The Crockpot Recession (EP.304)

22:15It's counterintuitive, but owning an index fund and be more diversified increases your odds of outperformance of all other investors. I just want to make one clarifying statement with this data, which is what it is. I trust the data, which is supporting index fund investors buy and hold. And I'm an advocate for that. I get it. However, so what this is showing is like, basically, if you buy a stock and hold it forever, it's not worth owning relative to owning a basket of stocks. Just generally speaking, most stocks are lousy investments, which I agree with. However, active investors, obviously, are not buying a stock at inception and holding it for its duration.

22:51Just because a company has a lousy lifetime return doesn't mean that there aren't opportunities to make money. Yes, I agree. For example, I just sold Facebook, not to brag. A stock could be down 60 % over a three-year period. It still could have gained 100 % over a three-month period. I knew that you sold Facebook because you shared the receipts with us on Slack. I feel like you were getting ahead of this. I shared receipts because you asked for receipts. So what are the numbers? That's a fair point. But I think the reason that concentrated portfolios underperform is because you have an extreme.

23:25The people who outperform, outperform by a ton. And there's way more people who underperform with a concentrated portfolio. If you want to outperform, a concentrated portfolio is the way to do it. But very few people can be above it. No, it depends. How much do you want to outperform by? the more diversified you are, the less likely you are to significantly outperform. Yes. And significantly underperform. The surprising one there is that Peter Lynch used to own like thousands of stocks. He might have taken a small position. He had a lot of holdings in his companies. Yes. If you go back and read the Peter Lynch stuff.

23:55I did not know that. All right. I listened to a lot of conference calls this week. And one of the interesting charts is from Charles Schwab. By the way, I bought Schwab. I used some of my proceeds from Facebook to buy Schwab. You're pivoting from tech to finance. Just as the piece. But look at this chart, transactional cash per account. It shows cash per account and cash is a percentage of the portfolio. And it's as low as it's been. This chart goes back to 2004. Only 5 % of a balance is in cash, like just cash sitting in an account, non-interest-bearing cash, getting whatever, 40 base points, whatever the minimum is.

24:31But I guess my point is, for that to be the low in 2004, just eyeballing this, what do you think the average is? is the average 10%. Yeah, that is surprising. I think if you had to pinpoint one general investor misbehavior, I would say, is holding too much cash in general. And just not being fully invested. Yeah, if this is a brokerage account, your cash should be your cash, and I'm all for having a cash buffer. But there's no reason to have a 10 % cash drag in your long-term investing portfolio. I would be surprised if this number doesn't rise in the coming months. With Robinhood's cash sweep, which you don't have to do anything for, I think they pay 4.4%.

25:07And I do feel like people will see that and go, ooh, I think I'm just going to hold off and wait for stocks for a little longer. I think a lot of people will have that mindset. If it's just a cash sweep and it's giving you that much money, I think some people will feel very comfortable doing that and just sitting there. Yeah, I'd feel very comfy in 4 % too. Absolutely. I agree. That's why you have to define what does this account for? Is this account for stocks or do I have to have an asset allocation here? Because if it's for stocks and you're trying to time it and you're probably not going to win that game.

25:34All right. Is inflation thing happening here? I looked at the last 10 annualized inflation readings. So every month they give out the annualized number that it peaked at 9.06 % in June. It has been down in the last nine readings since then. And the last one actually was technically if we're going decimal points, 4.98%, we're under 5%. So there is a trend here. Obviously the counterpoint for a lot of people would be, yes, the rate of change is slowing, but all that inflation is cumulative and prices overall are still higher, even if they're rising at a lower rate. Both are true. Yes. It's a good trend.

26:06But policy decisions are based on the latest number. Policy decisions are not made based on cumulative inflation. It's based on where it is today. Other people have done this. I haven't done it. But don't you think once the June and July and August numbers start falling off, the 9 % and 8.5%, that we're going to be at 3, 3.5 % by, I don't know, end of this summer, probably? Yeah, I'm sure you could easily do that on a spreadsheet. I don't know what the numbers are. But Jeremy Schwartz has a tweet. He said, a few chart updates with our CPI calculations that include alternative shelter components.

