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Animal Spirits Podcast

The Mother of All Bubbles (EP.389)

4 Dec 2024 · 1 h 8 min
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Podcast Summary: Animal Spirits Podcast - The Mother of All Bubbles (EP.389)

Episode Overview In episode 389 of the Animal Spirits Podcast, hosts Michael Batnick and Ben Carlson delve into various topics related to financial markets and investing, including US exceptionalism, bubbles in market valuations, risks to retirement savings, and other economic observations. The discussion spans both macroeconomic trends and personal anecdotes, offering a mix of humor and insight.

Key Themes & Discussions

  1. US Exceptionalism
  2. US as a Global Leader: The hosts discuss the US economy’s dominance in global markets, noting that it now accounts for nearly 70% of the leading global stock index.
  3. Investor Behavior: There is a notable influx of global capital into the US financial markets, raising questions about sustainability and potential overvaluation.
  1. The Concept of the "Everything Bubble"
  2. Market Valuation Concerns: The hosts reference articles discussing the "mother of all bubbles," asserting that many asset classes, including bonds and equities, appear overvalued.
  3. Market Sentiment: The discussion highlights the tendency of investors to flock to US markets, potentially leading to complacency and a lack of diversification.
  1. Retirement Savings Risks
  2. Scams and Misplaced Trust: Mention is made of individuals losing their retirement savings to schemes promising high yields and guaranteed returns. A cautionary tale is shared about a retiree who invested in a Ponzi scheme under the guise of a high-yield investment.
  3. The Appeal of Yield: The hosts note that in a low-rate environment, high yield becomes a powerful selling point, often leading investors to overlook associated risks.
  1. The State of the CFA
  2. Declining Interest: The episode discusses the observed decline in candidates taking the CFA exam, attributing it to the rise of passive investing and changes in career aspirations among younger generations.
  1. The Real Estate Market Outlook
  2. 10-Year Predictions: The hosts analyze predictions regarding the housing market, debating whether it will outperform inflation amidst varying economic conditions.
  3. Supply vs Demand Dynamics: The discussion suggests that housing prices may remain buoyed due to persistent demand outpacing supply.
  1. Cultural Observations
  2. Tipping Culture & Consumer Spending: The hosts touch on societal trends regarding tipping, especially in light of rising consumer expectations and experiences in service industries.
  3. Changing Entertainment Consumption: They comment on the growing trend of podcasting on video platforms like YouTube, noting a shift in how audiences engage with content.
  1. Personal Anecdotes and Observations
  2. Travel Experiences: The hosts share personal stories from travel, including humorous encounters and reflections on vacations and family dynamics.
  3. Movie Reviews: They also offer quick reviews of recent films, highlighting both family-friendly offerings and critiques of certain movies.

Conclusion The episode presents a comprehensive overview of current economic and market trends, blending serious discussions with lighthearted personal stories. The hosts encourage listeners to reflect on their investment choices amidst shifting market dynamics, underscoring the importance of critical thinking in investing.

Key Takeaways

  • The US economy continues to draw global interest, raising concerns about potential overvaluation and risk.
  • Investors should be cautious of promises of high yields, as many scams prey on those seeking stable returns.
  • The decline in CFA candidates may signal broader changes in the finance industry and investor education.
  • The housing market outlook remains speculative, with debate over its potential to outpace inflation in the coming years.

Additional Resources

  • Newsletter Subscription: Sign up for The Compound newsletter [here](https://thecompoundnews.com/subscribe).
  • Animal Spirits Email: Reach out to the hosts at animalspirits@thecompoundnews.com for questions or feedback.
  • Podcast Disclosures: For disclaimers related to the podcast, visit [here](https://ritholtzwealth.com/podcast-youtube-disclosures/).

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Transcript

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0:00Today's Animal Spirits is brought to you by Public Ben. Ben, I have a confession to make. over the last couple of years, like so many other fine Americans with interest rates at levels that we hadn't seen in forever, not in my investing career, I accumulated more cash than I otherwise would have. You are the cash on the sidelines right now. But now, do I just take all my cash and invest into the stock market? I've been investing in the stock market, of course, my whole career. I want to maybe get some yield, lock in some yield, some bonds, if you know what I mean. know where I'm going with this?

0:34Yes. I think a lot of that cash is going to move into bonds. So at public.com, they have a bond account and they invest in individual bonds, corporate and high yield bonds. You can lock in like a yield of 6 % or higher right now. Is it individual bonds? You actually do lock in the rates for the record. I'm a stock guy, but I need some dry powder, right? I want to be able to be aggressive if, and when we get a healthy correction. Yeah. So you can go to public.com, Check out their bond account. 6 % yield or higher. Lock it in because we don't know these bond yields are going to be here forever. Lock it up.

1:07Yes. Brought to you by public investing member FINRA and SIPC. As of 9-26-24, the average annualized yield to worst across the bond account is greater than 6%. Yield to worst is not guaranteed. Not an investment recommendation. All investing involves risk. Visit public.com slash disclosures slash bond dash account for more info.

1:30Welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

2:00Welcome to Animal Spirits with Michael and Ben. Ben, welcome back. Yeah, good to be here. I was here last week, though. I just... You got a little bit of a tan? You know what's weird when... I take a tan. People come back from vacations and you don't tan. I mean, you got a little bit of a tan. I don't really tan that, you know. I tan over the summer when I've got constant exposure to the sun, but I can't just go to a tropical place and get a tan. My face will melt off. I've never seen you with a tan before. No, I bronze in the summer. Although when you get back from a vacation, people say, they make a joke about you not getting a tan.

2:34It's like, all right. Ah, yes. You're not those people. But there is the thing, you just get a little color. It's like, ah. You look alive again. You look alive again. It really does. Yeah, I've got my vampire winter shade going on. It is. That's one of the depressing parts about winter. It's like your complexion matches the snow. I have more travel thoughts I'll share in our travels before the doc. Well, I've also got something of a teaser myself. and the uh in the ad read to public i dropped a reference a line if you will lock it up you lock it up from wedding crashers rob and i listened to the wedding crashers rewatchables on the on the on the drive this weekend wow that was a capsule i'll i'll get to it later in the show it was 2018 or 20 2018 when they did that show and it was very very interesting listening to it now to tell you where the environment was when they first, and we'll get to that later.

3:25Okay. Anytime I make an announcement for a rental wealth management potential employee, I say housekeeping. I don't know what else to call it. It's not housekeeping. Announcement. Announcement. It's like morning announcements at school. All right. I've said this before, and I'll say it again with a twist. We have a booming office in Southern California, Los Angeles. A little south of Los Angeles to be exactly specific. And they need help. Now, here's the twist. they need an incredible advisor to help them grow their business. This person needs to be amazing. What this person doesn't need, a book of business, which is often a prerequisite for moving.

4:06If you are this person and you're an incredible advisor and you love the operations part of it, I don't mean operations, opening accounts, trading, that sort of stuff, but just a lot of the support that a lead advisor would need, we need help. Someone who's organized. Yes. Yes. And we've had a lot of luck finding employees through Animal Spirits. We're essentially like a junior LinkedIn here. This is, yeah, I would say this is, we're Red Holtzworth Management's monster.com. So every time we put this out there, is monster.com still a thing? I don't know. But our best employees have all come from Animal Spirits, not to break.

