Home Buyer's Remorse (EP. 458)

11:10Ben Carlson:Dividends are kicking in a little and P's have contracted by 10%. So the reason that stocks are down is because valuations have fallen. Now you could say, Hey, wait a minute. That does kind of make sense. Inflation might be higher. Like, you know, these things do happen where earnings and stock prices don't always exist in the same. They don't always follow each other. So that could make sense. But I think that if this is a blip, this is a taco liberation day kind of thing. You're going to go, man, there are some cheap stocks out there that were getting bombed out that I could have bought.

11:40Michael Batnick:Yeah. Um, so the sell-off makes sense. I'm not saying like people are being stupid for selling their stocks. I understand why the stock market is falling. We had a bunch of emails about the taco stuff. And this is a very fair point. It takes two sides to taco in this case. It's like, what if Trump is like, all right, mission accomplished, we're done. And then Iran's like, well, we're not done. Like, we're not done.

12:06Ben Carlson:This is not as easy as the tariff thing. I totally agree with that. There's a lot more going on here.

12:10Michael Batnick:So Duality Research has a similar chart that Matt did where he breaks down the sector returns of the S &P into the price return, the EPS growth, and the PE multiple. And every sector has positive earnings growth, every single one. And the only three sectors with multiple expansion, obviously energy stocks and utilities and staples, but where it really matters, technology. earnings are up 18 percent 18 percent and yet technology stocks are down 12 percent that's 25 percent multiple compression i actually think that some multiple compression is warranted in tech

12:58Ben Carlson:stocks of course it is with all the money that they're spending and they're becoming more asset heavy and less asset light and less intangible like it the valuation compression there makes a lot of sense to me.

13:09Michael Batnick:Yeah. So, so two things can be true. Two things can be true. Um, the market is, the market is sniffing something out that doesn't smell too good. Redpoint did a big report on what's going on in software. And they estimate that 95 % of the current price action is by terminal value. So that's why all of these companies, Adobe, Duolingo, where you see their earnings per share at an all-time high and the stocks are down 70%, yeah, the market's not dumb. It doesn't matter. It could put up record earnings for the next six quarters. But if the market believes that ultimately Adobe's business will be a fraction of what it is today in 10 years, that's all that matters.

14:01Yes.

14:02Ben Carlson:And that's why stock picking is hard because you could probably buy a basket of companies right now and be okay. But if you try to buy a few stocks that you think, well, the market is wrong because I got the P and I got the E, I can calculate that. It's not as easy as that.

14:16Michael Batnick:Yeah. So anyway, interesting market as always. Carl Quintanilla tweeted, this is from Goldman, since the start of the war, long only trading activity on our desk has essentially been non-existent. It is eerie. I worry that we are now approaching the point of this conflict where the long-only community will become unfrozen and start cutting some real risk. I think every day investors are looking at the screen and, you know, market fell yesterday, tried to open higher, sold intraday. But where is the trapdoor down 3 % day where the VIX gets to 45 % and people like... Now, there's always a camp in a correction.

14:54Michael Batnick:There's always a camp that says you need capitulation. I don't know where that comes from. I mean, I get it. You need people to really throw in the towel. I understand where that's coming from. You don't need it.

15:04Ben Carlson:to the vampire squid though but are we really i can't really put goldman in the same bucket as like the long-term vanguard target date investors like those are real long-term investors i don't put goldman in that bucket no offense it didn't say long term it didn't say long term it said long long only sorry long okay sorry long only yeah so you mentioned the volatility being normal thing i just had to i've been totally clawed pilled i just want to go on record saying this took me probably took me too long dude wait till you discover coffee it's but it's by far the the it's by far the best financial analyst of all of the LLMs.

15:37Ben Carlson:It's not even close. Is that fair? From our perspective and what we use it for? Yeah. So I did this thing where a chart can Matt help me create this chart that showed just volatility is normal, right? And the number of drawdowns since 1928. And we looked at 10%, worse, 15. And someone said, okay, Ben, what's the forward return from there? I said, all right, yeah. You know, I've probably done this in the past. So I just said, at the end of a month, the S &P finishes down 10%, 20 % or 30%. What do your forward returns look like? Okay, so I still had to do some calculations because I want to make sure I get these numbers right.

16:07Ben Carlson:I don't quite trust it 100 % yet. So I did some calculations really quick. It takes me five minutes. And then I upload that spreadsheet to Claude. I say, I need you to figure out from these dates, mix and match these returns that I calculated with these specific drawdown points, right? And it does it immediately. Now, this probably would have taken me, if I did this five years ago, like I would have by hand, it would take me two hours, probably. It did it in 30 seconds. And oh, by the way, it said, hey, just so you know, I color-coded these drawdowns for you, and I color-coded the gains as well.

16:39Ben Carlson:And I calculated the average returns and the win rates. Okay, so I still have to go and check these because I want to make sure. But it just shows, look at the win rates. If you buy at the, again, this is the end of the month. And the reason I did end of the month is because I like total returns, right? I'm not a price return guy. I'm a total return guy. But the win rates are all in the 90%. If you just buy down 10%, your average returns going forward are like, for the next 12, 36, and 60 months are 15, 42, and 72. Like, it's pretty good. They're all pretty close if you buy down these 10, 20, or 30%.

17:09And the win rates are all 93, 94, 90, 99.

17:13Ben Carlson:Like, it's really, really high win rates if you buy stocks that are down.

17:17Michael Batnick:But when you don't win, you lose bigly.

17:21Ben Carlson:Yes, obviously. Yeah. I thought this was kind of interesting, too. Now, some people will say, like, why does it matter how long it takes the Earth to rotate around the sun, right? Why do we care about calendar years? I don't know. This is kind of fun. So since 2009, and I knew this.

17:37Michael Batnick:Wait, hold on. You think calendar years are kind of fun, but birthdays aren't? And to be clear, I am not a birthday guy. So even though Ben is a birthday Grinch, it's not like I'm like, oh, everybody text me to celebrate my birthday. I don't like to celebrate my birthday. In fact, I hate to celebrate my birthday. So I am not a spotlight guy. I get social anxiety in large crowds like that.

17:58Ben Carlson:Last year in Miami, you did that. I did what? you got socially anxious when everyone was celebrating you in that steakhouse with the fireworks and yes yeah so that i don't get anxious about a lot of things but it makes me sweat i just

18:10Michael Batnick:really feel uncomfortable in those situations for my bar mitzvah i get so uncomfortable that i had like a sports party because my nightmare was for bar mitzvahs they bring the boys and girls out and like all the people look at them and they dance with the dancers and like that's that's the worst thing for me so anyway back to calendar years ben let's let's hear why you like calendar years

18:26Ben Carlson:Since 2009, there have been exactly two down calendar years in the S &P 500. Okay? It's really 17 years. There's been two down years. 2018 was negative 4%. 2022 was negative 18%. Okay? That's it. Those are the only down years that we've had since 2009. So far, 2026, as of the closed Monday, was down 7%. The point is, down years don't happen that night. Now you can say, well, this has been an extremely great run. So from 2000 to 2000.

18:58Michael Batnick:Who cares? Give us a down year. I mean, I don't want to, I don't want to, I don't want to fall 30%, but if we fall, if the S &P closes down 7 % this year, is that, is that the end of the world?

19:07Ben Carlson:No, that's what's funny. If the S &P closed down 7%, it would be the worst year. It'd be the second worst year since 2008, essentially. It's just crazy to think about that. Like right now, that's how good investors have had it. because, yeah, the market fell at four out of 10 years from 2000, 2009. So my point is that, like, this is...

19:28Michael Batnick:And to be clear, investors have had it so good, and they have, because companies have delivered so good. Yeah.