26:36Officially, CPI shows headline inflation of 5 % in the last 12 months. Our calculations show under 3%. Inflation was much higher in reality before and now much lower. So based on the way that inflation shelter is calculated, there are some shenanigans with a lag going on. And according to Jeremy's calculations, inflation is under 3%. I read this this morning. I thought this was a good one. What is the average inflation rate in the last five years in this country? inclusive of all the 8 % or 9 % we've had. What's the average inflation rate? 3%. 3.3%, which is basically the average of the last 100 years.

27:07So you take the near deflation we saw in the pandemic, add it to the really high inflation we've had since then, and you get the average, the long-term average. Fun with numbers, but I thought that was interesting. I'd say bullshit with numbers, but point taken. Okay. Question from a listener. You talked about how baby boomers have so much money for a generation. And anecdotally, so many financial plans that I run for our folks have them with way more than they need. They're diligent savers and investors. And it goes back to how Morgan Hauser will talk about growing up with a depression-era parents feeling totally uncomfortable spending money.

27:36So we have all these boomers with excessive savings and investments that are unwilling to turn the switch and actually spend that money. And anecdotally, we hear this from our advisors all the time. All the time. Chris, who runs our wealth management division, says he's constantly having talks with people trying to get them to spend money. And a lot of people just don't want to. And not only that, I feel like Our advisors, they share the wins. Like when you get a client to buy the car or the house or the whatever that they've been like working their entire life for, it's a huge win. Yeah, that is a win.

28:03And we love seeing those pictures and stuff. So the question becomes, do we have a permanent floor of higher inflation in the future if boomers decide to actually spend that cash? Or do they pass it on to the next generation, which does not have the depressionary appearance and are more comfortable spending? And so could there be a higher rate from either of these things if that money gets spent? Yeah, that's a good question. I think that it's interesting because on the one hand, we legitimately might have a retirement crisis, but also there are people, I don't want to say the average American that has access to a 401k.

28:31I know that like half of the country doesn't have access to, but for the average boomer that spent the seventies, eighties, nineties aughts contributing to their retirement account that are in decent financial shape, I think a lot of them are going to leave a lot of money behind because the older you get, you're spending slow dramatically. You do have social security. People are probably cautious because they fear outliving their money. And so as a result, they spend less. I think that boomers are not going to spend down their retirement accounts. And I know, again, we're broad brush here, but.

28:59It's a succession thing where 10 % of the households own 90 % of the equities. So unfortunately, most of that money getting passed down is going to be from rich parents to rich kids. That does away with the inflation thing in my mind, because it's not like it's this broad money that's going spread out to everyone and everyone can spend more. it's unfortunately going from rich people to rich people. Unfortunately, that's how it is. All right. We've talked about this before. The Atlantic had this article saying the millennial generation is just fine. By 2019, even adjusted for inflation, median income for millennial household was 9 ,000 higher than that of Gen X at the same age and 10 ,000 higher than the median boomer household in 2019.

29:40And the pandemic didn't really change that much. Household incomes of 25 to 44-year-olds were at historic highs in 2021. So you look at average real wealth, and that's just for inflation. It's kind of crazy. Gen X is higher now than baby boomers at the same age. Millennials are right on trend. Gen Z is on trend. Basically going over this myth that all millennials are broke. Well, dude, our parents were in their mid-20s in the mid-70s. Was that a great time to be a millennial back then or a boomer our age? No. Or buying a house with 20 % mortgage rates. The point is millennials are right where they should be based on other generation trends.

30:18And I'm guessing because millennials are more highly educated, you see this household income by education. Millennials are going to make more money over their careers. Millennials are going to be the richest generation ever. And then Gen Z will be there. It's going to happen like that. So why do you think millennials feel so poor then? Why do we always see these stories about millennials can't do this and millennials can't do that? Because they're saying even homeownership at the same age, 50 % of boomers owned their home compared to 48 % of millennials at the same age. Even the housing thing is not as bad as people make it out to be.