4:40So if you think that's you, reach out to us. Okay. Financial Times has a piece called The Mother of All Bubbles. I feel like we've had at least one of these articles since 2013, like every six months or so. I looked back at, for some reason, when I saw this article, I looked back in 2015. It was actually a zero hedge piece that Robert Schiller went on and said, everything's overvalued. Everything. Housing, bonds, stocks. Everything's overvalued. When is the origin of the everything bubble that people were throwing around there? I mean, that's mid-2000s. It's got to be a decade, no? Yeah, it's probably been a decade.

5:15But I thought this piece was interesting. Set aside the title for a second. So the whole thing here is just how much money. Like we've talked about the U.S. economy and markets being the envy of the world, the rest of the world. And part of that envy is now flows and everything is flowing into here. So they say, united by the faith and the strength of the U.S. financial markets and their capacity to keep outperforming all other economies, global investors are committing more capital to a single country than ever before in modern history. As a result, the U.S. accounts for nearly 70 % of the leading global stock index, up 30 % in the 1980s, and the dollar, by some measures, trades at a higher value than at any time since the developed world abandoned fixed exchange rates 50 years ago.

5:57May I? Mm-hmm. This person is saying, and by the way, this person, they wrote another bombastic article that we discussed years ago. I just can't remember which one it was. Okay. I think you mentioned that. Yeah. So this isn't their first rodeo here. Yeah. Anyway. um conveniently choosing the 1980s which i believe was a trough in u.s market cap true following this yeah that's true following the 70s yeah so so so it's like oh uh we're 70 up for 30 at the lows what if you started at the 90s or the late 90s when we're about where we are today how about that true this is interesting too the u.s now attracts more than 70 of the flows into the 13 trillion dollar gold market for private investments which include equity and credit i just the sheer listening to the sheer amounts of money pouring in here.

6:43That part is interesting too, though. I mean, there's just, there literally is no other country, region that comes anywhere close to us. Yeah. Now, I didn't read the article because I think I understand what this person is trying to say. And I don't entirely disagree with the message that I think that he's saying, which is that everybody is all in on the United States and there are potentially opportunities elsewhere. Is that the TLDR? Yes. Yes. It's just a contrarian take of if everyone is this excited about the US, then this can't last or this can't possibly be a good thing. You have to take the other side of this.

7:21Okay. If you're a contrarian person, that's what you say. Reasonable. No, but reasonable. So look at this chart that we had, a chart can make for us, showing the relative returns of other regions of the world. So we looked at emerging markets, international developed, China, Japan, and Europe. and we and Matt annualized the differences. So on a one-year, three-year, five-year, 10-year, 15-20-year, the US is outperforming every market and every timeframe except Japan has outperformed us over the last three years. And I believe this is adjusted for dollars. So for the point of view of a US investor.

7:55And yeah, US stocks have beaten the crap out of all these countries for a long time. Now, we've looked at charts historically of like US minus international and rolling various timeframes. And there's always been mean reversion. but it doesn't mean that it has, that it has to mean revert, right? Like we've been, we've been waiting as, as global investors for a long time for, for this to, to change. And now the danger is of course, like, all right, well, is now the time to dump your international stocks? Like right now when everybody is so pessimistic, so it's, it's hard. There's no, uh, the problem is this is the magnitude of the outperformance has been worse in the past.

8:30Like Japan outperformed the U S and the rest of the world in the seventies and eighties by a much larger amount. But the, the amount of time that this one, this cycle has lasted. I think that's the thing that we've haven't really seen before. It's a long time. And it's not, it's not without good reason. It's not like people are dumb. Like the U S has already done. So, so Jake quote skyd this. Are we doing that? I don't know. Economic over at blue sky quote tweeted the article and said he did like the, the, uh, posh spice, David Beckham. What's your real name? Why am I drawing a blank on her name?

9:04Victoria Beckham. Victoria Beckham. Did you ever watch that, Doc? I liked it. I really liked it. So she's saying the US market is in the bubble of the ages. And David Beckham says, be honest. And she says, I am being honest. What PE multiples are you comparing, says David Beckham. Then she says, European industrials with US tech. And David Beckham says, thank you. Credit to Jake. That's a great meme. And I think you can't talk about, to Jake's point, you can't talk about the differences of just straight PEs when the composition of the markets are so different. Now, obviously, the question is, and this is part of what makes investing hard.

9:38That was the mother of all bubbles. This is what makes investing hard. It would be a lot easier if we could see the future. It's like, has all of the US exceptionalism and premium multiples that have been earned, by the way, is all that baked into the pie? And is now the time to pretend? And we don't know. That's the impossible one to answer. So I had ChartKid create one for me. And I've seen something like this before. but I wanted to see market cap weighting on a global basis. This is just using the ACWI, which is the All Country World Index, and then the GDP weighting by country. So the US is 65 % of the ACWI, global stock market.

10:13But we only make up 26 % of GDP weighting around the globe. And the biggest - You should have had one more. What's that? Corporate profits, US corporate profits for the rest, compared to the rest of the world. Oh, it's probably pretty close to the market cap weighting. It's probably closer to the market cap weighting. The funny thing is, though, if you look at some of these other countries, Germany, France, India, Britain, Canada, Japan, their GDPs and their market cap weightings are pretty similar. They're in the same ballpark. The only other one that really stands out here is China. Makes up 17 % of GDP, but they make up just 2.4 % of the market cap weighting.

10:51Again, a discount that they have earned. Like, global investors are not dumb. So the funny thing to me here is that we seem to have just taken China's share of GDP and translate it into market cap. And everything else is kind of close. So I guess the one takeaway here would be like, geez, this makes no sense. How could the US be 65 % of the global stock market, but 26 % of GDP? And then you have the line. What's the Simpson thing? Say the line, say the line. The stock market is not the economy. Okay, you've seen the meme. The stock market is not the economy. And the S &P 500 and those big companies, those are not the economy.

11:30Right. Right? That's the whole point. We've talked about this before, that the sheer amount of revenues and profits that come from smaller companies, it's a much bigger number than you think. So you can't really make that kind of comparison and say like, this has got to come back into balance because it doesn't. And it never really has, I guess, for the US. Yeah, something has to give. Oh yeah? No, it doesn't. It is kind of mind boggling the sort of US exceptionalism here because it is the kind of thing in 10 or 15 years where you look back and either way, however this outcome happens, There's a fork in the road.

12:00One way, the U.S. underperforms or the U.S. outperforms. It's going to look very obvious in hindsight. Either outcome will look obvious in hindsight? Don't you think? If the U.S. continues to outperform, it'll be obvious. Of course we're outperforming. We have the best companies, the most profits, the most exceptionalism. We create the most jobs. How about this? I won't say that because it's not obvious to me today. I mean, I'm just looking at all these pieces. And then the other side of it would be, of course it's obvious. Did you see all this stuff, the cover indicators of the U.S. is the envy of the world and all this stuff?

12:31Okay, so again, there are reasons for this, though. Joey Politano at Apresitas, is that how you say it? His sub stack. Very good. He talks about America's productivity boom. Now look at the productivity growth in the U.S. versus the rest of the world. It's just we're off the charts and no one even comes close to touching us. and this is going back to the mid 2010s and it's only gotten our lead has only grown in the 2020s this is i think this is the big one this is the if you want to talk about like the american exceptionalism in one chart he shows america's business boom the business applications we've talked about i just took off in the 2020s i just think this the risk-taking thing is something that we have that most other countries do not have yeah so you can make the argument that it's structural and then somebody could say to me, anytime you use that word, it's probably, you know, anytime you use the word, it's a structural thing, then that's already baked into the pie and everybody knows it.

