Negative Arbitrage (EP.358)

27:19Right? They're so all over the place. Yeah. And I think that's one of the reasons so many people held on because it's like, I could have one of these 100 % years or whatever in this fund, but I can't take another, after a huge down year, another down year again. So I guess I'm not surprised, but I am a little surprised that it took this long for funds to start coming out of that. I think the reason why it probably took so long is because I would guess that the majority of the assets in ARK are satellite positions, right? Of the 60 billion at the peak, how much of that represented more than 10 % of somebody's portfolio?

27:55I'm guessing the bulk, were there people that were all in an arc? Of course there were. But as a percentage of total assets, I'm guessing the reason why most people were able to stomach the volatility is because it was a relatively small-ish position. Right. Wall Street Journal again today. I don't know if you saw this one. Young Americans are getting left behind by rising home prices and higher stocks. We've talked a lot about this, how young people, out of any group that has gotten screwed these past few years, they're the one that got screwed the most. If you didn't buy a house pre-2022 and locked in a 3 % mortgage, you got screwed and you have a right to complain.

28:29I'm giving the green light on that complaint. I'm not a big complainer guy, but I like, I'm giving the green light there. So the Wall Street Journal goes through this and they interview the people who, a newly married couple who can't buy a house, all these things. But then they give some stats. Americans 55 and older grew their assets by$114 trillion at the end of last year, up from$84 trillion just four years ago. This is using Fed data. That accounts for nearly 70 % of all households, which is$170 trillion or something, their share said it's 51 % three decades earlier. Working-age adults, meanwhile, with households under 40, have$15 trillion or 9%.

29:07Americans, 40 to 54, own less than a quarter of all assets, and they had nearly 40 % in 2001. And I think these numbers are actually a little deceiving because the baby boomers didn't have a generation of baby boomers to compete with, if that makes sense. Like millennials and Gen X is competing with the largest demographic of all time before millennials. And they've had 40 plus years to grow their assets. What do you mean? Because baby boomers' parents didn't have retirement accounts and didn't live long and didn't have all the assets? Yes. And they were a much smaller cohort than their kids. So you can see this chart in here that shows it by age.

29:44It keeps going up and the older generations keep having more of the wealth. That's because the rabbit going through the python or whatever, or the baby boomers, of course, they're going to pull that up. Because millennials are going to be the richest generation at some point. They're going to get all the money handed down to them at some point. So it's not as bad as it speaks about to be. The cycle will begin all over again with the next generation complaining. Yes. By the way, by the way, hold on. Hold on, hold on. Are the millennials going to be more dominant than baby boomers? Probably. We're going to be so much more wealthy than our parents.

30:16Definitely. Yes. Like in 20 years. Which a lot of people, definitely. Millennials are going to be the richest generation in history. It's numbers. Eventually, that's going to happen. There's going to be trillions of dollars handed down. People being born right now are going to hate us. Oh, yeah. Millennials will be the boomers someday. Yeah. Definitely. Think about it. In 40 years, people now say, oh, baby boomers, they bought their house for$8 ,000. People are going to say it to us like, oh, you bought your house for$200 ,000 with a 3 % more. Something like that. That's going to be the case in 30 years.

30:51you shared a chart a couple weeks ago about equity allocation percentages going higher and people getting smarter. Vanguard released their How America Saves report, like at least a precursor to it. It was kind of like a trailer. They did a movie trailer for it. We're not releasing the rumor report yet. And then now for movies, they have trailers for trailers, right? It's like, here's a 15-second trailer for the trailer that's going to come out tomorrow. It's a teaser for the trailer. So they said the percentage of participant assets invested in equities as of year-end stood at 74%. I think Vanguard manages like$5 trillion in retirement assets.

31:2479 % of planned contributions were invested in all equities in 2023, up from 77 % in 2022. So those equities just keep going higher. In an all-time high of 64 % of all contributions were invested in target date funds, which two-thirds of all money in Vanguard's $5 trillion retirement plans are going all into target date funds. So that's these automatic investments, right? That if you don't sign up for a group of funds on your own, we're putting in a target date fund. So the equity allocation is just going to keep getting higher and higher. So it's young people who have these automatic investments now.

32:01It's going to be people around the globe. So that equity allocation is not, I mean, a market crash would make it fall, but the trend is going to keep being higher than it is now. Is there going to be a... No, I was thinking for an angle here. I got nothing. I was thinking about the bridge between this and 24-7 trading. There was an article last week that we didn't get to, but there's a proposal or ideas being floated. This has come up in the past, but is this where we're heading, 24-7 trading for everything? I really hope not, but it seems like it's inevitable. Yeah, it does. I don't know how the operations behind the scenes stuff works there.

