The Best Bear Case on AI (EP. 478)

10:28Ben Carlson:See, everyone is gambling. It's too much.

10:30Michael Batnick:And then there's the crossover of young people are screwed. And that is a big Venn diagram of rage bait, right? Like this tweet where we're chimpanzees in the cage screaming about this.

10:43Ben Carlson:So you pulled up the actual survey from Betterment, which is the old friend of the show, Dan Egan.

10:47Michael Batnick:Oh, yeah. Oh, credit to me. I went to the source. How about that? So they said where sports betting fits into financial goals for Gen Z. 36 % don't participate. That's not a headline, right? Nobody wants to read that. So 36 % of Gen Z people just don't bet. 15 % used it to accelerate a goal. All right. 14 % occasionally redirected funds. Also very not headline-y at all. Nobody is going to click that. 23 % kept funds separate as fund money. Again, nobody's clicking that. That's not very interesting. That sounds borderless. Dare I say that sounds responsible? And 11%, 11%, so one in 10, have it as a high-risk strategy, investment strategy.

11:30Michael Batnick:You know, these numbers, I don't know. I don't find them unbelievable. Anything there that you say that there's no way that's true?

11:37Ben Carlson:No, this is not nearly as bad. But then Bloomberg talks to this 32-year-old dude who says, it's not just a hobby for me. I'm smarter than the gambling markets. And he said this year he made, he said he booked a whole vacation thanks to the Carolina Hurricanes, which sounds insane to say out loud. So you find these anecdotes and you latch onto them and you go, see, everyone feels like they have to do this, have to gamble on sports just to get ahead. The thing is, young people are so far ahead, so much further ahead financially than previous generations, just because it's so much easier. So we have people doing everything now.

12:11Ben Carlson:They're much more advanced than we were. More young people have IRAs, more young people have 401ks, more young people have Robinhood accounts, more young people also gamble online because guess what? It's easier. We didn't have access to this stuff, so no one talked about it or did it.

12:25Michael Batnick:No offense to Robert. He's 32. There's like the scene of wedding crashers when they're sitting on the steps of the Washington Monument or maybe it's in Jefferson. I can't remember. Come on. We were young. A couple of kids. And I think Owen Wilson says, not that young. Robert, you're not that young. You're 32 years old. Snap out of it. Robert says, I booked a whole vacation thanks to the Carolina Hurricanes this year, which sounds insane to say out loud. It's not that insane to say out loud. A little bit insane. But guess what? You could also not book a vacation because of the hurricanes.

12:51Ben Carlson:You're 32 years old. True. that you should be saving in a different way. But so there was this other survey done by Empower that a lot of people point to. And they asked every generation, what do you need for a minimum net worth to be? What does financial success look like to you? And what's a minimum salary?

13:07Michael Batnick:This is garbage. We've been through this before.

13:08Ben Carlson:The salary is like$600 ,000. And the net worth is like$10 million. And everyone's like, see, look at Gen Z. And I just, this is like the sampling bias survey. Like, I don't believe a lot of these numbers. And I feel like they're used to, I still don't understand the term gaslighting. I'm still trying to learn that one. It feels like gaslighting to me or virtual signal or whatever. It's funny because I do an annual rewatch of The Office Space and I put it on again the other night and I'm watching this and it's Gen X who is completely just miserable with their situation in life and being in a cubicle.

13:42And it just, every generation goes through this

13:46Ben Carlson:like quarter life crisis, whatever you want to call it. I think Gen Z is just going through earlier than most. And I had one of these moments in a great financial crisis. I remember I asked my boss for a raise and they kind of, they laughed at me almost like, are you kidding me? No one's getting a raise right now. And I was reading Ramit, I will teach you to be rich. He was the first blog I ever started reading like 2006. And I remember in 2009, cause I got caught up in the, listen, we're all screwed because the great financial crisis, like for, through no fault of our own, we're screwed. The job market stinks.

14:16Ben Carlson:No one's, you know, it's hard to ask for a raise. It's hard to get a new job. and I remember Ramit wrote a post about like, okay, listen, you can complain about the macro economy for 10 minutes and then what are you going to do about your own situation? And that's kind of like, you need someone to shake you out of it and go, stop getting into the herd over there who complains about it's all the economy's fault and it's all the boomer's fault and it's all the housing market's fault and all these things. Okay, fine. Get it out of your system. Now, what are you going to do for yourself that you can control to get out of the situation?

14:44Ben Carlson:And that's kind of where I am with young people. Like, okay, fine. Get it out of your system. We've seen these things before, but Gen Z really is better off in terms of income, in terms of stock market dollars, in terms of wealth by age. Like if you look at all the numbers of under 40, these people have more money in the stock market than ever before. And they just have more money in everything than ever before. And again, I do think the biggest gripe about housing, I totally am on board with that. If you miss the housing boat by five years because of you just weren't at the place in life to buy one, and you miss 3 % mortgage rates and much lower prices, it's not your fault.

15:22That's the Robin Williams

15:24Ben Carlson:in Good Will Hunting.

15:26Michael Batnick:It's not your fault. I have two different lenses through which I see and experience young people. Number one is this nonsense and social media, which paints a distorted picture of everything, right? Young people, old people, unhappy people, happy people, AI people, everybody's a warped image. So let me just put that to the side because that's not real life. Right. And then I have the people that we work with, which is also a, I suppose a, I don't know if that's a small sample of people. Well, I do know it's a small sample of people. How many people, how many young people do we have working for us under 30?

15:59I'm going to guess not 20.

16:02Michael Batnick:We've like, yeah, 20, 25, probably all over the country, not making$600 ,000. And by all accounts, these seem to be very happy people. I don't know that they're like representative of the entire population of young people. But I just, I just, I think that a lot of this shit is warped by social media.

16:21Ben Carlson:I know it is. If you're too online, then yes, I agree. I also do think that there's going to be something, whether it's happening now or in the future, where there are just so many more, I keep harping on this, there's so many more rich people that there are bound to be unhappy children who are almost like downwardly mobile for no fault of their own because their parents are so successful and rich that they're going to be miserable because they're probably not going to be as successful as their parents. That's true. Or they're going to inherit mommy and daddy's money. And it's like, they're not, they're never going to be happy because of that.

16:51Ben Carlson:That's going to be a big thing for a small segment of the population. The other big thing is that in 2008, when I was coming out of college,

17:03Michael Batnick:obviously not a great time, but there were no young rich people for the most part. No, no.

17:11Ben Carlson:There wasn't a thing.

17:13Michael Batnick:There's no influencers. That wasn't a job.

17:15Ben Carlson:But that's why the 2008 crisis was so different because everyone felt like they were in the same boat. Because there was older people who got in trouble, who lost their stock options, who got crushed in the stock market, who lost their house potentially, who lost a job, and also young people. So everyone was dealing with this. Everyone was on the same wavelength. And now there's a different wavelength. Because some young people would say, listen, okay, great. I put$20 ,000 into my 401k in the past five years. and now it's worth 45 grand. What good does that do me? And I understand that. But you also have to be patient as a young person and know that like most people don't get rich overnight and the stories that you're seeing, that's not normal.

17:54Ben Carlson:That shouldn't be a strategy.