19:35Ben Carlson:And now, obviously, two down years, but there's been plenty of corrections along the way. That's what I'm saying with going on with Sun. Okay. Torsten, I just think it's fascinating to think that as much worry as there's been, there's been literally two down years in almost two decades.

19:49Michael Batnick:All right, so this is my whole point about as much anxiety about the market and the economy with AI as people have. And the market's only down 9%. Right. I just don't buy that we're whistling past the graveyard. Sorry. I mean, it's, you know, maybe there's a lot of egg on my face coming if there's a financial crisis that I missed, but I don't know. Not my base case.

20:11Ben Carlson:Okay, so Torsten Slott says the same thing. Markets are too focused on the near-term challenges from higher oil prices. The real tradeoff for investors is four to six weeks of instability, paying off 50 years of stability in oil market supply chains and geopolitics. The Gulf region will be more stable and even more closely integrated with the global economy. And I put the Tobias Fumke thing in here. Did it work for those people? No, it never does. But these people somehow dilute themselves. I think it might, but it might work for us. What's this meme from? It's an Arrested Development one. I might have to rewatch the whole first three seasons of the show.

20:46Ben Carlson:It's one of the great sitcoms of all time. And it's full of memes that you don't understand. And the thing is, it wasn't a popular show and it's not. Wait, hold on.

20:55Michael Batnick:Is that Bateman and Will Arnett?

20:57Ben Carlson:Yes. It was like, that was Bateman's comeback, essentially, from being in non-existent forever. That was his, and Will Arnett's. Did you watch The Madison? I did not yet.

21:06Michael Batnick:Okay, Will Arnett makes a very interesting appearance in that show. Not exactly the person I thought would be on screen. Okay, all right.

21:14Ben Carlson:I feel like there's too many Taylor Sheridan shows I can't keep up with all the shows

21:18Michael Batnick:we'll get to that later what about DTF the Bateman show

21:23Ben Carlson:yes I'm still into that one I like it I can see how some people would be turned off by it and wouldn't like it I think the guy from Stranger Things his name is escaping me when he does the sign language I think he's hilarious in this show it's very funny but anyway my point is I just, the idea that this is all of a sudden things in the Middle East are going to be fixed. I feel like every president has said like, I'm going to go in and fix the Middle East. And I just don't think it's fixable for us. I don't think we can fix it.

21:57Michael Batnick:Well, yeah, there's, there's been thousands of years of conflict. I think you're probably right, Ben. All right.

22:02Ben Carlson:So my worry is like, okay, Iran goes, oh, the straight up Hormuz is more important than ever. Like we're going to use this as a choke point. This is going to be a worry for the next 20 years of them using it as a choke point. Like, I can't imagine this is the last we're going to hear about this. Even if we say, all right, we're done. We're out of here. Like, this is more important than it was before this. So I don't, I don't, 50 years of stability. I don't, I don't buy that at all.

22:24Michael Batnick:No way. Yeah. I don't think anybody buys that. I mean, hello, were you born yesterday? The Bloomberg made a chart of the difference between European gas prices, natural gas specifically, and U.S. and look what the fracking revolution did to our country and our energy independence, which was very much a political issue in the 2010s, right? That was a very heated argument, and it turns out energy independence is a good thing.

23:01Ben Carlson:So my new audible is I'm listening to How the World Really Works. Baklav Smeel is his name. I think I can pronounce that right. And it was one that I tried to read and I just couldn't get through it, but I put on audiobooks. And the whole point of the book is everyone, a lot of people think that fossil fuels are bad and they're really bad for the world and they're destroying the world. But he says like, we would not have gotten to where we are as a society without fossil fuels. And it's looking at kind of both sides of this and saying like how much more energy efficient we've gotten over time.

23:33Ben Carlson:And it's kind of like the leaps forward are insane, but it's an interesting look at just like, listen, the world is not the way it is if we didn't have fossil fuels. You can hate them if you want, but it's anyway, interesting look at it.

23:45Michael Batnick:So what this chart is showing is that our natural gas prices are basically unchanged over the last four years. There was a blip, short-term spike that came back down, but look at what it's doing to European gas prices.

24:02Ben Carlson:I'm really interested to see how much bigger the European response is going to be because they have to think, listen, we didn't do anything. We didn't start the Ukraine-Russia war and we got hope. Our energy prices spiked. We didn't start the Iran war. Our energy prices spiked. Like what is their response going to be? They're not just going to sit there and take this, are they? Forever? I mean, I just wonder if their fiscal defense spend is just going to go through the roof. Because they can't just sit there and take this every time something happens that their energy your prices spike and ours don't.

24:34Michael Batnick:I just asked Claude, okay, roughly 40 % of European homes use natural gas as their primary heating source. And it's higher in other countries. So yeah, this sucks for them a lot. Right, yeah. Like this really hurts. I guess the good thing is that it's not the winter, but still.

24:57Ben Carlson:They don't use air conditioning in Europe. So in the summer, they're going to be okay. Everyone just walks around sweaty with BO. So it's like medieval times. All right, so I put this price of, I put the long-term chart of US retail gas prices in here. The spike is insane. How quickly it went from three to$4 a gallon. I continue to think that if we, it's just a temporary spike. I don't think gas prices matter anymore. Like I know people see the big signs and they get angry with them, but I don't think for the economy, gas prices matter all that much. Is that a dumb statement?

25:30Michael Batnick:Yeah, it's pretty dumb. You sound like a coastal elitist.

25:33Ben Carlson:I don't think a short-term spike, I'm saying for the economy, I'm not talking about people's pocketbooks.

25:38Michael Batnick:Yeah. For the overall economy, does a short-term rising gas prices matter? I don't know. Probably very, very, very much on the margin. I don't think you'll see this in the data.

25:51Ben Carlson:That's what I think. It's going to be marginal if it's just this short-term spike. All right, DFA had a cool chart. They looked at the correlation between oil price changes and energy sector returns from 1964 to 2025. And the correlation was 0.29, which is kind of shocking. You would have think oil and energy would move in lockstep. I don't even, I don't believe this. Look at the chart. You don't believe it?

26:13Michael Batnick:Nope. If this is trying to show that energy stocks don't react to the direction of oil prices, then I reject this chart. Okay, so they show, for example, oil was up more than 100. Over the long term, it might not matter as much as you think. Fine. Nobody, not everybody lives in 10-year periods.

26:33Ben Carlson:But they're showing annual returns. They're showing 12-month periods, okay? And they say, for example, oil was up more than 150 % in 1974. Energy stocks fell. On the other hand, energy stocks were up in 2025, despite a market drop in oil prices.

26:47Michael Batnick:So what? Everything, every stock fell in 1974. And every stock rose in 2025. This chart doesn't do it for me. Sorry. Not impressed.

26:55Ben Carlson:I think the point is there's a lot of people who think energy stocks are a perfect, like, why buy oil when you can just buy energy stocks? And the point is, it's not always a one-to-one hedge. That's the point. Have you seen energy stocks? Yeah, they're doing well this year. But the point is, it's not always like that.

27:13Michael Batnick:Yeah. Okay.

27:15Ben Carlson:All right, you're right. Rejected. Recency bias wins. Reject the historical data. You're right.

27:19Michael Batnick:Oh, what? Because in 1974, energy stocks fell?

27:22Ben Carlson:This chart is crap. They show every year since 1964. How about this? Okay. There's no rhyme or reason to this chart. That's the point.

27:29Michael Batnick:Show a chart. Show this data presented differently. Show me rolling 30-day returns of energy stocks. And I bet you this looks a lot different. Yeah, you're zooming in. I'm zooming in.

27:38Ben Carlson:Okay, the zoom out is 12-month period, though. I think that's not like a totally like takes away all the little.

27:44Michael Batnick:It's a zoom out. Okay.