32:44I guess if it's all computer-based, it's not that difficult. But I think during, especially like bear markets, having the off switch is helpful. I think it's a good thing. It's a great thing. I don't want to be at the screen on Saturday. Right, you have 17 slacks to answer. You already have enough on your plate.

33:06We got some good memes on that, of you working hard and being the person standing. Anyway, last week you brought up Procter & Gamble doing the, their volume is flat, but their prices are increasing, so their revenue is increasing. Tracy Alloy wrote about this for Bloomberg. She talked about Pepsi. Pepsi's organic sales volume contracted 2 % in the most recent quarter, but pricing increased 5%. And then they said in the first quarter of 2023, prices were up 16%, my volume fell 2%. She's showing the shares of Pepsi are at her needle all-time highs. And I think, so obviously corporations and consumers were not the cause of inflation.

33:45The government spending in the pandemic were the causes of inflation, right? I mean, you could add a bunch of other things, but it was the supply-driven stuff and then the demand from, you know, all the pent-up demand and the money from the government. That was the two main causes of inflation. I think if you want to figure out, like, why inflation is being so sticky, corporations and consumers probably don't get enough blame for it. For the fact that inflation... You mentioned everyone... Why would consumers be to blame? There's no boycotting of, you know what? Screw this. Pepsi increased their prices 15%.

34:16I'm going to drink Faygo now. There's none of that. People are just going, ah. So there's no consumer substitution going on. On an overall basis. Consumers aren't. So this is, or the people with money are just keep spending. So a bunch of people sent us this Chipotle one. What did I say? Chipotle? Chipotle Mexican grill has increased prices six times since 2021. It was among the first restaurant companies to say it would boost its menu prices on delivery apps and its prices are set to rise further in California where roughly 400 locations are paying higher hourly wages in response to new state law.

34:49Traffic last year was 1 % higher. I'm sorry. You know which consumer is not to blame for Chipotle's price increases? This guy. I told you two years ago that I was boycotted Chipotle and my Chipotle consumption is down 70 % from its size. I thought you said you were still eating it. I've had it. So listen to this though. So they're still 8 % below pre-pandemic levels of traffic in stores and people going in there. But their same-store sales are up. So because their prices are higher, sure, fewer people are coming, but the people who go are still spending money. And so there's a certain amount of people that just won't change their habits.

35:27And they'll keep paying higher prices. Well, me, a man of the people, I've changed my habits. All right. I don't know if your$75 buffet is actually helping anything at Disney. And the thing is, I just don't think consumers will – it would take like 10 years of this for consumers to ever change their habits. That's my point. Good luck betting against a steamroller that is American consumerism. I guess that's my point. Right. Well, yeah, speaking of spending, so Disneyland was packed. Universal was even more packed. I mean, it just feels like we're in an absolute boom. They never went away. I remember someone emailed us and said, some of this stuff used to be seasonal.

36:15Now it's year-round, right, for a lot of the travel places. Yeah. And I think part of that is because of work-from-home stuff allows people to take vacations on off seasonal times. Here's some good news on inflation, Ben. Carl Kintan, he tweeted this. So this is from the CEO of Walmart. Quote, we are now seeing prices that are in line with where they were 12 months ago. I haven't been able to say that for a few years. The last few weeks, we've taken even more prices down in areas like produce and meat and fresh food. Pretty good. Walmart is one of the cheapest stores on earth, isn't it? Do you ever shop there?

36:52I got Walmart Plus with one of my 19 credit cards I have. It was like, if you sign up for Walmart Plus, you get it for free, whatever it's called, whatever their free delivery service is. and I've been using them for a lot of stuff lately instead of Amazon. Household items and food and they are way, way cheaper than Amazon. Oh, they deliver. Interesting. Yeah. So free delivery if you use, and it's, if you use a Walmart Plus, which is like their prime. Hmm. So we're at Target household. So the Walmart is, I don't know, 10 to 15 miles from me. The Target's like two. So I just, I feel like I'm at Target twice a week just doing a Target pickup.

37:27The pickup, my wife does that a lot. Yeah. It is convenient. Black Friday savings are here at the Home Depot, which means it's time to add new cordless power to your collection. Right now, when you buy a select battery kit from one of our top brands like Ryobi or Milwaukee, you'll get a select tool from that same brand for free. Click into one of our best deals of the season and stock up on tools for all your upcoming projects. Get Black Friday savings happening now at the Home Depot. Limit one per transaction. Exclusion supply. Full eligible tool list in-store and online. When you walk into a Burlington, you're walking into amazing prices and great gifts.

