The Best Stocks in History (EP. 457)

9:21Ben Carlson:for a half hour vibe after a nap, you know? And it's like, they can be a completely different person. That's the market these days. It's a completely different person from one day to the next based on an announcement. Correct. I think that if you're trying to map this stuff out on a fundamental basis, you're wasting your time. That's my point.

9:41Michael Batnick:I thought this was a very well-said, well-written tweet. A rare tweet from our friend Super Mugatu, Dan McMurtry.

9:52Ben Carlson:Someone DMed me like two months ago and said, hey, what happened to this guy? Where did he go? I liked following him on Twitter. Occasionally, he gets back into the conversation.

9:59Michael Batnick:Dan's living his best life in Miami. Killing it. All right, Dan said, note to self, very scary times. Remember that the reason bears sound smart and end up looking stupid so often is that there are always several highly salient bear arguments. Whereas the reality that there are several billion people trying to make things better and solve problems is intellectually unsatisfying and fuzzy. This is amplified in the era of eyeball maximizing feeds dominating people's conception of the world. Do not be fooled by the psychological games of people seeking to dominate attention. Do not ignore legitimate issues.

10:35Michael Batnick:But most importantly, do not forget that 95 % of the world is trying to rig the game to work out. There is a vast conspiracy to grow the economy over bears and increase asset prices. It's called society.

10:52Ben Carlson:And this is the part of the market meaning more than ever these days. I remember Josh wrote about this like after the financial crisis about, hey, do you think like the government and people in power are really going to try to let this thing go under and not going to do everything in power to keep it going? That's the thing. Like if you think the world is going to end and people aren't just going to constantly send out the bazookas and spend more money and do more stuff and rig the game to go higher, you're not paying attention. Right. Seriously.

11:18Michael Batnick:I mean, yes.

11:19Ben Carlson:Sometimes, of course. You don't have to like it. That's the reality.

11:23Michael Batnick:Well, who doesn't like that? The people who are betting it. The PermaBears. They hate it. I'm not talking about PermaBears. So the 11 dumb people on Twitter. That's what he's talking about. Yeah, sometimes the train falls off the tracks. Guess what? We rebuild.

11:38Ben Carlson:Yes. Okay, so getting back to the oil stuff. This is a chart from... I don't remember who this is from. Energy products are at an incredibly low contribution to U.S. household personal consumption. So in the 70s and 80s, energy spending as a percentage of household budgets got up to over 6 % by the early 80s after the energy shock. Now it's down to 2%. So the point is there's a way higher capacity to handle if gas prices stay at$4 or$5 a gallon for an extended period of time. It seems like households have the ability to eat it because it's not like it's a huge part of their budget.

12:14Michael Batnick:And how about corporations? Obviously, we're talking about the stock market here. Think Apple cares about the price of energy?

12:21Ben Carlson:But that would be, the pushback would be that, like, the price of everything has to go up, though. The price of all the inputs, the price of, it's not just gasoline. It's the, you know, airplane, airline tickets are going to be more expensive. So that's the thing, like, is how much.

12:34Michael Batnick:This is like the Midwit meme conversation, right?

12:38Ben Carlson:A little bit, but I guess that's the point is that people wonder, well, geez, won't$4 or$5 a gallon gas totally derail the economy? Probably not. I think we've learned maybe the margin of safety is lower this time, but everything that's been thrown at the economy this decade, it's been able to withstand. And so the question is, does it still have enough ammunition to withstand this current onslaught, however long it lasts? The market is betting right now that it does, that it can. Which, again, I think is so interesting to me that the market is so willing to look past all this stuff.

13:11Michael Batnick:Literally knowing absolutely less than nothing about the situation in the Middle East. is it, it's a little bit hard to imagine this lasting into the summer.

13:21Ben Carlson:Yeah, I agree. But I don't know what, if we back off, this one straight, again, I don't get why it's called a straight. Someone's got to explain it to me. Me, I'll chat GPT it. This thing is like the most important piece of land in the world going forward now. Like it has more importance going forward. It's funny because Josh always says like, oh, the straight-off horror movies. Remember for years, that was his joke. And now it actually really does finally matter. But does that thing just stop mattering All of a sudden, it seems to me like it's going to be used every time that there's something going on.

13:51Ben Carlson:Unless we completely take it over. Well, matter to what? The world. The energy prices. Well, of course it matters. Of course it does. All right. Pantheon macro, Carl Quintinia. In$150 barrel oil scenario, we think inflation would peak in Q2 at about 6%. Of course, oil crashed yesterday. What was it? Did it finish the day down 8 % or 9 %? Something like that? That's what it was done in the morning at least. The question is, how long does this have to happen until we get there? I don't know. I guess this is like a what-if market right now. What if this lasts? What if the market keeps looking past it?

14:25Ben Carlson:What if, what if, what if? How about this? Mike Dorning, a bunch of people posted this. Investors are now betting overall U.S. inflation over the next 12 months will surge above 5%. Implied inflation rate from one-year break even per Bloomberg. Now, again, a lot of this stuff is before yesterday, so who knows? And the Wall Street Journal had a chart that shows market is implying a probability of a higher probability of a rate hike than a rate cut this year. Now, here's my question to you. That's not happening. What good would a rate hike do? You hike rakes just so you can bring them back down?

14:58This is an exogenous shock.

15:03Michael Batnick:Since when is destroying demand a good thing, a good idea? I understand why we had to do it in 2022.

15:11Ben Carlson:Yes, that made sense.

15:13Michael Batnick:Obviously, that made sense at the time. But for something like this, come on.

15:18Ben Carlson:But Colin, so Colin says in the span of three weeks, the market went from expecting three rate cuts in 2026 to now expecting a rate hike. That's incredible. But I guess you could see a scenario where we back off and then that flips again and it goes back and those expectations don't matter. But my point is why, why would, what, what good would a rate hike do besides potentially push the economy more towards slowing down further?

15:40Michael Batnick:If there was a market for these two lines flipping, I would say through the end of 2026. By the way, I had to look at the, I had to Google what year it was the other day. I was writing something. I was like, wait, is it? No, it can't be 2026. Is it really? And sure enough. And AI is not making us dumber? It's not helping our memory. All right. Anyway, my point is this. I would say, I would guess that yes, these lines would flip would be at like what? 92 % that they would flip back.

16:15Ben Carlson:That would be a pretty, yes. If you wanted, that's, that's like an even better bet than Seattle not winning the Superbowl. Something like that.

16:22Michael Batnick:You know, I got a lot of emails, a lot of emails about Seattle winning the Superbowl. Not a single one patting me on the back for predicting one battle. That's just the way the world works, right? Nobody wants to give you credit. They want to bring you down. One battle after another was consensus. What was your payout on that? What's the difference? No, it wasn't. It was like 85 cents.

16:43Ben Carlson:Okay, that sounds consensus to me. You bet on the horse with the lowest odds of winning. It might have even been less. Okay, I'm not going to give you a pat on the bat for that. Everyone thought that was going to win.

16:56Michael Batnick:Hold on. This was not a recent bet. I did this months and months and months ago. I'll find what the payout was. It might have been 70 something cents. Okay.

17:05Ben Carlson:I love the Forrest Gump analogy, so I'm going to give you this. So the S &P at the lows was down 6.8%. Maybe it rolls over and goes further, but that's the biggest drawdown so far this year. And I feel like there's a lot of people who just want to rip the bandit off and get the correction over with. It's the, remember in the storm, Lieutenant Dan's up on the mast and he's screaming, like, this is all you got? You call this a storm? I feel like there's a lot of people who just want, like, hey, listen, we have the reasons. Let's just do it already. Can we just get the correction? And maybe that's one of the reasons we're not getting it.

17:33Ben Carlson:So many people seem to just like, all right, fine, let's do it. Higher oil prices, higher inflation, war, uncertainty, volatility, and it just won't happen.

17:46Michael Batnick:I can't, well, when you say there's a lot of people, I feel like there's a survey in your brain. Like you're doing a lot of projecting. You have no evidence that there's a lot of people that want to sell.