13:25And therefore, like, again, you could spin yourself in circles. I feel like the guy in Princess Bride, right? The weird thing about this is I remember, I think I, right when I got out of college, remember when you first read your first like adult books? Cause I never read in college, like in college or high school, cause I was an idiot. And it's so funny. My daughter reads all the time now, my oldest daughter. And she's probably already read more books by age 10 than I had by age 21. I never read anything. I didn't start reading until after college. But I read The World is Flat by Thomas Friedman, read it out of college, and I thought, I'm the smartest man alive.

13:55Because I've read a book. But the thesis of that book was that, like, the fall of the Berlin Wall and globalization and all this stuff flattened competition around the world. And you'd have thought that thesis would have made this whole thing much different. Like, why is this the case? Yeah. If the globalization in the internet and information technology makes it easier than ever for anyone to do anything and start a job and communicate. Well, because it's cultural. We support risk taking. I guess that's the only answer. But knowing that back then, it would be surprising to say this is the outcome.

14:30Okay, here's another one. Derek Thompson on Blue Sky. This really is remarkable. He's showing two charts from Jason Furman, labor productivity and nonfarm business of the euro area. Europe's productivity growth has collapsed to basically zero. At the same time, the continent's politics is turning away from immigration. Quote, Europe's just a museum is becoming an insult to museums with membership growth and new exhibits. Shots fired. Are we going to do a counter for every time we do a blue sky post here? Like, ding, you know? Yeah. That's two. Here's an interesting chart. I think this is from John Authors at Bloomberg.

15:06It shows until the election, U.S. and European bank stocks moved in tandem. This is from December 2023 until the election. And then as soon as the election happened, whoosh. They went in complete different directions. I guess I understand why U.S. banks did better because of the deregulation stuff. Why did European banks all of a sudden sell off? Because investors were selling European banks and buying U.S. ones. Just a positioning thing? Yeah, no, you're probably right. I don't know. It's a positioning thing. All right. Speaking of positioning, the constant wondering of where. By the way, this is another element of this is the top, right?

15:48This is added to the list of the last 15 years of this is the top moments. What? This conversation? Yes. Every conversation is that this is the top. I was looking back. For some reason, the YouTube algorithm sent me an old Animal Spirits video. And there was one, and it was like 12 months ago. and it was the Ben Carlson top because I think it was Michael Santoli told Josh that he's saying Ben's spiking the football way too much lately on his podcast. And I think we called it the Ben Carlson top and still. Yeah. By the way, but how is this topic? I think what we're saying is like, we don't know that the US hat performance is going to continue.

16:24No, I'm saying a lot of these stories, just shoving it in the face of the rest of the world, saying the US, look at how great we are. Yeah. But it's not, not the first time we've had this conversation. There's been multiple go-rounds of these over the years. Yeah. Fair. So, okay. Beltrunas. ETFs just set a monthly flow record in November with$155 billion, a shocking number given there was only 21 business days in the month. That's$7.3 billion a day, about triple the norm. Triple, thanks to the Trump bump. Year-to-date flows at$983 billion, headed to a trillion for the first time ever, likely by one stage as well.

17:00Now, probably a lot of this is crypto. But even nevertheless, I just continue to marvel at where this money is coming from. Every time we say this, we get a lot of emails about different theories. And the answer is it's not one thing, of course. We hear from, oh, it's overseas investors, it's mutual funds. That was the one I heard recently, that's overseas investors. I'm sure it's all these things. It's so much. And just wow. Yes. So much. I think one of the, one of the themes continues to be, there's just a lot of money in the world and it needs to find a home. Yes. Everywhere. All right. Jason Zweig has been doing wonderful work in the last year or so, just pulling things to light of, of shady practices.

17:45And he has this, this story from last week that is, is really sad. And it talks about these people who, what was the fun? What was the fun called? Yield. What was it? Yield Max? Yield Max. One of these companies was promising a guaranteed return of 15. Oh, a firm called Yield Wealth. So yeah, Yield Wealth, 15.25 % return, no losses at all. And this one guy took his$760 ,000 retirement fund. And his wife is like, I don't know. This is not, he's 60 years old. And he talked to his wife about it. And he said, I can't handle the volatility of the stock market anymore. This guy's going to give me, this place is going to give me a guaranteed 15%.

18:26took all of his money out of his 401k, every single cent, rolled it over, and now all of a sudden stuff stopped coming in. There's no income anymore. This place was some sort of Ponzi scheme and it's gone. He says, with the promise of, this is from Zweig, with the promise of such high income and a guarantee against loss, says Graham, it sounded like a perfect solution. Which is just, a tale as old as time, unfortunately, but here's my question to you. So I've said this in the past that. The best selling point, especially for retirees and people who are conservative investors is yield. When you said the best, you mean the easiest thing to say.

19:04The easiest sale you can make is yield. You don't need to know anything else. What's the yield? 9 %? In. 10 %? In. 12 %? In. Last week, I had a handyman in the house doing some things that I'm not capable of doing, like screwing in a light bulb, for example. And he saw my charts on the screen. And he's been it before, so he knows that I work in money or whatever. And he's like, hey, let me ask you a question. Where would you invest$50 ,000? And I said, well, what are you looking for? What's your risk tolerance? What are you looking for? Nothing too risky, maybe some income. So I explained to him.

19:46I'm like, all right, well, the risk-free rate is 4.2 %-ish, right? That's what you can get from the government for 10 years. And so anything, if you're looking for income, anything above 4 % has to have a level of risk. 6 % is more risky than government. 7, 8 is more risky, et cetera. So if I said to him, Hey, there's a product that's, you know, 11 % principle protected, whatever, whatever done two seconds. Oh yeah. But funny that not to go too much of a tangent on this. He's like, all right, well, cause he's like, you know, I'm something not too risky, like maybe some income. And I tell him that he can get 4.2 % or whatever.

20:24He goes, what about Tesla? So, you know, it's a whole separate conversation. But my question is this. So how many private credit fund scams are we going to see in the years ahead? Because these things are opaque and kind of black box and don't worry what's in there. No one really knows. I think the scams in that space, there's going to be a lot of them of just yield promise. It's private, illiquid stuff. Don't worry about it. there's going to be scams there. For sure. I'm not, just to be very, very clear, this is not in a scam bucket, like separate conversation. Today, speaking of private credit, BlackRock announced that they're buying HPS, which is a private credit company.

21:07I think they have 150 billion in assets under management, a lot of money. So in the past year, BlackRock has bought Prequin, Global Infrastructure Partners, and now this company. BlackRock is making a huge push into private markets. And here's a quote from the Wall Street Journal, from the CFO. Combining public and private credit is the future of fixed income. And there's no reason to not believe what BlackRock says it's going to do, it's doing it. So that is going to be another interesting wrinkle over the next coming years in the fixed income world is private credit getting into being commingled with public.

21:43The fact that BlackRock already owns half of the homes in the United States. I mean, got to believe them. Stop. That is a joke. All right. I'm going to get an email. I've got an email from BlackRock in the past. We have. I told her the one I got was, someone asked me to change a headline of my blog. And I was like, no, I can't. And by the way, it's Blackstone that owns half the houses. And of course, that is a joke too. So Logan Motoshami does all the work, swatting away the non-truth spewers about this. It's like 2 % or something. It's like 1%, yeah. It's very, very low. The terms of institutional investors that own homes.