30:45The main difference has to be just college costs. People are being buried in debt coming out of college. Our parents did not have that. They also didn't have social media to make them feel shitty about themselves. I think that's part of it. So even if the incomes are higher, the expenses are higher too and more in your face. I think so. So you'd say, well, tuition costs are higher, housing costs are higher, daycare costs are higher. You know what else our parents didn't have? The obsession with CLEX. Obviously, there was advertising in the 70s, but it wasn't like fear porn. like it is today. One of the things I was thinking of the boomer millennial thing, my daughter has gymnastics on Thursday nights and I was taking her there and she likes me to watch, but I usually just bring my computer and watch.

31:22And you hear all the parent conversations and you hear this at every sporting event or whatever, every kid's event. And the parents talk about how busy they are because the kids have to go to this and they have to do this. And every parent just loves to talk about how busy they are because their kids are constantly doing stuff. And I feel like that's something boomer parents never talked about or complained about. Maybe they didn't have the travel sports stuff and they didn't have as many things to do. But don't you feel like parents of today love talking about parenting way more than the previous generations did?

31:49I have no frame of reference. You don't think our parents complained? I mean, probably not to us, but I don't know. Don't you feel like our parents ignored us more? Or I guess maybe this is a helicopter parenting, but I don't feel like there was as much of a focus on parenting as like the thing. My mother was very strict to me. I was punished the entire eighth grade. You probably deserved it though. I bet the boomer parents were more strict, but I don't think that they were as involved in the lives of their kids as parents are today. In terms of like the planning and the... We never had a calendar on our fridge when I was growing up.

32:24That's true. That kind of thing. Everyone has that now. Last night, I randomly said to Rob and I was like, do you think we're doing a good job? She's like, what do you mean? I said as parents. It's hard to tell, right? I hope so. Yeah, you do your best. All right, this is a good one from Stephen Ratner. Tight labor market has led to record gains for workers at the bottom, even after inflation. By contrast, it took until 2017 for the bottom half of Americans to climb back to pre-Great Recession levels of income. This is showing, again, that the bottom 25 % has seen the biggest wealth gains. And they saw the biggest drop-off during the pandemic as well.

32:56And now they're right back on trend. And this, to me, is probably one of the more surprising charts of any economics charts. And there's been a lot of surprising ones. that if you were to say inflation is out of control and at four decade highs, but the bottom 25 % is seeing the biggest wage gains because of it. Has this ever happened before? That's kind of a rhetorical question. I don't think so, right? The way our society is structured, people are very upset about this because who pays for the bottom 25 %? People with money. And people with money are literally paying their wages. And there's inflation.

33:31And so, no, society will definitely not cheer this on, even though it is objectively a good thing. This is a good thing. There's no federal minimum wage that was raised, but the pandemic effectively raised the minimum wage, and it's higher than it's ever been. And it, I don't know, doubled probably in the last three years. I agree. So if you're going to the restaurant and you're complaining about higher prices for food and drinks, you're paying higher wages for people who needed a boost, and they got it. All right, let's talk about crypto just for a second, which has been on an incredible tear.

34:02You know, like an NBA playoff game, they'll go like, he's got a quiet 30 points tonight. I feel like Bitcoin is up a quiet 100 % from the bottom. That's a good point. I think most regular people aren't talking about it, given how burned they got. But Bitcoin started the year at 16.5. What do you mean when you say regular people? People who do back tests or don't do back tests? Non-crypto natives. I feel like we've been defining regular people six different ways. It started the year at 16.5. Now it's at 30. And maybe one of the reasons why we don't discuss it a lot is because, meaning we Americans, is, I don't know why, but it leads me to this point.

34:34So DataTrack, this is Nicholas, said, virtual currencies are much more of a global phenomenon than many US investors may realize. For example, Google Trends search volume data shows that the countries with the greatest collective interest in virtual currencies and related events in the space are in Europe, Africa, Asia, Central America, and the Middle East. The United States rarely makes the top 10. And I think this makes sense because we have by far the best financial infrastructure in the entire world. I don't know, for all Americans, why do we need crypto? Well, I also think there was enough ink spilled on crypto and enough talking points made that I think people are sick of talking about it until something actually happens and there's an actual use case.