27:48Ben Carlson:Agree to disagree. All right. No, you just agree to not trust the data sometimes. You're a data truther at times.

27:55Michael Batnick:Nope. You can manipulate the charts to show what you want. That's fair. I'm not a data truther. The data is the data, and I don't like the way that this data is presented. All right.

28:04Ben Carlson:I think it's interesting. The correlation being that low is surprising is all. There's no – I think the whole point is that –

28:11Michael Batnick:Energy shocks don't last 12 months all the time. You're measuring the wrong thing. All right.

28:17Ben Carlson:So I mentioned before, like, tech valuations probably should be compressed. and this chart from the FT, this is the reason why. So it shows revenue generated per dollar of fixed assets. And for Facebook and Google and Microsoft and Amazon, it's going down, down, down. And for Apple, it's continued to rise a little bit because they're not spending money. All this means is that there's just much, these companies are going more from intangible to tangible because of all the investments in AI. And it will be very interesting to think, like, listen, we had to do this, but is this the thing that finally changes this cycle?

28:48Ben Carlson:Of the tech premium. but but it's more than a short-term blip is this this changes it maybe forever like this yeah this whole 15 year cycle or whatever we've been on this is the the ai thing is the thing that finally changes it the cost of data centers and the cost of compute it's going to finally change this this is a very this is a very plausible story i could buy this so if these companies were up were we're living in a world of 40 % to 70 % operating margins

29:21Michael Batnick:with high cash flow. And now this is, we have reached an inflection point.

29:28Ben Carlson:And that's the thing. And people go, wait a minute. Earnings are still growing 15 % per year. Why is my stock going down? Or why is the valuation compressing? I think that's going to be a thing that people are saying about a lot of these stocks going forward. I don't get it. That's what happened to Microsoft after the dot-com bubble. Earnings were growing like crazy and the stock did nothing. People are going, this doesn't make any sense. Why isn't it matching the fundamentals?

29:48Michael Batnick:Yeah. The difference is the stocks were, the valuations were absurd back then. So like Facebook is trading at 16 times forward earnings. So yes, obviously, obviously investors are saying timeout. This is not 2021 anymore. But I would also argue that at 16 times forward earnings for Facebook, and 20 for Microsoft or whatever, the re-rating has sufficiently de-risked these stocks. I'm not saying Microsoft is a screaming buy today, but I think if you could put the stock away for a couple of years, I think you're going to make money.

30:29Ben Carlson:Duncan asked me the other day, all these stocks that have gotten crushed, where would you look? And I said my boring answer, and we talked about this on Ask the Compound, I could go through a lot of different charts, is just, I think you'd probably say, if I wanted to go bottom fishing right now, these stocks are down 30 % or more. Every time Meta and Microsoft fall like this.

30:49Michael Batnick:If you're going to bottom fish, bottom fish and a mega cap name.

30:52Ben Carlson:Yeah. And guess what? One of these times, maybe you're wrong and it takes a lot longer to come back, but that's where I would do it. That's like the safe answer, I would say.

31:00Michael Batnick:We had a really good podcast. Josh and I did a really good podcast with this guy, Jonathan Boyer, who's a value investor. And I said to him, like, there's no extra points for difficulty with investing. And if you are a value investor and you're buying stocks because you think the market is wrong, the burden of proof is really high. And guess what? Most of the time, most of the time, the market's not wrong. And buying 52-week lows is a really, really, really, really, really bad long-term strategy. So I asked him, why not just wait until these stocks stop crashing? I'm not saying that you can know when the bottom is, who can, but why at least like wait for some sort of signs that, okay, the selling has stopped, right?

31:40Michael Batnick:Like it's not, the stock's not crashing anymore. It bottomed, it rallied, it fell, it failed. Like it's gone sideways, some consolidation. And he basically, he had a good, he had a good answer. He said, I do. I buy over time. And that's as good of an answer as any. So just for the listeners, like if you, you know, I wouldn't say don't go all in on a stock that's in free fall. That's not a great, that usually doesn't work out well.

32:01Ben Carlson:You don't blow your whole wad on the first dip, right? Because you're probably going to keep dipping.

32:08Michael Batnick:All right. 2025, it turns out, was a really, really bad year for stock pickers. 79 % are to perform. Man, I thought it was going to be a stock pickers year.

32:17Ben Carlson:Shoot. Well, 2026 is. Should be. No, it is. No, yeah. I'm saying it should be. We don't know how the stock pickers are doing.

32:27Michael Batnick:Okay. That's a good point. So yesterday, the equal weighted index was flat. It was down 1 % in the year. And the S &P was down 7%. So by definition, it is a stock picker's year. I hope they picked the right stock. So I hope they avoided the mega. I hope they were underweight. Listen, they're underweight. If you're not a closet indexer, that's the point.

32:44Ben Carlson:Yeah, yeah, yeah. I'm sure they have a lot of year. Are you a closet indexer? That's what you figure out. Yeah. The crazy thing to me is that I wrote about this a little bit after we talked about it last week. If you look at the, for this Beaver report, if you look at the 10, 15, 20-year numbers, and it's across, it's not just large cap. It's small cap, mid cap, reads. It's all these different categories. International. It's something like 90 % to 95 % of active managers underperform the index. And my baseline was always for index funds. And I don't even make fun of me on index funds. But I assumed it would be 70%, 75%.

33:16Ben Carlson:That seemed like a good baseline to me. That's how many active managers we all perform just because of costs and fees and all that stuff usually. The fact that it's been 90 % to 95 % is kind of insane to me. I didn't think it would be that high.

33:30Michael Batnick:Yeah.

33:30Ben Carlson:You could say this is the hardest period ever for stock pickers, and I wouldn't argue with you. But the fact that it's that high is pretty crazy to me. The fact that, like, indexing became so, so popular, and people were talking about it being a bubble, and it's going to lead to all these things. And guess what? It worked better than it's ever worked in history for indexing. That's the crazy part. All right. This story from the Wall Street Journal was flying around. People love to share these charts. They're rich but not famous, and they're suddenly everywhere. everywhere. The number of Americans worth eight or nine figures is up markedly.

34:00Ben Carlson:It's transforming the U.S. economy. Now they show this chart and they show there are 430 ,000 U.S. households worth $30 million or more.

34:08Michael Batnick:Hold on. Time out. 430 ,000.

34:13Ben Carlson:Isn't that crazy? And this is as of 2022. So this number is definitely higher. 74 ,000 people that are worth$100 million or more. okay even adjusted for inflation the wealth of the top 0.1 percent of households has grown more than 13 fold over the past 50 years again adjusted for inflation that is a face-blowing stat that's hard to believe yes so they show they break this down they show the number of households by 30 million and up 50 million and up and 100 million up but again they're adjusting for inflation for these figures and the 100 million one just keeps going up even 50 and 30 is kind of a little more volatile but there are so so many rich people these days and this is why there's there's like rich person anxiety too you you saw that viral story from the new york times last week about the couple in new york who makes 500 000 a year and they say they're middle class okay that shit really pisses people off oh yeah rich people claiming that they're working class people for good reason that's if you have make a half a million dollars a year in the top one percent but this is why those people feel that way because they go yeah sure i make half a million dollars a year but i'm not worth 30 million dollars like my neighbor is park avenue or whatever like and

35:32Michael Batnick:i just 430 000 households are worth 30 million or more you sure that's as of 2022

35:40Ben Carlson:yeah it's insane right yes as of 2022 because that's the last day to the fed fed data for this

35:47Michael Batnick:All right. And think about how much more the stock market is up, which is where all the wealth is since then. So what is it now? 700 ,000? That's the thing. That is honestly like a, that is hard to believe. Wow.