22:25The amount of individual investors that own homes, right? Right. Like dwarfs institutional stuff. Yes, the individual renters or individual landlords own more homes, single-family homes than institutions. Jeff Batek at Morningstar. Remember last week we talked about Leverage Mania? There's a new place called the One-in-One Funds. I don't know who's running this. It's just a new fund company. But it's the Corey Hofstein return stacking. So it's Bitcoin and ETH, NASDAQ and ETH, S &P and Bitcoin, S &P and ETH, S &P and NASDAQ, S &P and VIX. And it's using options to add leverage to a portfolio so you can have a different…

23:03I like this idea. These aren't terrible, actually. It kind of makes sense if you understand. If you understand. The key word, if you understand, I think these are perfectly viable products. Yes, I actually think these are kind of interesting. But you know that the ones that just go psycho and go way above this are going to get more assets. Of course. The reasonable ones aren't going to get a lot of assets. All right, so you saw this thing about the Enron post yesterday. What happened? Can you please explain to me at the next click? I don't know if it was a meme or a, the community note said it was a crypto scam.

23:43Masturating as a bankrupted. So there was a tweet saying, this is at Enron from Twitter and says, we're back, can we talk? And it's talked about, and everyone's going, oh, Enron's back. This is a sign of the times. And it was, I don't know if it was a meme or a joke or a scam. Well, hold on before, just a little bit of color. Cause I saw Jack, our friend Jack Rain's tweet about it this morning. All right, this is from Sherwood News. The college company had owned the Enron trademarks since June, 2021, allowing it to legally sell merchandise with the Enron logo. and that trademark is now owned by Gatos' new Enron Corporation.

24:11For those curious, the college company also owns one other trademark, Birds Aren't Real, alluding to a Gen Z conspiracy theory that birds are actually government agents. So, all right, so I'm still not clear what's going on here. What's going on here? I don't know. If it was a crypto scam, though, or something, my whole thinking is that the 2020s is kind of morphed into the decade, especially for young people of, like, financial nihilism. And if this was a crypto scam thing, the whole, all the meme coin stuff. I guess it comes with the territory, but I think on the one hand... Wait, can you explain why you're saying this is a crypto scam?

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24:43Like I said, I didn't click the video. Oh, the community note for Twitter says that a crypto scam masquerading as bankrupted Enron Corporation. Got it, okay. And I just think the one positive net benefit of all the craziness that's gone on the markets in the 2020s is that we've got more people involved in the markets. And I think people have upped their risk-taking. Millennials, remember that millennials had their own like death of equities thing, where they wanted nothing to do with risk calling the great financial crisis. And Gen Z is like, no, give us as much risk as possible. But with that comes, I feel like this nihilism of the meme stocks and the meme coins and the shit coins and all this stuff.

25:17And I feel like that is the double-edged, the other side of the sword, where it's just like, stuff doesn't matter. Let's invest in the funny thing. That part is the thing that's kind of depressing to me. Yeah, it is. But like every other previous generation, they'll learn, like we all did. We all went through our shenanigans early on. But I do think that getting more people interested in investing, just the concept, even if it's not the right pathway to start, is unbalanced. It's a good thing. But maybe another side effect of this is CFA candidates going lower. Why would a young person try to do fundamental analysis, like deep work, when you could just buy shit coins and make money?

26:02Yeah. Yeah, so Mike Zaccardi tagged us on this, and it shows the CFA exams taken per year. And the huge drop off in 2020, obviously, but it came back a little bit. And then now it's way lower than it was in the late 2010s. And it doesn't appear to be coming back. And the Financial Times gives some reasons for this. They say the pandemic was part of it. I guess a lot of the tests were taken in China, and the shutdowns there slowed that down. So there's not as much growth in emerging markets. I mean, no offense to the society or the institute. I mean, Ben and I are charterholders, but it does seem a bit antiquated in today's world, though.

26:37A little bit, yes. I'm sure that that's part of it. Like when we were coming up, banking was sexy, right? Like being an investment banker was cool. Now, of course, I couldn't be an investment banker because I got kicked out of college twice, graduated Queens College, didn't know anybody. I was not - I just never would have been an investment banker because I couldn't handle the hours. Well, I mean, I wasn't even - That was never happening for me, let's be honest, right? No, well, me neither. I didn't have the grades or the pedigree. Yeah, you did a sort of pedigree for that. But now – I didn't pay the cross.

27:06Yeah, but young people don't want to be an – who wants to be an investment banker? I'm sure there's still a lot of people from the Ivy League. But yeah, I'm sure tech is much more sexy. Of course, you're right. But like, it's just not as cool as it used to be. No, no, no. But I'm surprised that because more – and one of the other reasons they give is that just the rise of passive investing and ETFs, you don't really need the portfolio management skills. The funny thing to me is a lot of people do throw shade on the CFA. And for me, it helped me in my career. It helped me get jobs. Whether it helped me become a better investor, that's another story.

27:36But it helped me get jobs by taking it. And I think it did help me early in my career. It is funny though, because people always talk down on the CFA, but you know who the person who started the CFA was? Whose idea it was? Was it Ben Graham? Benjamin Graham was the one who, it was his idea that got the CFA rolling. Can I, I don't know if I ever told the story on the air. I don't even know if I ever told you this story, Ben.

27:59In 2010, a friend of mine that left Mass Mutual. And by the way, I was thinking about this the other day. You know what is going to, what do we say is going to die with boomers? Whitey-tuddy underwear with the blue and the yellow stripe. I did a whole blog post on it. It's like, I'll find it. Here's another thing. shoe shines. I literally used to wear a suit every day because that's what everybody else did. And I got my shoe shine because I was an impressionable young idiot. And that's what I saw people doing. That's going away, right? But you ever get your shoe shine, Ben? Maybe once, but yeah, I don't think so.

28:41Go get your shine box. Anyway. Okay. So my friend who left Mass Mutual got a job as a wholesaler at at PIMCO. And he got me a job interview. And I was sailing through, dude. I spoke to two people, was doing great, personality was shining through, making jokes, showing interest, developing rapport. And then I get to the hiring manager. And I'll never forget it. I went to his office, mahogany, greased back hair, the whole thing. Exactly what you picture a Long Island branch manager to look like. And I think this was for an internal wholesaler. I'm pretty sure. Yeah, of course it was. Because you don't start as an external.

29:25There's an internal wholesaler position. And we're talking, we're talking. He looks down at my resume and goes, CFA candidate? That's not what this job is. He's like, why are you, wait, you know this is like sales position, right? This is not an analyst position. I don't think this is right for you. I was like, no, no, no, no, no, no, no, no, no, no, no. There's a turnoff? I was like, I'm only doing it so I can get a job. I'll stop right now. I'll stop right now. And I didn't get the job. And I'm like, I'll never know. I'm, I don't know, 85 % sure that had I not had that on my resume, the job was mine.

30:01Listen, we don't want people who know about markets on this job, okay? They'll learn it here. Yeah, this is not the career path for CFA. But isn't that wild? Like, what a fork in the road type of moment. I applied for an analyst job at a bank right out of college. and it was analyst and name only. It was also a sales job. And they asked me like, what are you interested in? I'm like, well, I'm a number person. I want to, you know, and they're like, no, no, no, no. We call this analyst, but really this is a sales role. Yeah. I'm a markets guy. Yeah. All right, Ben, last week or a couple of weeks ago, we were getting a little bit worried about the fact that everybody's pretty excited.