38:05That's main character energy. Because at Burlington, the holiday savings aren't the only things turning heads. Discover quality finds and perfect presents for everyone on your list, even those who are hard to shop for. Toys and jewelry to new beauty brands and styles, these gifts go seamlessly from our stores to under your tree. Seriously, with these savings, why shop anywhere else? All right. We got a few more inflation emails on auto insurance. And apparently, there's a thing called social inflation. Ben, do you know about this? No. What does that mean? I'll tell you. So here's from the emailer.

38:43If a driver hits another person or a piece of property causing bodily injury or property damage, the legal demands and settlements for these type of claims have skyrocketed. What may have been a$100 ,000 demand for damages 10 to 15 years ago often is now a million dollars plus, with commercial large vehicles somewhere$25 million plus, with higher settlement and trial cost driving significant costs into the system, often referred to in the industry as social inflation. As the other listener mentioned, many insurance companies are struggling with profitability for this product line, even the best managed ones.

39:18The industry can't keep up with the rising ultimate cost of the policies, which are only determined after they are purchased by the consumer. So the best way to hedge inflation is to jump in front of a car. That will do it. That will do it. You'll be good for a few years. All right. More green shoots. This is from a Ford dealership in Little Rock. The new 2023 Ford F-150. $10 ,000 off MSRP. That's different. That's a change from what we've seen over the last few years. Interesting. Actually, speaking of - Wait, this also says 1.9 APR for 72 months. So they're buying down rates there too? Looks like it.

40:00Zerp is already back, I guess. I drove the rental car that we got. I got a Tahoe or Yukon. I don't know. I don't know. One of those. just gigantic. I curse at them every time I go to one of my daughter's soccer games because they take up, you can't get through the parking lot to find a parking spot. Yeah, just tremendously. It's driving a pontoon on the road. Just tremendously large vehicles. And I will say parking it was not a lot of fun. Got to be hard to find a spot, right? Yeah, not a lot of fun. There should be SUV-only lots. All right, a lot of people, I feel like people are ready to predict the downfall of this economy at every turn.

40:35like anytime there's like a just a little bit of breathing room and my whole thing about it is yes there's going to be a downturn at some point but i feel like you have to give the u.s economy the benefit of the doubt until proven otherwise is that fair yes innocent until proven guilty so a lot of people were saying last week because the gdp numbers came in a little bit soft okay stagflation is here because inflation is still a little higher and growth is slower and Dario Perkins put a chart together that shows all of the big developed economies and their GDP growth over the last four quarters plotted against inflation.

41:09And it looks to me like there's, there actually is some stagflation in places like Germany, UK, Sweden, definitely not the US, who has by far the best growth of anyone over the last four quarters. And yes, things were soft last quarter, but Atlanta Fed is still saying, I don't know, 3.9 % or something over 3 % for the quarter. And that could change obviously still pretty strong. The transcript this morning had a, we had, uh, we got data last week on PCE or people's incomes rose 0.5 % of March.

41:51This is people are making more, they're spending more and something, there has to be like an asteroid to knock us off this trajectory and hopefully not literally, but like this story about people running out of excess savings and like, is that behind us? Like, are we done with that? That was like wishful, that was wishful thinking, I think. So this is the transcript post, a bunch of good macro thoughts. This is from Capital One Financial CEO. I think the U.S. consumer remains a source of strength in the economy. The labor market remains strikingly resilient. Rising incomes have kept consumer debt service burdens relatively low by historical standards.

42:31When we look at our customers, we see that they have higher bank balances than before the pandemic. And this is true cost income levels. On the whole, I'd say consumers are in pretty darn strong shape relative to historical benchmark. Visa CEO said something similar. TransUnion CEO said something similar. I don't know. The Wall Street Journal had an article about the share of the gross domestic product for the world in the U.S. has gone up since 2010. You can see China has started to come in. Japan has gone down. India has risen quite a bit. India and Japan are on the same level. So the U.S. went from 20 % in 2009, 2010 to 27 % now or something.

43:09I do think the consumerism we have is unique. Of course there is. Across the globe. We're spenders. We're, we're, we just, so I'm thinking, I can't stop thinking about this stub up situation. The, the tickets, the tickets that I bought for Tuesday's game were five 50 each net of ticket masters, ludicrous fees, which is a whole separate topic. Dude, I didn't buy. These are not great seats. I'm in, I'm not even in the lower bowl. These are in the two hundreds. Your return is even worse. If you add on the frictions involved in the cost, right? it's terrible. It's, it's horrendous, but, but the opposite of an asymmetric bet for you.