35:14That's why there's no talking about it because people are sick of talking about what could it be and people are ready to hear like, what will it be? We're not worried about the government stealing our money or serious debasement. And I could hear the crypto max is going nuts right now. But you know what I mean? It's this is not a third world country. Our dollars are pretty secure despite inflation. All right, let's talk about AI. Did you see this thing? Somebody tweeted the music industry is about to change forever. This AI generated songs created by Ghostwriter 977 is blowing up on TikTok. It features AI Drake featuring The Weeknd and is so good.

35:45Did you listen to this? I didn't. I don't like listening to Drake's regular music, so I'm not going to listen to an AI generated one. But I don't know. This kind of thing doesn't worry me as much because I think there's going to be lawsuits up the ass for this stuff. And I think this stuff is going to get cut down before it ever takes off. You think that the music industry and the movie industry is going to let AI take over? That's my big thing about AI is the established players are not just going to let this happen on a creative field. Don't you think? You think that artists are going to let AI take their voices without getting paid somehow?

36:15There's no way this is ever going to happen. How about this? I don't have really any opinions. We'll see. But Andrew, the metaverse guy, Steinwald, tweeted, I'm pretty freaked out about job losses from AI. This is not like we created a new tractor for farmers that requires 10 fewer farmers. AI is a tool that will require fewer people for all work. This is like the release of a new mega tractor for every industry all at the same time. Overblown or somewhere in between or what? I think one of the reasons tech people are freaking out so much, maybe it's because they understand it better than us, but it's also because aren't tech people the most at risk of their job losses here?

36:48Don't you think tech people are the ones who should be scared the most of AI replacing them? I really don't know. I think that there are wide-ranging implications for a lot of industries. Yes, but mostly knowledge industries. I think about the stuff that AI is not going to replace in my life. Is AI going to change the personal trainer at your gym or something? I feel like a lot of the physical stuff you do in the real world, people don't have to worry about. I think it's the people who are in the tech sector who are going to have to worry the most. Because if you can tell an AI, do this coding for me, quick as 10 engineers, shouldn't tech people be the most worried?

37:20And maybe that's why they're freaking out so much. Within the next five years, will there be some sort of, I don't know if societal upheaval is too strong of a word, but will there be a cultural divide between people that use AI and people that were laid off because of it? I don't think that's far-fetched. Could be. I also think that AI is going to create jobs as well. I I know people keep talking about the jobs it's going to take away. There's going to have to be some sort of filter there where people can help use it and explain it. The music industry stuff, I'm sure people are going to be using it.

37:45I'm sure the musical artists are going to be using it to help them make music, just like they use more technology than they did in the past. So I think people forget about how many jobs technology actually creates over time too. There's certain industries for sure. You'd think the call center thing would be, I don't know how many millions of people work at call centers around the world. That's the kind of thing where AI probably will take it away. But I don't know. So remember five years ago, Scott Galloway had that thing that there are more cashiers in the country than teachers or something. And people were worried about, well, Amazon's going to have this grocery store that's going to take away all the cashier jobs.

38:18And you see at McDonald's now, has that caused riots in the streets because there's not as many cashiers because now we have the self-scan stuff? But I think this is this guy's point is that this is coming for every industry. I don't know if there's ever been anything like that. I don't think it's coming for every industry though. That's my point. There's some physical stuff that a computer just can't do, I think. Happy to be around. Yeah, it's not going to take everybody's job. I do think that we will revisit this issue on future podcasts. So New York Post, I said, I think AI is going to probably do more harm than good, even if it does a lot of good.

38:46So AI cloned teen girl's voice in$1 million kidnapping scam that says, I got your daughter. The mother said, I never doubted for one second that it was her. That's the freakiest part that really got to my core. Oh, it's so awful. You sent us an email. Didn't someone turn to assassinate you? Was it an AI bot? I gotta be honest, as hilariously worded as that email was, there was a second where I was like, wait a minute. It wasn't even asking you for anything. Didn't it just say like, I'm going to assassinate you? Sorry, nothing you can do. I've gotten similar emails accusing me that they've seen me doing, let's just say inappropriate things.

39:22And so I called my friend because I got the exact same email. Everyone gets that. Pay us money, we're going to shoot. But the funny thing is, let's say someone did have a video of you doing something very inappropriate. Yeah, I was about to call Robin and say, our life is over. My friend literally, and I only know this because we joke about this today. My friend replied, because he's such a dum-dum. I don't think he knew that it was fake. He replied, f*** you, send it.