17:55Ben Carlson:You don't think a lot of investors assume that with everything, all the headlines going on and everything happening, that we should be in a correction right now.

18:00Michael Batnick:Those are different things. Yeah, of course. I think there's a lot of people that say, given the state of everything, we should be lower. That's what I'm talking about. You're saying there's a lot of investors who want the bandit to be ripped off, and that's why we're not ripping it off?

18:11Ben Carlson:No, just assume it should be. Given all these variables, we should be in a correction. We should be. That's what I'm saying. No, correction is 10%, right? There's a pullback. 5 % is, yeah. 5 % is a pullback. This is nothing.

18:26Michael Batnick:Wait, when does the correction go from healthy to not healthy? A healthy 10 % correction?

18:30Ben Carlson:10 % to 15%. 15 % not healthy anymore. 10 % healthy.

18:35Michael Batnick:15 % check your triglycerides. Know what I mean? Oh, I spoke to a trainer yesterday, speaking of. Okay. Putting some feelers out there. Not liking how I'm looking naked.

18:44Ben Carlson:In a gym or in an online trainer again?

18:48Michael Batnick:I want somebody to come to my house. I'm too embarrassed to go to a gym. It's just not my scene. I've never been to a gym. Can't start now.

18:57Ben Carlson:Gym's a great place. you get to go to the bathroom and see naked 70 year old men walking around in the locker that

19:03Michael Batnick:does sound enticing plus the home visit even for zoom it was way too much money 200 a session come on man in this economy how much is a home session gonna be that's gonna be even more expensive it does the same thing whether it's home or okay is that that can't be the going rate for a trainer

19:21Ben Carlson:Wait, it was$200 per session?

19:23Michael Batnick:Per session. Right?

19:27Ben Carlson:That's very expensive. I don't know what their going rate is. That seems very expensive to me.

19:31Michael Batnick:Yeah.

19:32Ben Carlson:If you worked out four times a week, geez, that's, yeah.

19:36Michael Batnick:I'm not doing that. Okay. I'm not working out four times a week and I'm definitely not paying$200 per four times a week.

19:43Ben Carlson:See, and you think AI is going to take all the jobs. This is my analogy. You can go on ChatGPT right now, Find the best. You say, this is my body. This is what I want to do. This is my weight. This is the stuff that pains me. This is what I want to change about myself. Create the most personalized workout plan possible you can for me. You can do that right now. Give you the best, you know, use these dumbbells. Use this weight. Do this many reps. Do this many sets. And guess what? Some people still need a personal trainer.

20:10Michael Batnick:Yeah, you know why? That's why AI is not taking all the jobs. I know this is not rocket science. I need somebody to watch me. I have no discipline. I'm a child. Exactly. Yeah.

20:20Ben Carlson:And this is why financial advisors are never going out of business because of AI.

20:24Michael Batnick:Preach brother. Um, all right, here's a, here's a headline that my friend shared with me. I predicted the 2008 financial crisis. What is coming may be worse. Um, this was in the New York times and here's the lead at the start of the 2008 financial crisis. I was at a hedge fund by its end. I was at the U.S. Treasury. At both. I worked with people only a few years out of college. The drama of 2008 was all they knew about financial markets. Remember what's happening, I told them. You'll never see anything like this again. Now I'm not so sure. Maybe they'll see worse. This is from Rick Bookstaber.

21:04Michael Batnick:We've had Rick on the podcast before. And this piece, got to be honest, was complete trash. No offense. So I read it.

21:14Ben Carlson:Actually, you know what?

21:15Michael Batnick:Offense. Rick is a nice guy, but come on, man. What is the point of this? First of all, what was in here was so, there was nothing in here. Now it's for a general audience. So I understand maybe that's, but there was nothing novel in here. It was AI. It was private credit. It was concentration in the S &P 500. Dude, come on.

21:36Ben Carlson:Yeah. What are we doing here? Risk is too far out of the spectrum. You feel good about publishing this? There has to be a catalyst. in his defense. Maybe he didn't write the headline, but the whole point of the article, yes, I, no, I, it does not feel, again, there has to be a catalyst for this stuff happening. It can't just happen because people are taking too much risk. That's way too vague. There has to be like, what is going to cause this? I agree.

22:00Michael Batnick:But think about how many people, how many people read this and did something that they're going to regret with their portfolio. Now, he might truly think that he's helping people, that this is really, we're about to enter 2008 and I'm saving people. All right. Maybe. I suppose he won't be the first or last to have done that in the last 15 years.

22:19Ben Carlson:How many headlines have there been since 2008 that read, I predicted the 2008 crisis, or he predicted, or she predicted. There've been a million of them, and not one of them has ever come to fruition. I got a question for you. I have a theory, but gold is down. I think if you're an intraday person, you are. Gold is down 20%. If you're not an intraday person. Big intraday person. I don't understand.

22:41Michael Batnick:Are those not real prices?

22:44Ben Carlson:It is, but if you're looking historically, it's just easier to do open and close. So gold is down, we'll call it 20%. Okay? It's down quite a bit. It's selling off hard. I have a theory here. I want you to tell me why you think it's down so much first.

22:59Michael Batnick:Well, I want to hear your theory first.

23:01Ben Carlson:I don't have a theory. I don't know if you – because you usually have more realistic theories. Mine are more like out in the – Oh, okay.

23:09Michael Batnick:All right, so before you give me your garbage take,

23:14Michael Batnick:Todd Sohn has a chart showing the daily gold ETF flows on a rolling 20-day sum and negative two standard deviations on the outflows. The worst four-day sell-off since 2000. Or no, that's wrong. It says 2000.

23:35Ben Carlson:No, this chart just goes to 2000. It's since 2013.

23:38Michael Batnick:Oh, that's right. Okay. So worst four-day sell-off since 2013. So the reason why gold has fallen so much is because there are more sellers than buyers. What's your theory?

23:48Ben Carlson:Well, duh. But the – so we had a trend-following hedge fund that we invested in in 2008. And it was the only thing in 2008 that went up. It was up like 15%. Everything else was down. Everything got killed. And in 2009, we asked the manager, like, how is business going? You must be getting a ton of money coming in because of this early 2009. Things were still not like people didn't know what was going to happen. And they said, no, it's the craziest thing. We're the only thing that's up in anyone's portfolio this year. And we're the ATM. Everyone is pulling from us because we're the only thing doing well.

24:22Ben Carlson:And if you need to sell, what are you going to sell? The thing that's down or the thing that's up? And I think gold is in an ATM effect right now. Like people are a little worried about what's going to happen here and they need to sell something. And what are you going to sell when you're a little worried? The thing that's up a lot. That's what's happening. It's the ATM effect. I like it.

24:40Michael Batnick:Yep, I buy that. So yes, more sellers than buyers, but I think that you have correctly identified why there happened to be more of one than the other.

24:48Ben Carlson:Yeah, you wouldn't sell the thing that's getting smoked. You sell the thing that's doing really well. All right, so I mentioned that the markets rule everything around us. Did the bond market win again? Because if we get two-year treasury in March, like I guess this is like two weeks ago, three weeks ago, the two-year hit the low of the year at below 3.4%. Then it shot up to 3.8 % and maybe intraday higher. Is this just another thing of the bond market spooking the administration again? To me like, okay, all right, we cannot upset the bond market. It really is pricing in rate hikes and higher inflation, and this is not good.

25:25Michael Batnick:Yeah, the yields are shooting again higher this morning. It really is just remarkable. So yields are still going up again.

25:31Ben Carlson:or back up again.

25:32Michael Batnick:It is remarkable that the market is just hanging in there. Right. Even as a -

25:39Ben Carlson:The mortgage rates are back to 6.5%, right? Like this, this is going to have, even if the ripple effects are, again, a few months, if we stopped everything now, there's still some ripple effects.

