, Poor Dad or not? Yeah, let's do it. Okay, I'm fine.

23:55Michael Batnick:This guy is just an all-time bad guy.

23:57Ben Carlson:Well, I got a million people sending me this because I wrote some blog posts about the Rich Dad Poor Dad guy. And I call them Rich Dad Poor Readers. And there was a New York Times, New York Post story saying Robert Kiyosaki is$1.2 billion in debt. I actually read beyond the headline. I don't think most people did. It's not as bad as you think. Like, he was bragging about this. And I guess this is the way that you know that someone is really rich if they brag about being in debt that much. but then i guess his ex-wife said you know what this is like his real estate holdings or something this he's not 1.2 billion dollars personally in debt it's way way smaller and he's like trying

24:35Michael Batnick:to inflate his so is he flexing saying like look i'm so rich that i have the ability to take on

24:40Ben Carlson:this much yes this is he's trying to flex yeah and i think a lot of people said wait a minute this guy is always real against debt in the system and people taking on debt and he's a hypocrite obviously. And my finance joke here was, listen, the guy is finally putting his money where his mouth is. He's preparing for hyperinflation. If hyperinflation is coming, you want all that debt. So I think he's, anyway, I was, listen, I read the book, Rich Dad, Poor Dad. It was on all the top, when I said like 10 best investing personal finance books to read, it was always there. It never made sense to me.

25:14Ben Carlson:I never, I never got it. I never, I was like, oh yes, I know some people like the light bulb goes off. That one to me never did it for me.

25:22Michael Batnick:I liked it. I don't have any, I don't remember any of the points of me, but.

25:28Ben Carlson:Yeah, I guess the, the whole, like it felt like a made up story to me the whole time. So I'm like, I don't know. That part doesn't do it for me. All right. I was looking for something. I think I wrote a blog post the other day about you and I were talking about Gen Z. Will they ever buy homes? And I wrote a piece in like 2014 about millennials saying, Hey, I think millennials are going to be fine. They're going to buy homes. Cause people were saying, at the same time, just like now, millennials are never going to buy a house. They saw their parents get wrecked. Unemployment is terrible. There was all these stories saying millennials are never going to buy a house.

25:57So I was looking for this thing and I found a story I wrote in

26:00Ben Carlson:2016. And you've talked a lot about the low return thing. So this is an article from Bloomberg in 2016. Turning 30 just got a lot scarier. A coming collapse in investment returns means that people that age today will have to work seven years longer or save almost twice as much to end up with the same nest egg as those of a roughly generation ago. So says McKinsey and company in a new report. And they said the golden age of the last 30 years is gone. Exceptional inflation adjusted risk returns in the stock market won't be repeated. Okay, this is 2016. They had this chart, they show like, this is, you can't.

26:35Ben Carlson:Since then, the Vanguard Total Stock Market Index Fund, VTI is up 15 % per year, almost 325 % in total. You know, all right, two points.

26:48Michael Batnick:As you're reading that, I'm thinking, it's so insane that the media is so negative today. And then I quickly reminded myself, it's always been this way. There's always been sensational headlines. And when I say always, I mean, like in the 1910s, this is not a 2026 story. It has literally always been this way. And I thought like, it's so crazy that this is allowed to be printed by legitimate journalists. Credible, Bloomberg, a coming collapse in investment returns. A coming collapse in investment returns. And the average listener, what does anybody know? Oh my God, McKinsey says back in 2016, this seemed very real.

27:31Michael Batnick:It was kind of collective wisdom at the time too. A lot of other people were saying this. Of course it was. All right, my main point is, and I was thinking about this weekend, unrelated to this. So over the weekend, There was a story in Silicon Valley about a company called Instinct, which I hadn't heard of until yesterday. You know about this story, Ben?

27:50Ben Carlson:I'm apparently oblivious.

27:52Michael Batnick:Okay. So over the weekend, Instinct is an AI agent company. And these things are all the rage. They're raising at multi-billion dollar valuations. There's a couple of them. and people were using their machine, their instinct agent to book reservations at Fort Charles and other hard to get, impossible to get reservations. And they were pinging Resi owned by Amix. They were pinging Resi's API like a gazillion times. And Resi looked probably looked like they were being attacked. Like what the hell is happening? So they shut it off. They canceled some of these people's future reservations and just booted them from the platform, say, nope, you can't do this.

28:38Michael Batnick:And as I'm trying to make sense of what's happening, and it seemed fairly straightforward, but I was thinking about a bigger picture. You have to find a trusted source. Here's where I'm going with all this. And I thought, you know what? I don't really want to spend that much time trying to get to the source of truth here. I'm excited to see what Ben Thompson has to say about this, right? He will break it down. I will just wait for his take. Okay. And I'm proud of the work that we've done, Ben, since 2017 when we started this podcast and we're writing long before that about telling people to ignore this bullshit.

29:10Michael Batnick:And I'm very, very, very happy that we are a source of truth for a lot of people to push back against all of this bullshit that is constantly shoved down people's throats. I agree.