39:53Called their bluff. Maybe this is the reason that many millennials are still unhappy, even though the incomes are the same. Lance Lambert, in March 23 % of the nation's 200 largest housing markets registered a month-for-month decline. 77 % of the markets registered an increase. So he has this cool chart that shows that percentage that are growing versus declining. And the declining happened for a while, and now it's going the opposite direction. And a lot of these housing markets are rising again. Back to him, among the nation's 400 largest housing markets tracked by Zillow, 218 are back to or just set a new all-time high for housing prices.

40:26This doesn't seem like it should be happening in a world with housing prices that are 50 % higher and 7 % mortgage rates. This part is not great. I guess if mortgage rates stayed at 7 % for another five years, housing prices would have to just churn lower and lower. But I do think that there's a scenario where mortgage rates go to 5 % and the whole housing thing just puts a floor under it and we never see even a big correction people we're looking for. There's obviously some places that are seeing it. If rates stay at 7 % for the next three years, we will definitely see housing prices come lower.

40:59And I say definitely, I think definitely. But if we don't, then you're right. Maybe we don't get the big correction. I just think that the affordability back to 2019 levels is, unfortunately, I think a pipe dream. That might be gone. I don't think that's ever coming back. So Lance Lambert, again, among the nation's 400 largest housing markets tracked by Zillow, 218 markets are back to, or just set a new all-time high for house prices. Yeah, I mean, I feel for people our age and younger who are trying to get into a home, it's brutal. Do you want me to point out the fact that I just read that piece or not?

41:28Please, that's my bad. I apologize. We had an email that caught my attention and hand up. That's fair. I was gonna let it slide. I'll do better. Mike Simonson, median price of a single family home is still 439.9, up a tad over 2022. Median price of new listings is 399, 4 % lower than last year. And again, these are both going up again. This is interesting to me. Can I say not good? No, not good. So Adam Azamek had this new paper out and he talks about, this is an interesting piece. He's like, the research shows remote work caused like 60 % of the increase in prices, which I don't know how you do the attribution there, but let's say it's plus or minus 20 % there, like that remote work had a big piece of it.

42:10His point is, why did rents and housing prices go up in big cities then if people were leaving them during the pandemic? And his answer was household formation. And so I think this is the thing that the wave of millennials who want to buy houses and form households is so big that it's dwarfing these other financial spreadsheet aspects of higher rates and higher prices, and that the demographic thing is just the, the thing. It's the tail wagging the dog. That is why the prices are going to have a floor on them is the millennial household formation stuff is just, that's the thing. It's the trump card.

42:44Harry Dunst said it many years ago. Demographics is destiny. All right, one more real estate thing. I have not seen him predicting a crash lately. I'm sure he's still bearish. Every six months, there's a new biggest crash in history that's coming. Just wait. Someone sent me this. It's the average rents in Manhattan by number of bedrooms. Studio, one bedroom, two bedroom. Studio is$3 ,200. One bedroom,$4 ,200. Two bedrooms,$6 ,000. And three bedrooms,$10 ,800. This is average prices. Manhattan feels like a made-up place to me. Maybe this is your point about New York. It's not just New York, it's Manhattan.

43:17I've never lived in Manhattan. I can never afford it. I can see why if these are average prices. Holy, it just, it feels like a made up place to me. My first apartment lease was in Astoria. And Rob and I were just talking about this the other day. We had a good apartment, relatively speaking. And I think we paid$2 ,000 for like a big one bedroom. That apartment is definitely probably 4 ,000 right now. The person in me that remembers my 20s totally understands why people would move to New York and everything about it. And the old middle-aged man in me looks at these numbers and says, I don't get it.

43:52It's like a competing thing in me where I do get it, but I still don't get it. Well, you get it for young people. It's an incredible place to spend your 20s. Yes. I guess that's why, yeah, you get four roommates. Yeah. All right. Great quarter, guys. I was slacking with Ben and Josh this morning. That quarter is so freaking awesome. And we're investors in quarter, just full disclosure, sure I've mentioned that before. I was listening to Goldman Sachs live this morning. I jumped onto the conference call live. And even in the live chat or the live conference call, you could still rewind. Does Goldman CEO DJ the hold music as you're waiting for the call to start?