35:56Ben Carlson:2022 was also a bear market. So think about that. There's, so yeah, it's, it's probably now 600 ,000. So a couple of things here. One, I think if you take this and the fact that it's not just like the top 10 % of the top 5%, it's really, it's not even the top 1%. It's like the top 0.1%. 0.1%. Yeah. I may be even short here. In the next 12 years, we're going to elect a socialist president in this country.

36:21Michael Batnick:No, don't say that.

36:23Ben Carlson:Rubbers. With AI, AI is going to make inequality worse. Okay? Think about what happened in New York. This is going to happen on a national basis.

36:31Michael Batnick:I hope the rich people collude and have as much power as we think they do to make sure that we don't get a socialist president.

36:37Ben Carlson:I'm just saying, if this trend keeps being in place and AI is going to make it worse and we see all the corruption going on in the government right now, okay? We are going to elect a socialist president.

36:46Michael Batnick:All right, so I don't know -

36:47Ben Carlson:Mark it down right now.

36:49Michael Batnick:Anything about -

36:50Ben Carlson:Obviously, I'm not saying I want that. I'm saying this is going to happen. This is where the country is going, I think. But isn't it really expensive

36:58Michael Batnick:to put somebody in office? It is. So where does the money come from to get a socialist person to the top?

37:07Ben Carlson:How did the guy get elected in New York? I don't know. I think it's different at the national level. all right i just i think that's i think we're going down a bad path here is all i'm saying i think that's where we're heading well yes this is this is tough because again ai is going to make this worse ai is not going to make any quality better it's going to make it worse but why why you're going to be able to start a business with far fewer people guess what that's more That's more money in the hands of fewer people.

37:42Michael Batnick:Let me ask you a question. I'm being serious. So when we say wealth inequality is going to get worse, let's just assume that the bottom, I don't know, 10 % will see no improvement from AI. The bottom, bottom of the K. What if AI lifts 70 % of the economy?

38:07Ben Carlson:Then it would be a miracle technology if it did that.

38:11Michael Batnick:I don't think it's like, I don't think it's been decided that this is going to make things a lot worse. I'm not saying that it's going to make things better. So that's not what I'm saying. But I don't know that we can say that.

38:23Ben Carlson:I'm more sure about this than anything right now. Really? Yes. AI is going to make inequality way worse. Think about starting a company with fewer people and you keep all that equity yourself. All right.

38:37Michael Batnick:Let me read an email that we got. Okay. This is actually exactly what we're talking about. I own a manufacturing firm in the rural Midwest. Cutting to the chase, my production people employees are generally lower quarter in IQ. Now, this sounds mean. I don't think this person is trying to be mean. It's hard for many people to imagine, but if I asked them to pick a half gallon, 1 % organic milk out at a grocery store shelf, they would be flummoxed. Too many ideas to hold at one time. Let's remember what AI is, artificial intelligence. In the same way the barcode scanner allowed a new cohort of people to be checkout people versus keying in all groceries or how spellcheck helps some people communicate by fixing almost every word, the adoption of AI actually extends the runway of employment for lots of people that graduated high school with a fourth grade reading level, which is a sixth of the population.

39:36Michael Batnick:He said one sixth of the population can't qualify to be in the military due to low IQ. So this is a real issue. That's wild, but whatever. Different topic, I suppose. In short, the AI doomerism about it spreading the gap among haves and have-nots forgets that a lot of have-nots can use even the simplest AI to extend their skills in the workforce. That's a good alternative.

40:01Ben Carlson:Yes, I hope so. Yes, I agree. The ability to do it will be there.

40:07Michael Batnick:A lot of these discussions, because obviously the same thing with every discussion, it's either all good or all bad.

40:12Ben Carlson:Yeah, right. The barriers to entry have been completely flattened if you want to learn about something, right? You can ask as many questions as, yeah, you're right. If you want to learn about a specific topic, it can give you step-by-step, But yes, it's there. The ability is there if people take it.

40:28Michael Batnick:Wow, 430 ,000 people with$30 million net worth. It's just unbelievable. All right, here's another one. So Delta, speaking of the upper end of the K. So Delta Airlines, they said, our consumer is really healthy. We live at the top end of the K that people talk about, the premium end of the K. And that's where over 90 % of our revenue is sourced from. the group of folks that want to travel. They're investing in themselves. They're investing in the experience economy. We've seen eight of the top 10 sales days in our history this quarter, and five of those within just the last two weeks, within just the last week of this past March, even with fuel prices, even with the war going on, our bookings are up 25 % year over year.

41:11Michael Batnick:So I'm sorry. I'm not sorry. I just think that the stock market is leading a lot of the discussion right now. And assuming that we don't get a recession, that earnings don't contract from the point of view, the stock market, it's the oil market that's leading the discussion,

41:26Ben Carlson:right? This is good. This is good stuff. For years, we talked about when will the travel boom stop? Remember we thought it was, okay, this is just people are going to take a couple trips after the COVID and then it's going to stop. And it hasn't stopped at all.

41:37Michael Batnick:30, 30 million. I mean, okay. I keep hopping on the 30 million. Go down like two steps. how many people are$5 million? Right.

41:47Ben Carlson:And what stops them? All right. Back to my socialist stuff here. This is from Alison Schrager at Bloomberg posted this. Financial nihilism is generational. And it's saying that more young Americans say they feel behind financial and believe speculative investments will help them reach their goals. Now, it says 80 % of Gen Z feels this way and 75 % of millennials. I understand the zeitgeist behind these kind of things. But I think if you look at the difference between people online and people in the real world, it's never been starker. Because the whole thing that people think that this financial nihilism exists, and the only way you can do it is by speculating on crypto and prediction markets.

42:25Ben Carlson:And what percentage of the population is that really? It's people online who talk about it. If you go in the real world, most people are happy. Most people are doing fine. When you talk to regular people, they're not like dread.

42:36Michael Batnick:I don't think most people are happy. I wouldn't go that far.

42:39Ben Carlson:But I would say most people aren't miserable. Yeah, most people you interact with on a regular basis, when you go to your kids' games and when you go to the school events and when you go out to dinner at restaurants, do you see people who are moping and unhappy? No, most of the time you see people smiling and having fun and laughing. And I think this idea that everyone is miserable and everyone wants to just speculate because their life is horrible, that's supremely 100 % online people and that's it. The real world is not like that.

43:04Michael Batnick:I could not agree more. Okay. So yes, more than a kernel of truth as to why people are doing this. And there is a segment of the population that's doing this, obviously. It's not all nonsense. But this idea that it's like an epidemic.

43:20Ben Carlson:I think the number is something like two to 4 % of people who gamble on sports become totally addicted and it ruins their life.

43:26Michael Batnick:That's a way higher number than it should be. And it's not everyone else. And two to 4 % of people that are doing it, unfortunately, is probably hundreds of thousands of people whose lives are ruined, whose family's lives are ruined. So it's f***ing tragic, obviously. But let's not conflate that with the idea that everybody is like that.

43:45Ben Carlson:All right, so you started out with the recession stuff. I use Claude again, and I said, hey, so the National Bureau of Economic Research, they're the ones who say it's a recession. And usually they tell us like six months later. They have to wait for confirmation. They have these six different indicators they look at to determine are we in a recession or not. And they have to look at the weight of the evidence, right? They look at payrolls and personal income and consumption and industrial production and households, employment, and then manufacturing and trade sales. And I did this. I said, Claude, make me a dashboard of this.

44:17Ben Carlson:And they show. Is it weakening? Is it positive? Is it slowing? So right now, it basically says elevated watchfulness. That's what Claude tells me. My little French buddy, Claude. Um, this is certainly the, I'd say like the worst state the economy has been going into one of these conflicts. Is that fair to say? Yeah. I think that's where, that's why I think that's why people are worried.

44:44Michael Batnick:The economy is, is flat, flat to weak.