29:26Ben Carlson:That was the biggest. That's one of the reasons I started writing in the first place because I was so sick of the negativity coming out of the crisis. I couldn't take it anymore. Speaking of which, this is interesting because, good lead here, there's a great story in the Wall Street Journal this past week that is very positive and it's not falling back on the victim stuff. The American dream is alive and it's minting millionaires. So they talk about Dick Portillo, which is kind of funny. My kids, I can't remember what movie we were watching. My kids can't believe that people used to actually, your name is Richard, and no, now you're Dick.

29:58Ben Carlson:My kids are like, how is that a thing? I think there was a comedian who did a bit on this. How was that ever a thing in the past that people that, like, obviously that's never happening again. No. Right? No. Dickie Greenleaf and Talented Miss Ripley, right? It's just, it's never happening again. Anyway. So it says, talk about how he opened a hot dog stand in the 1960s, didn't know how to cook a hot dog. A century later, he sold the company for a billion dollars, which I still remember the very first time I tried Portillo's. My wife and I, I think we weren't even married yet. We go to visit my brother in Chicago at his condo.

30:28Ben Carlson:We go straight to the bar because we got there late. and we're like, oh, we didn't even have dinner. We got here so late. My brother ran over to Portillo's and got us the spicy Italian beef and brought it back, and my wife and I still remember that to this day. Like, oh my gosh, that's one of the best sandwiches I've ever had in my life. And he talked about, I guess, in his memoir, he grew up poor. He thought he didn't have anything to offer the world. His family was immigrants. They lived in a housing project, and the whole point of this story was there's all these people that came from really, really bad backgrounds, and most of the people who are these big-time millionaires now, most of them didn't come from Ivy League schools.

31:05Ben Carlson:They're just regular people. They interview all these people who started an HVAC company. Not technology, like the way you think everyone gets rich these days. So they talk about, they call them these everywhere millionaires. They say there's 3 million of them, collectively worth more than$65 trillion. Most come from poor or middle-class families, simply because there are 99 times as many people in the bottom 99 as the top 1%. Among star founders, there are two and a half times as many from poor backgrounds as from the top 1%. Only a quarter of business owners worth$5 million or more inherited their companies.

31:37Ben Carlson:And they go through all these different examples of this. And the whole point of the article is, listen, you can complain about how bad things are, or you can like bootstrap and try something. Now, obviously, how many people are actually going to win the lottery like these people? I get that pushback. But I love the tone of the article.

31:57Michael Batnick:I agree. I loved it too. Thank you, Wall Street Journal, for writing this. And also, this was a moment in time. The last, I don't know, 75 years of people being able to do this, that's in the past. Because the next crop of 65 trillionaires, it's just inheritances. Not only, but it's... So in this piece, they talk about these guys who started Dave's Hot Chicken eight years ago and sold the business for a billion dollars.

32:33Ben Carlson:They started it in a parking lot in Los Angeles with$900. You don't think AI is going to help people start businesses easier than in the past? Totally, without a doubt. You're right. It feels like a point in time, like in the 60s, you could start in the mailroom at Goldman Sachs and work your up to be a partner. I agree. That is gone. But I think AI is actually going to make it easier for people to start businesses that would have never started a business before. I agree. For sure. Fair pushback, though. All right. I think we've got to chill out with the college stuff. I feel like there's a lot of people on the corner now, and it's usually like the intellectual elites who are saying the ROI for college just isn't there anymore.

33:12Ben Carlson:It doesn't make any sense. And so there's a story in the Wall Street Journal. Americans without college degrees are having one of the best job markets in years. and it's trying to this i don't know if you saw this chart the chart is kind of doing a lot of work so it's saying in 2026 workers aged 22 to 34 with college degrees face worse relative unemployment than peers with no college degrees now that word relative is doing a lot of heavy lifting here because that's relative to 2003 okay is that you're following me now look at this next Look at the next chart in the same article. Share of population by employment status and age group.

33:49Ben Carlson:What group has by far the best employment prospects? No high school, high school diploma, or college degree. Right. It's not even close. The college degree is still worth it. And look at this. This is from the BLS. Unemployment rates for people 25 years and older by educational attainment, and they have it by less than a high school diploma, high school graduates, some college, and then bachelor's degree. Now, this has certainly shrunk over the years, which I think is a great thing for people that have less education. But it's almost 5 % for people who have less than a high school diploma, and it's 2.7 % for people without a college degree.

34:28Ben Carlson:2.7 % unemployment is just the normal state of being.

34:32Michael Batnick:This narrative that we discussed at the top of the show of everything being taken too far, this is a great example of that. Because I think rightfully so, I don't know when people started questioning college. I'm sure it's been, you know, it's been a while now, but it really started to get loud. Hey, wait a minute. Are we sure that 19 year olds should be making the most important financial decision of their life? Are we sure that, uh,$200 ,000 is an appropriate price because the colleges took it too far and they pushed and they pushed and they pushed until eventually became insane, totally unaffordable corruption, whatever, whatever, just, you know, insane.

35:06Michael Batnick:And over the years, we've gotten to the point where we are now, where it's like, we sure that college even makes sense anymore as a construct? Yes. Of course it does. Nuance gray areas, you know, abound, but we're now at that point.