44:26He does. DJ David Solly, he does the opening remarks. Yeah, he was pretty cautious. I don't pay too much attention to Goldman's numbers, but can I get on top of this one? Is Lloyd Blankfein going to come back and take over Goldman Sachs? Not bad. You can steal that one. So next week is the big week. Next week is 42 % of the S &P reporting. This week, we've got Netflix after the bell. I am still holding. So you sold Facebook, still holding Netflix. Yeah, still holding. Well, because I just feel like, I mean, whatever. Jamie Dimon said, the US economy continues to be on generally healthy footings.

45:03However, However, storm clouds remain on the horizon. Banking industry, Ed Stormwater. Okay. He's a master at talking out of both sides of his mouth. He can always talk about how things are fine, but there could be a crisis. You never know. They reported record numbers as they seemingly always do. And I have to say, like, all of the Jamie adulation, it's deserved. It really is. I listened to David Solomon. I listened to Schwab. I listened to Walt Benninger, who was very great. I listened to Larry Fink, who was just reading prepared remarks. Jamie is the best on conference calls. He lets his CFO answer the specific financial-related questions about whatever.

45:43But he jumps in. He's like, can I just jump in? And he is just slaying, demolishing the entire call. He's in a class of his own. All right, at least on conference calls. So for example, I pulled this quote. I thought this was interesting. He said, they're talking about Fed funds. He said, first of all, I don't believe it. The Fed has the rate curve, the forward short-term rate curve, almost 1 % higher than what the market has. So one of the things you got to always prepare for is it could be anything. We don't know what the rate curve is going to be in the year. And so we're quite cautious in that and quite thoughtful about that.

46:12Obviously, the short-term rate is higher recessionary risk, but, and then inflation coming down. So I think inflation will come down a little bit. It could easily be stickier than people think. And therefore the rate curve will have to go. He's confused just like us. That's what I was getting to. So we were talking about it earlier in the show, like what is the bond market saying? What is this market saying? There's a lot of confusion across every part of the economy. That's the Munger quote. If you're not confused, you're not paying attention. Especially now. All right, Bank of America. Look at this.

46:36So we talk about credit crunch and all that sort of stuff, but look at the banks. So you've got the net income at an all-time high. You've got common equity tier one capital, and the ratio is trending in the right direction. I thought this was interesting. They look at like net charge-offs. It was up to$807 million, up from$608 million the quarter before, and$520 million in the quarter before that. So that's creeping up. They said consumer net charge-offs driven primarily by higher credit card losses. So the credit card loss rate in the first quarter was 2.2%. It was 1.7 % in Q4. And it was 3 % in 2019, which is important.

47:15So prior to the pandemic, it was 3%. So it's rising, but it's still 2.2%. So really nothing to speak of there. Look at this next chart, Ben. Digital volumes. I don't know what Erica is, but I am a Zelle user. I've never heard Erica before. And it shows a chart of Zelle transactions versus checks. I mean, checks are in secular decline, right? That's a bear market. Yeah. I still see old people using them at the grocery store occasionally. Oh, really? You haven't seen that before? At the grocery store. Still. I went to the movie theater this weekend with Josh to see The Big Lebowski, the 25th anniversary.

47:44You know in the opening scene where he writes a check out for milk?

47:50That is the definition of a rewatchable movie. That only gets better as you watch it more and more times. The most rewatchable. Okay, average deposit trend. So Bank of America knows something about deposits. I don't know if they're the biggest consumer bank in the world, but they got to be in the top three. You see anything here, Ben, to cause alarm or anything? I mean, aren't the big banks just going to get stronger? I know this is backwards looking. Remember there was a banking crisis? They were a beneficiary. But look at the weekly ending deposit trends. It shows interest bearing, non-interest bearing, or total.