30:42The wall of worry is nowhere to be found, right? We like having a wall of worry. I don't know if there's a wall of worry per se, but it did stick out to me. Dietrich tweeted, AAII bears are outnumbered bulls for the first time since late April. Bit curious, no? You usually don't see a bear spike in a bull market like this. Very unusual. No offense to the AAII people. I've done talks for them in the past. I've written articles for them in the past. Is this survey useful anymore? I don't know. Well. Look, the bearish are always like at least a third. When you say useful, I don't know that it's effort.

31:28Again, no offense. And I don't think the point of it is to be useful. It's just, hey, this is what it is. I don't think that anybody's ever like made money trading this consistently. But it's just interesting. That's all. I just don't know if this is a good fear and greed gauge even anymore. Oh, no, it is. It is. Because I'm pretty sure that the bear spike in October 2022 was the bottom. Oh, okay. But it's just funny now that it's spiking now. It's a different spike, to be clear. It's nowhere near. We're up almost 30%. It's nowhere near what it was at the bottom. But nevertheless, it's just there's more bears and bulls in this sort of market.

31:58I'll take it. Okay. All right. Well, we're back. We're rebuilding it brick by brick. It's back. Okay. Black Friday. You a Black Friday guy, Ben? I buy a bunch of stuff online. I got a bunch of packages waiting for me when we go back from Dominican. How many t-shirts did you buy? Okay. No t-shirts. The one you're wearing? I didn't buy any t-shirts. I did buy a lot of the same type of long-sleeve t-shirt, if you will. Just a plain long-sleeve shirt. I can't help it. There's so many sales, and they know where to get you. They get you right on Instagram. It is true. You know what the thing to do now is, too?

32:36You go in and you put something in your cart and you go, eh, now I'm going to leave. And then they send you an email saying, hey, we saw you put that in your cart. Here's an extra 15 % off. Fine. All right, yeah. You do look at the numbers and you go, oh, everything's 60 % off? We were walking, we went to the movies the other day, which I'm going to talk about later. And then walking through the mall, my daughter wanted like a Christmas sweatshirt or something. And one of the stores said like, 50 % off everything in huge letters. And then in really tiny letters below, it said exclusions apply.

33:03And I thought, you know what? It's not everything. I want to talk to the manager. I saw Rag and Bone. They got me. It said 80 % off. And I'm like, nothing I bought was 80 % off. But guess what? They got me in the door. Credit to them. Yes. Shame on me. The up to, it always gets you. Okay, so Adobe Analytics, consumers spent a record$6.1 billion online on Thanksgiving, up 8.8 % year over year. Adobe Analytics expects consumers will spend the record$10.8 billion online for Black Friday, up 9.9 % over year. And Cyber Monday will remain the year's biggest shopping day, driving a record$13.2 billion in spend, up 6 % year over year.

33:42Somebody – I saw somebody tweet a video of like Black Friday. Remember back in the day people would line up at Best Buy at 5 in the morning? My wife and her parents used to get up and go at like 4.30 in the morning to places while I was still sleeping in. This is something our kids will never know about, right? Like people waiting. The other day I had my – for some reason I didn't have my – I always had my phone plugged in and an Apple CarPlay on. and I didn't for some reason and the radio came on and a song came on and my son goes who's seven he goes what song is this put on this other song I like and I said I can't it's the radio let me plug my phone in real quick radio who needs a radio and he goes what's the radio and I'd explain to him what it is well they play music and because then the DJ came on and started talking he's like who's this and I had to try to explain to him what the radio is and his mind was blown he's like I don't get it yeah why would you why would you listen to this when you can just pick the song you want total I said no in the past you listen, but you have to listen for an hour to get the song you like.

34:36They might play it. Maybe. By the way, the Black Friday shopping thing was one of the scenes in Thanksgiving, a very fine horror film that you will never see. Anyway, I was showing Kobe clips on YouTube of old basketball games. He was asking about the Hornets for some reason. So remember back in the day before HD, you couldn't see anything? No. And he goes, what did he say? Oh, he goes, why do they look all glitchy? I can't see anybody's numbers. He called it glitchy. I'm like, this is what TV used to be like. We didn't know any different. We didn't know any different. Anyway. All right. A lot of spending.

35:18A lot of spending. From GDP now, we're looking at 3.2 % real growth in GDP for this quarter, according to the model. So this economy just won't slow down. I don't know. I mean, I was thinking about this the other day. We were on Derek Thompson's podcast, Plain English, in like January 2023. And he was like, right now, I'm putting you on the spot. Recession or no recession this year. And we all kind of like, gun to my head, I'm going to say no. Think about how strong the economy has been since then. Everyone felt we were still going to recession back then. Not us. It's amazing. All right, Torsten Slock charts of the week.

35:59He shows 73 million people are receiving Social Security benefits right now. Now, he shows total federal spending. It's like almost$7 trillion. Social Security is about$1.4,$1.5 trillion of that. So we'll call it 20 % of the total, I guess. I know people want to make the government more efficient and cut spending. I think if they ever decide to touch this, that would be the biggest mistake we could ever make. There's ways you can make social security more efficient and raise the age for young people getting it or something or change the – but like trying to take social security away from people I think would be the biggest mistake they could make.

36:35So many people rely on this as their only retirement. Yeah, this is really the third rule. I don't think it's on the table, right? Nobody's talking about social security. I don't know. I hope not. All right. We got an email talking about inflation and how it was obvious that we'd get it with the STEMI checks. And so, hold on, what's the point of this? Oh, basically it's like, what is happening now that in five years will be painfully obvious to look back on? It's always a good like mental exercise. Yes, he was saying that a lot of the stuff we've been talking about is regret minimization and they're talking about their friends with this.

37:11But like things that seem obvious now with the benefit of hindsight, like looking forward, what would it be like? We were so dumb. Like how did we think that was a thing? I feel like no matter what happens, though, the hindsight always kicks in so quickly in the recency of, yeah, of course that happened. That's recency bias right there. Found it. Because your recency bias is with the election. Everybody thinks that the past is obvious. But I don't think that that's something that we do that often. I don't pretend that the past was obvious. That's not my thing. Okay, so the thing that seems obvious now is that everything is great, right?

37:51The markets are rocking. crypto can't go down. That's the obvious stuff now that in a few years you go, oh, of course. The economy couldn't possibly keep going up forever like this. The stock market couldn't possibly keep going up forever. That would be the thing people would go, oh, yeah, duh. It couldn't keep just going like this. Could be. Wouldn't that be? That's the simple one, right? Something throws a wrench into the economy. I think the tariff thing, if that ever really was a thing, I don't think the markets are discounting that at all right now. No, you're right. I don't know. Like, I know we've spoken a lot about how we've been in a secular bull market, which we have.

38:29But like, I think we lose sight of the fact that we just had a really, we just had a bad bear market. We did. 2022 was, I called it one of the worst years ever for financial markets. It was. Combination of stocks and bonds. And it lasted, it lasted, when did markets peak? Like, whatever, late, late, mid 2021. We had a two-year bear market and it was pretty severe. Like, Google got cut in half. So let's not forget, let's not act like that didn't happen. How about this as a hypothesis? Not predicting this. Are your arms crossed? Is that okay? No, I just, body language. I feel like, yeah, like you're scratching your chin.

39:05Go ahead. Interest rates. I think being at long-term average levels, four, five, 6 % rates, I think people are going to look back on this in five years and go, oh man, we should have locked those in. I don't think that's sustainable. Higher interest rates like this. How's that? 7 % mortgage rates, 5 % bond yields, 12 % private credit. I don't think this stuff is sustainable. I don't see how the economy can continue to rock higher with rates like this. I think rates have to come down if we want things to keep progressing. Not a bad take. All right. All right. Real quick on crypto. Sorry. Damn it, you guys heard my head.