35:22Ben Carlson:The thing is, though, there's a lot of colleges that are totally screwed in the years ahead. And so my dad went to the small Aquinas College in Grand Rapids, Michigan. What college? Aquinas. Very tiny, I don't know, 1 ,500 kids.

35:34Michael Batnick:Say that word one more time.

35:36Ben Carlson:Aquinas, like Thomas Aquinas, like the, you know.

35:38Michael Batnick:I don't know what that is. Is that a word or a name? Or a category?

35:42Ben Carlson:Have you ever heard of Thomas Aquinas before? Nope. Okay. Look it up. So it's a very tiny school. And he eventually was on the board of the school. And it's funny because if I would have went there, I would have got like a 50 % discount for being an alumni. And they see, they look at, this is pure demographics. People have talked about the fertility crisis coming. If you ask Claude or Chad GPT, number of 18-year-olds in the U.S. by year and extend it out to like 30 years in the future. The number of 18-year-olds falls off a cliff. So these colleges were looking at this going, we see this coming.

36:18Ben Carlson:The number of 18-year-olds graduating high school every single year goes down and down and down and down. And if you're not like a name brand college, you are screwed. So what this college did, I think my dad said like 50 % of the people who are there now play some sort of sport. So they just let everyone play. So they've had to try to do something to get more people to come. Hey, you can come be in the soccer team or the lacrosse team or the field hockey team, whatever it is. But a lot of these little smaller schools like that are absolutely screwed and there's nothing they can do unless we just let in all types of foreign students, which seems to be the opposite way we're going.

36:51Ben Carlson:Right. There was a huge article. That's a natural crisis that that's like you can see coming.

36:55Michael Batnick:There was a huge article in the journal that got a lot of attention about Syracuse having like some sort of enrollment shortage, I think it was, is how they described it. Yes, I sent it to Chris. But I generally forget the narrative stuff. My opinion on this, and I'm extremely unqualified to have an opinion, although I did get kicked out of college twice, so I think I know what I'm talking about here.

37:17Ben Carlson:You also got enrolled twice, so you must have been on something, right? I was enrolled four times back.

37:22Michael Batnick:How'd you get accepted? Okay. Here's my journey.

37:28Michael Batnick:Indiana, Kelly School of Business as an undergrad, Altebrick, pretty good. I did do well in my SATs, even though my GPA was -

37:34Ben Carlson:I still can't believe you ended up in the Midwest. That boggles my mind.

37:42Ben Carlson:It was the best school I got into. All right.

37:47Michael Batnick:Indiana. NASA Community College. Indiana. Queens College. Enrolled four times. That's a good tour. Pretty good. Anyway. Can you say the American dream is dead? The college stuff, the cost.

38:01Ben Carlson:Think about how much money you saved by going to community college, though, right? That's the thing, though. A cheaper version, people who complain about the cost of college, a cheaper version does exist. You can go to community college for two years, pay basically nothing, get all of those stupid coursework out of the way, then go to a bigger school. If you're really concerned about the finances.

38:19Michael Batnick:As an 18-year-old. Of course, you don't want to do that. There's all sorts of social pressures and the parents definitely don't. Listen, I don't want to send my kids to community college. What do you know?

38:30Ben Carlson:I get it, but I'm saying if that's your one big thing is the cost, there are ways around it. People just don't want to do it.

38:35Michael Batnick:All right. Here's one part about AI that I really don't like, Ben. This is super annoying. The questioning everything aspect of it. You see a picture, you repost it. Somebody says, dude, that's fake. And you're like, oh, right. So you do that once or twice. And you're like, hey, wait a minute. I'm not getting fooled again. Fool me twice. Right. What's that line in Tennessee? Yes. So So I've been taking screenshots and asking Claude, which is really f***ing annoying. I don't want to live in a world like that. But that's the world that we live in. So there was a trailer on Instagram for a movie called Gator Face.

39:20Michael Batnick:And I googled Gator Face trailer, and sure enough, it's actually real.

39:27Ben Carlson:So that sounds like a movie you'll go see. It's funny because... Wait, on this AI thing. When we were growing up, we'd play video games. You know when you beat a video game too much and all of a sudden the computer just goes on beast mode and kills you? Like, oh, the computer, you can't do that. It completed this pass or it killed this guy or whatever. When we play video games now on our Nintendo, my son wants to beat all the professional levels on the Nintendo sports. You know, you swing this stuff yourself.

39:53Michael Batnick:Wait, you can't, you can't, like remember back in the day in Madden, you can't even gain two yards.

39:59Ben Carlson:Right. So it's funny. They don't call it the computer anymore. They call it AI. Like, oh, the AI is beating us again. So for them, like AI is just everything now.

40:08Michael Batnick:Yeah. So this movie, Gator Face, Ben, it seems to be that they've combined two of my favorite genres into one movie. It's a slasher or old school style, Ben. And there's also actually alligators eating people. What a mashup. I feel like this was made specifically for me.

40:31Ben Carlson:Okay. My son will watch this too. You're just alligators eating. There probably haven't been enough of those.

40:39Michael Batnick:Look at the thumbnail of the trailer. It's a woman with her head in between an alligator's dress. Say no more. I'm all the way in. Okay.