25:48Michael Batnick:Oh, I have a better, I have a better movie analogy for the market not selling off. Okay. Outside of Forrest Gump. I know what you did last summer. When Jennifer Love Hewitt is screaming, what are you waiting for? Oh. that's pretty good thank you all right did you read the new besan binder piece no i'm over it i i will i retired okay i don't i don't need an update i'm good i i thought the

26:14Ben Carlson:update was interesting so he the first one he went to 2016 and he said you know 89 firms accounted for 43 trillion dollars in net worth creation right 60 of companies underperformed t-bills over the long term all this stuff like groundbreaking research you're you're over it But he updated this through 2025. And now, so again, 89 firms, 43 trillion in total net creation, right? Now, 46 firms account for half of the 91 trillion in net wealth creation. So it's just saying this past 10-year period is just the concentration has got even more. Like it's a smaller and smaller number of stocks that have made the most wealth over the long history of the stock market.

26:55Michael Batnick:Yes, we know this to be true. I can, I can, I can, my ability to be, huh, has gone to zero for something like this. Really?

27:05Ben Carlson:Nothing.

27:06Michael Batnick:No, there's nothing else that can come out of this type of a study. I also rejected a little bit. I mean, obviously the, the takeaway is this is why you index. You don't need to convince me of that. I'm already there. I've been there.

27:18Ben Carlson:Yeah. You casted a wide net so you can make sure you get these winners. The interesting thing to me. But, but, but hold on.

27:23Michael Batnick:But also, yes, we know that buy and holding forever individual stocks is a terrible idea. Empirically, most stocks are not worth marrying. Guess what?

27:36Ben Carlson:I don't think a lot of people know that. I think the school of Warren Buffett taught people that you just buy and hold stocks forever and you'll be fine. That's true. I think there's a lot of people who need to learn this lesson.

27:48Michael Batnick:That's true. but, and also in the real world, and this is the biggest gripe that I have, nobody does this. Okay. Nobody buys a stock at the IPO and holds it forever. And when I say nobody, yes, there are people that have made fortunes doing that over, but like in general, nobody actually buys a stock at the IPO and that doesn't sell it forever. This is not the way that markets function. People are buying and selling every day. And so just because the stock XYZ, Disney, for example, Home Depot, for example, these are at multi-decade lows relative to the market. Like in other words, Home Depot hasn't outperformed the index over 30 years or something crazy, right?

28:22Michael Batnick:Does that mean that there weren't opportunities to make money in Disney or Home Depot over time against the market over a seven-year window?

28:28Ben Carlson:Yeah, yeah, yeah. All right. We give this caveat every time. But it's true. It is true. You're right. Look at table two. So this gives the stocks with the highest annualized returns over at least a 20-year period. And NVIDIA is the highest, which is crazy. 37 % per year. Go back to 1999. Netflix. But look at some of these other names that you've never heard of. Axon Enterprise. Plenum Publishing. Lin Broadcasting, Pioneer Group. A lot of these companies that you've never heard of before. Again, these are like 20-year-plus periods. There's a lot of them on here that would surprise you that you've never heard of before.

29:02Ben Carlson:Manor Care. I haven't heard of most of these companies. Exactly. That's surprising to me. Anyway, all right. Fine. You're not impressed anymore with Besson Binder. I am. I think this is some of those important research that's been done this century on the stock market.

29:21Michael Batnick:I agree. Well, this is major confirmation bias for you. And I'm not saying that in a bad way. But this is like hammering home what you believe to be holy ground.

29:31Ben Carlson:But I think before I saw this research, this research is, it's more concentrated and more confirmation bias than I would have even thought before I saw the data.

29:41Michael Batnick:You saw this and you were like, I knew it. And here's proof. And me too. No, I'm saying it's surprising to me

29:48Ben Carlson:how concentrated it really is. I never would have thought it would be this concentrated. It really is.

29:52Michael Batnick:My only point is, not my only point, we saw this stuff, this is like 2017. When did this first come out? It's just, there's been five iterations.

30:00Ben Carlson:Yeah, and he did the update and it's even more so.

30:02Michael Batnick:All right, Mr. Bassett Midder, professor, could you give us three years? Give us like three, four years until the next one. All right.

30:09Ben Carlson:Such a hater.

30:11Michael Batnick:Me the hater? You hate happy birthdays,

30:13Ben Carlson:you grouch. Duncan said, I'm going to get, trolled hard for that take. That's fine. I've given it before. Yeah, Ben the Grouch. That's true.

30:24Michael Batnick:You're not actually a Grouch in real life.

30:27Ben Carlson:No, I'm really not. Anyway. Which is funny because if you ask my parents, I loved my birthdays when I was growing up. My mom would always make fun of me because I was so into it and now I just don't care anymore.

30:38Michael Batnick:Oh, so you got birthday shamed. You're embarrassed. Maybe I'm fighting back against being shamed. You know what? Fine! mind nobody say happy birthday see if i care i don't care at all minding my business so

30:53Ben Carlson:this is interesting this is from jason firman in the new york times he wrote an op-ed he said if you hate trump's economy i have news for you and he breaks down the economy under joe biden and the economy under trump it was basically 2024 versus 2025 or later and he breaks it down by gdp and inflation and real earnings growth and the s &p performance and mortgage rates and the unemployment rate and gasoline prices and the budget deficit and trade deficit, all this stuff. And honestly, it looks almost exactly the same. Right? Like all the stuff Trump has done and the economy basically is the same.

31:29Ben Carlson:All the stuff Biden did. A lot of people hated the stuff Biden did. The economy looks the same as it does today. A lot of people hate the stuff Trump is doing. The economy looks the same as it did under Biden. Can I just point that one thing?

31:42Michael Batnick:It's the direction.

31:46Michael Batnick:sure okay you know the memes you know the memes you know the memes where it's like bitcoin at 70 ,000 and bitcoin at 70 ,000 like a week ago versus today and it's like jennifer aniston

31:53Ben Carlson:and the guy with the wrinkles on his face yeah but the other part that we've talked about a lot is you look at the sentiment among republicans and democrats uh when biden was elected then the republicans hated the economy trump was elected now they love it biden was elected democrats love the economy. Trump is like, now they hate it. The point is, it's the same economy.

32:14Michael Batnick:Yes, more or less. Shouldn't or should not a number like this consumer sentiment, shouldn't it be capped at 100, just zero to 100? How come it goes all the way up to 140?

32:29Ben Carlson:That's a really good point. It's kind of like the QBR rating in football. Why is it like 159 or something? Everything should be capped at a hundred or 10.

32:36Michael Batnick:Yeah. A perfect 158.3. Oh yeah. How about, how about we just stop being cute and just cap it at a hundred?

32:42Ben Carlson:I guess the point is all this stuff that's gone on this decade and the economy is so big and dynamic. It's really hard to like, it's, it's turning a battleship, right? It's not like this thing pivots on a dime. It takes a while. And all the stuff that these presidents do. It matters in the headlines, in the short term, in some market stuff. But for the economy overall, it's really hard for them to change the overall shape of it. That trend is hard to break, whatever trend it's on.

33:15Michael Batnick:Okay. Last week, we spoke about new home sales. I think maybe this is a better demonstration of what we were talking about, pending home sales. So not just new. Lowest level in history. It is amazing. It really is amazing that the market - So why does this index go to 100 as well?

33:42Ben Carlson:That's a great point.

33:43Michael Batnick:Why does it go to 130? All right, new rule. 100 is the max for all these indexes. It's a great point, Ben. The housing market is in absolute ice age. Yeah, why isn't the market lower? Isn't housing a third of the economy?

33:57Ben Carlson:It is pretty bizarre. housing is like 20 % of the economy, but that includes all the construction and furniture and moving and all the other costs that are lending. If you work for a mortgage lender and you've been waiting for years and years and years for mortgage rates to fall so the housing market can become unthawed and it just hasn't happened yet, it's got to be exceedingly frustrating. I can't even imagine working in that industry.

34:21Michael Batnick:Well, I think it's beyond frustrating. These people's livelihoods have been taken away. All right, this ties in nicely with the Bessem and Bender study. I had clawed making this chart. Scroll down back to the real estate section. So Home Depot stock is getting smushed. Okay? It is breaking below what had been support. It is now the lowest that it's been in a long time since… Don't you think a lot of the renovation stuff was pulled forward? Well, of course. So this is how the market works. So Home Depot is flat since April of 2021. So I had Claude do this thing for me. I said, hey, show me the cumulative US home sales over the last, what is it, five years basically, where Home Depot has gone nowhere or has delivered, let me rephrase it.