44:47Ben Carlson:Yes. I think that's, if you look at this data, you'd go, yeah, it's, it's flat. It's not, not doing great. It's not doing horrible. It's just, it's okay. Yeah.

44:56Michael Batnick:Speaking of Claude, how do you feel? We haven't spoken about this. How do you feel about the A24 remake of Bloodsport?

45:03Ben Carlson:Oh, really? I don't know, man. Can they find a guy with a chest as big as him that can make a dance like that? What was the guy's name? Chun-Li or something? The bad guy?

45:13Michael Batnick:What's Chun-Li's name in real life? That guy was terrifying.

45:18Ben Carlson:I had to introduce my son to Van Damme the other day because he's watching Expendables 3. And he goes, wait, who's this guy? The new bad guy is Van Damme. I said, ah, we'll have to get through his catalog too, I guess. I love Van Damme.

45:29Michael Batnick:George will love Sudden Death.

45:32Ben Carlson:Yeah, you're right. He will like that one.

45:36Michael Batnick:So good.

45:37Ben Carlson:He knows all these guys now. Every single cheesy action star is in Expendables at some point.

45:44Michael Batnick:So, for the younger audience, Jean-Claude Van Damme was this really handsome, amazing kickboxer. Martial artist, I suppose. He's not a kickboxer.

45:54Ben Carlson:The kind of guy who would never be in movies today because there would be too much unintentional comedy.

45:57Michael Batnick:Yeah, it was just The movies are hilarious. He's an artifact of the 90s. Yeah. So in Sudden Death, there's a bomb in a hockey stadium. Is it Pittsburgh? Is he a penguin? I can't remember.

46:11Ben Carlson:He becomes the goalie. He becomes the goalie. I saw that in the theater with a friend, and we were just like, I don't know.

46:19Michael Batnick:No, no, no. In the 90s, you did not question it. At least I did. I mean, I was too young to question it. I probably thought that could happen.

46:26Ben Carlson:He made a save because he was like, yeah. It was... So good. The 90s were a simpler time. Much simpler time. A lot of self-awareness back then.

46:36Michael Batnick:All right. Torsen Slott. No signs of AI replacing offshore workers. So they're looking at... This chart's super blurry. But he said, we are monitoring the unemployment rate in the Philippines and India for any signs that AI is reducing the need for outsourced workers in corporate America. So far, there are no signs of AI replacing offshore workers.

46:55Ben Carlson:So I feel like my AI thing is inequality. your AI thing is labor replacement, right? We both have our sort of like doomerism. We're dabbling in doomerism for AI. At what year would you have to say, okay, I was wrong about this. Like what year would the unemployment rate have to spike enough to be like, okay, fine, maybe this isn't going to happen. Would it be like 2028, 2030? Like at what point, if the unemployment was still like five or 6%, would you go, okay, AI is just not having material impact like I thought it would?

47:21Michael Batnick:That's a good question.

47:23Ben Carlson:I would love to know what the end date is. Like end of this decade, If we haven't had a huge spike in unemployment in productivity, like then maybe it's just not going to happen.

47:32Michael Batnick:I don't even think you need to go that far. I would say if by the end of next year, the labor market looks similar as it does today, then yeah, we should be okay. Right.

47:45Ben Carlson:Because again, we're still not seeing mass layoffs. We're not seeing, it's just people have kind of stopped hiring and it's,

47:50Michael Batnick:but it's hard because it's never just one thing because what if there's a recession? Are we going to blame AI for that?

47:57Ben Carlson:I do think the recession will be the thing that like, do people get hired back? That's when you'll really know because in a recession, people don't, they, the companies don't mind link. They'll, they'll lay off. They don't care. Will they hire people back? That'll be the tell.

48:09Michael Batnick:Check this out. So, um, I mentioned red point earlier, the, uh, Lincoln bio, what do we call it? Uh, Lincoln, Lincoln show notes. If you, if you want to see this report, they have a chart showing, um, so it's a, it's a 2026 market update. They go deep into software and venture and what's going on and all that sort of stuff, comparing public markets to private markets and valuations and all that good stuff. All right. So I thought this chart was fascinating. They're showing the top 20 largest VC deals as a percentage of total enterprise software funding. And it was eight, six, and 7 % in 2020 through 2022.

48:46Michael Batnick:Then it spiked to 23 % in 2023, 31 % in 24, and 44 % in 2025. 25 and uh open ai and anthropic and xai are sucking up all of the funding so just like the public markets private markets are extremely concentrated yeah everything is it's concentration all the way down right that's right ben that is interesting i also i saw a chart from belchunas i didn't put in the show notes about people complaining about how concentrated the u.s stock market is and then he showed it compared to the rest of the world if you look at south

49:24Ben Carlson:korea which has been extremely volatile market lately huge run up and now it's i think it's down 20 now two stocks make up like 45 of the index it's way more concentrated elsewhere yeah i think japan is really the only one that's more diversified than us all right um mike duda said this tweet let's talk about crypto total crypto market cap is flat over the past five years despite significant inflation from existing protocols and plenty of new protocol launches you don't need to look particularly far beyond this chart to understand why crypto sentiment isn't great right now so obviously this is going from a another peak obviously a little bit so but still this is kind of crazy all the i guess all the vc dollars that poured into crypto all the different protocols all the different layers it is pretty surprising at this point that more hasn't come out of it besides bitcoin essentially being well stable coins is a huge huge industry i would say Also, one of the other problems with crypto is that I'm doing, this is not my world, but I'm just assuming that a lot of the talent is gone and is now doing cool as shit in AI and probably not going back.

50:26Ben Carlson:That was the thing where it was like everyone is going to work in crypto now. This is the new cool thing. Obviously, AI is probably that. Now, I tend to agree. So what's going to be the, are we ever going to get the thing for crypto? Is it just stable coins? That's it? I think if that's the outcome, most people in crypto would call it a failure. From what they laid out at the beginning of this, I think if stablecoins are the thing, that would be looked at as like, we didn't do what we set out to do. Is that fair?

50:52Michael Batnick:I would agree. I would agree. But it's still a$2 trillion asset class.

50:57Ben Carlson:It's still, yeah, that was effectively created out from thin air. Yeah, so.

51:03Michael Batnick:Market check. S &P is up 1.5%. The NASDAQ is finally bouncing. NASDAQ is up 1.7%. I don't know if there's news or not, but all right.

51:12Ben Carlson:The news was last night. basically what happens basically trump said like even if we don't take back the straight of harmus i'm willing to end the war he's ready to he's ready to call it like all right so i said

51:25Michael Batnick:what happened last night actually um and in any other day but i would have known what happened but guess what i finally blocked twitter on my phone okay i do wonder i got i got this thing called Brick, and I installed it yesterday. What does it do? And so I blocked Twitter on my phone. I can't go on Twitter. I do think about that. So I have not checked Twitter in the last 24 hours.

51:50Ben Carlson:Because of Twitter, I see all these headlines, I see these stories, and there's all these stories people are talking about. And I often wonder, like, there's obviously people who aren't on it who never have any idea these things are happening. Because most of the stuff like this reported on Twitter, it rarely jumps into actual news lexicon or like the big, you know, sometimes Twitter moves the news, but all the stories that people pay attention all the time, that's just online people paying attention to them.

52:16Michael Batnick:So I mean, it's on my computer, so I'm still here. But the reason why I did it, I feel like most of the time that I'm on Twitter on my phone is when I'm home with my kids.

52:29Ben Carlson:Yeah, that's not a good feeling.

52:30Michael Batnick:So I don't need to be on Twitter and laying in bed with them, obviously. All right. Let's keep moving. All right.