40:48Ben Carlson:I want to talk about, of course you are. I feel like every time I log on to social media and there's a new model that comes out, people are like blown away the tech the people who know this stuff are blown away oh my gosh it solved this mathematical equation or whatever that the ai can do these math problems it's unbelievable and i think of the newman the newman model the newman thing from jurassic park the yeah nobody cares yeah and looking through the the jobless claims and continuing claims continue to go down the atlantic had this piece about or the new york had a piece about like why has the job apocalypse not happen.

41:25Ben Carlson:Now people keep saying, well, just wait, just wait, just wait. Fine. And Sam Altman said, the economy has so much inertia. I've been trying to think through, like, why has everyone been so wrong about this so far? Like, why has the labor market has not been impacted at all? At all. So you mentioned Ben Thompson earlier. He talked about this book called Getting Things Done, which is productivity thing. He wrote a whole piece about this on trajectory today. And he talked about how no matter how many, and he talked about all the systems he's building to help his like assistants out and like make his life easier.

41:59Ben Carlson:And you hear all these tech people talking about this. I have this system and it checks this and it does this. He said, no matter how many systems you build, you still have to act. It's not enough to have systems to do things. You have to actually do the things. Writing things down is unbelievably powerful. And he's saying AI really is really good at writing things down. Its power will always pale in comparison to getting things done. So AI increases everyone's capabilities if they want to use the systems, but not necessarily motivation. So, and I think his point was like, you can, AI can really help you get stuff done, but you also still have to determine what should get done and what needs to get done.

42:34Ben Carlson:And, and so I, AI is never going to help motivate you. So like you could have all these tools. Think about how many people in the public sphere that we talk about that don't use AI at all. There's all these tools they could be using to make their life easier. And no one really does it. Ben, you're so right.

42:51Michael Batnick:AI is not going to do this on its own, is it?

42:54Ben Carlson:Can't believe you still have it. But is it as simple as that, where, yes, we have these tools and the people that use them can make their life so much better, but most people are just going to go, eh, I don't know. Or to your point about the reservations earlier, if everyone has the ability to say, my AI agent, hey, make a reservation at the greatest restaurant, best restaurant in the town. If everyone's AI agents are doing that, who's going to get it first?

43:21Michael Batnick:How do you have - Yeah, I saw a take that made me want to puke. And this is the type of moment that I think all of us normal human beings are like, stop the train. I want to get off now. I don't like this. Somebody's like, this is a take. Why should reservations be free? Shouldn't there be a marketplace for reservations? Why a reservation for Saturday at 7.30 is obviously worth more than a Monday reservation at 515. Could we just calm down with the capitalism?

43:52Ben Carlson:So this is like paying for the IMAX movie tickets higher. But this is what's going to happen though. So if everyone has the ability to say, hey, AI agent, go book me that trip somewhere. Go book me the restaurant reservation. If everyone can do that and have the AI agents do it for them and wait forever to do it.

44:06Michael Batnick:This is the be careful what you wish for moment.

44:09Ben Carlson:But this is what's going to happen. Guess what happens? The people with the most money are going to get it. Awesome. That's where we're heading, right? Horrible. Or you pay someone to wait, or they're going to say, fine, it's going to be a physical, wait in the physical line. Oh, my God. And you're going to pay someone to do it. Yeah. Yeah. Gross. That's where we're heading. Fun times. All right. So there was this op-ed in The New York Times a few weeks ago talking about how older Americans are hoarding America's potential. And it talked about how the, I know you hate these stories. You hate them.

44:45Ben Carlson:But I thought that, so it talked about how baby boomers have so much wealth and they're holding things back by not selling their houses and all this stuff. And then Boston College did a follow-up piece that I thought was a good context for this.

44:59Michael Batnick:Mr. Moyne is the author, the guy that wrote this, of the forthcoming gerontocracy in America. I'm sorry. What? Is that a made-up word? Well, old age. Oh, is that what that's gerontography? All right. I hate it.

45:16Ben Carlson:I hate all this. I hate the negativity. So Boston College said, are older Americans actually spoiling the economy for everyone else? Like, let's look at this. So they say it's true that one third of owner-occupied homes are owned by people ages 65 and over, even though they represent just one sixth of the population. You're right. Just kill them. I have the solution. Get rid of them. He shows this. This is really good, though. So they look at, they separate that group, 65 and older, into 20%, what do you call them, quintiles? And they look and they show median home equity versus median financial wealth.

45:52Ben Carlson:And for all but the top 20%, home equity basically is the entire wealth for that. For the bottom 80%, home equity is almost the entire net worth. It's only the top 20 % that home equity makes up a smaller share and they don't. So the point is, for most Americans, 80 % of people 65 and older, the home is their financial asset. That's it. That's the wealth.

46:17Michael Batnick:All right, and here's the problem, Ben. We're not letting them tap that wealth because they're staying in their houses too long. So new rule, there is a 25-year limit on how long you can stay in a house. And after that, sorry, old people, you got to go. What do you think?

46:34Ben Carlson:He was saying like, what is the alternative besides like a reverse mortgage or like these people are going to need that wealth at some point?

46:40Michael Batnick:Or after 25 years, your mortgage goes back to zero. It just resets. It starts all over. You think you're at the end? You paid off your mortgage? Nope.