35:17Michael Batnick:Home Depot has delivered cumulatively 0 % returns for its shareholders over this time period. Of course, it went up a lot, came down a lot. But if you bought it five years ago, thinking there would be a home boom, you were right and you lost money. So$9 trillion worth of cumulative sales since April 2021. And Home Depot, which theoretically would have been one of the biggest beneficiaries of all of this home sales, the stock has gone nowhere. And this is why, for me, I have a very difficult time buying and holding a stock. I know too much. Yeah. I've seen too much, Ben.

36:05Ben Carlson:I was bullish on the housing market in 2021, and I bought Zillow. And it's been crushed since then. Done nothing, essentially. I sold it a while ago.

36:14Michael Batnick:There's so many examples of this. Yeah, it's hard. of companies just winning and their stocks anticipating the win and just pulling forward a lot of returns and then eventually investors getting disappointed over and over and over and over and over and over and over again.

36:31Ben Carlson:All right. So last week we did an update on, what did we update that we were wrong? Oh, the GDP now is 5 % and really came in under 1%, right? I like doing these throwbacks to previous episodes. Ernie Tedeschi did the share of total expenditures by top 10 households by income. and there's that chart going around from Moody's that shows the top 10 % is spending 50 % of all the money, right? Unfair, K-shaped economy. Matthew Klein said, this doesn't match the data. Ernie Tedeschi said, yes, let me find it. The share of expenditures by the top 10 % of households is actually 22%, 23%, and it's lower than it was pre-pandemic.

37:10Ben Carlson:The actual data for this. They're basically saying there's a data error in the Moody's. It's not picking this up right. He's saying it's actually lower now than it was pre-pandemic. And it's pretty flat too because if you look at this chart, he's going by 0.2 % for every tick there. It hasn't changed at all basically in the last 10 years.

37:29Michael Batnick:Wait, so where did the misreported data derive from?

37:34Ben Carlson:That's a good question. I don't understand this stuff enough. But they're saying, look, if you check it with the other sources, it's wrong. The way that they're looking at disposable income is not right. It's not the top 10 % is not spending. Oh, yeah.

37:47Michael Batnick:How do I know that this one is right? What does total expenditures include or not include? I want to know what I know. I want to know what was causing the gap in the data.

37:57Ben Carlson:I do too. All right. Matthew Klein had a whole piece on this. I'll send it to you. It's in my blog post about it. Oh, what did you inflation adjust here? Oh, man, you are really into the Claude charts now. The charts that Claude produces look really good, aren't they?

38:10Michael Batnick:They're so good because not only – so I had an inflation adjust to oil and gasoline. Not only does it do that, but it also like annotates the charts.

38:22Ben Carlson:Yes.

38:22Michael Batnick:So for all of this –

38:24Ben Carlson:I did one last week for median house price versus median income. And it showed me like the peaks and the valleys on the top. Like it's really, really good.

38:32Michael Batnick:So yeah, and for all the peaks and the troughs, it gives you the date and the why. Yes. Great stuff. Um, all right. Claude's coming for Chart Kid Matt. Never. New vehicles. What's going on? I didn't, I missed this article.

38:48Ben Carlson:Okay. New York Times has an article. It's just crazy. High car payments make ownership feel impossible. And it's not, because you only, most people buy a car every what? Five to seven years, maybe. So I think there's a lot of people who are now cycling in going, whoa, I did not. And they interviewed a lot of these people being like, I, this is crazy. And they interviewed someone who is a 27 year old who bought a brand new$80 ,000 car and like had to get it repossessed because they couldn't afford the payment.

39:15Michael Batnick:That didn't happen when we were kids. Of course not.

39:20Ben Carlson:But it says that.

39:21Michael Batnick:Am I making that up? No, you're right.

39:26Ben Carlson:The new car stuff is way, way different.

39:29Michael Batnick:The first car that I bought when I was kicked out of school for the second time. I was home and I was working full-time for years because I had to pay rent in Indiana, like a schmohawk, which whatever. Another story for another time. But I was working full-time and my bank account was getting, my coffers were filling up because I was living at home and I was earning wages, Ben. And I bought a used G35. Remember that car? The sedan. You don't remember the Infiniti G35? You are really not a car guy. Okay. So anyhow, I paid$26 ,000 for it. And that was like a cool car for a kid to be driving.

40:20Ben Carlson:Wait, I thought you said this didn't happen. You did it. It was$26 ,000. Okay. That sounds a lot for back then. My first car was, you'll be surprised. You hear this, a Honda Accord that had 110 ,000 miles on it, and we bought it for$2 ,500.

40:35Michael Batnick:Yeah, but your parents gave that to you? Of course.

40:38Ben Carlson:My brother had it, then I got it.

40:39Michael Batnick:Yeah, no, I paid for this with my grown-up money. But$60 ,000 car,$80 ,000 car for a kid?

40:47Ben Carlson:Nuts. The average monthly new car payment reached$774 in January, up from$588 in January 2021, where the 20 % of new car borrowers agreed to pay over$1 ,000 a month at the end of last year, which was a record. I tend to agree. I think this is another social media thing where more people now think they deserve a new car than did in the past. I think, and maybe that's a misread on my part, but I can't believe more people aren't just buying used cars.

41:15Michael Batnick:But you know, that's what I was about to say. So my Infiniti was probably three or four years old when I bought it. Why aren't people buying used cars? And maybe used cars are expensive too, but -

41:25Ben Carlson:Yeah, because the depreciation ran off a lot. It's huge. Not so. All right, let's talk AI. From the Wall Street Journal. AI isn't lightning workloads. is making them more intense. Okay, so they looked at an analysis of 164 ,000 workers' digital work activity, and they did this, they tracked it what happened when people started using AI. How did it impact their work? Covering more than 443 million hours of work across over 1 ,100 employees, making it one of the biggest studies of AI's effects on work habits to date. They looked at like the activity 180 days before and after they started using the tools, and they find that AI intensified activity across nearly every category.

42:02Ben Carlson:The time they spent on email, messaging and chat apps more than doubled by their use of business management tools such as human resources or accounting gross 94 so the whole study said people who use ai end up working more not less i also think there's this thing where could we see a fake productivity boom where people are worried ai is going to take their job so they actually work harder we're going to see like a five-year fake fake productivity boom because people are like scared of ai taking a job. So they actually work harder. This has been my thesis. And I don't, some people will say, just wait when AI improves, these numbers won't, this won't be the same.

42:37Ben Carlson:A will take over. But this has been my thesis the whole time that it's just going to make a lot of people work a lot more.

42:43Michael Batnick:I wonder what the output of the work is, is a better quality. I would imagine it is. It's dude. Oh, website. Just leave that by accident. It's too early for these types of studies. I'm happy that they're out there. I knew you were, I knew you were going to say that. Well, it is. That's the retort. Why? It's like measuring the impact of the iPhone in 2007. Okay. What's the point?

43:03Ben Carlson:Chat's been out since 2022. True.

43:08Michael Batnick:I'm just saying. It's still quite early. Okay. I knew that would be the retort. You know me so well. Not well enough to say happy birthday, but… David Leavitt tweeted, this is quite literally what Skynet does to… Listen, you're free and clear this summer on my birthday. hey, don't say happy birthday to me. I can't help it. I love you. We're going to say happy birthday. That's what you do for people that you care about. You just, hey, thinking about you. Good to see you. How you doing? All right. Engineers wanted to make humanoid robots look more realistic. So they successfully grew actual living human skin in a lab and permanently attached it directly to the metal face of a robotic machine.

43:43Michael Batnick:That's very creepy. So somebody grabbed that and said, this is quite literally what Skynet does to infiltrate the human resistance with the T-800, T-850, and T-888 series Terminators, which are Cyberdyne systems, infiltrator units covered in bioengineered living tissue, including skin, blood, and hair, over a metal endoskeleton. Dude, we were just talking about this recently. I think you rewatched T2. That scene where Arnold cuts the skin right into the arm and rips it off, f***ing rocked my world. I remember I wasn't allowed to see that movie when it came out. I was like six years old. My dad wouldn't let me see it.