52:39Ben Carlson:Torsten Slack had the housing update, and he shows the average monthly mortgage payment on a new 30-year mortgage. Okay, and it goes back to January 2000. And this thing is remarkably stable from January 2000 to January 2020. Obviously, housing prices crashed. Mortgage rates came down. But it's kind of crazy that the monthly mortgage payment wasn't that much higher in January of 2020 than it was in January of 2000. I think this period they're going to look back on and go, that was a historical anomaly. That will never happen again.

53:13Michael Batnick:So this is also obviously, obviously, a huge part of why people are pissed off. So we mentioned 20 minutes ago that a lot of it is social media and true. Yes, social media is amplifying it. But the spike in inflation that we're still living with, the unaffordability of home prices has nothing to do with social media and everything to do with this just genuinely sucks.

53:36Ben Carlson:I have a movie idea. I'm going to pitch you. Okay. You want to now or? Yeah, right now. So I think there's two premises in movies that always work for me. Body swap and time travel. Those two premises always work. So here's what I'm going to do. Okay. Movie producers, feel free to call me. I'll help you with the script.

53:54Michael Batnick:Hold on. The last body swap movie on Netflix was awesome.

53:57Ben Carlson:Which one is that? Is that the one that you, me and you watched together where they sit in a circle and swap bodies? Yes, Body Swap Netflix. That was called It's What's Inside. Yes, you gave me that one. That was awesome. That was a very good movie. I watched it and then I made my wife watch it with me. I like that one too. That's a very good movie. So here's what I want to do. My Body Swap movie is going to be a baby boomer, okay? Has to be a young person now with housing costs where they are. And a young person now, so a Gen Z person, has to go back to 1980. Okay? When housing costs were way lower, but there was no technology, nothing to do.

54:32Michael Batnick:Let's send Ramp Capital back. Ramp loves to hate on the boomers.

54:37Ben Carlson:It's going to be a person who's a boomer swaps into a young person today to see what it's like. And a young person today has to be a young person back in 1980 when housing prices were lower, but there's a lot less to do. There's a lot less technology. So that's my body swap movie.

54:50Michael Batnick:All right. So if Ramp goes back to 1980, immediately he does the Jack from Lost. We need to go back. Yeah. So there's got to be some. Nobody wants to go backwards. No social media. Yeah. Come on. Nobody wants to go backwards. That's a good premise. All right. So last week, we were talking about people potentially regretting buying a house. Yes. And speaking of socialism and housing, there was a line in the book, The Prize, which I finished, which was a long-ass book. Good listen. It was the history of oil, which is obviously the history of economics and policy and the world. And that was a great book.

55:30Michael Batnick:So there was a line in there from this guy, Bill Levitt, who started Levittown, one of the first suburbs on my island. And he said, no man who owns his house and a lot can be a communist. He has too much to do.

55:45Ben Carlson:We could use more Levittowns in this country.

55:48Michael Batnick:So I thought that was a nice segue into this email that we got. In June 2024, so this is a person who's like, yeah, guys, man, buying a house. In June 2024, we closed on a three-bed, two-bath ranch in Long Island. You may recall I reached out about two years ago. Okay. Oh, this is the guy who reached out about how his friends became competitors. Remember that? Oh, yeah.

56:08Ben Carlson:Like buying a house?

56:09Michael Batnick:Yeah. So he said, while my wife and I don't have full-blown buyers or more, holy shit is this home a money pit. All right, so here's how it's gone so far. June 2024, it closed on the house. June and July, new water heater, 2 ,500 bucks. We knew it was old, but didn't realize the prior owners were living with lukewarm water. By the way, I'm living through that. Not great. I went out of hot water at like 9 o 'clock.

56:35Ben Carlson:Wait, isn't that in the inspector? The inspector missed that? Oh. I'd go back to the inspector and say, hey, I want a refund. You missed this? Isn't that one of the things they're supposed to inspect?

56:50Michael Batnick:Love it, Ben. Thank you. Good idea. All right. August 2024. One week after our daughter was born, rain coming through the ceiling, new roof, 12K. January 25, basement renovation. All right. Self-inflicted, he said. Fair enough. June 2025, two AC units died. And it would have been 6K to replace all of them, so we want central air, which he said was the best decision they made. 14 grand. December 2025 new dining room table and couch

57:17Ben Carlson:I'm like adding up these things in my head

57:19Michael Batnick:yeah that's a choice but nevertheless table and a couch April 2026 winter destroyed our old front porch bricks falling off beyond patching 10k not including the landscape and we'll need now so and this you know this is like this happens this is what owning a house is this is a particularly shitty experience but so yeah I mean, needless to say, anytime, oh, our parents bought a house for$200 ,000 and then 30 years later, it's like, hey, buddy, first of all, that's 2.4 % compounding over 30 years, you know, compound interest. But what about taxes? What about all this stuff? Like, don't tell me that a residential home is, your primary home is not an investment.

58:00Ben Carlson:So my parents bought their home. My parents have lived in the same home since 1991, still live there. And the house is probably built in like the 1970s. And they've spent more on renovations, I'm sure, than they paid for the house. Between new siding, new deck, new hot tub. Probably two times over. New floor. Yeah, exactly. New windows. They replaced the whole house, essentially. Are you a hot tub guy? I think we've done this on the show. I do like how my wife has been pushing. My parents have had them for years. My mom goes in it every single day. She's home. She's in the hot tub at least once a day.

58:32Ben Carlson:She brings a book and a beer, and she goes in it. That's her thing. Every day, she relaxes in the hot tub.

58:37Michael Batnick:A book and a beer. I love it.

58:38Ben Carlson:Yeah. Good for her. I mean, I could go for a hot tub, yes. my wife has been pushing for him for a while

58:46Michael Batnick:who's not a hot tub person

58:49Ben Carlson:guess what I would much rather have a hot tub than a cold tub

58:51Michael Batnick:alright so when you come here we're going to go to Chris's house we're going to schvitz and we're going to sauna and we're going to cold plunge I don't want a cold plunge

59:02Ben Carlson:how about this I prefer a hot tub to a sauna

59:07Michael Batnick:I like both

59:09Ben Carlson:yeah I don't mind but yeah cold plunge you're not going to Pay me to do that. Okay, let's talk private markets a little bit. This is from the Blue Owl CEO. Or Blue Owl something. There was a big story in Bloomberg about this. The industry could have done a better job explaining these dynamics in terms of illiquidity, how it's hard to get out. Between us and the advisors who sell our products, I don't think we made it clear enough. I can't believe they said this out loud. I don't know who has the worst PR team, people in private credit or AI people. Because they say a lot of stuff that they probably shouldn't be saying out loud.

59:42Ben Carlson:Like that's the whole thing. Like you, you have to talk to your clients about what illiquidity risk means, how hard it is to get your money out. That's the number one thing with these products.

59:52Michael Batnick:Hotel California.

59:54Ben Carlson:It is. Uh, do you want to get into all this other stuff, but like what stops these redemptions? And I don't know if that, I don't know if there's anything new to say on private credit at this point.

1:00:04Michael Batnick:So yeah, it's a, I guess just there's so much to say, but I do want to say this. One of the, one of the, um, problems that is not discussed enough is if you could get your money out. Now, I don't think anybody's actually doing this. So maybe this is sort of hypothetical, but if you could take your money out of private credit out of one of these intervals at NAV, right? Which is basically at an ultimate high. If you can get a dollar out for a dollar and then you could turn around and buy a publicly traded BDC that's trading at a 25 % discount, why wouldn't you do that?

1:00:40Ben Carlson:right i'm sure that people are doing that that's what matt levine said like what if the underlying assets are really worth 80 cents not 100 but you have to pay out nav so you're getting more money than you probably should right now so what stops this paradoxically

1:00:53Michael Batnick:what stops this is if these private funds the private bdcs and the interval funds if they say all right you got us we're going to mark it down by 15 percent then maybe investors say ah you know what? We'll just ride it out. Problem is I don't think they can afford to mark these things down because of the leverage requirements. Because then they're even more upside down on the leverage. And then do banks start pulling some of these financings? So that's a bit beyond my pay grade, but it's not that simple.