46:49Ben Carlson:So his point was, there really is no good solution to this. These people need the money somehow, but what is it? A reverse mortgage? Like, what else could they do to tap this money?

47:00Michael Batnick:I'm sure those companies exist. Like, reverse mortgages were a problem back in the day, but I'm sure they've gotten better. And when I say I'm sure, I'm not sure.

47:07Ben Carlson:There are options, but it's just saying that you can't just say, oh, these people should just sell their homes and move on. Like, that's not a solution for a lot of people. See, I actually stood up for the boomers for once.

47:17Michael Batnick:Well done.

47:18Ben Carlson:Maybe it's because everyone called me a boomer a few weeks ago.

47:21Michael Batnick:All right. Speaking of boomer, what's with that mustache? Come clean. You did it for me? I love you just the way you are.

47:27Ben Carlson:No, I didn't do it. I kept it for you. I kept it longer. So I've always been a very big fan of theme parties. I think it runs in the family. Get out of here.

47:37Michael Batnick:I never would have guessed that.

47:39Ben Carlson:I'm an introverted person. So the permission to be extroverted, I love it. So in college, we used to have theme parties all the time, you know, the stupid toga parties and dress up. And so I hate him. Oh, I love a good I love a theme. But I think my mom, when they were growing up, they had when she was in high school, they had they brought they moved to a different town and they bought a house with a pool. And every Sunday, my grandfather would have a huge party and they would have I see all these pictures. They would have these toga parties and they'd always dress up in theme parties. All right.

48:08Michael Batnick:So you went to a porn star theme party, a vintage porn star theme party.

48:14Ben Carlson:So at our pool slash boat club that we belong to, it's been there since 1903. It's been there forever, over 100 years. So for the last 100 years, I don't know how this tradition started. So it's open Memorial Day to Labor Day. Labor Day is the end, right? They have one big final. And so you go swimming there, you can dock your boat, and they have a little place you can order food and drinks. And then on the weekends, they have social gatherings. And it's fun. It's right on the water. And the Labor Day party, the last party of the year, is always called the Pirate's Ball. and everyone who comes, they have 200 tickets and every year it sells out and everyone has to dress up as a pirate.

48:48Ben Carlson:And so I said, I could draw a mustache on, but instead I'm going to go out, I'm going to grow it out. Okay, so I grew out my Pirates Ball Must. And I said, this year we have to have a theme. So we did Peter Pan. And so my little daughter, Kate, who like is the princess, dressed up as Tinkerbell.

49:05Michael Batnick:Adorable.

49:05Ben Carlson:So yeah, but my wife and daughter, so my two youngest love this theme. Like they're like this. It's funny, you go around, Everyone is drinking beer. Adults are wearing pirate costumes. Kids are wearing teenagers. Everyone is dressed up as a pirate. It's so ridiculous. But that's what makes it fun because it's so ridiculous. So my daughter and wife have a visceral reaction to this mustache. They absolutely hate it. Why couldn't you just draw one? Why couldn't you use a fake mustache like everyone else? And I said, no, I got to do it. I'm going to do it. I'm going to do it. And I said, you know what?

49:35Ben Carlson:They said, fine, shave it off. The party's over. And I said, I have to save this for Michael. I love it. This is good content. I got to show it. Then I'll shave it off tonight.

49:41Michael Batnick:And you know what? Your mustache grows in very thick. I'm extremely jealous. So I don't really grow facial hair. It was kind of annoying. My brother has a big beard. I don't know what happened. At a bachelor party one back in the day, we went to Austin and I decided to grow up my mustache. Didn't work very well because I also have like light hair. So I dyed it jet black with Just For Men. And it looked, I don't think I have pictures of it somehow, but looked ridiculous. I can't do it. You can, credit to you. You look great.

50:10Ben Carlson:It's kind of uncomfortable. Yeah, I'm not going to half-ass it for the theme parties. It was very fun, too. I liked it. All right. Oh, you mentioned your favorite 80s movies last week, and a bunch of people sent us theirs in and said, hey, you forgot this, you did this, but I thought you had a pretty good list. Well, I didn't forget anything. It's my list. Yes, but just like, hey, you missed this. So someone sent in and said, this is the biggest travesty of Rotten Tomatoes. Rocky has a 38 % from the critics. And so I'm not a Rotten Tomatoes guy. I've always said this before. I'm an IMDb guy. I look at the IMDb ranking out of 10.

50:45Ben Carlson:That's how I make my judgments. I don't like the tomato meter or whatever.

50:51Michael Batnick:Like the movie, the critics and the audience, it's like East versus West.

50:55Ben Carlson:But then you click on the reviews to see who these people are. And it's like this dude with a podcast with five people who listen to him who retroactively went back and gave Rocky a rating because they didn't like it.

51:08Michael Batnick:All right, is this not the greatest? I didn't even look at this until just now. Description of a movie ever. Heavyweight champion Rocky Balboa trains in Siberia for a match against the Soviet fighter who killed Apollo Creed in front of a ferocious Russian crowd. He fights for one final showdown. It's amazing. The montages in that movie? It's the best. It really is. All right, this is a true story. I swear to God. You know, Ben, that I am not in shape, right?