17:56Michael Batnick:Life has seasons and like every young person before them, they will age out of this season of their life and into whatever's next.

18:05Ben Carlson:Yes. And I still do feel like as a whole, young people are going to be richer because some of them box out of the housing market. I really do think that's a thing, and it may still make them unhappier, but I think that they're going to be one of the wealthiest generations ever at a younger age than most because they know more about the stock market and they have access to it. See, this is what the world does to us these days. We start out talking about how this is one of the greatest bull markets of all time, and then we have to bring it down.

18:38Ben Carlson:Everything is a caveat. Speaking of which, so in the 2010s, the big caveat was the only reason that we have a bull market, and I'm speaking in like doomers here probably. You're speaking in what?

18:49Michael Batnick:I didn't hear that.

18:50Ben Carlson:Doomers. Doomers. The only reason there's a bull market is because interest rates are at zero and the Fed's monetary policy and QE. That's the only reason we have a bull market, right? That was in 2010.

19:00Michael Batnick:That was 2010 to 2000. Well, not even 2010 because it's 2010. See, here's the thing, Ben, getting back to my earlier point. In 2010, nobody was talking about a bull market. No way. This is all revisionist history, right? It's like looking at basketball stats and saying, this person was the best. No. If you saw it, you would say, no, no, no, no, no, no. No, no, no. Yes, the S &P 500 was up 37 % in 2009 or whatever the number was. That wasn't a bull market. We were there. In 2011, we were still talking about double-dip recession. That wasn't a bull market. The only time we even started talking about a new bull market was 2013.

19:38Ben Carlson:Yeah, but a secular bull market can only be defined in hindsight. It can't be defined in the moment. Fine.

19:44Michael Batnick:I know there's nuance here, but I know you were there. We were not talking about a bull market.

19:48Ben Carlson:Of course, no one. Yes, I agree. So that was the thing in the 2010s is 0 % rates. And now in the 2020s, it's anytime you show someone there's a bull market, they go, oh, yeah, well, government spending, government debt, deficits. That's the only reason for the bull market. And obviously, that's a big part of it. That money does drop to the bottom line. But here's the thing, because in the 2010s, the question was, OK, fine, Europe has negative rates. Why aren't stocks going crazy there? In the 2020s, it's remember we showed this data for Michael Semblis before. Canada has a or not Canada. China has a bigger deficit than the US.

20:22Ben Carlson:China is now borrowing as much or more as a share of GDP than the US. Look at what Chinese stocks have done this decade. And I didn't really realize it was this bad. MSCI China has done literally nothing this decade. is up 2 % in total in the 2020s.

20:38Michael Batnick:I hear your point. You can't compare Chinese stocks to US stocks. I get it. We are a capitalist society and they sort of are not.

20:45Ben Carlson:It's kind of crazy when you think, and obviously, hey, the debt goes to different things. My point is, as you know, you can't just pick one variable like that and you go, okay, if you just pull this lever, things go up. It doesn't work like that. Of course. Right. I think there's people who actually think this is true though, that the Illuminati is pulling the lever and making the stock market go up. And if it was that easy, they would just keep pulling the lever. Right? Well, keep...

21:12Michael Batnick:What's keep that chicken Jerry from? Is that a blooper on the internet?

21:19Ben Carlson:Gotta plead ignorance here. I don't know what that one is.

21:22Michael Batnick:Yeah. Yeah. It was a weatherman who went viral.

21:25Ben Carlson:Okay.

21:25Michael Batnick:All right. Anyway, moving on. Well, you can't have a bull market without this. Chart from the Wall Street Journal via Bank of America. the median earnings growth for the S &P 500. So strip out the one time, like the hyperscalers, the median earnings growth is about 14%, which is the highest it's been in a long time, which gets back, I mean, at least since 2023, like way, way, way, way higher than normal. Gets back to the earlier point. This could be peak growth. Like we might -

21:56Ben Carlson:This is a good chart though. This, because you're right, this takes away the extremes and the concentration and the, hey, this is all just a markup from Anthropic and OpenAI. It's not real. This is a good chart. Very good chart.

22:09Michael Batnick:All right, on TCAF, we were talking about how much money is still in money market funds despite the raging bull market, despite higher interest rates on bonds that you could lock in, despite money market rates coming down, like the money is not moving out. And somebody rightly said, guys, you always talk about money market funds. You never talk about how big the denominator is. And I would say, I said, actually, not true. Not true. On Thursday, I omitted the fact that the market is so much bigger. But we've shared this chart a million times in the past. So credit to this person for sending us the email.

22:42Michael Batnick:You have to make the adjustment. Because we were saying like, oh my god,$3 trillion. That's money on the sidelines, whatever. It's 11 % of the S &P 500 market cap, which is below the 18 % average since 1990.

22:56Ben Carlson:So I don't know that I've seen this chart before going this far back. I assume ChartKid helped you with this. That is bananas that money market funds were 61 % of the stock market in March 2009.

23:06Michael Batnick:Yeah, I think that was just a pure denominator collapse.

23:09Ben Carlson:Well, of course. But being that high. Yeah, it's nuts. Because it was half of that in the dot-com bubble or whatever. So this is a Wall Street Journal article. It said there's$3 trillion in retail money sitting in money markets. And I really do think that cash is a bond allocation now. I think so many people got fed up with bonds because you lost 18 % of your money in the ag or whatever that people said, you know what, fine. Cash is my bond allocation. And even if I get lower rates and lower yields, I'm going to have a barbell portfolio. And I'm not going to get hit in bonds again. Which is interesting because I think you and I, something we may have been wrong about or we were leaning, that we thought once rates get to a certain level, it's going to be competition for other stuff, right?

23:58Ben Carlson:So if you look at tips right now, because everyone's worried about inflation, right? Correct? People think inflation's gonna be higher. We're in a 3 % world, not a 2 % world. Inflation is sticky. Government spending is obviously not slowing down. Nothing stops this train. So how are you getting 3 % in a tips yield for a 20 or 30 year bond plus inflation? So you get a real 3 % for bond. Like that's a pretty darn good deal. And William Bernstein wrote a piece on this. He's a big tips guy. He always writes about this in a lot of his books. He's saying by 2010, yields for tips had fallen below 2%.

24:34Ben Carlson:By 2011, below 1%. In 2021, the five-year tips yield fell to negative 1.76%. You had a negative yield. You were literally paying the government in a real basis to buy these tips. Now you can get 3 % in tips. And he's saying, this is like a massive, massive buying opportunity. Like you can get 3 % real in a government bond. Holy crap. And no one cares. No one wants this stuff. And I understand it. Yeah, nobody cares.

25:03Michael Batnick:People think in nominal terms. So on. They also, they also, people also have been, they just, the scars are still fresh. Their hand still hurts from touching the oven. They don't want volatility in their fixed income.

25:16Ben Carlson:So on Steve Eisen's podcast this past week, he had Jason Tennant from Strategas. Well, you had Todd Stone from Strategas last week too, right? We did have Todd Stone. So they asked, what's the level of interest rate for bonds that would get people to sell some stocks? And they all agreed. I thought it was like four, four and a half percent, which probably you and I probably would have said, yeah, back up the truck. People are going to be, and they said, it's actually way higher. And this is just total bull market mindset that if you're getting 20 % a year in the stock market, what do you care if you can get four or five or 6 % in the bond market?