44:15Michael Batnick:He took my brother and his friend to see it. So I probably saw it like two years later, but I had to be eight or nine years old. Then it like shook the ground.

44:23Ben Carlson:So did you ever, so my son is trying to move it on to all the other action movies now. So all the Expendables movies are on Netflix. Did you ever watch those movies?

44:30Michael Batnick:I only saw the first one. It was quite good. No?

44:35Ben Carlson:I mean, I don't know. They might be some of the worst action movies ever made by like legitimate people. Every action star is in them. Oh yeah. I mean, but my son -

44:42Michael Batnick:I have zero memory of it other than having a great time.

44:44Ben Carlson:There's like four of them. Okay. Okay. So our friends at CrainTrust had a robot at Future Proof last week, two weeks ago. And I made the point, again, that if you're the first person to buy a robot and the robot turns around and kills you, that's on you, not the robot. That's fair, right? Like, you don't want to be the first person to buy a robot if it turns on you because it's so strong. That's all I'm saying. Speaking of. I asked the robot, what's your favorite dance? And it actually did the robot. Movies and robots, I watched over the weekend.

45:15Michael Batnick:Not good. Mercy, which was a pretty blatant ripoff of Minority Report.

45:23Ben Carlson:Okay. I saw that it was on Amazon. I was going to watch it too. Not good?

45:27Michael Batnick:No. Okay. In fact, bad. Watchable, but barely. You know what? It's like you could put it on in the background while you write a blog post at 1130 at night. Okay. It's one of those.

45:37Ben Carlson:You do know me.

45:41Michael Batnick:All right. Anyhow, nobody wants this. Please. I don't want to see... I don't want to say this in the world ever. I know it's coming. All this stuff that people don't like. So for example, somebody emailed us. It's cool to think about the ability of the tech and what it means for business owners. But just know that if it is implemented at scale across an entire company, it is going to cost at least three people their job. Real jobs that offer value for small businesses. real people who are part of a healthy company culture, who work together to deliver a product to customers. I know that tech is new, so the possibilities are exciting.

46:21Michael Batnick:But because of this, the marketing team who takes leads and turns them to estimates, estimators, and project coordinator, who schedules the crews to do the actual work are now on their way out the door. Not to mention the marketers who get leads aren't mentioned, but I'm sure that there is tech that shrinks that team as well. I guess it's cool for owners and profitability, but not really. It just kind of sucks. And honestly, for what? To grow the pie? At what cost? And this person is saying what I'm sure a lot of us are feeling.

46:53Ben Carlson:Oh, yeah.

46:54Michael Batnick:And not to be callous.

46:57Ben Carlson:This is why a lot of people hate AI.

47:00Michael Batnick:Yeah. Yeah. And I don't really, I don't disagree with this person. Do I want everything to stay the way it is? Like, do we need? No. Yeah. I wish it could stay the way it is. but for better and for worse, that's not how the world works.

47:14Ben Carlson:This is the history of the world. Yeah, it really is. Yeah.

47:17Michael Batnick:So I'm bullish. I think in 50 years, like I don't think that people will look back on like this is a watershed moment of the end of humanity. But the, you know, not to be this dead horse, you talk about this every week. Yeah, the displacement of now to then, it's going to be terrible. Real people losing their livelihood. It's f***ing tragic. Here's another one. Michael and Ben, regarding the debate on yesterday's pod about whether AI is making people smarter or not. I can confirm that Ben is correct on this one. Sorry, Michael, but AI is absolutely making society less smart. All right, so here's the context.

47:49Michael Batnick:High school teacher. 90 % of students have no desire to use AI the way Michael does, as an amazing tool to follow their curiosity seeds. Michael's take assumes that most people have things they are curious about. And that's a very fair point. He said, unfortunately, most students do not have interests anymore. This is a super depressing email. They go home after school, ask ChatGBT to do their homework for them, and then scroll on their phones for eight hours. I promise you that when they are asking Chat to do their homework, they aren't doing it because they want to learn more about biology. Of course.

48:24Michael Batnick:It's not every student, but most are like this. If you thought the gap between the haves and the have-nots is bad now, it's going to get way worse than the next generation between the 90 % of young adults that are addicted to social media and conditioned to outsource all of their thinking to AI. and the 10 % who are learning to think for themselves. I no longer consider my primary job to be teaching content to students. My main goal is to prevent as many young adults as I can from being ruined by technology. This seems a little bit dire.

48:51Ben Carlson:It's a little over the top. Do you get the sense - But I get it, but I understand. I get the sense just from having my kids in school that technology has made teachers, I don't know what percentage, just I feel like it's beaten down a lot of teachers. and you hear stories I hear stories all the time about the it's not just um just the technology but uh kids wanting to get their own way and in the past it was kind of like the I've just heard a lot of times that it's harder to punish kids these days and it's not as easy and I it just seems like the collective sentiment among teachers is way lower than it was when we grew up didn't didn't seem like and I went to a Catholic school so I had like I had some nuns and um it just seemed like the teachers all just like nothing this stuff didn't get them nothing got them down it's like they just did stuff like if you liked it great if you didn't like it i don't care either it seems like the teachers nowadays are just way more beaten down by a lot of this stuff that's going on in the world is that fair i don't know dealing with phones dealing with the way different ways kids are these days i think it's a lot harder to be a teacher today than it was in the past oh yes for sure i have a friend who's a i have a friend who's a teacher in my hometown and he said he has kids bring a note from a doctor saying, and my friend is kind of an old school kind of guy.

50:07Ben Carlson:He's a throwback kind of guy. And the kid hands him a note and it says, from the doctor, I can't remember what the reasoning was, but the kid needs access to their phone for their anxiety. Like, they have to have a phone on them. So the parents obviously signed off on this. And my friend takes the note and he crumples it up and he throws it in the trash and he says, go sit down. But that's the kind of thing, right? I don't know what the - What's wrong with those parents? Right? They coerced a doctrine anyway. Are you? Pretty sad. Wow. Wow, wow, wow. All right. This is a really uplifting episode so far.

50:45Ben Carlson:My God.

50:46Michael Batnick:What is wrong with those people? All right. What do we got? Crypto? The Bitcoin buffer ETFs are working. Okay. This is from Todd Sohn. we had the Kalamos. You were intrigued by this. I used one of these funds.

51:04Ben Carlson:When I sold my Bitcoin, it was the Thanksgiving of 2024, maybe, or something. Yeah. No, 25. Okay. And so I said, you're right. So I initially, I felt like, I don't want to miss out on potential upside. So I put it in some of these buffered ETFs and Bitcoin crashed and it worked. Yeah.

51:23Michael Batnick:It did work. Remember like the 0 % downside one? It looks like it's working. Yeah. Cool to see. All right, this is interesting. Real quick, we mentioned Hyperliquid last weekend or last show. I was looking at it over the weekend, the S &P 500. Now, interestingly, I noticed that they called it the USA 500. Why? They don't have carte blanche to just use S &P's proprietary data, right? So our friend Frank Chaparro has a sub stack about this stuff. and he quoted Cameron Drinkwater, great last name, chief product and operations officer at Dow Jones Indices. This collaboration expands access and utility of our flagship benchmarks within digital trading environments.

52:12Michael Batnick:We believe digitally native investors should demand the institutional quality standards that define our indices, and we are thrilled to work with trade to do so. So anyhow, interesting on two fronts. Remember we spoke a couple of weeks ago about the moat for some of these companies that are getting destroyed by AI. It's like, whoa, whoa, whoa, whoa. You can't just snap your fingers and replace the ratings agencies just because you think you can rate a credit with a robot. That's not how it works. So I thought it was interesting on that front. And also because we had a headline from the Wall Street Journal this morning saying that the New York Stock Exchange, kind of an established player in the financial ecosystem, said Tuesday that it was joining with Securitize to develop its tokenized securities trading platform.