51:37Ben Carlson:I do know that.

51:38Michael Batnick:Okay.

51:38Ben Carlson:Because you talk about it.

51:40Michael Batnick:Like at all, at all, not even close.

51:44Michael Batnick:We did the JP Morgan run. It's like a, it's a 5K.

51:49Ben Carlson:That's right. You and Josh had a big thing over who would finish first. Okay. I put on the Rocky IV soundtrack and I ran for three straight miles.

52:02Michael Batnick:So the first like mile, I was like jogging pretty slowly. I ran three straight miles and I averaged like nine minutes a mile for the three and a half miles and I haven't I haven't even ran a mile in 20 years

52:13Ben Carlson:that's how this is for the 5k or this is you just did this

52:16Michael Batnick:no the 5k okay that's how jacked up that soundtrack gets me and every other little boy that watched that in their childhood

52:23Ben Carlson:it is kind of amazing it gave me like it gave me like superpowers that's a good idea that's a that's a yeah it's an amazing soundtrack too

52:31Michael Batnick:two worlds collide rival nations let's go All right. All right. So this happened over the weekend. At the Telluride Film Festival, the world saw a three-hour-long documentary from A24 by Nathan Felder and a documentarian called Lance Oppenheim. Did you see the trailer for this? Oh, yeah. All right. 34 days before, this is from the New York Times, 34 days before Elizabeth Holmes, the founder of the medical testing company Theranos reported to prison to begin her 11-year sentence for defrauding investors. She invited a camera crew into her rented home in Southern California in an effort to clear her name.

53:13Michael Batnick:Yet the two people she chose to chronicle her life were Nathan Fielder and the other guy. I forget what it's called, but you can see everything. It's a three-hour documentary that I will go to the theaters for, and I think a lot of other people will too. I've never seen a documentary in theaters. Have you? No way.

53:32Ben Carlson:You're going to go to the theater to see this? 100 % So here's my problem with Nathan Fielder I've watched a lot of his HBO shows I know people love this guy It's not for me The problem with his stuff is He tries to make it feel like This could be real Or this could be fake But we're going to make you think that it's real And at my point I just I check out I'm like fine Just tell me if it's real Tell me if it's real If you're trying to make me think something is real But it's really fake That's a part of his that I don't like It just It's so absurd It's like Oh but it could be real But

54:02Michael Batnick:So this is the very confusing part. This is real life.

54:07Ben Carlson:Yes. I don't... It looks obviously crazy. Aren't you intrigued? I'm intrigued. I don't like the tour of these bad people who try to fix their reputation, though. I think, to me, she's just a con artist in Charlton like all the other ones.

54:24Michael Batnick:This is not bad. She's not going to fix her reputation.

54:27Ben Carlson:Well, of course. It looks to me like she's going to come off even crazier and people are going to finally realize how nuts she is.

54:34Michael Batnick:All right, we got an email. I was hoping you guys could elaborate a little since you are both Allen wrench guys who assemble your own stuff. I believe there are two types of people. The kind you throw out, the one that comes with furniture, and the kind who have a drawer full, stuffed with dozens of them in the garage. Which do you both fall into?

54:50Ben Carlson:I mean, when I get a new one, I totally have the drawer because I go through and find the one I used that I liked before and use it again. I have a million Allen wrenches.

54:58Michael Batnick:You have a go-to Allen wrench.

55:00Ben Carlson:Oh, yeah. because sometimes the angles are so hard because you have to like turn it a little and turn it a little and go back, you know? So you want the one that has the thing that you can just keep rotating.

55:09Michael Batnick:So I am somewhere in between. I've kept a lot of the things, but I've never reused them. So from now on, they just, they go in the trash.

55:18Ben Carlson:Yeah, if I find a good Allen wrench, I remember where that bad boy is. Okay, I got one more lake story for you. So I thought about the, you know how people always say that social media is like people just putting their fake lives out, you know? I didn't do a lot of like social media posts, but I did this one. We let my son loves fishing. I talked about this last year. I think we went on a fishing charter for salmon in Lake Michigan. It's pretty cool. In August, that's when they come up and you can get these huge salmon. And we were going to go. We kept getting rained out. And my brother-in-law was going to come.

55:47Ben Carlson:He's a big fisherman. My father-in-law was going to come. He loves fish. I don't like to fish. I just I'm there for the kids. So we got we got up at 445 in the morning to go fishing. And there was a huge lightning storm. So we got pushed back. So we didn't go to the afternoon. So my kids have been up all day. no let's go from four to nine that's what the fishing captain told us and it's just me and my two twins are nine years old and we go out and we throw the lines in and we immediately catch a fish and we reel it in it's really heavy and it's like this is going to be amazing it's easy and then two hours go by not even a bite nothing we're on these waves they're rocking and rolling and my daughter is laying on my lap and she's like i'm starting to get sick i'm getting nauseous we already went through all the snacks an hour ago you know i bought a cooler of snacks it was awful My son, of course, loved it.

56:30Ben Carlson:He's spraying off the deck with the guys. He's learning about fishing. He's, you know, walking around the boat, checking all over. George is a man's man.

