The Best Performing Stocks of 2025 (EP. 445)

27:09Listen, we both know a lot of smart people who are still like, listen, crypto is going to create the rails, the new rails of the financial system. That's what it's going to do. It's going to be the payments. It's going to be the transfer. And maybe everybody is with the stablecoin stuff. There's a lot more stablecoin transactions than there are with Visa and MasterCard. But I guess the thing is, well, what does it have to do with Bitcoin? True. I think gold and silver, obviously, took a lot of the shine off of Bitcoin this year. And I'm sure a lot of people go, wait, I could have just owned this other thing instead of Bitcoin and done way better?

27:44I keep thinking this is a minor black eye for Bitcoin. The fact that gold did so well this year during a technological bubble, revolution, whatever you want to call it, it's surprising because it's been a risk-on-risk-off asset. and Bitcoin being risked off in this kind of year. It's kind of bizarre. All right, let's talk some private market stuff. So I've been pretty sober, I think, about the risks of private credit, especially direct lending. I think I've been less hysterical than some folks. But like what I'm talking about, hey, listen, these are loans, right? The banks used to make these loans, these syndicated loans.

28:22Now Blackstone is making the loans. And I think it's, for the most part, even though there's some shenanigans, even though there's some companies that have bid frauds and defaulted. Yeah, there's defaults in public credit too. It's not just here. However, this raised my eyebrows. All right, story from the FT. Private credit firms snapped up nearly 14 times as much consumer debt this year as in 2024, piling into riskier areas such as credit cards and buy now, pay later debt. In 2025, private credit groups, including the likes of KKR, Blue Owl, and Sixth Street, either purchase or struck so-called forward flow agreements to purchase$136 billion of consumer loans, according to figures compiled by KBW analysts.

29:06That number compared with just$10 billion in the previous year. Now, I will also say that these are not dumb people. KKR, Blue Island, Sixth Street, that's actually, in fact, the opposite. But yeah, this is worth monitoring. But haven't we learned that the buy now, pay later, like the default rates on those are surprisingly low? Very low. but also in a benign economic environment. Now, the counterpoint, Ben, is like, well, yeah, these are riskier debt. Guess what? In that article, it also said that this is the most lucrative area of asset-based finance, that JP Morgan made like 20-something percent on the credit card receivables.

29:46Right, even if you get a 5 % default rate or something. But isn't it just, you and I have talked about this, like the risk for any of this stuff is like what happens in a recession? I feel like that's like the easiest risk you could possibly bring up. Yeah, but you know what? Not that I reject that argument, but what do you call 2022? Because in 2022, bonds got f***ing annihilated. And guess why private credit is so popular? Because they performed really well. Yeah. Are we going to act like 2022 was not a stressful year for equities and for fixed income? I think until we have an actual event in the economy, a true slowdown, a recession that lasts for a whole year or something, some people aren't going to trust this stuff.

30:31And my counterpoint to that would be what comes out of a major recession unscathed? Are private credit loans going to be the only thing that go down in value? Right. Yes. You know what I mean? That argument is just so hollow. Right. Of course. Yeah. High yield is going to get crushed. That's what happens. If there's a financial. Yeah. Wait, are you telling me that defaults will pick up in a recession? Holy shit. Stop the presses. Yes. We don't have recessions anymore though. Right. They last like two months. All right. Someone sent us this and this is from one of the Reddit channels, which I still, I'm too old to in middle age to use Reddit.

31:11But when people post pictures of my, I read them. Ben, you're not middle age. The next article that we're going to talk about, it's all about millennials. and it said people age 29 to 44. And I'm pretty sure that includes you. Yeah, middle age. I'm afraid that my responsible life choices have made me permanently boring and miserable. It says I'm 30 and I spent my entire 20s making all the right decisions, focused on my career, paid off debt aggressively, rarely went out and avoided major risks. Everyone tells me I'm set up for life, financially stable, and I should be proud. But looking back, I realize I have no exciting stories, no memorable failures, and a very small circle of friends who mostly talk about mortgages and promotions.