39:50like the one guy this i'm not having a guy we had 50 people tell us keep talking about crypto but one guy didn't want us to i can't shake i can't shake him uh going to the airport next week imagine i see him next week that'd be something anyhow all right somebody tweeted if sailor sold he would go down as having placed one of the best trades of all time 14.9 billion dollars so far that's how much he's up on this trade to put that in perspective here's some of the biggest in history. John Paulson's bet against subprime mortgages. Paulson's hedge fund earned approximately$4 billion by shorting subprime mortgages during the financial crisis.

40:26George Soros, when he shorted the British pound, profited$1 billion. You have to adjust that for inflation, but whatever. Jesse Livermore made around$100 million short in 1929. That's the equivalent of over$1.4 billion today. Again, sailors up around $15 billion. I hate to split hairs here, but you can't make this comparison. Saylor used his publicly traded company to raise money. He didn't raise money from investors that make a place a bet. He did. You could say like the greatest investment of all time is Apple buying back shares for the past 10 years because they made, you know, so you can't, you can't, you can't make this comparison.

41:05I'm sorry. That is not a trade. It is a trade, but he's using the balance sheet of a publicly traded company. That's different then. Okay. Okay. Fair enough. But nevertheless, it's a good trade, but you can't compare it to these other trades. These other trades were like, those were legitimate hedge fund trades. This was a publicly traded company that he was doing it with. You're right. You're right. Um, so not apples to apples, but he deserves credit. He says here, I'm not selling. Yeah. So he said about selling. So we were hypothesizing like what could potentially stop this. And so we've got Mara, a company.

41:43What is Mara? Is Mara a Bitcoin mining company? I have no idea. I've never heard of it before. Mara Holdings announces a$700 million private offering of interest-free convertible senior notes due in 2031. Proceeds will be used to acquire more Bitcoin. So if a lot of other companies do this and they get the same advantage that Michael Saylor does, maybe the premium on microstrategy will shrink and maybe it will start to go into other companies. And there was a third company that started to do this. So possible still remains an incredibly exciting show. That would be the interesting thing if Bitcoin didn't really crash, but MicroStrategy starts going down.

42:18Yeah, possible. That's a possibility. Possible. Okay. From our own Nick Majuliet of dollars data, he had three predictions for the next 10 years. And I pulled out one I thought was interesting. He says, U.S. residential real estate will underperform inflation. And he shows this graph from Shiller that I've used in the past too, that basically shows for the first, I don't know, for 100 years or so, on an inflation adjusted basis, housing prices basically went nowhere. 1900 to 2000, housing prices on an inflation adjusted basis went nowhere. Since 2000, they've taken off like a rocket ship. Yeah.

42:51And Nick says, basically, it's risen too much too quickly as a result to think it'll have a negative inflation adjusted turnover the next 10 years. I would take the other side of that. Me too. Yeah. I don't know about this. Although I'm not sure. How about this? I'm like, I'm not sure. Like, it's not a terrible prediction. Yeah. It's not a terrible prediction, but I don't know. I don't know what stops this train. It's close. I would say like, this is sort of a toss up. Like either side would be like plus one 10 minus one 10, that type of thing, or minus one 10 each. No, I don't think so. I, well, I mean, a lot of it depends on what inflation is, but.

43:24Well, that to me, that's the thing. It's like, what's inflation going to be? Cause I still, I don't think that house prices are going down. I, I I'm making this up. I think they'll go up on, you know, two to 3 % a year for the next decade. So the question is, what's inflation going to be? Yes. But the thing is, if inflation is higher, that's good for the housing market, typically. Good how? Right? Higher inflation is better for a housing market because it costs more to build a home. It costs, replacement costs is higher. And in higher inflation environments, housing prices actually do better. It's good for people that own a home.

43:54Yes. That's what I mean. For housing prices. Yes. All right. Torsten Slock also had his US housing market outlook. And I thought he gives 10 facts that kind of summarize everything because it's like a 100-page book. I don't know if you went through this. But some of these are interesting. So median age of all homebuyers is now 49 years old, up from 31 in 1981. And to me, that's all baby boomers, right? That's just you have a huge demographic that controlled it back then and it controls it now. Their model predicts housing prices will increase 10.8 % in the coming year. That would be a pretty good start to beating inflation.

44:30Let's see. 40 % of homes don't have a mortgage. Record high household equity. 73 % of housing values. That's how high equity is. 36 % of Americans are record high say they would rent if they were going to move. So they wouldn't buy. More than half of all mortgages outstanding have an interest rate below 4%. And let's see. So are they saying that there's just so much more demand than supply? Yes. That'd be my basic thesis for why housing prices will probably do better than inflation because I don't think in the next 10 years we're going to build enough homes to meet the demand. Yeah, that's not controversial.

45:08That's the thing. Yes. Okay. Wall Street Journal article. They have an article saying that people are now buying houses before they get married. So people who are moving in together, I think that the number was 75 % of people moving together before getting married. I'm guessing that number is way, way higher than it was back in the day. Whoa, whoa. This seems like a big mistake. Oh, yeah. I think so too. So they say, let's see, 555 ,000 unmarried couples said they had bought their home in the previous year according to census data. That is up 46 % from 10 years ago. So way more people are doing this.

45:41Unmarried couples account for 11 % of all home sales. And that's steadily increased in the past two decades, even while marriage rates have fallen. And so they show this chart here of this. this is just, this is, has, this will not end well on it, right? Well, the thing that I'm, are you thinking because like, what if they don't get married? How annoying and ugly is it to split a house? Yes, yes. If you break up with someone, I don't know who, whose name you put it in, how that works. Do you start fighting over, well, I put$25 ,000 into this house and you didn't. And yeah, this sounds awful. Breakups are already ugly enough as it is, but I understand why people do this though.

46:20People say, hey, we're going to get married in two years when things make more sense and we're out of school or whatever, but we're going to buy a house now because why wait anymore? Yeah. Yes, but yeah. Ben, this is a picture of you. Okay, so my sister sent this to me. My younger sister is going through and taking all of the old pictures that were printed out. Can you believe we used to have to do that? You bring a roll of film in and they would develop it for you in like three days later you'd go pick it up. And she's taking all those photos my parents have and digitizing them. And she, everyone somewhere else just told me one.

46:52She sent me this one. I must have been, I don't know, five years old there or something. That carpet is incredible. So that, this is my house. Yes, that I lived in for, I don't know, 10 years. And look at the carpet. Houses were so disgusting in the 1980s. Yeah, it's true. Can you imagine anyone right now moving into a house from the 80s? Especially young people who've grown up in HGTV. Houses were just, I mean, even like the 50s and 60s, sometimes house, like, If you watch The Graduate, some of those houses I would live in today, those were sleek. They were cool looking. Houses of the 70s and 80s are just disgusting.

47:32Speaking of 70s and 80s, did you watch the Yacht Rock documentary? I did not, but I'm a big Yacht Rock guy on my boat. Of course you are. Who's not? Yeah, it's a lot of fun. So you liked it? Yeah, it was great. Okay. Yeah, I didn't know a lot about the era and the stories behind it. I know the music, of course, but yeah, a lot of fun. It's one of those things where it's hard to, I'm sure they go with this in the doc, it's hard to define what it actually is. Well, here's how the doc opens, or one of the lines that tickled me. It's not that it doesn't rock. That made me laugh. Okay. They're trying to describe the shot.