25:51Michael Batnick:Yeah, it sounds the same thing, right?

25:53Ben Carlson:It's the only – 5%, 3%, same thing. You say it after the fact. Whenever this thing ends, someone's going to look at bonds and go, why didn't all these idiots put their money into five-year treasuries? Are you kidding me? Because they were yielding what – and that's the only thing you know after the fact. And I mean, yeah, no one's going to say, oh, I'm going to lock in 5%. Awesome. maybe some retirees. Most people aren't going to do that.

26:16Michael Batnick:I forgot to mention exciting news. Our longtime friend Morgan Housel has joined the compound. Morgan has a podcast called The Psychology of Money, name of his bestselling book. And I do mean bestselling. It has to be the number one selling book in the history of finance, no?

26:35Ben Carlson:If we call it like a personal finance behavioral psychology book, probably, yes.

26:39Michael Batnick:Well, I don't even know what number two is. Is The Intelligent Investor the number?

26:43Ben Carlson:It has to be an intelligent investor. That thing that's been on sale since the 1940s, and it's still like it.

26:47Michael Batnick:I bet you Morgan sold more than the intelligent investor. I don't know.

26:52Ben Carlson:It's just been out for maybe.

26:53Michael Batnick:Anyway, Morgan is an incredible person, incredible author, speaker. He's one of the few. Not too many people can write and speak. Very difficult. I would say I'm probably below average at both. I could do both. I could do both. It's two different muscles. You're right. It's two different muscles. Not well, but I could do both.

27:12Ben Carlson:There are some really good writers who, if you hear them speak, you're like, oh, gosh. Yes, you and I are both like Bs.

27:18Michael Batnick:No, you're a great writer. You're an A writer, C plus speaker. I would say I'm a C minus writer and a B speaker.

27:28Ben Carlson:That's fair. Average it out and we're Bs. Yeah.

27:31Michael Batnick:I would say Derek is another unicorn, Derek Thompson, AA.

27:36Ben Carlson:Hey, listen, I graduated college with like a 3.3 grade point average. I think that's where we are. 3, 2, 3, 3. if we average it out. Wait, I have one more thing to say.

27:44Michael Batnick:Oh, speaking of books. I got rid of almost all my books.

27:49Ben Carlson:Okay, you sent a picture of you sitting in your driveway with a bunch of U-Haul boxes.

27:54Michael Batnick:So they're being picked up.

27:57Ben Carlson:It looks like we haven't picked up yet. Why would you do this? Because a bookshelf just looks so nice. There's something about a bookshelf with all these books. Why did you do that? I have no, I can't fit a bookshelf in my house.

28:09Michael Batnick:Oh, you have no room for it? Nope. I, uh, listen, I, I enjoyed looking at it, but it's sort of a piece of furniture. I wish I could keep my books. I can't keep them forever. I have 11 boxes where there's taking up too much space. I'm never reading these books again.

28:23Ben Carlson:So you give them to the library or what? I kept the ones that are signed, but they, I don't know, some book company picked them up.

28:29Michael Batnick:Okay. Felt like, uh, that season of my life of hoarding my books is over. I wish I had space for a bookshelf, but I don't.

28:37Ben Carlson:Well, it's funny. Almost every new book I buy now is either on Audible or Kindle. So I don't, I, people send me books still, but most of the books I have now, I'm, I'm consuming an electronic form. There you go. All right. Let's talk about a bull market story here. Oh, wait, there's one more bond chart. Just yes.

28:55Michael Batnick:Just real quick. Another risk to the bull market bond rates just continue to march higher. The, especially at the long end, which is like the worrisome part. Yeah.

29:04Ben Carlson:But what we just talked about shows that it's not a risk until it is like no one the in a bull market no one that's nonsense it's not a risk until it is i mean

29:14Michael Batnick:isn't it literally that's true we just we just had this conversation no one no one cares about

29:19Ben Carlson:bond yields right now when the stock market is giving you so much it's a potential risk

29:25Michael Batnick:and it's not just in the u.s global bond yields are screaming higher and i think for the most part the stock market not for the most part the stock market has absorbed higher rates stock markets at all-time highs. Of course it has. The median stock is at an all-time high. We are now used to this. If the third year goes from, if it lurches from five to six, the stock market will buckle. But if it's a steady march higher, I don't know what the line is, but something to keep an eye on.

29:52Ben Carlson:The stock market really has been like a boxer that just absorbs punches. Like, takes a million punches. Remember when the Simpsons were Homer? His whole thing was that people would punch him until they fell over. And he just took the punches and then finally that's the stock market. So everything that's been thrown at them, it takes it. And then every once in a while, it punches back and goes up. But if you would have told me four years ago, hey, mortgage rates are going to be at 6 % forever, and bond yields are going to be at 5%, and you're going to get the highest 30-year bond yield and keeps going higher, I would have said, man, that can't be good for the stock market.

30:25Right?

30:26Ben Carlson:Stocks don't care. It's crazy. All right, great bull market story here from the Wall Street Journal. The dating scene that's suddenly dominated by chip nerds. Thanks to mid six-figure bonuses, engineers at Samsung and SK Hynix are the hottest bachelors in South Korea. See, they should make a reality show about this. And they interview all these people. And they talk to this guy who works at Samsung. And he said, like, everyone there is getting six-figure bonuses. And he says that, like, there's more romantic interest for him and his coworkers because they got stock options.

30:58Michael Batnick:The real housewives of SK Hynix.

31:00Ben Carlson:I love it. That's a great bull market story, though, right? Yeah, it's good. I think they said the average, you know, I'm sure they get stock options too. And they interviewed one woman who said, I dated a guy who worked at SK Hynix for three years. And my biggest regret is that I didn't buy the stock.

31:17Michael Batnick:It's 30 minutes of the show. We haven't even mentioned the rebound in the AI memory names in particular. Oh my gosh.

31:24Ben Carlson:They came roaring back immediately, right?

31:25Michael Batnick:Sandisk was up 35 % last week. But see, this is the point. When we're part of the problem too, Ben, we love talking about the bad news. and the good news, eh, who cares.

31:35Ben Carlson:That's because we move on, right? One risk, one week, next week, other risk. I'm thinking about this as we continue to harp on potential bad news

31:48Michael Batnick:because that's what we do. We worry. It's just as good as it gets. Humans are never going to change. But I do think that there's like some weird, I have no evidence of this. There's some weird thing going on where people want to go back. and I think part of that is certainly COVID but like people want to reset and I think I don't know how to articulate that

32:15Ben Carlson:so you're talking about inflation and prices and stuff and okay

32:20Michael Batnick:I don't even know that that's like I don't even know that that's like a 2026 story I think it's like a forever sort of thing

32:28Ben Carlson:I do think in a lot of ways though 2020 is a huge line of demarcation

32:32Michael Batnick:for sure.

32:33Ben Carlson:There was a before COVID and there's an after COVID. And I think that is, that has screwed with a lot of people. I do agree with that. All right.