31:44My anxiety told me that security is the ultimate goal, but now that I have it, I feel an acute sense of regret and panic. And this, this is honestly one of my worries about young people. And you and I have talked about like the, the fact that drinking is, is, is careening lower and people don't do it as much anymore. I mean, come on, Ben's in the podcast bust. Yeah. I mean, it's a great way to get with people and, and let loose a little bit. But I listened to this podcast today with Tim Ferriss and Arthur Brooks. Arthur Brooks is, does some of the best writing. He writes for the Atlantic. He writes some of the best stuff on happiness and what makes us happy.

32:17And so I wanted to listen to it because he's very good on this stuff, about the fact that money and happiness and what actually makes you happy. But they got into their morning routine stuff, which is the Tim Ferriss trope, and they talked about all this stuff about how their morning routines are down to a science. And Tim Ferriss made a comment, and I'm not throwing shade on him because I'm sure he has his stuff figured out, but he said, listen, my brother and I used to go out for martinis all the time, but I realized when I put my sleep band on, when I had one martini before I went to bed, it would tell me my sleep was horrible.

32:49And I think, honestly, this is no scientific understanding at all for me. I think those sleep things are totally bunk. And I think if it tells you you had a good night's sleep or a bad night's sleep, it depends how you feel, not like what this thing tells you, right? So he's like, I decided to... Why do you need technology to tell you if you had a good sleep or not? Exactly. So I think people who over-optimize like that, And if that optimization causes you to not go out and have a drink with your friend or your brother to like have a good time, because what the research actually shows is that the best possible outcomes for happiness and longevity in life are relationships.

33:28It's how many relationships you have. And guess what? Going out and maybe feeling crappy the next day, but you went out with your family or your friends and you had a good time. I think that's worth the tradeoff of not having a perfect, the band on your arm told you you had a bad night's sleep. That's, I think people, the over-optimization crowd, I think sometimes takes things way too far. And to me, that's not living life. I under-optimize. These are dorks to me, but you know what? Here's where I am. And genuinely, to each their own. I don't care if somebody wants to over-optimize. That's their decision.

33:57And I agree. You're right. Some people, if they don't over-optimize, they're not going to be happy. I just think you can take it too far. And I read a post like this. But don't you think, for the most part, this is just how people are wired. Like even this dork who wrote that thread on Reddit, even if he can go back, Let's be honest. People are, people are, people are how they are. And it just is like, I don't think people wake up and choose to be happy, disgruntled, anxious. Like it's just how you were born. Unfortunately, like my son, Kobe, he's annoying. He doesn't choose to be annoying. He can't help it.

34:30I do. Having kids made me realize that more than any, the nature versus inertia thing. I think, and I look back at my own life, how many of the things in my life that happened because of the family I was born into. I think like recently, like Michigan football has been going through a lot of stuff because their coach got in this scandal and stuff. And have you heard the Jim Gaffigan bit about like him being Catholic? He has all these kids and he's Catholic. And he's like, listen, it's too late for me to change now. I was born Catholic. I've been Catholic my whole life. I can't change now. And some of this stuff is just the way you're born.

34:58You can't change. Like I was born into a family that we have a friend group. We have some friends who don't play cards. And our families, I grew up playing cards my whole life. my kids are into games like card games like we love playing games and playing cards and some people didn't grow up with that and it's like that's not their fault they just didn't grow up playing cards yeah it's like it's you're right it's like so much of it is hardwired and how the circumstances you were born into and like how your dna or whatever evolved as a person like will dictate so much of your life that's out of your control i grew up with cards too uh which i'm fortunate for jen rami was that a big one for you guys i like gin rummy uh we played spades and the big thing in the midwest is euchre euchre i don't know euchre is a midwest game it's like it's kind of like spades or hearts but a little variation uh i'll teach you sometime it's uh i was i was asking my dad if you're it's a midwest thing i was talking to my dad about kobe i was like was i like this because i i definitely had i had some shit growing up and he said i can't remember exactly what he said when it relates to Kobe, but he said, we, mom and I didn't know what to do with you because I, I never did my homework ever, ever, ever.