48:06It's just that it's not rock and roll. Right. But it's catchy, right? Yeah, it's fun. It's fun music. It's both music. That's what it is. Okay. All right. There was an article in the Wall Street Journal by Ben Cohen. why everyone is now watching podcasts on YouTube. And you and I were a little bit late to convert our, although it feels early now, I guess, in hindsight, we were a little bit late to convert our podcast into a video because we were thinking - Yeah, we were dead wrong on this. Yeah, dead wrong. Who wants this? We had a bunch of people ask us, say, why don't you guys put the whole pod on?

48:41Because we were showing, I think we did video clips back in the day. And then a bunch of people said, put it on, put the whole thing on YouTube. We said, no one's going to watch that. Well, also, to be fair, we didn't have the resources to do it. Right. But anyway, so they showed the U.S. share of weekly podcast listeners. And kind of wild. Spotify grew and then flatlined. Apple is going down. And YouTube is now ahead of all of them. I did not realize that Apple's share has fallen as Spotify's. Because Spotify and Apple were basically neck and neck in 2020. Well, remember Overcast? Overcast sort of stopped working for me.

49:17It got glitchy, so I dropped it. This year, YouTube passed a competition and became the most popular service for podcasts in the US with 31 % of weekly podcast listeners. Sega is now the platform they use most. 150 million people in the US now watch YouTube on their TVs every month. In the final stretch of his campaign, President-elect Donald Trump appeared on more than a dozen shows that collectively drew more than 100 million views on YouTube. Daniel X said, he's the CEO of Spotify, if you said five years ago that people would want to watch people talking and sitting in front of a microphone, I'd say probably not.

49:49Oh, speaking of, by the way, Animal Spirits is not going to be – our video is not going to be on Spotify. Yeah, Duncan did this with Asset Compound too and showed me, and it's really cool. It's really cool. So I was watching the Mark Andreessen, Joe Rogan video. Did you watch – we don't need to get to that. But I love the option. It's not like I'm sitting holding my phone watching it, but like – it's kind of like concurrently, you have the podcast going and then there's the video too on your phone. Yeah. And if you want to check in on the video, you can. Yeah, if you want to check in, you can.

50:21So anyway, so we're, so our podcast is going up normal times, Wednesday, Wednesday morning at eight. And I think our video is going to be up. So if you, if you want to wait or whatever, you have the option now. What is, time is it going up? What time does it go up? So the video goes up later the same, like this later the same day, Wednesday five, Wednesday evening. Wednesday evening. Okay. Duncan. Duncan. What do we got? Actually, you know what? Duncan, get in here. I have a bone to pick with you.

50:49Duncan. I don't know. What time is our videos going up in Spotify? It'll be around like 5.30 to 6.30. It depends on the length of the episode. Some weeks you guys are going like an hour and 20 minutes. Other weeks, 55, you know. Okay. All right. Well, Duncan, you kicked the hornet's nest over the weekend. On Slack, Duncan was saying that what? New York City-ers or New Yorkers are so elite. And I said, you know what? I want you to defend your take. You know what? I want to quote you. What did you actually say? You, you, you. Sean and I were joking about how a New Yorker can't be a man of the people.

51:23That's it. Oh, yes, yes, yes. All right, defend your take. Well, it's just, I mean, a man of the people is someone in touch with the common man, the common person. And it doesn't feel like the average New Yorker. It's the New Yorker's an uncommon place. So you're saying the most populous city or one of the most popular-related cities in the United States cannot know what it's like to be a common person. Well, the examples I was giving you guys are that I feel like to be a man of the people, you have to actually care about the people around you. And I gave you some examples of, you know, where New Yorkers, the bystander effect, just don't ever come to the defense of people around them in the city.

51:57So you're moving the goalposts. You're moving the goalposts. Now you're saying that New Yorkers are rude on the streets, in which case I would agree with you. I would agree. Not rude. Dude, I was getting examples of people being in altercations and things like that and no one stepping in and coming to the defense of their fellow citizens. Michael is very hurt by your statements about the everyday man. I didn't say Long Islanders. Okay, fair enough. That's true. All right. Well, thank you. Thank you for that. People are going to love this. Agree to disagree, Duncan. Thank you. Okay. I have a few more vacation thoughts.

52:30New York walkers. Yeah, not the most polite bunch. Yeah, but if there's 7 million people, you're bound to run into some bad apples. Yeah. All right. Anyway, just getting back to the podcast stuff. For a decade, podcasts were something you listened to while you were doing something else, driving, working out, unloading the dishwasher. That's where I do most of my listening. That was a passive experience. Now, an entire generation has been conditioned to think of podcasts as something they can actively watch any time on any kind of screen, a phone or a computer or TV, which might sound nuts to you, but to young people, it just sounds normal.

53:02It is. Yeah. Yeah, it's, we've talked about the demographic breakdown of how people consume things. And young people, YouTube is their thing. When I have a, I got a new TV last year and it's a Google TV, it's the interface. And when I pull it up, it'll have the streaming channels and all the options and movies. And then there's a YouTube thing and it'll give me YouTube recommendations. And to your point, I think a lot of people are watching YouTube even on TV. Yeah, yes. Is it most people who watch YouTube watch it on a TV? It could be, it is. Here's, listen to this. Since the pandemic, video podcasts have been growing faster than audio on Spotify.

53:37And the number of users watching video podcasts increased 88 % over the past year. Wow. Would never, ever have guessed this. No. That is crazy. All right, Ben. So you have more vacation thoughts. Hit us. A few final thoughts. So people are very anti-tipping in the United States now because they're just bombarded with it, right? You have to tip for everything. People hate tipping now. It's become a thing where people actively hate it. tipping is fun at an all-inclusive resort because everything is already paid. So it's a psychological thing. It's mental accounting. But we went with an envelope full of cash to tip people.

54:13And I'm Jim Carrey and Dumb and Dumber. There you go. There you go. It was fun because you're not paying for anything else. So you don't mind tipping. And the people there, like the service is so good. I just love Dominican people were so good. I talked about how great the Lazy River was. Someone sent us this saying, next time you're in Houston, stay at the Marriott Marquis downtown and they have a lazy river in the shape of Texas. That sounds kind of awesome. It's not just a lazy river that's in the shape of something. Remember, we were in Houston and I ordered us four margaritas and the guy poured Clos de Azul.

54:46That's right. And you had to have a talk with him. Unbelievable. They're going to give us the great seat by the waterfall. So I mentioned the lazy river being amazing. There's a great way to ruin it. So we were going around and then there's a flotilla of like 20 people on a family reunion. And you know people are like all attached together, you know, on the tube. You know people are serious drinkers when they like get a new drink every time they get around the Lazy River, but they also drink out of the thermoses. Like they bring their own cups to drink out of. Not just the cups, you know. Like if you bring your own temperature controlled cup, you're a serious drinker.

55:17Like you're not messing around. And one of them threw up in the Lazy River. You got to be kidding me. Had to evacuate, yep. How old? Luckily it was towards the end of that. These were older people. Just a little over-served. You showed me a picture. What was Brock Party's shirt? Was it NSFW? I can't remember. It was Big **** Brock. And it was a dad. We were on a snorkel trip. That is NSFW, by the way. We have kids that are listening back. Okay. So we took a trip to a snorkel thing where we went out to the ocean. A snorkel thing. I do love snorkel things. Snorkel things are great. It was fun because your kids, you always want them to do certain things, and they're going to be their own people.