56:36Michael Batnick:He sounds like a great hang.

56:37Ben Carlson:He really, he - Actually, he is a great hang.

56:38Michael Batnick:I did hang with him.

56:39Ben Carlson:He's more of an out, way more of an outdoorsman. Like he would work on this fishing boat if he could. The guy said like, hey, you should come work for us. And he's like, dad, do you think they're serious? And then at the very end, the sun is setting and all of a sudden, it's because they put 10 poles out. You just kind of idle along and the boat's moving so that it hooks the fish and you reel them in for like 20 minutes. And at the very end, every single pole finally catches. And we reel them all in and we get this huge haul. But I was thinking, I put this great picture of like all our fish in the sunset, but that has nothing to do with the two hours where I thought I was ready to kill myself.

57:11Michael Batnick:I thought you were going to say that people thought this was AI.

57:16Ben Carlson:That's real. Anyway. So these fish are gigantic. Did you eat them? They fillet them for you. We haven't eaten them yet, but we're going to. So we had way more meat than we needed. Like we gave some away, But they fillet it for you and put it in a bag, and you put it in your cooler and take it off. So yeah, we shall see. But those are all like king salmon. Huge in Lake Michigan. Kind of crazy.

57:33Michael Batnick:Giant fish. All right, what did we get into this week?

57:37Ben Carlson:Recommendations. Okay, I don't know that anyone still watches Apple TV because I feel like they don't market it or something. But the show Silo, I started watching. It's on the third season. I'm sure I've mentioned it before. I think it was a series of books that people really love the books. And the first season is kind of interesting. It's like, why are there these people living in a silo underground. What happened? Was it a nuclear bomb, a chemical attack? What is the reason? They have all these weird rules. And so it was kind of intriguing. And then the second season happened and it was super duper boring.

58:06Ben Carlson:I'm like, what is the payoff here? They're not giving us anything. It sounds like a lost. And then the third season happens and the payoff was totally worth it. Like the second half of the third season was amazing. It was like two, they finally broke it up into two shows. Like here's the silo and here's how they got into the silo. and the payoff of what happened was really, really good. And I don't know if anyone even watched this show still. It was a very slow burn.

58:31Michael Batnick:It's funny you mentioned that about the Apple TV thing because Chris said, text me, Dark Matter is back. I'm like, I don't even think I, I don't know what that is. I don't think I saw that show. And I looked it up. I'm like, oh yeah, I really enjoyed that show.

58:44Ben Carlson:Yeah, it was good.

58:45Michael Batnick:I read the book. Was Joel Edgerton, is that Jennifer Connelly or am I thinking of somebody else? Yes. Okay. I enjoyed the show of the first season. I remember what was two years ago. But these things on Apple, it's just weird. They sort of come and go.

59:00Ben Carlson:They had a new Ryan Reynolds movie this weekend. Came out of nowhere. Also finished Furious. They didn't really land the plane, but I thought it was a good show. The finale wasn't, I felt like, ah, they didn't land the plane very good, but it was, I really liked that show on Hulu. I got one for you since you're a Hollywood stories guy. The Rob Lowe book is fantastic. Oh yeah? It's so good. he talks about how he grew up down the street from Martin Sheen so he hung out with Charlie Sheen and Emilio Estevez when he was a teenager Robert Downey Jr. was in his high school he knew Tom Cruise from The Outsiders it feels like name dropping in a lot of ways but in the best possible way great great Hollywood stories totally worth a listen finally I watched Backrooms because I know it got kind of lumped in with obsession like hey these young filmmakers I know there was this thing on, it started as a YouTube show, I guess.

59:53Ben Carlson:I'm sure you watched this movie. Of course, I watched it in the theater. Yeah. See, I loved Obsession. I don't get the point of this movie. I don't understand it at all. It didn't make any sense to me.

1:00:04Michael Batnick:Did you enjoy it at all, or you just hated it?

1:00:06Ben Carlson:I thought it was very intriguing. The first, like, 45 minutes, it's like, okay, it kind of, like, was weapons to me. It's like, wow, this is a very intriguing idea. I wonder where they're going with this. And to me, the payoff wasn't, I was like, oh, okay I don't see the point of that yeah I didn't didn't do it for me I didn't I didn't necessarily

1:00:23Michael Batnick:love the payoff either but I just love that it happened like I had a good time in the theater I was had no idea where it was going I thought the opening scene the opening scene scared me do you remember the opening scene they're just walking I could I could tell within the first

1:00:37Ben Carlson:five minutes like I'm not gonna like this movie okay it's yeah it's not for you well but I tried it. All right.

1:00:45Michael Batnick:Our friend Sam Rowe, I saw him tweet about the Paul Giamatti episode from Black Mirror. Are you a Black Mirror guy?

1:00:50Ben Carlson:I watched the first season. I haven't really watched it since.