36:10Like starting in kindergarten. I never did it. I just didn't care. I thought I was too smart that I didn't need to do it. Uh, that didn't work out so well in the long run, but they, yeah, my dad's like genuinely like we, we tried everything and the more we pushed, the more you resisted. And I just, it's just who you are for better and mostly for worse, but it just, you know, it just is. Yes. All right. That's a deep talk for the day. What's the millennial thing here? Oh, okay. So this is an interesting article, Ben, and you are a millennial, so you're not middle-aged. Stop it. I'm literally the oldest millennial ever.

36:42That's true. So the Wall Street Journal had an article, how the highest earning millennials made it to the top of their generation. It used to be, and just this title is kind of interesting because millennials did, especially like people that were in my age group, coming into the workforce in 2007 to 2009, not the best. Like I, how many people in my age group started at Bear Stearns and then six months later, the thing blew up? Yeah. That was, yeah, not a great time. Anyway, so the article has some data. It used to be doctors and lawyers. So they're talking about how people in our generation got into the top 5%.

37:25What do they do? It used to be doctors and lawyers. And the top 5%, so baby boomers in 1990, the top 5 % adjusted for inflation was$212 ,000. Now it's$300 ,000. Whoa. And they have a chart showing the chances of reaching the top 5%. This is an interesting one. so for the for our our parents cohort uh you had a 30 chance if you were a lawyer of reaching the top five percent now it's just 20 finance around the same computer math around the same um what else in here is that much different not a ton but i guess it's really legal too many lawyers okay so don't go to law school kids that that that number to me that's a huge number again inflation adjusted the top 5%.

38:13So this is obviously a wealth inequality thing or an income inequality thing, right? If you're at the top of the heap, you're doing so much better than people were before. And this, this makes sense just from our lived experience of how many rich people did we know back in the day versus now. I was, so my wife was commenting how seemingly everybody in my town is on vacation. Now, I don't live in a rich town like on the North Shore or anything like that, but I guess it's an upper-middle-class neighborhood. Fairly diverse, but upper-middle-class in terms of incomes. And growing up, am I misremembering?

38:59I don't remember people going on vacations like this. I don't think people's parents had the money for this. I think we took one trip a year. And now if you're not taking four or five, you're like the outlier. It seems like it. Again, maybe this is just for us, it's like availability bias or something. But you're right. People take way more vacations than did in the past. I think that's a fact. Also, I guess like just on this idea of just how different things are and money and like everybody has a$1 ,500 phone. Is that like lost on anyone? How nuts that is? I mean, how much is an iPhone? Expensive.

39:32Everybody has one. Yes, and it's a necessity now. That wasn't in the past. You're right. All right, back to the article. One less. All right. Not, I guess, not shocking, but just interesting. Going to an elite private school rather than a public flagship university increases students' chance of joining the top 1 % for earners by roughly 60%. Wow. It shouldn't be this way. because you went to Harvard or Yale or wherever, or Stanford, that you have a better chance because it's on your resume of earning more money. It's kind of insane. Because of the choices you made from age, I don't know, 14 to 22.

40:15No, the choices your parents made, for the most part. Or that, yes. That's kind of amazing. And obviously part of it is just the people who went there helped their kids get in there, and that is amazing. Okay, JPMorgan has this retirement by numbers report, which is pretty interesting. And they show retirement spending by every five years. So you start out age 60 to 64, then 65 to 69, all the way up to 95 plus. And it shows that each five years, your spending decreases. And it's pretty linear decrease, right? Like five to 6 ,000 every five years or so, you know, spending decreases. And our Tony Isola, who we work with, he wrote this blog post and he works with clients.

40:57He's an advisor for us. And he calls it the first decade retirement plan. And he says that he tries to help his clients spend more money that first decade of retirement because that's when your health is better. So he says that like, there's this new study that shows that the number of years people live in poor health is increasing because obviously medicine and everything is getting better. You can live longer, but a lot of those years are going to be in poor health potentially. So it's every, the average health life expectancy now is 12.4 years, meaning time living in poor health for people at age 65, dying at 87.