48:17Nothing going on here. I feel like every time a bank or a credit card releases something, it's like this next chart. Consumer something remains strong. Consumer whatever remains strong. This is credit worthiness. Yeah. I know that this is backward looking and the SVB stuff happened in the tail end of this first quarter. So I get it. We'll find out next quarter. But forget about that. Because even prior to the banking stuff, people were worried about the economy rolling over, the consumer rolling over. And they might. But it's a crockpot recession, Ben, if we're heading towards one. They might.

48:46It just hasn't happened for the last year. There's the title to the show right there. Crockpot recession. Crockpot recession. Okay. Trademark that. I want to give a plug to a company that we invested in about a year ago. that's been building something for financial advisors. So I've been thinking a lot about this, Ben. Our tech stack that the advisor, financial advisor uses is pretty mature. There's not a lot of gaps. There's very few things that we're still using a spreadsheet to do. One of those things though - Besides my personal budget. Is, I can't believe that. There's no personal finance tools out there.

49:17One of the things that we're still doing is, and this is not my world, but we have a lot of clients that this applies to is dynamically modeling out their equity compensation and how that impacts their taxes and all that sort of stuff. This is a crazy data point. There was$762 billion of tax under withholding in 2021 alone. So what does that mean, like under withholding? That means that there was$762 billion worth of surprise taxes that people had to pay that they didn't know that they owed money on. So this company led by Russell Kroger, who was a financial advisor that was sick and tired of doing this.

49:50That was me in 2021. I had to write a big check. I did a little better planning this past year. Shame on you. So this company, Triacto, helps financial advisors model equity comp for their clients and helps them understand the tax implications like this under withholding that we just discussed. I think for financial advisors that are working with clients that have this sort of stuff, it's going to be a must have. We showed this to some of our advisors and you asked them after we had a call with in a demo, is this a want to have or need to have? and they said, this is a need to have. Pretty good buy signal.

50:21So we're going to link to this Triactive website in the show notes. They're still early. They've been building. There should be like a fully functional, and the product doesn't exist. There's like an MVP there, but there should be a fully functional product later in the summer. If you want to join the wait list, Russell will reach out to you individually. So you're not going to go into a black hole, reach out and he will reach out to you. Okay, that's that. I know we're running late, but sorry, there's a lot to get to today. You saw Apple's new high yield savings account? I'm wondering what their end goal here is doing this.

50:49I mean, they did the credit card. I don't really understand it. I'm sure there's something. I don't know if the credit card took off. I kind of remember the partnership with Goldman Sachs not working well, but whatever. Starting today, Apple Card users can choose to grow their daily cash rewards with a savings account from Goldman Sachs, which offers 4.15%. But here's the other thing, because I was thinking like, well, is it only for cash rewards? They said once a savings account is set up, all future daily cash earned by the users will be automatically deposited into the account. The daily cash destination can also be changed at any time, and there's no limit on how much daily cash users can earn.

51:21To build on their savings even further, users can deposit additional funds into their savings account through a link back account. Good question from Duncan. They're working with Goldman Sachs. Goldman's Marcus account pays 3.9%. How is Apple getting more from Goldman than we are? I guess because Apple's not looking to make money off of this. I don't know if they're subsidizing this, but they're taking a much smaller spread because they don't care. Pretty wild. What if Apple becomes like a big player in financial services? I've always thought it should have been Amazon, but if Apple does it, I'd be happy to let them manage my money for me.

51:46I know I'm jumping around just one sec, but speaking of Amazon, Ben, you were prescient. Remember you said you want Amazon to build high-speed Wi-Fi everywhere? Oh, yeah. There's a service that they have called, I don't know how to pronounce this, it's K-U-I-P-E-R. Kuiper? Kuiper. Kuiper? Andy Jassy in the letter wrote, Kuiper is another example of Amazon innovating for customers over the long term in an area where there's high customer need. Our vision for Kuiper is to create a low-Earth orbit satellite system to deliver high quality broadband internet service to places around the world that don't currently have it.

52:18Boom, Ben, credit to you, you nailed it. Anything else you wanna see Amazon do while we have their attention? I kind of forgot about, the only thing I want from them is them to come break down all the boxes for me in my garage. If they could do that, just bring a box cutter and break them down and take them away for me, reuse them. So I don't have to bring them to the dump all the time. Big dump guy here. Big dump guy, still going. Went twice last week. New recommendations? We had a very full doc this week. What page am I on here? 41 pages this week. Incredible. Yeah, we went hard this week. Before we get to some wrecks, this tweet made me think.