1:00:52Michael Batnick:There's a lot of gems in there. And I missed this one from last... You know what? You would love this episode. Okay. It's 35 minutes long. It's Paul Giamatti. Somebody knocks on his door. I can't remember the setup, but it's like, whatever. Somebody died and he has to get involved with the funeral somehow. And it's like a visceral, sad, flashback-y type of episode that only Paul Giamatti could have done. He is unbelievable. You know, my problem with Black Mirror, though,

1:01:29Ben Carlson:it's like reading a short story. I feel like I need more. I know it's very intelligent. Some of the ideas that they have in it are really cool, but I can't just have a one episode. Watch this episode.

1:01:39Michael Batnick:It's 35 minutes. All right. I'm telling you, you're going to love it. Okay. All right. This is interesting, Ben. You know, I have that like fire, the Amazon, is it an echo? I don't know what it's called, but it's on my kitchen. It's on my, like my island in my kitchen.

1:01:52Ben Carlson:It's like a mini TV, right?

1:01:53Michael Batnick:Yeah. So it's probably, I don't know, 15 to 20 inches wide. We don't have a TV in my kitchen, but we have this thing instead. And so it's where we, we listen to music. The kids watch whatever they're watching in the morning. and I love it because it cycles through my old photos. Oh, yeah. And it'll show like my kids in 2018 versus my kids today. And I just love, love, love that aspect of it, that every single day I see a photo that makes me happy. And there's also advertising in it because of course it's Amazon, right? So for whatever reason, Ben, this movie, Bad Lieutenant, kept getting flashed on my screen, like for a long, long time.

1:02:36Michael Batnick:And I just thought it was very strange and it is very strange. And it's about to get -

1:02:40Ben Carlson:Is that a Nicolas Cage movie?

1:02:41Michael Batnick:It's about to get weirder when I tell you what this movie is. Okay. So I knew nothing about this movie. I'm laying in bed one night last week and I see it that I could watch it. It's with Harvey Keitel and it's rated NC-17. Okay. This movie was from 1992 and I'm guessing was incredibly controversial at the time. I've never even heard of them. Harvey Keitel plays a corrupt, psychotic, deranged policeman. And there is a full frontal to end all full frontals. Unbelievable, Ben. Unbelievable.

1:03:21Ben Carlson:When I read your description of this in the doc, I thought you were going to say that when your pictures cycled through, there was a full frontal picture that came up. That was actually a scene in the movie. So this is genuinely one of the most inappropriate, I don't know what other, which is just sick,

1:03:36Michael Batnick:sick, sick is the word. One of the sickest movies I've ever seen. And I can't believe that Amazon was advertising that on my screen next to my dog slash baby photos.

1:03:49Ben Carlson:It knows how deranged your movie taste is.

1:03:51Michael Batnick:I think you're, you're a hundred percent right. It says a lot about me and less maybe about Amazon. Not a recommendation at all, but I'm sure there's some listeners that have seen this movie back in the day and it just, holy shit. Holy shit, Ben. Yeah, you could skip that one. Lastly, I finally finished Friends and Neighbors season two. It took me six months to get through it. I'm running out of time, Ben. Like the gentleman came back on Netflix. I don't know when I'm going to have time to watch this. Because my kids are going to sleep later and later these days. So Kobe goes down at 9.20 and then I'm straight into bed.

1:04:23Michael Batnick:I can't stay up. so I'm in bed at 940 I put something out I sleep in five minutes so my TV my TV viewing is going to take a hit which is fine that's the way it goes but I but anyway but I really enjoyed season two pretty good right I really liked it for as insane and over the top and nonsensical as it is I think there's a lot of humanity there which is incredible considering how how big a pieces of shit most of these people are yes the storylines get a little

1:04:52Ben Carlson:over the top but still like Like somehow they bring it back to the - The funeral episode that you mentioned. It looked really good, right?

1:04:57Michael Batnick:Fantastic. It was just real shit. So I really enjoyed that a lot more than I thought I was going to. All right. Next week, we will be in California talking to an audience about how to talk to your clients about Ray Dalio. Excited for that. Excited to see everybody. Best event of the year.

1:05:16Ben Carlson:Next week's show will be a little late. I'm guessing late Wednesday, early Thursday, probably. So we're probably a day behind for next week because of when we're recording. And if you're at Future Proof, come to high, there'll be 5 ,600 other people there-ish. I can't wait. My favorite part of Future Proof is that very first cocktail hour. And you and Josh and I walk down those stairs, and you look out, and you just see people as far as the eye can see, shoulder to shoulder. And you have the sunset in the background of the beach. That, to me, is like my favorite. Like, oh my gosh, this is amazing.

1:05:46Ben Carlson:I love it every year.

1:05:47Michael Batnick:That's my favorite theme party.

1:05:49Ben Carlson:Right, there you go. Yeah, all right.

1:05:51Michael Batnick:All right. animalspirits at the compoundnews.com as always you send personal emails you get personal responses thank you for listening we'll see you next time

1:06:13Ben Carlson:hello look what TJ Maxx dragged in The Devil Wears Prada 2 is now streaming on Disney Plus and Hulu We are digital, we are downloadable, we are streamable.

1:06:24Michael Batnick:The fashion event of the year is certified fresh. Pull yourself together, we have work to do. Critics say it's smart and witty, and the perfect sequel. That's all. Get runway ready for The Devil Wears Prada 2 on Disney Plus and Hulu.

1:06:39Ben Carlson:Rated PG-13.