52:55Michael Batnick:This would mark a step forward from the tokenized stocks traded outside of the US. Under these current offerings, token holders aren't granted the same benefit. All right, anyway, this is not particularly relevant, I don't think, to like 95 % of this audience. But - I just wonder what the liquidity

53:10Ben Carlson:is going to be for these products.

53:11Michael Batnick:I'm guessing at first it's going to be, you know, not great. But for people, for crypto natives, for people that have all their money on the crypto blockchain, who don't want to move their money their money from Coinbase back into Fidelity, back to Coinbase. You have your money and these crypto-native solutions, particularly for people outside of the United States, that want to use their stable coins to access US securities. That's what this is for. Again, not applicable to a lot of people, but the New York Stock Exchange getting in here, S &P getting in here, noteworthy.

53:44Ben Carlson:It is funny how much people want to know over the weekend what's going on, especially in a geopolitical crisis like this. Yeah, dude. Where's the S &P trading? But doesn't it seem like the after hours is always like a bigger overreaction and then the market opens and it kind of calms down a little? But yeah. It's not for you. But it's going to be interesting. Yeah, people are going to want to use it. But I don't know. You know, I mean, the market used to be open Saturday from 9 to noon. Back in the day. I think it stopped in the 50s.

54:15Michael Batnick:We haven't spoken about these stocks in a while. Dude, Microsoft is getting f***ing annihilated. it's down. Down what now? So it's at fresh lows, lowest level since April 2025.

54:31Ben Carlson:Is it too simple to think that people are using using it as a proxy for open AI?

54:36Michael Batnick:Sure. Yes, I do. It's down 31%. By the way, all of the software names that I sold, not to brag, have rolled over big time. Not very confidence-inspiring. Salesforce is breaking, not to new lows, but breaking the recent range of, you know, it's settled down, breaking down, not great.

54:56Ben Carlson:Microsoft down 30, Microsoft down almost a third is kind of crazy. With a market only down six.

55:05Michael Batnick:Listen, I was talking to Jimmy Labenthal about this. It's going lower. Obviously, the sellers are in control, okay? Duh. You don't need to be a genius to figure that out.

55:11Ben Carlson:This seems like getting close to plug your nose and buy territory.

55:15Michael Batnick:It does. Now, I… A company like this? I will wait for it to stop going lower. I'm not saying I'm going to nail the bottom of this. I don't even know if I'm going to buy it. But this seems like it's an overreaction at this point. Down 31%. Come on. That's a lot. You know, who's selling?

55:32Ben Carlson:So this thing went from$4 trillion at the peak to$2.8 trillion now in market.

55:36Michael Batnick:I'll tell you who's selling. If you're in a stock that is in a 30 % drawdown and it's your real money, yeah, you're scared. Right? I mean, this is... We know how human behavior works. But...

55:51Ben Carlson:Well, it's also people looking for AI losers. That's the track we've been on this. Barry sent me, so I think all the mag stuff is still down on the air. Barry sent me this article. I regret buying, I wish I'd never bought a house at the cut. And they go through all these stories of people who bought a house. They realize like, wait, this is going to be a fixer-upper and it's going to take way longer than I thought. I'll read some quotes from the article. My home felt like these golden handcuffs trapping me in the job I hated. This is from a 39-year-old. If I just invested my money in the stock market instead of buying a home, I'd be a lot richer.

56:26Ben Carlson:Andrea, 27 from Michigan. So in the 2010s, after the great financial crisis, the housing market crashed. There was all these stories, and like the Atlantic and all the coastal elitists wrote all these pieces being like, home ownership is dead. Millennials are never gonna buy a home. No one's gonna wanna buy a home anymore because they saw housing prices crash. And I said, I'm shorting this take to high heaven. There's no way. People are gonna buy homes. That's what people do. People get married. They buy homes. This is what happens. This is the next stage in life. do you think that there will be a decent percentage of the next generation that's going to change their minds about homeownership and just go, no, I would rather invest in the stock market and rent.

57:00Ben Carlson:No, I don't think even like a 10%, 15 % of them are like, no, I don't want to.

57:07Michael Batnick:Yes. I do believe that.

57:09Ben Carlson:I think that this is going to be a real thing for some people.

57:11Michael Batnick:I do believe that there will be a certain percentage of the homeownership, newly homeownership population. I don't know if it's five or 15, that will experience buyers and more. They got a shitty house, whatever, their job, their life status change. Of course that's going to happen. However, you have to think about the alternative. If you need to be in a house because you are a growing family, it's just in certain places difficult and in other places impossible to rent.

57:46Ben Carlson:Yeah, I think it's like the coasts. it's such a stark difference between buying and selling. Like if you don't have rich parents to help you or an inheritance in San Francisco or New York City, like you have no shot at buying a home.

57:58Michael Batnick:Well, it depends on the neighborhood. But on Long Island, for example, you can't rent a house. I'm talking about the city. Maybe there's like houses here and there, barely, you know, few per neighborhood. You're right.

58:12Ben Carlson:But by and large, if you want to be in a house,

58:14Michael Batnick:you got to buy it.

58:15Ben Carlson:So this is interesting because, so the Wall Street Journal had this piece, their home wouldn't sell, so they became America's latest accidental landlords. And they told these people who, like, I put it on the market. People weren't buying what I was putting out for the offer. So I decided, listen, I got a 3 % mortgage. I'm going to rent it. I'm going to just buy a new house, and I'll be a landlord. And they said that this is 2.2 % of rental listings on Zillow in November had previously been listed for sale. In some places, Houston, Denver, Austin, Tampa, it's even higher. It's like 4%, which doesn't sound like that much, but it's the highest it's been on record, they're saying.

58:45Ben Carlson:And so people list their house. They can't sell it. So they decide just to rent it instead. And they have all these stories about people going, oh, this is awful. What a terrible experience this was. My home got wrecked. The bathrooms were gross. I had to fix stuff. I didn't want to do this. I think that's being, you know, owning rental homes can be, can work for people who know what they're doing. If you don't know what you're doing, I would not want to be in that position.

59:11Michael Batnick:I did that. And I got very lucky. I could not have gotten luckier with the timing of it. when I bought it, when I sold it, and it wasn't fun. And I had like almost no problems. Owning a house, even if it's your own house that you live, it's a money pit. It's a lot of responsibility. And it's the type of thing that everybody, it's the type of thing that you can't know until you know.

59:36Ben Carlson:So remember, I actually have a positive story on this. It was probably like 18 months ago. We had a little shingle problem with a roof. We had a little leak and a roofer had to come. And remember he said, listen, I don't even show up to your house for less than 500 bucks. It's$500 to get me in the door. And then whatever it costs. And it took the guy 10 minutes and I paid him, I don't know,$1 ,200. It was ridiculous. But like, what are you going to do? I can't get up there and fix the roof myself. So at our place on the lake, it's really, really windy. And I had like five or six shingles that blew up.

1:00:02Ben Carlson:My neighbor said, hey, Ben, something's wrong with your shingles. They blew up. So I got a recommendation for a different roofer. Try someone else. The guy came. He said, oh, yeah, I get up there and I could caulk them down and I staple them in place. And he said, you know what? and he got up there. I think it took him 10 minutes. He fixed these six shingles that I probably could have never done. I would have messed it up somehow. And he's like, I did leave the top because he wanted to have a little, whatever, he's explaining to me I don't know what he's talking about. I said, all right, that's awesome.

1:00:26Ben Carlson:Great work. What do I, what do I, what's the easiest way to pay you? He goes, no, free of charge. So what do you mean free of charge? And he said, this is how we grow our business. We have no marketing budget. If we have a small job like this, that's going to take a few minutes. And this guy drew 45 minutes to get there probably. He said, we do it free of charge. All I ask is that word of mouth. If someone asks you for a roofer, you use us and tell me. And I said, I said, I love that guy. Wow. That is a great business. He said, you know what? What's crazy? Our business is growing like crazy. We're moving to the east side of the state.

1:00:54Ben Carlson:We're moving to the north. He's like, he's like, it actually works.