32:40Michael Batnick:Somebody emailed us. So wait, hang on.

32:42Ben Carlson:Getting back to this recession thing. I keep thinking through like, what is the reaction function going to be? And I think that the sentiment could be so, so overwhelmingly negative. Like we've never seen before that. That's pretty easy to say that consumer sentiment will just drop to lowest levels. We've ever seen it. But what if some people actually are happier that we're in a session? And it's kind of like, you know what? I've been suffering. Now they're suffering too. And what if there are, there is a certain 20 % of the population, 30%, whatever the number is, who kind of go, you know what?

33:11Ben Carlson:I don't mind this. I don't mind a recession. My life hasn't been very good anyway. Oh yeah. Yeah. Yeah. There's going to be a lot of that where some people are going to be happy when we have the next recession. That's going to be, that's going to be an emotion.

33:24Michael Batnick:Uh, my just got a text message, been. Oasis, Don't Look Back in Anger is out now in cinemas and IMAX September 9th.

33:33Ben Carlson:I was thinking about that the other day, since we're almost time for Future Proof again. One of my best concert experiences I've ever had in terms of just the vibes. Vibes were off the chart of that concert. It was amazing. That was so much fun. I loved it.

33:47Michael Batnick:One of the best nights of my life.

33:48Ben Carlson:That was great. All right. What's the email here?

33:50Michael Batnick:Okay.

33:54Michael Batnick:markets. Okay. You say markets are always right. Many times if markets are always right, there would be no buying opportunities. Therefore this popular statement is inaccurate. Don't scare the people into always indexing. Believe.

34:08All right.

34:09Michael Batnick:A lot to unpack here. My operating premise is that the market is always right. And now I know that's not true. Obviously the market is not always right. Because guess what? The price changes tomorrow and the day after. And sometimes the price changes so fast that the market can't always be right. And especially when there's uncertainty and confusion. I guess the point that I'm making is it's hard to know when the market's wrong. And if you think that that's controversial, you're an idiot. That should be like the The fundamental premise for any investor is that it's hard to know when the market's wrong.

34:49Ben Carlson:Okay, so that's a really good segue. So Bert Malkiel was on Barry's podcast a number of years ago, right when Barry started Masters in Business. And I had this quote. And he says, people think that market efficiency means the price is perfectly right. That's wrong. He said the price is never right. In fact, prices are always wrong. What's right is that nobody knows for sure whether they're too high or too low. It's not that the prices are always right. is that it's never clear that they are wrong. The market is very, very difficult to beat. I think that makes more sense to me.

35:16Michael Batnick:Okay. So that's also, I was thinking about this. I was in a car ride with a friend and we were talking about the stock market and he sounded like every retail investor. And I don't mean that pejoratively at all. Okay. He sounds like every retail investor who's done extraordinarily well over the last 15 years. And I know, Ben, you said there's some people that want a recession. There's a lot of professional investors who want this era of the best and most well-known companies beating everything. People need that era to end. They need it to end. Right. This idiot just bought five tech stocks and he's killing me.

35:55Michael Batnick:I can't believe this. So my friend, and let's just call my friend the average investor, who bought Google 10 years ago and just held it. And when I say just, extraordinarily hard to do. I didn't do it. So I'm not putting them down. has beaten the shit. And there's so many investors like that that have beaten the absolute living shit out of quote professional investors. Right. Okay. And there's nothing that I could do to convince him that this -

36:26Ben Carlson:You were just about to use a big word there and you stopped yourself.

36:28Michael Batnick:Assuage. Yes. Was I about to use it right? I was like 50-50.

36:32Ben Carlson:Yeah, keep going.

36:33Michael Batnick:Okay. There's nothing I could say to convince him that this has been a really good market environment. And I think what he hears is, and I'm like, dude, I'm not like wagging my finger at you and saying that like I'm a better investor trader than you are. That's not what I'm saying. And I'm definitely not trying to scare people into investing in index funds and needing to hire a financial advisor. That's like not my shtick. I would encourage people to invest however they invest. And it doesn't matter if you beat the market. Just put your money in the market, what you can afford to save for your future.

37:06Michael Batnick:That's like my whole MO, Ben, is safe for the future. Whether you beat the market, whether I'm smarter, better trading, it doesn't matter. But it is an interesting thing because I was thinking about this. Well, in what environment can the retail investor lose to us? I know for a fact that I will be the average, quote, no-nothing investor. And it would have to be in a bear market where buying the dip no longer works. because I know that if I'm investing in a bear market, I'm not going to get blown up. If the market's down 30%, I could be down 30%. If the market's down 30%, I won't be down 70%.

37:43Ben Carlson:Right, the guy in the three times leveraged NASDAQ fund is going to be down 80%. I also think that just a different market environment, and maybe these don't exist anymore, but value stocks work, dividend stocks work, international stocks work, and those things are working. But if they really worked as tech stocks got, smoked for a long period of time. That's the period. That's the time where -

38:04Michael Batnick:So that's the environment that all the Buffett acolytes are dying for. Yeah. I don't care. We don't need that. So anyway, Weisenthal also was on this beat this week. He tweeted, what is true is that an individual trader going up against pros will have a hard time outperforming the index. I don't know what the going up against pros part means in there. But anyway, he said, but unless you're managing other people's money, I've never understood why this is a particularly important thing to care about. But even on this point, the story over the last 15 years is that to beat the market, all you had to do was buy the big names that every Joe Schmo has heard of.

38:39Michael Batnick:No need for any satellite imagery data, sophisticated algorithms, or complicated Excel models. It's been a very interesting 15-year period where the professionals have gotten smoked.

38:50Ben Carlson:Yeah. It's been the first level thinking market for a long, long time. for a long, long time. Yeah, good point. All right, let's talk about AI. So AI feels to me like the debate has shifted to the, remember the hard landing, soft landing debate we had about the economy? It just kept going and going and going. Alex Demas had a good tweet here. If you look at the last three years of AI progress, technologists have largely been right about the massive increase in capabilities, right? That's probably better than anyone. The things that AI can do is probably better than anyone could have possibly imagined when JetGPT came out.

39:19Ben Carlson:At this point, like, oh my gosh. And the economists have largely been right about the economic impact. I don't expect that to change. This is the one, I think he's, I think this is the right take. That the capabilities of this are going to keep getting better and better and better. And it might not have the earth shattering impact that people think. And that's going to be, it's somewhere in between the hard landing and the soft landing. And everyone's kind of like, wait, I'm kind of right and I'm kind of wrong. That's where we've been.

39:49Michael Batnick:Can I pile on your grand rapids hedge? I was thinking about the Paul Kudrosky Cantrose interview. And Paul Kudrosky has been making the case for a while now that this is a massive bubble. He has the, I listen to that too. He makes the best bear take that there is. Yeah, it was good because he's not like, he's not like, this is all nonsense. He's like, well, obviously it's real. Otherwise there wouldn't be this level of investment.

40:13Ben Carlson:He's not just a doomer either. He literally works. He's a VC. Okay. And part of it, I think, I worry that like, wait, is it just shtick that he's just the AI bear guy and he keeps doubling down. But his bear case, it's the best bear case that there is by far. So how do you sum up his bear case? His bear case is that just listen, there's never been this amount of spending before on something like this. And the ROI is just not going to be there in time. Right? Is that fair? That's basically it. And it's not just that it's the biggest spending as a percentage of GDP in history. It's that it happened faster than any time in history.