1:01:29Ben Carlson:So their hope right now is just that these redemptions

1:01:31Michael Batnick:slow down and it's more slow down but it might take but it might take six quarters but i think

1:01:38Ben Carlson:we're learning way more hot money in this space than that people thought one of the big big problems here is that the media is all over this and it's not their fault um i mean some of it is

1:01:51Michael Batnick:but it's not like like this is their job to report on this stuff um and the real problem is in terms of like selling redemptions is that guess what? If 20, 25 % of these portfolios are in names that are going to be impacted by AI and these companies will be impacted by AI and there's more bankruptcies and there's more reporting on the bankruptcies, there will be more redemptions. And I don't know what slows that down. So this could be a minute. Now you would think at some point after, I don't know, 10 quarters of 5 % redemptions. If you were going to sell, if you were going to sell, you probably would have at that point, but I don't know, man, this is going to be, this is not going away overnight.

1:02:34Ben Carlson:No, it's not the thing like the public markets where if something comes back, you go, okay, and if I'm not going to sell it now, like this, this is, these are long held assets. It's not like this all of a sudden rectifies itself quickly. I can't believe that they're still thinking about that. They're still rubber stamping and green lighting the putting alternative assets to 401k plans. This is going to be a disaster.

1:02:53Michael Batnick:So great timing here from the U.S. Department of Labor. They released this yesterday. U.S. Department of Labor proposes a landmark rule to democratize access to alternative investments in 401k plans. It's just wonderful. Great chef's kiss. Nailed it.

1:03:07Ben Carlson:Think if advisors and their clients aren't able to stick with this stuff, people in 401k plans, this is going to be an utter disaster. I hope most 401k plans don't do it.

1:03:18Michael Batnick:is a target date fund.

1:03:20Ben Carlson:That I kind of agree with. Yeah, that makes the most sense to me.

1:03:25Michael Batnick:And I would trust Vanguard to steward that process. If they want to have an option, but it's got to be an option. It's got to be opt-in. It can't be forced into these target date funds. It's got to be like a different share class or not whatever, a different fund that people opt into.

1:03:41Ben Carlson:Yeah, I don't know. There's no way that's going to work. All right.

1:03:46Michael Batnick:So, so, uh, Ben, I teased earlier about, about you discovering coffee after Claude, you, you got into seltzer. How did, how did this even happen? Like, how does one get into seltzer, uh, at, at the ripe young age of 40, however old you are?

1:04:01Ben Carlson:I never was big enough. I think my wife probably had more of a pop addiction than I did for like diet Pepsis. And she said, you know, I have to stop drinking so much. So I'm going to start drinking these seltzers. and I started drinking them too and found some I like. The Whole Foods brand one is really good. Just, I like simple sparkling water. That's it. I don't like the flavors. Yeah, I don't like the flavors very much.

1:04:22Michael Batnick:Although, let me ask you a question. So I call it seltzer, but I think some parts of the country call it club soda.

1:04:29Ben Carlson:What do I, I don't, I'm trying to think of what I call it. It says sparkling water on the case. That's what I call it, I guess. Sparkling water. Yeah, that works. Sure. All the same. Sounds cuter, right?

1:04:37Michael Batnick:Oh, this made me laugh. So subject line, the cable guy shit in my toilet. That's pretty good. I had to laugh this morning when listening to the most recent episode where Michael brought up the repair guy shit in his bathroom again. The cable guy was at my house two weeks ago to repair spotty internet service. He was in a completely different part of the house and proceeded to shit in my bathroom without asking. I would have had no idea, but he decides to help me on his way out. I'm curious if he was flexing on me or just being polite. I live in Milwaukee, so I'm guessing it was the Midwest polite thing to do.

1:05:11Michael Batnick:So, um, sneaking one in that's, that's a, that's a move. So when he said, I would have had no idea, but he decided to tell me, I emailed him back. I said, what did he say? Something along the lines of, Hey man, I had to use your bathroom. Had a colonoscopy yesterday and my stomach hasn't been this.

1:05:41Michael Batnick:and then the emailer chef kissed this and said i guess it could have been worse at least he did

1:05:46Ben Carlson:an upper deck me wow that's basically i i totally blew out your toilet you should have it cleaned

1:05:53all right before we get to recommendations my wife used my own advice against me

1:05:59Ben Carlson:so uh kids got really into michigan basketball this year they're one of the best teams uh and they were playing their regional matchup this weekend in chicago not that far from us right less than a three-hour drive they won their game on friday they play again on sunday after my wife said let's surprise the kids with tickets to the michigan game they have michigan tennessee michigan's favorite let's go watch the game and i was like no it's kind of expensive and you have to drive down there. You have to park, drive back. You have all these crowds of people. You're more of a live sporting person than me.

1:06:30Ben Carlson:You go to way more live sporting events than I do. My thing, my thing is like, like movies, the experience at home is way better watching sporting events than watching it live.

1:06:38Michael Batnick:That's not, that's not, that's not true. It's true. It's true. It's true. It's true for football. It's a hundred percent true to be watching at home is a better experience. That's true.

1:06:45Ben Carlson:That's true. Basketball is different. And so we got pretty good seats. My wife said, listen, our kids are willing to be young once. Isn't this the kind of stuff we want to spend our money on? I said, you know what? She got me. She used my own stuff against me. We got tickets. like the day before, surprised the kids that night, said, hey, lay out all your Michigan gear, and drove down to Chicago, went to the United Center. It was awesome. It was so much fun. The energy in the building for like a March Madness game was spectacular. Michigan destroyed them. They looked awesome. We had these really drunk, obnoxious Tennessee fans sitting behind us who were just going crazy.

1:07:15Ben Carlson:They were using like karate kid lines, like, put them in a body bag, Johnny, like with the Southern accent, which was actually kind of funny. But so, so my kids, like my daughter Katie's the cutest little thing. She has Michigan jersey on, Michigan hat. She's got Michigan socks pulled all the way up. She's got, they said they wanted to make signs. We're like, no, you can't make big poster boards because the people behind you, they can't see. So they made little signs like construction paper. And they made little signs. My son George has his foam finger, you know? And they both got on the jumbotron with their signs.

1:07:44Michael Batnick:Oh, no way.

1:07:45Ben Carlson:Michigan's best player is Yaxal Lendeborg. He's from Puerto Rico. And they call him Dominican LeBron. And my daughter made a sign that said, Go Dominican LeBron. And he put it up on the jumbotron. And her whole face turns red. And then George got on later. And so, and we stayed afterwards for them to cutting the nets down and stuff. And man, it was fun. It was just an awesome, awesome experience. So my wife is right. I was wrong. And you're right. Basketball is better in person.

1:08:10Michael Batnick:Yeah. Anyway, fun time.

1:08:14Ben Carlson:Now we're on to the Final Four, which we're going to spring break because people keep asking me, like, hey, you're going to the Indianapolis one? The Final Four is in Indianapolis. And I probably would have thought about it if not for the fact that we're on spring break. But also, I don't want to go to a Final Four game and see if they potentially lose. Because them and Arizona is like the two best teams. It's a toss-up. Yeah. I'm so unplugged.

1:08:33Michael Batnick:I don't watch college sports. Who are they? Michigan's playing. Who did you say? Arizona?

1:08:39Ben Carlson:Michigan and Arizona. They're the two best teams by far. And it's going to be a toss-up. I think the spread's like a point, a point and a half. They're both played the best all year. They had the best records, essentially. They're the best two teams, and they're playing the first game of the Final Four, or the second game of the Final Four, and it's going to be an epic game. I can't wait. It's the kind of game where if they lose, it's like, okay, it's a really good team. I'm not going to be upset.