43:50Yeah, it's horrendous. now a lot of this is like, obviously it's been, it's been forever since the Knicks had a contender, but people are spending$550 like, like that on, uh, I'm like not great seats. I think, I don't know what the get in price is going to end up being, but it's going to be close to$500 just to get into the building. That's a, that's a ton of money. Like I've never spent that. much of my life on tickets. It's, yeah. For two people, adding the concessions, getting to the arena, we're probably talking a$1 ,500 night-ish. Yeah, it's not cheap. A lot of money. Matt Klein had a piece about China saying, like, what's going, what's wrong with China?

44:31And he is showing their retail sales and if they would have followed trends in 2020, but they stagnant. You remember our retail sales took a huge jump up and is at a new permanent plateau. China's went down. And he's saying the problem in China right now is people aren't spending enough money. They're the exact opposite of us in terms of their retail presence. We love spending money. Their culture, for whatever reason, it stagnated. Hmm. All right. I told you last week, I think I mentioned it to you and Josh, I have a friend who is starting a business and it's based in AI, right? And I can't tell.

45:11Based in AI. Well, whatever. AI is in the name. And I have a hard time telling, like, oh, man, this is a wonderful idea. First mover advantage. This is going to clean up or this thing is going to get wiped off the map by Google, Microsoft, Amazon. Apple, pick your poison. And FT had this thing about AI talking about they compare conventional VC to Microsoft, Amazon, and their investments in this space. and last year Microsoft and Amazon both had bigger investments in AI than the whole VC industry combined. I mean, you'd want to think the creative disruption thing would be, you know in the movie iRobot with Will Smith, how the biggest corporation in the world is the one that made these robots, right?

46:01You would assume with AI, it's like, well, of course there's going to be a new company that comes along that's going to end up being part of or bigger than the Magnificent Seven. Like it has to be. But what if it isn't? What if it's just these firms just get bigger and stronger? I mean, I won't be so cavalier about the statement, but of course Microsoft's going to be the winner and Google. I mean, they already have everything and Amazon. But historically, it's kind of like IBM. They're funding these things. But it's like IBM was there. IBM was the company for decades, and then they just got left in the dust.

46:35And so you'd think historically that would be what would happen, but I just don't, it probably won't this time. to your point, like the baseline assumption is these companies are going to get bigger and stronger because of this probably. Well, there's, there's people in that camp that are like, who's competing with these companies. They're funding all the innovation. Who's going to, nobody's going to sneak up on them. Right. Or if there's a competitor, they're going to buy them. Right. Exactly. Exactly. So there's people that are in that camp and there's other people that are like, well, look at history, look at the turnover in the top 10.

47:05And it's like, come on, this is, you have to be open-minded to the fact that, yeah, it's different this time. It absolutely is. The funny thing is, is that there's a lot of people who, who anytime you talk about government intervention or government spending are like, I want free markets. Like they used to be free, like, which has never really been a thing. Like the government has always intervened in everything. But if you want to see free markets, this is the magnificent seven is free markets. Cause there's been no regulation on breaking them up. Right. Right. So this is, we have free markets and what you get is these huge companies that have no competitors, but each other.

47:38But Ben, you know what? Like there's this – there's a cohort of people who are upset about buybacks and think that companies should just spend more money on R &D and developing projects, right? So Apple – It's a waste of money. What are they doing? Apple, one of the biggest moneymakers, best companies of all time, best allocator of capital, et cetera, et cetera, all the accolades. Bloomberg wrote a piece this week saying that the company spent a decade and$10 billion developing a car that will never see the light of day. It spent eight years and many billions more creating the$3 ,500 Vision Pro, a device that won't become a major money maker for years.

48:26So I just say this is like, be careful what you wish for. Did Mobuson do a piece on this? Somebody, I feel like I read a piece years ago, maybe just a little more, I can't remember, that like R &D is often like a net negative. Like finding a good use of capital is really, really, really hard. Right. It's almost like a lottery ticket, right? For a lot of these companies. And oftentimes when these companies are like swimming in free cashflow and whatever, like giving it back to the shareholders is not a bad idea. Let them reallocate it somewhere else. I was worried about the Vision Pro taking over and people just having headsets to their faces.