40:47Ben Carlson:And you just, there's too much other spending that has to go on in the future. And if you just look at these like an actual investment, unless we turn technology into a god, and he's saying like, the only way I'm wrong is if this is actually a call option on AGI.

41:03Michael Batnick:So my takeaway was, you know what, this is just, I put this in a too hard pile. Now I know as people talk about this is a financial podcast, we should probably have strong opinions on, is this a bubble? Is it not a bubble? I don't know. After I listened to that, I was like, I just, I don't know. How could I know? How could I know if Google Apple and Microsoft and Amazon are going to get a high enough return on their investment. How the hell could I know?

41:27Ben Carlson:Yes, I totally agree. You come away from listening to that and you go, oh man. But even he asked him at the end, how are you like betting it? Are you putting a big short on this? And he was kind of like, not really. I can't really force myself to put it. I'm not reinvesting or something. But yes, I totally agree. I'm hedging this one. I'm totally on the fence. We said before, we told Derek, like, no, this isn't a bubble. And I lean that way, but I'm not 100 % on that. How could you possibly?

41:57Michael Batnick:I mean, all the signs are there.

41:58Ben Carlson:Yeah. But I don't know. Paul makes a very good, on the Big Technology Podcast, it's worth a listen. He makes a very good bear case. Very good bear case. Here's another part of it. Wall Street Journal. Why the$3 trillion in spending is higher than it seems. And they show all this off-balance sheet stuff for all the big hyperscalers. and then they break it down and it's mostly Google and Meta and Microsoft and Oracle and Amazon and NVIDIA have these massive off-balance sheet leases that have not started yet. And obviously, if the Wall Street Journal has it, the market knows this. But this is another thing like, hey, actually this amount of spending, what they're committing to this is even bigger than the numbers that we see at face value.

42:43Ben Carlson:And it's going through the free cash flow levels down to, okay, we're into borrowing territory now. And Google has even issued equity. So that's kind of the thing here.

42:57Michael Batnick:All right, well, it's certainly real. Anthropics revenue run rate is up to$65 billion. Sean, make this chart comparing the AOR of Anthropics to the trail and 12-month revenue of various companies. And it's done more revenue than Pfizer, Cisco, So ConocoPhillips, Intel,$10 billion ahead of Uber,$15 billion ahead of Coca-Cola. I don't know why I just said it like that. And$18 billion,$17 billion ahead of Netflix. Holy mackerel. And it's right behind and it's probably about to pass Oracle and Delta.

43:37Ben Carlson:See, I'm not impressed because how can Delta be ahead of them? Doesn't it show how bad of a business airlines are? that Delta has a higher revenue run rate than all these companies? Yeah. It's kind of funny to think about.

43:49Michael Batnick:And it's so much smaller.

43:51Ben Carlson:But yeah, you're right. And this is a company that was founded a couple of years ago, a few years ago. And they're already earning more money in revenue than all these. Yeah, so that part is real.

44:03Michael Batnick:All right, last week with Todd Stone, we were talking about the explosion in the ETF marketplace and what's coming, wrapping prediction markets inside of ETFs. And then there was a filing. from a company, I don't know who this is, but Jeffrey Pratak tweeted, wild, wild stuff. Filing to register 32 ETFs tied to each NHL franchise. Each ETF will invest in futures contracts tied to the CME FSPI index for the team concerned. Whatever. I hate this.

44:32Ben Carlson:Obviously, I hate this. It's kind of funny that the NHL is the first one to do this and not the NFL or the NBA. But yes, obviously this is, it's also crazy that there is an actual futures contract created in the CME for this? Like this is, it sounds halfway legitimate, but.

44:51Michael Batnick:Keep gambling out of your brokerage accounts. You should not be able to commingle your retirement fund.

45:00Ben Carlson:That I agree with. Your retirement account with sports gambling. Your fan, that's why, yes, I like the separation of church and stay here. You should keep your gambling in your FanDuel account or your DraftKings account or whatever it is. Like that should be separate from your Charles Schwab and your Robin Hood account.

45:15Michael Batnick:Because you know why? You could so easily drain your brokerage account. And just shovel that money into the hole that is sports betting losses. This is. It needs to be. There needs to be a little bit of separate. There needs to be a little bit of friction. To slow people down from making bad decisions.

45:36Ben Carlson:But this will kind of test our, our, like, do we actually believe these gambling numbers? Like how much money are these ETFs going to get? Will they actually have enough traction?

45:46Michael Batnick:I don't think so.

45:48Ben Carlson:So the hope is that they just fall flat on their face and that they never get enough money to matter.

45:53Michael Batnick:That's the hope.

45:54Ben Carlson:Obviously, this stuff is not slowing down ever. You talked to Todd about this. Like this is just – there are going to be so much crap thrown against the wall. It hasn't started yet. No, so much crap. All right. So when do we start regulating this stuff? We just don't care? Well, you and I care. I don't think the regulators care. All right. I guess it is kind of a wild, wild west. And it's like, hey, if you want to touch the hot stove, do it. You know what?

46:17Michael Batnick:I guess I am a little bit sympathetic to the where's the line argument. Although maybe that's like a straw man type of attitude.

46:28Ben Carlson:I don't know where the line is.

46:33Ben Carlson:It's funny. I was going to talk about this later. But you asked last week, like, why are Westerns a movie genre? And so I started listening to this book. I had a long drive last week, so I listened to a bunch of audiobooks, which is a great way to pass the time on a drive. I know podcasts are, but you can listen to an entire audiobook on a long drive. It's a great way to pass the time. So I was listening to this book called The Gunfighters by Brian Burroughs. And it's this book about Wyatt Earp and Billy the Kid and Wild Bill Hickok and all these people that are in the Western movies you've seen.

47:05Ben Carlson:And you're kind of like, wait a minute, that was a real person? So it's about the actual history behind them. In the first chapter, the author explains that in the 50s is when people kind of started researching this stuff. And it really came in a big way, the TV shows and the movies in the 50s. And he kind of said, why were Westerns so popular? And he said, the reason is that Westerns are so popular, especially in America, is the freedom component. And you're on your own. And there's no laws. And there's no regulations. and there's no rules. And he said, that's why Americans love Westerns. Because you have that element of freedom and you're on your own and no one's there to help you.

47:41Ben Carlson:And that's why ETFs are also wild, wild west. That checks out. Good analogy. Well done. That was good. All right. So we talked before about, yes, young people being really angry about the housing market. It makes sense. There was this guy writing in Bloomberg who wrote about his own situation. and he says he's been a renter over the years and he says, I love renting. It gives me flexibility. It gives me a fixed overhead. He said he's rented in Brooklyn. He's rented in Miami. He says, I love knowing that my rent is basically the maximum I'll pay in housing costs aside from some minimal expenses like renter's insurance and small repairs that aren't covered by a landlord.