52:50I don't think we've spent enough time marveling at the fact that meta completely upended its business, renamed itself, and insisted that the metaverse was the next big thing, only to have AI prove that entirely wrong like six months later. That really is kind of wild. I sold Facebook because I think that they already got a lot of the benefit of the layoffs and cost-cutting. I'm not shot and froding, hope this act gets killed, but this thing is just kind of nuts. Think about what they really did. Are they going to change their name back to Facebook? It was a huge miss. Meta.ai maybe is the next, I don't know.

53:19They can't. That's like a dog with a tail between its legs, right? But they're already backing away from the universe. You know what? Prediction, they changed their name back to Facebook. Wouldn't surprise me. All right, recommendations. You mentioned Dave last week. I thought episode two of Dave was just one of the best episodes of television I've seen this year so far. He's so good. He was on The Town with Matt Bellany talking about how - Dave was? Yeah, it was a couple weeks ago. Oh, I missed it. I think it was I was in Florida. And he talked about how he just is supremely confident in his abilities.

53:47And he knew he was going to be a star someday. And he's not like a over the top egomaniac. But he's just like, I knew if I put in the work, it was going to happen. It's a very smart show. You're right. He is the millennial Larry David. I forgot when we were in Florida. Now, I think it was on Peacock. Now, Knock at the Cabin. We watched Knock at the Cabin. That's the M. Night Shyamalan one. Probably a better premise than a movie. But I kind of enjoyed it, despite the fact that it was a little dark. but I really like movies that make you think we're going to put you in a weird scenario and you can have a conversation of like, what would you do in that scenario?

54:16I thought the first 85 % was like really pretty solid. Yeah, I liked it better than I thought. They didn't land the plane at the end, but if you've seen the movie, they literally didn't land the plane. No spoiler there. Somehow last weekend, I got sucked into Father the Bride, which is a movie I probably haven't seen in 25 years. My wife loves that movie. That's another one that back in the day, I would watch that with my mom. I have two daughters. That's the kind of movie that hits differently once you have kids. And I mean, first of all, Steve Martin is just fantastic in that movie. Amazing.

54:42There's a guy who's been 50 for his whole life, but totally hits differently once you have kids, especially daughters. And it kind of got me a little bit at the end of it. I'm not gonna lie. A little dusty. I can admit it. I got a little sappy. That's all I got. I watched the first episode of Barry last night. I love that show. I'm cautious. Here's the thing. The writers are HBO. The writers are so good that I don't want to like fade them. So I'm only one episode in. We'll see. I watched the first two episodes. Okay. How was the second episode? If they didn't have NoHo Hank, there's an amazing scene with NoHo Hank at Dave and Buster's.

55:14That's all I'm going to say. But it really used to be a much lighter show. I think he's obviously doing it on purpose. But after we watched the first two episodes, my wife just goes, man, this show has gotten really dark. I still really like it. It's really well done. It's very dark. So I think the The one movie that I've watched more runtime of than any other movie, I feel pretty confident in this, is Casino. It's always on, and I always catch 20 minutes of it, and I feel like it's underappreciated. I know Goodfellas is better, but I don't think the gap is as big as a lot of people think it is.

55:51I was always a Goodfellas is way up here, and Casino is a step down. That was always my initial read on it, but I did rewatch Casino a couple years ago. I'm still a Goodfellas guy. Well, so am I. I'm just saying, I don't think the gap is that big. Okay. Agree to disagree. We've done a lot of that this episode. And hey, I don't know. I got nothing. At least we could get a knock at the cabin. We got that going for us. All right. Thank you for sticking around. This is a long episode. So if you're still with us, we appreciate you listening. AnimalSpiritsPod at gmail.com. Oh, wait, wait. Before we go, someone on YouTube gave a comment saying, Michael didn't realize he was middle-aged even though he's bald his wife complains about his shirt options and what was the other and he he wants to drive a minivan or something it was just perfect you figuring out you're middle-aged I loved it I'm still fighting it I'm still fighting it all right see you next week

56:58Thank you.