49:04it sounds like Apple's already cut back on this a little bit and the demand is lower than they thought. And they said like their planned update in 2025 could be canceled potentially. I mean, you said like the experience is amazing, but there might not be enough apps yet. So you can't exactly call it a failure, but are you surprised that it seems like it was in, it had its moment there for a couple of weeks. And then, I don't know, you don't really hear about it much anymore. And you don't see it out and about much. unless people are just using it on their couches. But do you think it kind of flopped a little bit?

49:39Yeah, I'm not surprised. I mean, I think this is more or less consensus, no? I don't think anybody thought that the Vision Pro was going to be a monster hit. Maybe there's a revision accessory. I don't know. You can contact me. It got a lot of publicity when it first came out. No, of course, and rightfully so. It's a magical product. But I think most people were pretty pessimistic on the prospects for this being a giant category today. I don't think Apple probably expected it either. True. All right, let's talk housing prices. I was having a conversation with a friend at a birthday party a couple weeks ago, and we were just kind of doing the thing you do as middle-aged people and talking about, like, geez, did you see that new housing development going up and how much they're selling the houses for?

50:16Like, can you believe they're selling houses for that much money? It's like this new housing development. It's in a pretty good location, but, like, you know, like$1.5 million to$2 million homes in Grand Rapids just seems egregious. It's for not, you know, you're not like on a lake or it's not like a hard, a really nice place you'd want to be. And we were talking like, I think the new normal of housing prices is just something people have to get used to. Right. So, yes, it's not going the other way. Someone sent me this article from point two and they said, how fast are like the hundred housing, biggest housing markets in the country?

50:51How long did it take their housing market, housing prices to double? and 68 cities saw it happen in less than 10 years. So prices have doubled in some as recently as 2019, which Detroit was one of those places. Homes in Miami and Tampa have doubled since 2018. Baltimore and Spokane, Washington, same thing. Buyers in Irvine, California, in the last seven years have seen the prices go from$750 to$1.5 million. There's no going back, unfortunately. No. Even if prices fall 5%, 10 % would be a huge correction historically. We're not going back. Michael J. Fox, you know, or Doc, we have to go back. That's not happening.

51:34I don't know. Was that Lost? Oh, yeah, that was Jack. Did you ever get Lost? Yeah, we have to go. Yeah. I loved Lost. Big Lost guy. Okay. Connor Sen had a good piece on how higher rates now are going to make housing worse in the future. Anyone thinking the Fed's going to fix the housing market, it's just not going to happen, unfortunately. Like whatever the, if the Fed raises rates, it's bad. If they lower rates, it's bad. He shows that they had this big boom in production, especially in apartment complexes. And you're seeing places like Austin where rents are falling because they built so many apartments.

52:05But now that rates have risen, basically the building is going down again, right? We had this boom in new homes being made. We got a boom in apartment complexes. Higher rates make that hurdle rate way bigger to buy those. And the cap rates are way lower. So he says, with the labor market in good shape and large numbers of millennials still under house, shelter inflation could stay warmer than the Fed would prefer for years with central bank policy itself being part of the problem. Meaning if we're building fewer units now and you still have this demographic wave of millennials coming and Gen Z right behind them, that that portion of inflation, that's not going to help matters if we're not building enough.

52:43And having rates be higher now is going to set us up for more pain, whatever, three to five years down the line. which I completely agree with. There's no incentive for these builders to build with mortgage rates 7%. This is going to be a problem for years and years to come with no easy solution. Yes, definitely one of the biggest stories in the economy. Ben, let me ask you this. are you as surprised as i am that these gigantic companies can still be so volatile stock this person stock talk weekly tweeted meta was trading at 510 yesterday it's trading at 410 today after earnings down 17 this move constitutes a one-day loss of nearly 250 billion dollars in market cap which would be the worst single session value loss of any stock ever and then you also of Tesla, another behemoth mega cap stock up 31 % in 40s.

53:44What does this tell you about market efficiency or lack thereof? I don't know. I'm shocked. I don't know if I should be or shouldn't be, but maybe not shocked, but just like, yeah, shocked that these gigantic stocks could just swing like that. It's just kind of wild to me. It is weird that you can have a 1987-like crash in stocks that are this big, right? I think what this says is that you can never arbitrage out herd mentality. Like the herd mentality of piling in and piling out, you're never going to be able to change that. You're never going to make it more orderly when someone hits the buy or the sell button, when there's a piece of news like this.