41:32So the point is, yeah, which kind of sounds like it stinks. The point is, you want to front load that spending. And I think the die with zero guy said like your net worth should peak when you're like 55. And you should be spending it down from that point on when you're healthy and can enjoy it. And we talk a lot about this spending stuff. And I'll I'll plug Talking Wealth again because someone else in the comments last week said, hey, you guys didn't tell us about this enough, this Talking Wealth thing. So Talking Wealth is our channel for advisors. I talked to Stefan Sharkansky last week about how to beat the 4 % rule.

42:06His whole thing was how do we balance the risk of longevity, meaning you outlive your money, versus people who chronically underspend. and he did. And I, we kind of explained in there, but this whole thing about how to spend your money in retirement is like, every time I write or talk about this, like people have very, very strong thoughts about it. And I think it's one of these things in the financial advice space for the next 20 to 30 years is going to be one of the most important things that we figure out for people. Is there anybody, it's such a puzzle. Our advisors spend a ton of time and energy convincing our clients not to wait.

42:47How many success stories do we have of the client that bought the second house or whatever? We obviously celebrate that, and we're really proud of that. Hike to the top of the mountain or whatever it is, yes. Yeah, whatever it is. Is there like, no, you shouldn't spend your money? Is there like, no, you shouldn't spend your money evangelists? Oh, yeah. A lot of personal finance people are like that. Like, hey, you have to spend 2 % of your wealth. Otherwise, you're going to run out of money. There's a lot of people like that that can't help turn it around. But I think this is going to be one of the most important things the financial advice industry does in the coming years is helping baby boopers spend their money down.

43:21This is interesting from the Daily Economy, which is a new one I've never heard about. It says 401ks built America's wealth and proved all the critics wrong. So there's this idea that, hey, once pensions went away and everyone's on their own, people are screwed. They can't do it anymore. No one's going to save. Everyone's out of luck. So it says around the time of the 401k tax code change, there were 30 million defined benefit plan participants in private sector at an all-time peak. So this is like late 70s, early 80s. That was nearly double the total in defined contribution or individual retirement plans such as 401k at the time.

43:54Today, the number of active participants in defined benefit plans is down to 10 million. So 10 million people have pensions now versus 30 million at the peak. But there are almost 90 million people in defined contribution plans. Thanks to 401ks, the total number of workers with any retirement plan at all is at an all-time high, even accounting for population growth. So all of the opt-ins or the opt-outs versus opt-in, all that stuff has completely worked and there is now more people than ever saving for retirement even when you account for population growth versus the late 70s, early 80s. So actually 401k plans kind of sort of worked.

44:28Just wait. They haven't even begun to work, Ben. Just wait until we get private investments in them. Then they're really going to work. But for years following the 2008 crisis, how many stories did we hear about the retirement crisis? Do you ever hear anything about that anymore? Not much. Obviously, there are some people, there are always going to be some people who basically rely on Social Security and that's it. And if we ever decide to break up Social Security somehow, I think it's going to be the biggest mistake we ever make. But there are more people than ever who are investing and saving in a 401k plan.

45:02Even if the average, I think the average balance they say or the median balance is like$200 ,000 or something. Like what you think about it like that, that's not obviously. Is it? I think it was like 200. But still, it's much better than people think. There wasn't this period where pensions covered everyone. Again, 30 million people. And I think the population at the time was 180 or 200 million or something in the US. So even a kind of population, both foreign cases actually have worked. Hell yeah. I saw an article. Andrew Garfield is going to be playing Sam Altman. In a movie next year called Artificial.

45:38You know what? Can we stop making movies about people? The biography movies. We have the Bruce Springsteen one. There's too many of them. So a couple of weeks ago, I was like, wait a minute. They're doing a Neil Diamond one? It's too much. So actually, the Neil Diamond one. Are they really? So it's Kate Hudson and Hugh Jackman. You haven't seen that yet? Oh, I saw the preview. I did not realize that that was a Neil Diamond one. Okay, it's not. It's a Neil Diamond tribute band. Oh, just like Saving Silverman. So I actually, now I'm interested. Now I'll go say it. Okay, I didn't know what that one was about.