1:09:02Michael Batnick:My sports consumption has crashed, and I think it's a permanent bear market, and I'm not upset about it. It just is. It is life, right? We're getting older.

1:09:11Ben Carlson:Yeah, I've been like that, too.

1:09:12Michael Batnick:So I stopped completely listening to... So I, from 2015 until, like I said, listen, you grow up. I stopped listening to Howard Stern. That was like, it was like a massive part of my life. Like a massive, massive, massive part of my life. Like part of my identity was listening to Howard. I stopped listening to Simmons and Rusillo. Like, cause all I listened to now was audio books. I don't have time for anything else. So between that and. Yeah, listening to sports podcasts.

1:09:35Ben Carlson:Just around big events, I listen to them now.

1:09:37Michael Batnick:So that was, that was how I was plugged into a lot of the NBA. And like, I'm even like, I've, I've like missed Nick, Nick's games, which I never, ever, ever did.

1:09:44Ben Carlson:but I've gotten more into it now. I had a lull to big bear market. Now that my kids are into it again, now I'm watching more. Like I gave up on college basketball essentially, but my kids get back into it because we've got a good team. So I watched them anyway. So, um, okay. Speaking of experience, never,

1:10:00Michael Batnick:never, never thought it would happen to me, Ben.

1:10:02Ben Carlson:It's crazy. Right. stuff happens. Uh, so I took George to see project Hill mirror. You said, take him. Uh, it was an unbelievable, just the kind of movie that makes you realize why you love going to movies, smile on your face all the time. People keep saying it's 20 minutes too long. They're probably right, but I didn't really care. That's an 8.5 movie. It should have been a summer blockbuster, probably. I don't know if it matters. Gosling has the movie star belt. I think there's only a few people who could have handled that role. It's a Tom Hanks, Matt Damon, Tom Cruise kind of thing. Not only is the performance good, but that's a movie star person that does it.

1:10:37Ben Carlson:And I think he has that belt right now over anyone, and it's not even close. Question for you. So there's this whole idea of shitification going on. That things are getting worse and quality is worse. And I go in a movie theater and I think this is crazy. When I grew up, I had a little fold down seat. It was so uncomfortable. My movie theater stunk growing up. Now you can recline, lay back. You have a heater on your seat. Huge recliner. And I'm thinking about this. But the people next to me in the whole row, it's all these young teenagers. They take their shoes off at the movie theater. That's straight to jail, right?

1:11:11Ben Carlson:Are you kidding me? Yeah. Multiple kids. shoes off underneath their seat socks and i'm thinking new no we're not getting that comfortable teenagers high school probably and my son absolutely loved it i took kobe to see it and

1:11:28Michael Batnick:i cried not like not like i mean i had two little tears i got emotional not even over something in the movie but just seeing the movie with him so like your kids he's nine years old and i just i got emotional making like a lifelong experience from like he will 100 remember seeing that the way that we do remember seeing movies when we were kids yeah it was it was well it was better the second time for me to start with him but i just it's just different when you see a movie second time first first second movie that i've seen in the theater and i can't even tell you how

1:11:55Ben Carlson:long probably since i was a child my wife's gonna make me go back with her his there was many points my son's jaw was open like like he was just blown away but he loved it so much and how funny was it yes, the whole Rocky thing. He loved The Alien, for sure. It was such a great movie.

1:12:11Michael Batnick:It made me very, very, very happy. Anyway, so it's - I was impressed with how well they did it,

1:12:16Ben Carlson:like from the book. And I had to go, but I'm reading the book again because I've never done it with a piece of fiction because I want to get more of the - because the movie didn't go into the science as much as the book, obviously. I thought that was one of the cool parts of the book, but yeah, very well done.

1:12:28Michael Batnick:So$54 million in its second weekend. That's a bigger second weekend than Sinners, Oppenheimer, and Dune. But think about - And Dune, too. Think about how massive, massive Oppenheimer was.

1:12:41Ben Carlson:So this movie is getting tons of word of mouth, obviously.

1:12:44Michael Batnick:Bigger than Oppenheimer. Holy shit. It was so phenomenal. It just made me happy. Yeah, well done. Oh, based on your lead, I watched Anaconda with Kobe.

1:12:53Ben Carlson:He loved it. It was terrible. Really bad movie, but it made me laugh like four or five times. Like actual, actual laugh. It was kind of, there was some really, it was a really dumb movie. It was way too meta, like with the original Anaconda. um but george is like ice cube at the end yes um ridiculous one more wreck for me i listened to the amy polly amy poller's got a new podcast i can't remember what it's called it's been out for a year now so she interviewed steve correll i don't think i've ever heard correll on a podcast before but listening to them having been a huge watcher of the office and parks and rec and i was in me for both of those shows i was out immediately like i don't want to watch office that looks dumb and i got into it and i'm like oh parks and rec is just a it's a female version of michael from the office Like that's, that looks dumb.

1:13:34Ben Carlson:But Parks, like both of those shows, I love both of them. And hearing them talk about the shows together was awesome. It was really well done.

1:13:41Michael Batnick:He was on Howard years ago. He is just a regular, regular guy.

1:13:45Ben Carlson:That's what it's, it does seem like that. He is kind of down to earth. Yes. What you see is what you get kind of deal.

1:13:50Michael Batnick:Okay. So watch the Madison with your wife. All right. This is a borderline table. It's a table pounder.

1:13:59Ben Carlson:All right. I'm a Michelle Pfeiffer fan. I'll watch it.

1:14:01Michael Batnick:She looks incredible.

1:14:04Ben Carlson:and who wait who's the lead in it with her so here's here's the plot Kurt Russell it's a six episode show okay I can handle that and it is not anything like

1:14:14Michael Batnick:Taylor Sheridan's other stuff so the premise is um and I can't not spoil it but can I can I reveal a spoiler if it happens 10 minutes into the show or should I just not do it hit me with it Okay. So this is a spoiler for the Madison. The spoiler happens in the first 10 minutes. We got a few emails about spoiling that there was an alien in Project Hail Mary, even though that was in the trailer. So I'm sensitive to spoilers too. Okay. So fast forward if you want. So Kurt Russell and Michelle Pfeiffer are a very wealthy couple that live in Manhattan. They have two stuck up spoiled daughters that are grownups, 27 and 36.

1:14:56Michael Batnick:The 36-year-old has two kids and divorced, and the 26-year-old is married. Kurt Russell goes to a hunting cabin in Montana with his brother. He's been going there his whole adult life, and they go fly fishing, and they do what dudes and bros do. He's begged his wife and his family to come out there. They won't come out there. There's no, there's no indoor plumbing. So in the first 10 minutes of the episode of the show, maybe his first 20 minutes, he goes out there fly fishing and he dies in a plane crash. And so the rest of the show is about Michelle Pfeiffer and the family going out there and just experiencing it.

1:15:33Michael Batnick:And so I watched the first episode, Robin comes in. She's like, what is this? Oh, Michelle Pfeiffer. So she, so she took ahead and she went ahead without me. And then I caught up, but probably not a show that I would have liked that you would think I would have liked, but it was just awesome. It was just a good show.

1:15:49Ben Carlson:Okay. Talk me into it.

1:15:51Michael Batnick:Really enjoyed it. All right. And that is about that. So market check. All right. Hold and gain so far, but four o 'clock is a long way away. You got to start somewhere.

1:16:03Ben Carlson:All right. We get a 2 % update maybe, but not a 2 % down day. Yeah.

1:16:07Michael Batnick:All right. We'll see. Anyhow, thank you as always for all of the emails. animalspirits at thecompoundnews.com. Remember, if you want to see us in San Francisco, info at ritholtzwealth.com. We'll see you next time.