54:24I guess that companies can, particularly after earnings, like that companies can, I don't know, not what companies can do, that investors can be shocked to this degree and have a 17 % sell-off in the after hours immediately following an earnings release. It's just a mind-blowing shit. With as many analysts that follow these companies and track them, and now we have satellites that track, you know, the supply chains and knowing as much as they know about companies now, way more than they did in the past. And yeah, you're right. And they still could be surprised. Well, this also gets to the fact that like, I think a lot of newer investors would maybe look at an earnings report or just see the headlines and not understand how a company can beat under the top and bottom line, beat estimates and still go down or the opposite situation.

55:14But there's two things. Number one is that if a company was up 90 % over the last 12 months running into earnings report, then obviously it's a buy the move or sell the news type of thing. But you could also have a thing where not only will a company beat, but they'll have record revenue and record earnings. But that doesn't matter because that already is in the price. The market already discounted that. It's always about guidance and looking forward. And I guess even with all the analysts in the world, you don't know what a company is going to guide towards. How could you? Right. The numbers, like you said, record numbers, but the CEO says one line and the stop drops 10 % in two seconds.

55:55Yeah, it's not about what you just did. You don't get credit for what you already did. Yeah, I guess that's why it's so hard to trade in the short term because it's all expectations-based. Because when these companies, when Meta and Netflix were down 70%, their numbers weren't great, but they were better than people expected, and then they shot up, and now it's the opposite. All right, we've talked for a while now about how there's record amounts of net worth, especially with people on the upper end, but not everyone. This is from the AARP. Someone sent this to me. About one quarter of U.S. adults age 50 and older who are not yet retired say they expect to never retire.

56:3170 % are concerned about prices rising faster than their income. One in four have no retirement savings, according to a research released by the AARP. So even if the top 50%, 60 % is seeing massive gains in net worth, there are still people who are unfortunately never saved or being left behind for whatever reason, circumstances, bad luck, whatever. This is why Social Security is such an important benefit, though, because that's going to be the whole kit and caboodle for, it has been for 25 % to 50 % of the people, pretty much. It's going to be the majority of their retirement income. Is this the first time you've ever used kit and caboodle on the show?

57:14It's possible. Yeah. Trying to keep in your toes here. It's a good phrase. Anyway, just looking at the other side here. Okay, what else we got? Any of the random stories from California? Before I go into my coaching diatribe? No. I do have one thing. We were – it is funny like how people think about spending and what is an acceptable thing to spend money on and what isn't. I'll give you an example. Last night at dinner, we were talking about Robin and I going through – the neighborhoods are just hopping on Zillow and somebody – it might have been Duncan. It was like Zillow should charge a monthly subscription fee to use the platform.

57:59And I was like, that's a terrible idea. Like they want as many users. They don't want to create any friction. They don't want any, they want as many users on the platform as possible. Like that's, that's their business. And Doug was like, you're telling me that you wouldn't pay a nominal fee for, for using Zillow. And I said, yeah, I am telling you that I wouldn't pay$2.99 a month for Zillow, which sounds ridiculous, but I just wouldn't pay for it. Would you? Yeah, I would. I love Zillow. So do I. But if you're not in the market for a house, you would pay for Zillow for what? The thrill. I don't know.

58:36There's something about it. I don't know. There's something about it. I'm like, you get hooked on it. But you're right. I probably would pay though. But I'm just saying it's weird where people draw the line, right? Like I'm drawing the line at$3 for Zillow. I'm just not doing it. Last night, another thing happened last night at dinner. This was as close as you could possibly get to saying something to the waiter. This is the topic of the show, right? When do you say something, when do you not? Kevin ordered a martini. And one of the great things about the martini is the glass, right? Ben, you know this.

59:10Yes, that's a sales point, yes. For not frequent listeners, Ben doesn't believe that the stem, or whatever the glass it's called, enhances the quality of the drink. and he's wrong. He's just wrong. It's part of the whole package and it makes the drink taste better. No, I say that the only reason people like martinis is because of the glass. I mean, that's absurd. That's just an absurd statement. If it was in a regular cup, you would not drink, you would not think a martini is nearly as good. If it was in a red solo cup. Well, yeah. Agreed. Because it wouldn't taste as good. It would not taste nearly as good.

59:44Anyhow, Kevin ordered a martini and it came in like, it came in like a glass. It just came in like a, like a highball glass. It was very weird. And we were like laughing. Like, do you say like, hey, I was kind of hoping for a martini glass. And that's as close as the line you could get to be like, I'm not going to say anything. I'm not going to say anything. Yes. I'm sure they have their reasons, but that's a weird choice. I agree. Yeah. It doesn't go there. All right. So coaching, what's on your mind? You do a lot of sports with your kids. We do, I don't know, soccer, football, basketball, baseball.