1:00:57Michael Batnick:I'm like, that is such a great idea. Isn't it so obvious to do shit, to behave that way? I want to come back to this in a second. You know who didn't behave this way? The guy that charged me 500 bucks to take a dump in my house, leave a stain and tell me I need to spend$8 ,000 on a new boiler that I didn't need. That guy will never get my business again. I mean, obviously. All right. There is a perception among people in general, and even at our company, Ritholtz Wealth Management, that if you respond to somebody immediately, that they might perceive you as being not busy. Right? Right. You understand that mentality?

1:01:39Michael Batnick:It's insecurity, I suppose. Right. Don't they have something better to do with their time? Yeah. Right. The opposite is true. The opposite is true. This is a hashtag business life lesson from Michael. I love it when I get an email back right away. Of course you do. That's great. Of course you do. So we have a friend in our neighborhood that does our insurance. He does everybody's insurance. And if you email him with anything or text him, he responds to you immediately and always. And if you need something to be taken care of, he does it immediately and always, every single time. And when I get that response, I don't think, huh, he must not be busy.

1:02:27Michael Batnick:He is one of the busiest people that I know. He doesn't have time to not answer things immediately because it will just stack up. Right. So this - It should be common sense stuff, right? It's typically the point of view of a younger person who is like insecure because they don't have like the life experience or whatever. Like, oh, if I respond too fast, they must think that I'm not. No, I'm telling you, it feels so good when a service person responds immediately.

1:02:55Ben Carlson:Yes. And guess what? If I have a big roofing issue, I'm never calling another company again, ever. And I'm going to tell all my friends about this in the area. This is the company I have to call.

1:03:05Michael Batnick:Anytime. Exactly. Anytime somebody tells me, hey, do you know an insurance person? Yes, I have the best guy. The best. He responds to you immediately.

1:03:14Ben Carlson:I was really interested in the guys. Like, it works better than you can imagine. Our business is growing like crazy. And I was like, that made my day. The fact that this guy didn't try to bend me over to fix a couple of shingles.

1:03:25Michael Batnick:People get excited to share positive stories in their life. Yes. Right? Because it's unusual.

1:03:31Ben Carlson:I went at the soccer, my daughter's soccer game this weekend. I told like five people the story. because I'm like, it was awesome. I'm going to send you the name of this person.

1:03:38Michael Batnick:Yeah. Anyway, if you want to speak to my insurance guy on Long Island, I'll set you right up. Yeah, your car broker.

1:03:45Ben Carlson:Although, do we blame your car broker at all for the fact that you always get a terrible car? Is it their fault at all or is it your fault? You know, real quick,

1:03:54Michael Batnick:because this is not a very interesting story. There was two accidents. My car and Robin's car were each in an accident within three weeks of each other. I have been in an accident since 2002.

1:04:05Ben Carlson:Someone nailed you?

1:04:06Michael Batnick:I was coming. I was pulling out of Starbucks. And I was coming this way. And she like came in from behind me. Because there's a camera, right? So like if somebody was behind me, I would have seen it. I hit her. It's like, how did you hit? I'm like, I'm so sorry. Are you okay? Give me your number. I'll take care of it. It was very minor damage. I texted her. She never responded.

1:04:26Ben Carlson:Didn't want to deal with her.

1:04:28Michael Batnick:Anyway, and then somebody backed into my wife. so I took the car. This is, who cares? Very not interesting.

1:04:33Ben Carlson:Fun stuff. All right. So private credit. This is from CNBC.

1:04:37Michael Batnick:Let's save this for next week. This story is not going anywhere. Here's the only, the teaser that I will say. Yes, private credit has problems. Or yes, there will be problems in private credit. There's no doubt about it. Don't insult our intelligence and tell us that the portfolio is performing. We know. Nobody's worried about the performance today. It's people worried about future disruption with a lot of these software companies.

1:05:03Ben Carlson:Yeah, this is an illiquid asset class. So it's not like all of a sudden in a month, things will automatically be better. And you'll notice like it's so slow moving. I don't know what changes the current trajectory.

1:05:15Michael Batnick:Here's the LOL in all of this. The Cliffwater Direct Lending Index, which traces its inception back to 2005. The worst year, of course, is 2008. The return was negative 6.5%. It is really kind of amazing that we're spending this much time on it. And we should be spending a lot of time on it. But if you contextualize it this way, that let's just assume 2027 maybe is a bad year, and it's going to lose, I'm making this up, I can't know, 4%. It's just kind of hilarious. Like, that's a bad day in the stock market.

1:05:51Ben Carlson:Right. It's not going to be like a 50 % loss or something. like people. Yes.

1:05:56Michael Batnick:Okay. We'll get more into this next week. We'll actually put a pin in this as well. Cal Street raised more than a billion dollars at a valuation of$22 billion. I don't get it. We'll cover more. We'll cover this in depth next week. One thing that I do like. Big number. One thing that I love. Delta One, Walter Bloomberg tweeted, Cal Street to block athletes and politicians with trading. Thank God. Thank God they're doing something right.

1:06:24Ben Carlson:A lot of people are like, why is this not a regulation already? Why did they have to do this? This should be regulated. The government should tell them this.

1:06:30Michael Batnick:It's nuts. It's nuts. Again, another thing, 100 % approval rating. Government officials, particularly elected officials that are making laws, should not be allowed to own individual stocks. If people in the financial media that are anchors can't own individual stocks, are you f***ing kidding me? It's crazy.

1:06:51Ben Carlson:All right, Bloomberg had this big, Bloomberg had this huge feature, slashing tax bills for rich investors is a$1 trillion business. And it goes through all these different ways that people are now, it's saying like, listen, I know active managers can't beat the index. So I would rather have tax efficient strategy. And it goes through all these different, the tax for long short stuff, 351 conversions, box spread borrowing, no distribution ETFs, like box, these private placement life insurance and direct indexing and exchange funds, all this stuff now that you can do. and I don't think people outside of the wealth management industry realize how big this tax-aware investing stuff is getting and going to be.

1:07:28Ben Carlson:And it's just going to get bigger as baby boomers need to sell down their assets in the years ahead. This is going to be an enormous business and I think people who aren't in this, if people who aren't rich knew how easy it is, not easy. How many avenues there are to defer taxes, I think they would be madder than they are about the rich. The solutions that are out there now are kind of the same.

1:07:52Michael Batnick:If you have assets, if you have a million dollars, I'm making that number up. If you have an investable portfolio of any size, the tools that are available to you through wealth managers like us, it's mind-blowing stuff.

1:08:05Ben Carlson:There are times when we've said, I can't believe this is legal, but it is. We've got tax lawyers on it. People look through these with a fine-tooth comb to make sure this is on the up and up. And it kind of seems like, how is this even possible? But people have realized ways.

1:08:23Michael Batnick:Now there's no, there's, there's, there's, there is no free lunch with this stuff.

1:08:25Ben Carlson:No taxes are paid eventually. These are like deferral strategies, but we know a tax, if you have a lot of money and you can't put all this money into a tax deferred IRA or whatever, um, the ability to defer taxes and let it compound just makes the money way bigger. So anyway, that this is a thing that in the years ahead with wealth management, this is, this is going to be the thing. I don't care if you outperform the index. I care if you're on an after-tax basis.

1:08:51Michael Batnick:All right. Great news in movie land. Project Hail Mary joins Christopher Nolan's Oppenheimer in becoming only the second non-sequel or non-franchise installment of the past decade to open to$80 million and more domestically. IMAX kicked ass. 20 % of the overall domestic market.

1:09:15Ben Carlson:Nuts. With 2 % of the theaters, whatever you said.

1:09:18Michael Batnick:Yeah. It was so good. The book was amazing. I think when we found out that they were making a movie out of this, we were like, how are they going to do the alien?

1:09:30Ben Carlson:Yeah, I was nervous.

1:09:31Michael Batnick:Two nitpicks that I have. Did you watch the movie or no? I haven't seen it yet. Okay, so two nitpicks that I have. It was too long, whatever. It was. It was 15, 20 minutes too long. Maybe I missed it. but, and this is not a spoiler, the premise of the book and the movie, which was very true to the book, is that Ryan Gosling wakes up on a spaceship and he doesn't remember how he got there. It's a great start to it, yeah, to the book. I remember that. And there are all these flashbacks and slowly he's putting the pieces back together. I don't know if in the movie they made it clear that he didn't remember how he got there because there's not like that exposition where he's not like, hey, where am I?