48:20Ben Carlson:A mortgage payment, however, is the only one of the costs of a homeowner must pay to maintain a home. And then he basically says, all the money that I would have spent on home ownership, I've gone into low cost broad based index funds and he's okay with this. And I know a lot of young people aren't. A lot of people.

48:35Michael Batnick:No, but a lot of people have done that. I mean, I think,

48:37Ben Carlson:but I think this attitude is going to start becoming more and more pervasive for a larger segment of the population of young people than it ever happened before. Fine. I'll just put it in my brokerage account. All right, but it cuts both ways

48:49Michael Batnick:because what if you put your down payment in and then the market falls 20 % doesn't recover for three years and you're like, shit, my down payment.

48:59Ben Carlson:True, but I think some of this money is just maybe never going into a home where, yeah, you're right, they buy when they're 40 or something. I just thought it was a good, like, there are pros to being a renter.

49:10Michael Batnick:Yeah, yeah. Ben, getting back to the negativity bias that we spoke about earlier, SpaceX, a lot of talk about what's going to happen during the unlock. Is it going to fall below 100? Is anybody talking about the fact that it just bounced from 100 to$1.50 during the unlock.

49:30Ben Carlson:Yeah, you're right. Everyone was kicking it while I was down too. Nobody cares about good news. Hey, I do. I got into SpaceX for a quick little 20 % gain. Love it. Good for you. Trader Ben.

49:43Michael Batnick:All right. So there was an article in Bloomberg. The father of the 401k has a new savings plan. And my big takeaway from this, there's a picture of him with the cat on his lap. Yeah. And it says -

49:57Ben Carlson:Ted Benna.

49:57Michael Batnick:Ted Benna with this cat, Leo, on his farm in Jersey Shore, Pennsylvania.

50:07Michael Batnick:That's a new one. There's a Jersey Shore, Pennsylvania.

50:12Ben Carlson:That's new to me, too. So he talks about like, hey, listen, I so he he basically got the 401k because there's this tax loophole, which, of course, what do you what do you think of tax loopholes? Who is it going to benefit? rich people. He said, the 401k has really benefited rich people more than other people. I want to make it more equitable. I actually think the 401k has been a resounding success. And I know a lot of people would disagree with this. Here's the numbers from this article. What is to disagree with? It's been a home run. So he's saying it as, so here's the thing. When he started this in the late 1970s, of 401k when it first got hatched, 38 % of US private sector workers, many of them in unionized industries had pensions that promised income for life.

50:56Ben Carlson:It wasn't, there was never this time that everyone had a pension. And now we have, we would not have 65 % stock market ownership in the US without a 401k. It's simply, that wouldn't be the case.

51:08Michael Batnick:There's$10 trillion in 401ks. Ted, take a bow.

51:13Ben Carlson:Yes. It was a way bigger success than we ever could have realized or hoped for. because guess what? Those unions were going away and those pensions were going away either way. So if we would have had all the pensions go away and the 401k wasn't there to fill the void, it would have been 10 times worse. Then people would have gone, what? There's nothing? Just an IRA?

51:34Michael Batnick:That's it? Just at Fidelity alone, there are 600 ,000 accounts that have a million dollars more. And think about what that number is going to be in 10 years and 20 years. Yeah. Yes.

51:48Ben Carlson:I would still love it if we could open up the 401k for everyone. And the government said, listen, if you earn a paycheck, you can invest in the government's form of the thrift savings plan. Because there's still like 40 % of workers don't have access to a 401k because they work for a small business that doesn't have one or their employer doesn't give it. So I would love to see a 401k for everyone. That would be the Ben Carlson campaign promise. Everyone gets a 401k. If you want it, you can have it.

52:13Michael Batnick:I do love that he's not resting on his laurels and he wants to improve. because it's not perfect. To your point, there's always room for improvement.

52:19Ben Carlson:But yeah, Ted, take a bow. This is interesting from Bloomberg. More Americans now fly than ever before. So going back to the 1970s and they looked at people that have flown in the last 12 months or flown ever. And both of these have essentially doubled from, I don't know, flown in the last 12 months is like 25 % of people in the 1970s and now it's closer to 50%. And flown ever was 50 % of the 1970s and now it's closer to 80 or 90%. My six-year-old has been on more flights than I was in my entire life prior to age 25. That makes sense to me. I didn't really start going on planes as much until, I mean, I'd fly to Florida to see my grandparents occasionally, but the whole thing of people driving for spring break is not as big of a thing as it used to be.

53:10Ben Carlson:That used to be like everyone would just get in their car for 20 hours from where I'm from and drive to Florida. and we would lay on the floor of a van with no seatbelt on and sleep. This is another good one from this report, though. On an inflation-adjusted basis, from the early 1990s, the cost of a domestic flight has essentially been cut in half. That's pretty crazy. This is just the average fare from Chicago just for inflation is in half in the past 30 or 40 years.

53:38Michael Batnick:I really do believe this. I know this is not a new insight. We've spoken about this in the past. I think it was Jonathan Haidt that came up with this, but I can't remember who. All this complaining that we do is a huge sign of progress and luxury.

53:51Ben Carlson:It is. I totally agree with that. Yeah. Yes. The fact that we have time to complain about the Wi-Fi on the plane and all this stuff, it's a sign of progress. It's a good thing.

54:04Michael Batnick:So Louis did a bit about complaining about Wi-Fi on the airplane. Yeah.

54:08Ben Carlson:Everything is great and everything is amazing and everyone is miserable or something. and I was happy.

54:13Michael Batnick:Sebastian Maniscalco came through Jones Beach and I was thinking about this. You went to see him? I did not.

54:19Ben Carlson:Oh, okay. I've been to see him a few times. He's great.

54:23Michael Batnick:Okay, so you might not like this take. Okay. First of all, I've noticed people that go see Sebastian Maniscalco love imitating him. They love doing his bits.

54:35Ben Carlson:Oh, yeah.

54:36Michael Batnick:I can see that. Like no other comedian I've seen. They just love doing his bits. Yeah. Yeah. Yep. I can see that. All right. Here's my take. Sebastian, and this is not a knock on him per se. Sebastian Maniscalco is the comedian for people that don't really like comedy. The same way that people think that Olive Garden is great Italian food.

54:59Ben Carlson:That's actually, that's a pretty fair take.

55:01Michael Batnick:Because he appeals to everyone. He's funny. I mean, obviously he's funny. He's a professional comedian, but. Yes.

55:09Ben Carlson:And to be fair, I discovered him very early on and like his early stuff a lot better. If I'm playing that card.

55:19Michael Batnick:That was a great walk back. I'm more a fan of his early stuff.

55:25Ben Carlson:That's great. Name three of his comedy albums.

55:28Michael Batnick:Because, you know, like my dad, I was like, dad, I get it. Yeah.

55:33Ben Carlson:Yeah, but he's very animated. And I mean, they do on SNL now. Yeah. So yeah, that's a good take. That's fair. No, my wife and I saw Kevin Hart in like 2007 before he really took off. And it was honestly one of the funniest comedy shows I have ever been to. And now I think the guy is not funny at all. Like at all. And because success changes you. Success makes you not as funny anymore. I'm very sympathetic to comedians.

56:00Michael Batnick:I think it's the hardest thing in the world or one of the hardest things to like make people laugh.