46:15But there's too many. Like, do we have to do one of these for everyone? I mean, does everyone need their own biography movie? I don't care. Like, did anyone see the Bruce Springsteen one? Bob Dylan one, I thought. Chalamet's great, but like, it was just boring. Yeah, it was boring. Okay, I got a question for you. Yeah. I'm going to give you a setup here, and then I want you to guess. So I have an answer for the best video game of all time. We finally got our kids a video game system. We got a Nintendo Switch. For some reason, we just never. Our kids are 11 and our twins are 8. It's the first video game system they've had.

46:45They played games on iPads, but they've never really been video game people. And so we played games all Christmas Day. We got them this. And I never went past Sega Genesis in my house and then Nintendo 64 in college. You never went past Sega Genesis? I know. I just, I wasn't a, we loved playing games. but I'm saying I never even got to like the, you know, Grand Theft Auto or like the world building games of today. So I'm a basic video. So what's my favorite video game? What's the best video game of all time? According to me. Punch out. Okay. No, it's Mario cart. And there is no other answer. Okay.

47:23I've played all the iterations from Nintendo 64, super Nintendo, and it's just the best game. It really is. I mean, there, there's, there are clearly other better answers than that but for you i understand so in college in college we would just in terms of like the interaction i'm sure people would say like madden or something you know but in terms of the interaction with other people because you play with four people so when in college we would get back to the dorms our freshman year we would watch two or three dating shows after all our classes were done and then we would play mario kart the rest of the day until we like went to dinner and it's because you can talk shit to other people you get angry it doesn't matter if you're bad at it right it's just it's the best game for multiple people yeah because we we got mario kart for my kids the new super mario world or whatever mario kart world and we played it we've played it all day and all night for the last like three days it's just it's the best and man i love smoking my kids in it like they can't even touch me in mario kart i'm still good after all these years i did love video games but i stopped playing i think call of duty was the last game that i played a lot do you remember do you I'm a few years younger than you, but how massive Zelda was on N64 when that came out.

48:33Oh, yeah. See, I never got into the world-building games like that. I kept it very simple. Okay. I never went. Fair enough. I could see you. When you decided to skip all your classes in college, I bet you played a lot of video games. I did. Okay. I did. All right. Short show today. Let's do some recommendations. I got a few here. So I've got a new one on my annual Christmas list. I love watching holiday movies around Christmas. Christmas is by far my favorite holiday. And when I first saw it, it came out in 2008, Four Christmases with Vince Vaughn and Reese Witherspoon. It was a huge disappointment because that was when Vince Vaughn was on a heater, right?

49:09It's not that far removed from Wedding Crashers and Old School and some of the other movies. And it just, I thought it kind of landed like a dud. And four or five years ago, I picked it up again. And I watched it again this year. And man, Vince Vaughn was hilarious in that. It's actually better than I remembered. and each one of the parents because they go to four Christmases because the two parents are both divorced and it's John Voight and Robert Duvall and Sissy Spacek and what's Ted Danson's wife's name? Mary Sturm yeah, Mary's the immersion and every year it grows on me a little bit I only saw it once another great divorce movie it gets better the more you watch it have you ever heard of this movie I saw this on Netflix I was like, how have I not heard of this?

49:51it doesn't even make sense The Night Before Yeah, it wasn't that good either. It was a Seth Rogen one. So it's Rogen, Anthony Mackie, and Joseph Gordon-Levitt. It came out in 2015. I've never heard of it. Nathan Felder, James Franco. So I watched it when it came out and didn't care for it. Maybe it's the one I should watch again. Actually, it was not a bad one. What is it? Christmas Office Party or Office Christmas Party? Jason Bateman one? That's not a bad one. So anyway, that one's on my annual list now. so my 11 year old Libby got into Stranger Things I finally let her watch it and she plowed through on her iPad on Netflix and we'd watch it together at night she plowed through all four seasons in like three weeks and she just loves it so she's like she can't wait because the new season came out to watch it and I watched some of the end of season four with her again and I really liked the first season I thought the last three seasons were like boy it's getting a little repetitive I feel like we're doing the same thing over and over again and the fifth season is kind of the same thing like man this is repetitive She loves it.