1:10:14Michael Batnick:Right? Like, now maybe they explained that I just missed it. Maybe I wasn't paying attention. But anyway, that aside, this was exactly what you want from a blockbuster. It was so good. It was so much fun. It was super kid-friendly. Matter of fact, I'm going to take Kobe probably this weekend to go see it because it is, I want him to have that type of experience like I did seeing all these movies at a young age. It is one of those things that he's nine years old. He's going to remember seeing this for the rest of his life.

1:10:40Ben Carlson:So I haven't taken George to an IMAX yet. So I might have to do that for this weekend for him. So we had a trip this weekend. We were on the road. We went to a March Madness game from Michigan women's basketball game. My daughters loved it. So we're driving on the way there. My wife put on, she listens to the Kelsey brothers podcast because she's a Taylor Swift fan. So of course she follows the Kelsey brothers and they had Ryan Gosling on. Is there a person right now in entertainment with a better approval rating than Ryan Gosling?

1:11:03Michael Batnick:No. I mean, he had, I listened to him on the podcast

1:11:06Ben Carlson:and I've never heard him on the podcast before. He had amazing stories. He was funny. He's kind of, he still seems down to earth. I don't think there's anyone with a better approval rating than him right now. Everyone loves that guy. And how could you not? The story of the movie is that there are these little microbes that are eating the sun.

1:11:26Michael Batnick:And of course, it's going to kill everybody on the planet.

1:11:31Ben Carlson:And so Gaffling talked about how Andy Weir was part of writing the movie. and he, the whole thing was like, he gave all the credit to this guy who wrote the book. He's like, this, we wanted to stay true to this guy's book because the book was so good. We just didn't want to mess it up.

1:11:43Michael Batnick:But so Ryan Gosling had chemistry. So he meets an alien out there and they team up to tackle the problem. Not a spoiler, it's in the trailer. He had on-screen chemistry with this alien. Like it was just so much fun. It was so great. And the IMAX is like, at least the one in New York City, the giant one in Lincoln Square, you can't get in it. It's like sold out forever. Interesting. I'm sure. It's just a better way to watch the movie. It made me really happy. It was so good.

1:12:10Ben Carlson:Okay. Any other recommendations for you?

1:12:16Michael Batnick:No, just I'm enjoying DTF quite a bit.

1:12:19Ben Carlson:Okay. I took your recommendation. I watched the first episode. I love the shows with subtle humor like that. The show made me laugh. It's very funny. But you have to, I feel like you have to have the right, some people wouldn't think so. Some people, but I really liked it. I watched Rooster 2. I plowed through the first few episodes of that. Good call. That's a U show, right? Sometimes it's nice to just have a 20 to 30 minute show that doesn't have like, it's not like the weight of the world on it. It's just kind of a relaxing show. It's light. But here's what I love. I love, because this was in Good Fortune, which I, did you watch yet?

1:12:51Ben Carlson:The Keanu one? What's that? The Aziz Ansari, Seth Rogen one. Oh, no, no, no.

1:12:55Michael Batnick:I haven't seen it.

1:12:56Ben Carlson:I love how people with the cold plunging saunas are getting roasted now. I feel like that's a great thing to roast because they totally roast rich people doing the cold plunge into the sauna, back to the cold plunge, back to the sauna, and talking about how great it is for you. And they do that in Rooster too. And because this is the kind of thing where, you know the old joke, like how do you tell someone to Harvard because talk to them for five minutes and they'll tell you? You can't have a cold plunge in a sauna today without telling someone about it. You have to tell someone, I have a cold plunge and I do it.

1:13:24It's impossible to have one and not tell people about it.

1:13:27Michael Batnick:There's somebody in our life close to us that - cold plunge person that just got a sauna and a cold plunge who do you think it is okay i have no

1:13:37Ben Carlson:i have no idea come on dude one guess that works with us yes oh barry no chris oh that's true oh chris okay that's true i guess i couldn't see barry getting a cold plunge um but yes barry has

1:13:53Michael Batnick:no patience for for that isn't of course chris is getting his son and guess what i'm gonna partake I'm a huge Schwitz guy.

1:14:01Ben Carlson:I love Asana. But I just, I love Asana too, but I wouldn't do the cold plunge. I love how these things become fads though. And it's like, you have to tell someone about it. It's so good for your circulation. Anyway, my wife and I watched Hamnet, which is on Peacock.

1:14:15Michael Batnick:Wait, hold on, just a question. On Rooster, do you think that anything will happen in the show or do you sort of just think this is what it is?

1:14:23Ben Carlson:I think this is kind of what it is, which I like. And I love that Steve Carell is still doing this kind of stuff.

1:14:29Michael Batnick:Yeah, it's just very easy. There's nothing mean about it. It's not cynical. It's not an AI nonsense. It's just good.

1:14:36Ben Carlson:And setting a show on a college campus just works all the time. That setting always works. Steve Carell is, I think, an underrated actor for how good he is. I think he's subtly a very good actor. Anyway, so Hamnet is on Peacock now. So my wife and I watched it last night. And the star, she won the, I think her name is Jessie Buckley. She won Best Actress at the Oscars. Did you bet on that one? I did not. Okay. So this is not a Michael movie. It's a, I think it's got true and fictionalized parts about William Shakespeare's actual life, okay? His kids, his wife, and the first three quarters of the movie are kind of a rough watch in some ways.

1:15:18Ben Carlson:It's not a, it's kind of a sad story. I didn't, I had no idea what it was about. I went in totally blind, okay? It's a sad story. in the last half hour of the movie is unbelievable. It's so good. And the ending is amazing. And I couldn't believe, like, I can't believe, I was ready to, like, hate this movie. Like, ah, it's just kind of depressing. And it's really well acted. Everyone in it is a great actor. The performances are amazing. But I'm like, God, it's such a downer. And then the end happened and I'm like, wow. That was very powerful. Were you on your phone the entire time? I watched the whole movie.

1:15:50Ben Carlson:I was not on my phone at all. Impressive. I don't think it's a Michael movie.

1:15:56Michael Batnick:Oh, I know it's not.

1:15:58Ben Carlson:Yeah, no. Okay. Tell Robin to watch it. But you, probably not for you. No, you wouldn't make like 20 minutes of the movie.

1:16:05Michael Batnick:Robin, yeah, she doesn't, I don't think it's for her either. She doesn't love the movie. But it got me thinking. She's not a huge movie person.

1:16:11Ben Carlson:Bill Shakespeare, if he's alive today, what streamer is he writing for? He starts out at HBO. No, he's on Substack. Then Paramount coaches him. And I'm thinking he'd be writing shows because he did theater. So he'd be writing streaming shows. So he'd start on Netflix. Or start on HBO, because you do like highbrow. Then you go to Netflix. Then Paramount would poach him probably. Right? I'm trying to think what would Bill Shakespeare be writing about these days if he's doing a show. And I'm not going to lie. I've never seen Hamlet. I did not know what Hamlet was about. Does that make me an idiot?

1:16:41Ben Carlson:That's one of those things I probably should know. I had no idea. I knew the lines. I knew to be or not to be is from that. I had no idea. I knew it's a tragedy. I couldn't have told you what the plot of Hamlet is.

1:16:51Michael Batnick:Did you see Billy Madison? Shouldn't that have told you anything you need to know?

1:16:57Ben Carlson:Close enough. All right. Yeah, Hamnet. It's a film, that's for sure. But I enjoyed it. Okay. Especially the end. All right.

1:17:05Michael Batnick:Animal Spirits at the compound news.com. Happy birthday to Michael. Hope you had a great day. It's too late. I reject your birthday. Wish us. Thank you.

1:17:13Ben Carlson:All right, we'll see you next time. You know what the worst one is? Happy B-Day. H-B. See you next week.

1:17:25Thank you.