56:06Ben Carlson:oh yes it's yes and it's you have a finite amount of time though think about it people i've seen this because will ferrell had a new netflix show that came and went and everyone is going what will ferrell's not funny anymore what happened like he was one of the funniest people alive for like 12 years and it just you can't keep that pace up forever louis is still funny i saw his

56:27Michael Batnick:special at radio city last year and it was incredible yeah there's some people that still

56:31Ben Carlson:have it that are just really good at joke writing all right let's talk about rich guys in trouble We talked a couple weeks ago about the guy who owns the Dodgers and apparently used to own the Lakers being in trouble because he ran Guggenheim and there was some private credit stuff going on and insurance company stuff.

56:45Michael Batnick:A lot of self-dealing.

56:46Ben Carlson:Yes. Those are the allegations. Are you surprised that they let this guy buy the Lakers in the first place?

56:54Michael Batnick:I don't know. I have no idea what the vetting process looks like. How would they have uncovered this? He was a very, very, very rich guy.

57:01Ben Carlson:I guess that's true. like how, what kind of due diligence does the NBA have that would even know this stuff? But that's why I think this private equity, private credit stuff, it's really, really easy to hide stuff if you need to. Obviously this guy did.

57:15Michael Batnick:So maybe this is the next risk. I can't believe that he bought the Lakers and sold them a year later. All right, so I would love to institute a new rule. I don't know how it would be enforceable because if this guy has to sell for either financial and or legal reasons, okay? But maybe that aside, you can't buy and so if you buy a team, there has to be a minimum five-year holding period. Because think about a world where people are flipping NBA franchises for a billion dollars because that's the value increases by a billion dollars every two years. What is that going to do for the fan experience?

57:52If it is purely, purely a financial asset and there's little consideration to the experience

57:59Michael Batnick:of the fans, what does that could do to the league? I don't want to live in that league.

58:04Ben Carlson:Well, this seems like a pretty extenuating circumstances to me. I agree. And most of these are like, usually not assets you buy for, I mean, obviously it helps that the value goes up, but a lot of times -

58:16Michael Batnick:Yeah, but I'm saying, but if people, not if, people with money will see this, saw this and said, holy shit, this guy just made two and a half billion dollars in 18 months. Right. Let's do it. there's just so many rich guys now though it's crazy like think of how quickly they were able

58:37Ben Carlson:to find a buyer it's also kind of crazy disney stock has gone nowhere for 10 years bob iger's buying the lakers i don't know how much money he's investing okay well got a lot uh so matt ishbia who a big name in michigan not a lot of people he owns the phoenix suns he created one of the biggest mortgage developers in the country. They kind of needed a rescue from Oak Tree of all places because they made a bet that didn't work out and they tried to hedge some. And I think it's just a good reminder that even really, really rich guys, they can stumble. And like, there's nothing that makes you stay there forever.

59:16Ben Carlson:And actually, the ranks of really rich people changes way more often than people think. There's been studies on this. People who are in the top 1 % or the top 5 % can also find themselves like it changes. Obviously, it's easier to keep money than it was in the past, but this stuff is not guaranteed to anyone to stay where it is.

59:33Michael Batnick:Yeah. I saw a good funny joke about how poorly managed the sons are. No wonder he made a few bad trades with his mortgage company between Bradley Beal and KD. Yeah.

59:46Ben Carlson:So the stock's down 85%. I think they put some rate hedges on, assuming rates would fall. Like, of course, there's been no housing activity, right? And so it kind of makes sense that the stock would be down so much. All right, story time. So I did a speech last week at the FBA Crossroads down in southern Indiana. French Lick, home of Larry Bird. And the resort I was staying at, a lot of great finance people there. It was a fun conference. But I got down there and realized, oh, this place has a casino in it. And it was like 10 o 'clock at night. And I thought, you know what? I could put on like a Netflix show or something and just kind of relax.

1:00:19Ben Carlson:But man, there's a casino. and I texted you. I said, I have to go to the casino, don't I? I'm by myself. He said, yes, you have to go to the casino. So this is kind of obvious, but this relates to stock trading as well. If you own a stock and it goes from 300 to 500, and then it falls back to 400, you've made a nice gain in that stock, but you're kind of miserable. If you own a stock and it goes from 300 to 200, back to 300, you're floating on cloud nine because you came all the way back, even though you made less of a gain.

1:00:48Michael Batnick:That's how I feel about Netflix. I'm only down 15%. I feel like the smartest man alive.

1:00:52Ben Carlson:So I went down, I went to the ATM. I got a few hundred bucks out. I put it down and they had like$15 tables, which is funny. It seems low by the standards of today. Usually you can't find anything lower than 25, I feel like, when me and you go to Vegas. And I'm playing the right way, of course. And my money's gone immediately. I lose every hand. The guy next to me is getting a blackjack every other hand. He's winning everything. And I'm playing by the books and I just, I lose and I'm gone 10 minutes in. And I play the right way and my whole, I'm gone. I'm done. and the dealer was just a widow maker.

1:01:23Ben Carlson:So I said, I can't let that be the, no, I can't do that. So I go and get another, get some more money at the ATM and pay like$12 for an ATM fee. I guess we're all just cool with this. The fact that you pay the fee and you pay the non-ATM fee. That's cool. And I come back and I go to a different table with a different dealer. And all I do is win. And I come all the way back and I make up all the money I lost. And that's just that, And I think all I did at the end was break even, essentially. But that's a great feeling as opposed to the other way. It's the one where the guy's in the bus and he's looking at one side at Sonny, one side at the mountain.

1:01:59Ben Carlson:That was me with blackjack.

1:02:00Michael Batnick:And in your head, you've got the Ben Carlson from Milan entrance music playing. You're walking through the smoke machines.

1:02:10Ben Carlson:Yeah, so you feel great. And it's even one of those times when there's no greater feeling than when everyone at a table is winning. And even like everyone there was by themselves. And some old guy next to me even gave me a fist bump at one point. Like, hey, nice, nice. You know, when you're really feeling it. Great feeling. One more thing. Parlays are just everywhere now. So I sit down at this table, and I see all these people doing these other side bets. So you have your little circle where you put your bet, right? And above the circle, there's these little number threes. And I see every one of the tables putting little money down on these, like five bucks.

1:02:41Ben Carlson:And I sat the guy next to me. He won one, and it was like a nine-to-one payout. And I'm like, what is that? I've never seen this before. Maybe I'm just naive. And he's like, oh, it's a really high odds. You can, if your card, like a three-card poker hand. So if you get like a straight or a flush with the dealer's card, or if you get three of a kind, you win like nine or ten to one. Or if the first two cards are like queen of hearts,

1:03:05Michael Batnick:it's like a hundred to one or whatever.

1:03:08Ben Carlson:But the dealer's just funneling money from these people. Every once in a while. It's crazy that these parlays are everywhere. and people, everyone is betting them almost every time. I couldn't believe it. Anyway, wanted to give an odds lesson to these people.

1:03:25Michael Batnick:You know, I'm telling myself as we get ready for the NFL season that I'm going to cut it out with the parlays, but they're just so enticing.