1:00:18We have a lot of different sports in our family. and we're transitioning a little bit from like parent only coaches to like actual coaches in some of these leagues but still i've seen a lot of parent coaches and i just whoa whoa whoa whoa i'm sorry i'm sorry i'm sorry actual coaches what do you mean well like someone who's not a parent coach like my daughter's on like some club soccer team it'll be like an actual like a uh coach who coaches and not necessarily just a parent okay right and she's what she's almost 10 She's 10. Okay. All right. Which seems excessive, but this is what happens. This is what happens these days.

1:00:52I can complain about club sports later. So I've seen a lot of, you know, we started our kids pretty early, like, I don't know, four years old or something, playing soccer. And so there's different types of coaches, and I've seen a lot of them. So the first one is I have no idea what I'm doing, just trying to survive here, right? The coach who obviously has never done this before, they're doing it because no one else volunteered, and their significant other, like, made them do it. And you can tell, because the other parents get annoyed, and it's like, well, why didn't you do it? I don't know what I'm doing here, right?

1:01:18That was me with baseball last year. I got roped into it. I have no idea. I'm not a baseball person. We have one of those coaches. It's Kobe's team. Yeah, it's one of those coaches where the dad, like, he should, I mean, you know, he should not be coaching. And I get it. I don't want to do it, but he definitely shouldn't be doing it. Yes. So everyone has that. The other one is my kid is definitely going pro, and I'm giving them the damn ball every time, right? You kind of know, you're close to scoring. It's like, oh, coach's son's getting the ball here for sure. So there's that one. And there's also the one that, the really hard-o coach on his own kid, but very nice to the other kids.

1:01:58So they also secretly think their kid's going pro, so they're super-duper hard on them, but they're very nice to the other kids because they have to go hard on their own kid. So those are kind of the coaches that I've, I think that kind of runs the gamut, right? I'm not built for the like youth sports world. It's too intense for me. It's a lot, isn't it? And it gets intense. It's very, it's very cringe. It's very cringe. And you learn a lot about people. It's like, didn't know that this guy was a psycho, right? Yes. I could do a whole other, other list of parents that you see at these games. That's the, that's the weird part is the parents.

1:02:37Here's the two rules for kids. First of all, you never brag about your own kid besides to your spouse or maybe the grandparents. that's it about anything school sports no one ever wants to hear i don't care if your child is a prodigy people only want to hear about someone else's kids messing up they never want to hear about them succeeding right like that's just and i'm sure i've done this before but you you try not to uh number two is you literally can never say anything bad about someone else's kid in sports like why didn't they do this what are you thinking it's only encouragement and cheer you cannot like ever comment on another kid making a mistake oh you definitely keep all the kids you kicked it the wrong goal, but you cannot say anything.

1:03:14No, no, no, no, no, no. Ever. I, uh, I, yeah, recently somebody somebody I know where was always saying how brilliant this, uh, person in their family was. Just brilliant. For years. Brilliant. And when the time, when it comes time for the person to go to college, the truth comes out. Let's just say that. Let's just say that. Right. Yeah, you, I just, they're, like, you've heard this before. Other kid, parents who can't help but say, my kid is so gifted in this. They're the greatest player in this at school. And I literally could care about nothing less than hearing about your kids' accomplishments.

1:03:52No one wants to hear it. No one ever want, I would never want to tell someone, and I'll catch myself if I think I'm doing it, that like, oh, my kid did this. No one cares. Maybe the grandparents and your spouse, that's it. In the no one cares universe, which is a big universe and probably deserves more attention than it gets is like this is even lower than fantasy football like nobody cares about your fantasy football team don't even this is even lower than your dream you had last night dream fantasy football your kids accomplishments right alright Ben so we up to recommendations oh wait before we get there I just want to point out hold on did you see Tom Brady's resume floating on the internet it?

1:04:36No. Look, he's just like me. Summer 1998. Polo Fields Golf and Country Club. He's a sales rep. Developed interpersonal skills and exemplified flexibility in order to better serve club members. Gained invaluable experience working under club professionals. I mean, this is all... Wait, Tommy was at Merrill Lynch? He worked at... Yeah, he was at Assistant Senior... What did he learn? Let's see. research stock oh Tommy research stock and mutual fund reports while updated client portfolios gained knowledge of broker activity and day to day administrative duties now he also happens to have elected team captain of the 1999 University of Michigan football team credit to him so he did have some things that I didn't that's for sure alright any good movies on the airplane I watched two movies anyone but you standard rom-com fun it's a good i i recommended it to someone this weekend and they they said like it's it felt like a throwback rom-com that's how i just yeah it's cute um i watched iss international space station movie and it was this is one of the great trailers where they're in space the the russians and the the u.s oh that's right explosions on earth yeah are Russian astronauts called cosmonauts or did I make that up or what is a cosmonaut yeah that's right is that a Russian astronaut you got it is cosmonaut a Russian word or is what we called them oh wait I don't know anyhow the the movie should have been great they're on the spaceship and they see like a bunch of things blowing up no that is a good point why aren't why aren't they just called astronauts instead of cosmonauts no idea okay anyway anyway the movie was not good, unfortunately.