50:55But, so it felt like the last two seasons probably could have both just been movies, two and a half hour long movies, because it seems like we're doing the same thing over and over again. But the problem is, it's actually still kind of entertaining. And it's just, it looks good. Like the quality of it is very high, even though the story and the plot, it's like, what are we doing here? It's the same thing over and over again. So anyway, I don't like love the final season, but it's her watching it and liking it makes it better for me. And finally, finishing Pluribus, the finale. Didn't you say you kind of gave up on it?

51:26Well, I saw the first episode and then I decided that I was going to wait and hear from people like you to tell me if it was worth continuing. So should I watch it? So the first episode, I said, I worried that the first episode was so good, they're not going to live up to it. And I feel like that's still true. Like the, it's been downhill since the first episode. It got slower and it's still interesting, but I feel like the first episode set the bar way too high. And ever since then, it's been kind of like... I'm out. I'm gonna pass. I still... I think my wife likes it more than me. It's interesting, but I feel like they could have gone a lot of different ways with it than they did.

52:07And it's just kind of like, okay. It's okay. It's all right. I'm still watching it, but it's just okay. Okay. So the season finished like... It's like, all right. It was fine. but the first episode was by far the best um i finally finished uh i finished the offer if you're a big godfather fan you should watch it if not skip uh the guy that played bob evans was freaking awesome he nailed really good right holy cow uh so good um especially after reading that book you see like he actually feels like he's playing that guy yeah um so we were talking about over the last couple of weeks like how much i love the what ifs right in the nba like and in movies so i learned a few more things this is gonna blow your face ben chris farley was supposed to play shrek man i feel like i heard that before but so he recorded right before he died he recorded like 90 of the movie and then he died and then they brought him like myers wow i would love to hear his voice overlaid on it because i can't picture anyone else besides Mike Myers doing it.

53:13What else? Liam Neeson was supposed to play Lincoln. I could see that. I don't know, man. Seriously? Versus Daniel Day-Lewis? I have a specific set of skills. So I, what book do I listen to? I listen to The Men Who Would Be King, an almost epic tale of moguls, movies, and a company called DreamWorks. So it was about Geffen, Spielberg, and Katzenberg. So this is where you got all this from? yeah yeah um okay i love books about movies so um you said that you listened to the camera code book last week yeah very good so dreamworks dreamworks made almost famous and it bombed at the box office to like 30 million bucks yeah i think it's one that got lags later on um i started listening to that book this morning uh yeah uh francis mcdormand did a great job playing his mom.

54:10Is he not just an amazing storyteller reading his book? It's so like... It's awesome. Yeah. He's much older than he looks. He's been making movies for a long time, right? He's got to be 65, 70 maybe? Alright. It's the last show of the year for Animal Spirits. Want to thank everybody for listening, emailing. I never take this for granted as somebody who's a big consumer of different personalities. I grew up like a lifelong Howard fan and, um, and just listen to podcasts. Like I know how important it's to show up for the audience. So here, here we are on Saturday, you guys show up for us. We show up for you.

54:56We are so grateful that out of all the things you choose to listen to, we're, we're part of the rotation. So could not be more grateful and thankful for for everybody that listens we love our audience like the emails that just the people that get us and our stuff we're doing like the we get a lot of emails from people and yeah i think it really means a lot so all right hope everybody has an incredible 2026 hope all your resolutions dreams goals family health when are we getting your 26 predictions next week you know i don't think i'm gonna do it it's just it's i don't it's too much what it's an annual come on man when everyone else is sleeping tonight after being tired of Disney you get on your laptop and pound out some predictions I need five I'm gonna come but you know it's like it's so like it's such nonsense it's things that I think about it's like half-baked half-baked ideas I don't even think about it I forgot what they were that's true like just to have them hold ourselves accountable for them right yeah just we can put the title 2026 prediction okay everyone next time Ben, enjoy Scottsdale.

56:03I hope the pool is warm for you. All right. Yeah. Yes, it better be. We're paying for it. Have fun at this time. Thank you, John, and the production team. We'll see you next time. Bye.