1:03:33Ben Carlson:You still bet the parlays, huh?

1:03:37Michael Batnick:I am a... So my strategy for betting, which has not worked the last two seasons, but I feel like it might work this season. I like buy points. So I'll do Jalen Hurts over 25 rushing yards. Jalen Hurts, 125 yards passing over under Cowboys, Eagles, 31 points. And that'll be like even money. So I'm not doing like, I don't do like the plus 450 part.

1:04:04Ben Carlson:Okay. You're doing things that are high probability. Yeah. See, this is why I think that these ETFs on sports gambling are not going to work. Because if you just did a high probability sports gambling ETF, you get away the feeling that you get from gambling. That's all point of gambling. 100%. Like the ecstasy and the agony. And like, if you do it in an ETF that, yeah, I'm clipping 8 % a year because I'm betting, taking all the high favorites or something. Like, what is the fun in that? That takes away the fun in gambling.

1:04:32Michael Batnick:Well, you and I aren't going to do that because I enjoy, I enjoy actually, I enjoy losing money because that's fun. Making 8%, super not fun. Right, of course. But Jane Street will do that. They are doing that. Right, probably. um all right recommendations okay uh all right i rewatched blood sport now i'm pretty sure that blood sport is my number two most rewatched movie of all time i think it was always on usa

1:05:04Ben Carlson:all the time i watched it on usa all the time too yeah always on one is shawshank i think two

1:05:09Michael Batnick:was Bloodsport. It was always on from, I don't know, 1992 to 1997. It was on every single week. And I think I might've watched it every single week, but I haven't seen it literally in, Ben, I haven't seen this movie in 25 years at least.

1:05:30Ben Carlson:Yeah, it's probably been a while for me too.

1:05:32Michael Batnick:Because you've seen it a million times. It was still fresh in my brain, but I don't think I realized in fact I definitely didn't realize that that might be the single worst acting performance of all time by one Jean-Claude Van Damme holy mackerel was he terrible and guess what didn't matter the movie still slaps hard fight to survive kuma-te kuma-te when he gets the stuff in his eyes and he blinks really hard unbelievable I think everything had to be one take it was the worst acting I've ever seen but it's on prime and it's incredible.

1:06:05Ben Carlson:So you've probably seen Lionheart too.

1:06:07Michael Batnick:Oh yeah. I mean, Sudden Death. What's the two of them? Double Dragon?

1:06:13Ben Carlson:Time Cop. Yeah, he was an actual star for a while there. Van Damme would not make it. He would have to be satire to make it today. He could have only come up in the 1990s.

1:06:22Michael Batnick:Correct. I tried to take my kids to see The End of Oak Street, which is a dinosaur movie. And Robin looked it up and she said absolutely not. I said, it's a dinosaur movie. She goes, she read the description. Is it appropriate? No. There's whatever. Like Robin, it said freak. All right, whatever. I wasn't going to win that battle. It looks pretty scary. My dad, so I was thinking about Van Damme. I saw Universal Soldier with my dad in the theater. What year was that? 90. I know it was a different time, but Universal Soldier was 1992.

1:06:55Michael Batnick:Remember in the first scene when Dolph Lundgren has the ears on the necklace?

1:07:02Ben Carlson:I don't remember that one very much.

1:07:04Michael Batnick:Okay. Anyway, I did see The End of Elk Street. That was a fun-ass movie. Was it good? Yeah, really good. Okay.

1:07:13Ben Carlson:It looks great. The preview looks awesome.

1:07:14Michael Batnick:It's like an old-school sci-fi movie that was actually good. It's like a made-for-USA movie. So the premise is Ewan, not Ewan McGregor.

1:07:25Ben Carlson:It is Ewan McGregor, isn't it?

1:07:26Michael Batnick:It is. Okay. I always get him and Ethan Hawke confused.

1:07:30Ben Carlson:Okay. Yeah, Ewan McGregor.

1:07:31Michael Batnick:All right, so Ewan McGregor, Anne Hathaway.

1:07:34Ben Carlson:Who did everything this year.

1:07:36Michael Batnick:Right. And they're two kids. The story is based in 1982. There's a flash of lightning, and all of a sudden, they're in the Jurassic era. And they're surrounded by dinosaurs. The dumbest premise of all time. A straight-to-USA movie, circa 1992. Guess what? It worked. It worked.

1:07:55Ben Carlson:And I – oh, you saw The Invite. Okay, so I watched The Invite with my wife. And you recommended this to me. I had a handful of people who emailed us and said, this is a Ben movie, you have to watch it. I love this movie. Of course, it's perfect. I mean, listen, the premise is obviously a little absurd and over the top, but I just thought it's a one-night movie. I thought all four actors in the movie were great. I thought the fighting between Seth Rogen and who is he married to in the movie? What's her name? Olivia Wilde. Olivia Wilde. I thought the fighting of them was perfect for a married couple.

1:08:33Ben Carlson:I just—Ed Norton was very great as a straight man. And, man, Penelope Cruz has still got it after all these years. She looked great. It's weird that there's so many of these actresses from the 90s who can't age. Penelope Cruz and Salma Hayek and Jennifer Aniston and J-Lo. And how do you explain over 35 years that these people just don't age? I know it's diet and exercise and— Botox. Plastic surgery and— It's crazy though, but Penelope Cruz is great. Is it weird for me to say that I think Seth Rogen, who literally plays the same character in every movie he's in, he plays some version of himself and he has zero acting range at all.

1:09:09Ben Carlson:Is it weird for me to think that Seth Rogen could win an award for this movie? He was great. I thought he was absolutely excellent in this movie. All right, so as I told you,

1:09:17Michael Batnick:I unfortunately saw this in a very crowded theater by myself. I wish I was with my wife or a friend because there's a few very hard laugh out loud scenes.

1:09:25Ben Carlson:Yes, I laughed a dozen times in this movie, like actual laughed. It's really, really funny. But I thought Seth Rogen was, again, who plays himself in every single movie. He was excellent in this movie. I thought he was really, really good. It was great. It's a great movie. What a great year for movies, though. You were right about this. I thought 2025 was some decent movies that were a little overrated. I think 2026 is just a great year for movies.

1:09:50Michael Batnick:Last year, I was right. It was Sinners and One Battle. Yeah, good, but this slate is so much better, in my opinion. 2026 has knocked it out of the park.

1:10:02Ben Carlson:Yes, between The Odyssey and Obsession and The Invite, there's just been so many good movies. Yeah, I love it. All right. Good stuff. All right, that's about it. Long Time Hours again? What's that? We need a correction to kind of spruce things up a little bit. We're searching for negative stuff here, but we need a correction. I don't think it's going to happen. We're going to have another 20 % up here in the stock market. You don't think it's going to happen? I don't know. Wow, man. I mean, we're going to have another 20 % up here in the stock market, it appears.

1:10:34Michael Batnick:Okay. All right. If the market is down 7 % next Tuesday or Wednesday, I suppose, it's all Ben's fault. All right. Animal Spirits at the compoundnews.com. Thank you, everybody, for listening. Thank you to John and Duncan and Daniel and the entire production team. Remember, check out Morgan's new podcast, Psychology and Money with Morgan Housel. And we will see you next time.