1:06:30It was watchable, but it was a great concept, bad movie. Okay, two things. Man, Delta, and I'm a shareholder, so I'm biased, but they've got their shit together, Ben. You know, you can't find Angels in the Outfield, right? It's one of those movies that just vanished from the ether. It's not on Prime, on Hulu. It's not on any of the services. You can't find it. Yeah, I have a streaming app where I check. It's called Just Watch. And some movies, you'll type it in, and it'll say it's not available anywhere. It's like, what am I supposed to do? Nowhere? Yeah, guess what? Angels in the Outfield, get on a Delta flight because it's streaming right now in Delta.

1:07:04One more thing. You know the movie Kazam with Shaq? Mm-hmm. Like, I remember years ago, Josh had told me it wasn't a real movie. They only, like, made a trailer and did, like, promo. It was fake. There was never an actually Kazam movie. I'm like, what? Is that real? Of course it wasn't. And I was like, oh. Josh convinced me. I don't know. I don't think he was. Josh convinced me that there wasn't a movie. Well, guess what? I watched it back in the day. Kazam was on Delta. Not great, right? Did your kids watch it? No, no, no, no. No, Shaq's movie career, not that great. I finished two shows last week, and I think they're not for everyone, but I enjoyed both of them.

1:07:42I finished Ripley, and I finished Shogun. Ripley's probably too slow for a lot of people. Black and white thing, I already complained. Got that out of my system. So here's my take. The movie, the first two-thirds of the movie were amazing, and I thought it kind of petered out at the end. This show wasn't as good at the beginning, but the end was way better than the movie. I like it. The further it went along, the more I liked it. Shogun. Wait, hold on. Hold on. Somebody emailed us about a great black and white recommendation. You must have seen 12 Angry Men in high school or something. No. What year did it come out?

1:08:13Really? I don't know. I've heard of this movie. It's pre-1970. I'm not watching it. The 40s? The 50s? Sorry. And then I also finished Shogun, which I thought didn't quite live up to the hype of like the first episode or two. And it's the kind of movie show you definitely have to pay attention to because there's a lot of subtitles. And it's also a little hard to follow like because they kind of have some twists. But I thought it was really well done. And I'm, the Japanese people are very principled. It's like, listen, I was disloyal to you for two minutes. I'm going to cut out all my guts and I want you to chop my head off because that's what we do.

1:08:45Like they follow their principles and they're like to a T. They have honor. They have honor. You know who has no honor? StubHub. That's true. They would not kamikaze themselves. I remember my parents watched The Godfather Part 3 for the first time in the 1990s whenever it came out and just hated it because the first two were so great. For some reason, I've never watched the third part. And so I found out it was on Paramount Plus, and I watched it. And I know it's been panned for years and years, and I thought, I've got to give it a try. It can't be that bad. It's that bad. It's just... Everything anyone's ever said about it is true.

1:09:24It's just not a, it makes no sense compared to the other two movies. It's awful. Waste of time. Don't watch The Godfather Part III. I never will. Okay. You have my word. What do you say the best airplane movie ever is here? Oh, oh, oh. So this was on Delta. I did not watch it, but I've only seen this movie once. And it was on an airplane 10 years ago. Focus. You ever see that Will Smith movie? I've seen it multiple times. Is Margaret Robbie in that? Yep. I've only seen it on the airplane, but I feel like that, if I had to describe like the perfect airplane movie, that's near the top of the list.

1:10:03I love a good con artist slash heist movie. That was a good one. Very good. Okay. How much longer are you in LA for? I, we fly out Wednesday morning. All right. Good luck fighting with StubHub the rest of the week. I hope you cool off a little bit. Go have yourself a Bloody Mary to feel better. Tomato juice doesn't do it for you. Bloody Mary's overrated. Tomato juice is gross, but Bloody Mary's are great. Okay. Animal Spirits pod. No, what is it? Shoot. Animal Spirits. Animal Spirits at the compoundnews.com. See you next time.