55:57But the one thing I want for my kids was I wanted them to be adventurous. My kids are very chaotic, and they're sometimes hard to control. They're kind of nuts sometimes, but they're very adventurous. One of the things that I always like, roller coasters were always great to me. I always love to go on excursions when we go on trips. And so they got in. They had never done snorkeling before. We were snorkeling, and there were sharks and stingrays in the water. We saw these nurse sharks that we could swim with, and my kids did it right away. So that was kind of cool. But the thing gets over at like 10 a.m., snorkeling.

56:24And then we're on the booze cruise portion for the next two hours. and you know I'm having drinks during the day for the whole trip and it's kind of like I need to take it easy you know but the music starts playing and the Dominican people have the best rhythm of any nation on earth I think and they start dancing and it's like you know what I'll have a Coca Loco I'll have a few drinks I don't know eight drinks before 11am and in my mind vacations like that are like a wedding everyone is having fun yeah right everyone's in a good mood everyone is drinking having fun smiles on the face just the vibes are immaculate that's my kind of vacation yeah and also we had you got your home alone shirt on we made the joke because on our way back our first flight got delayed for whatever reason uh we were flying into charlotte and we the the time because we had to do the uh go through customs on the way back and then catch a flight and it was tight we had like a half hour to go through customs get your bags recheck your bags go through security again get to your gate we had to run through the airport the first time i first time my kids ever done that.

57:25Awful feeling. Also, kind of exhilarating. Nah, I'll tell you about this. You don't think it's kind of exhilarating? Like, are we, aren't we? Are we, aren't we? I was running, and I had my backpack on, and then my daughter's backpack on, and so I got backpacks everywhere, and I run into this guy with a backpack. He goes, hey, bro, what's up? I said, hey, man, we're going to miss a flight. You got it. Go ahead. It was cool. All right. Oh, one more. So we did a lot of swimming in the ocean. My son loves the bodyboard, riding on the waves. The waves are pretty big there. You could tell me the most scientific reason or the simplest reason for why the tides exist, why tides go up and go down.

58:00And to me, it's always going to be magic. Yeah. Can you imagine being someone before we had information and seeing the fact that the ocean goes up and goes down? Like, what sort of gods did they think did this in the past? Yeah. Don't you know? No, it's the moon and the gravity. Yeah. Sure. It sounds like magic. How about magic? Yes. Okay. Our own Bill Sweet, our CFO, my accountant, said, confirming my first flight out or bus mandate. And Bill is sharing a chart from the New York Times that shows the percentage of flights arriving 90 minutes late or more. And it starts out relatively low at 5 a.m.

58:37It's just 2.3 % of flights. And then it goes up. The later you go, the more likely you are to be delayed. And there's an interesting part of the article. So Bill is saying he's an early flight guy for this reason. So listen to this, Ben. Ben. This is some shit. The average flight today from Kennedy Airport to LAX is slower than it was in 1995 in every conceivable way. Planes face longer delays leaving the gate, take more time taxing before taking off, and spend more time in the air. But here's some shit part. Okay. They're gaming the system, Ben. They're gaming the system. Why do today's flights arrive more early than often, even though they're slower?

59:11Airlines have extended their scheduled flight durations even more than the flights have lengthened in actual duration. The average scheduled flight from JFK to Los Angeles has increased 23 minutes since 1995. I noticed that. They always go, hey, we arrived early. I feel like every flight now, I feel like they do this on purpose. Yeah, they're moving the goalposts. They're telling you that the flight's going to be three hours when they know damn well that it's two hours and 42 minutes. Yeah, because on our flight back, we thought we were going to be late. And the captain goes, you know, I'm going to take like a shortcut here, try to get the wins.

59:40And it's like, no, you're not. Yeah, you're lying. So there's a chart that shows the percent of flights arriving at least three hours late. And it's terrible. It's at an all-time high. Why should it be this way? It shouldn't. It shouldn't. I don't know. It should not be this way. I feel like every time I go to an airport, I wonder how we do this every single day. How are millions of flights around the world taking off and going? Like, how does this not get totally screwed up all the time? New all-time record at the airport this week. 3.087 million people. See, to me, that's a wonder that it's anything.

1:00:12That it all works as well as it does. Okay. We're going very late. So we're going to save my story about my – I got a new outie. I can't believe it. Okay. All right. They had me by the you-know-what. I had no choice, and I'm very angry. I'm not mad. I'm angry. So how much money did you lose on your other one? I'll tell the full story next week. Okay. I feel my blood pressure rising as I – Okay. I have a quick story then. before I left, I noticed I had a metal protrusion sticking out of my tire. And I thought, oh, shoot. And I go to my, it's the day before we left on our trip. And I pull it out with some pliers and immediately air.

1:00:56Tire goes flat. So shoot, I got to deal with time to get back. Have you ever changed a tire in your life? Of course I have. Man of the people. Duncan, take that. Have you really? I have changed a tire. Yes. How many times? You know what you're doing? This is the first time I've ever, I've done it in the past where I've helped people. Like I I helped a friend in high school. I've never had a flat tire to change myself. I did it. I thank God for YouTube because I got it up. I got all the lug nuts off. Yeah. And then the tire's stuck. Not moving at all. I'm hitting it with a mallet. I'm kicking it.

1:01:22Nothing. And I go to YouTube and it says, take the spare tire and whack the top of your tire because it's just stuck on there. Oh, tire on tire? Yeah, tire on tire. And it immediately came off. So thank God for YouTube. Did it. Bell tire fixed it for free. Back on there. All right. Recommendations. We were both at the movies this weekend, I think. So I went on Sunday. We always buy tickets early before we get there, you know? And Wicked sold out literally all four theaters in Grand Rapids. Nothing. Every time. There might have been one or two seats, but we have five. So nothing for us, of course.

1:01:53Moana sold out all across the city. So we had to see the red one with The Rock and Chris Evans. Terrible? Terrible. Very bad. My kids enjoyed it, but I don't know who that movie's for, really. It's not a holiday classic. I watch Christmas movies because of the family element. It was trying to be like this over-the-top action movie. My son loved it. That's my type of kid. Really, really bad movie. That's all I like. Streaming is crazy because big-name stars just show up on TV shows and movies out of nowhere. You've never heard of it. So we were flipping through the other day, and my kids wanted to watch a holiday movie.

1:02:30And there was a Ben Stiller movie on Hulu, brand new, called Nutcrackers. Never heard of it. Just came out. And, gotta say, it was stuff that's been done before. It was the parents die, and there's four crazy kids, and the uncle has to come take them over as a foster parent. And he's the big city guy, but they live in the rural area. It's been done before. Gotta say, it was actually pretty good. Okay. Not a bad at-home movie. What's Greedy People? Oh, and I watched Greedy People on the Airplane. What is that? Never heard of it. Joseph Gordon-Levitt. And it's the guy from yesterday and the girl from yesterday, that Beatles movie.

1:03:04It was the two leads in that. and it's just one of these accidental death. There's money involved. There's a hitman. It's like five different stories coming together. Oh. Kind of interesting. Not really well done, and then the ending was very dark. Not without expecting. So, like, the kind of movie you would only watch on an airplane. That sounds like that. And you should only watch on an airplane. It was decent, but it kind of trailed off at the end. But airplane movie. Okay. By the way, we spoke about this recently, you and I, about Deadpool versus Wolverine. I just have no interest. I'm not even going to watch an airplane.

1:03:41I just don't care. I totally understand that. It was entertaining to me, but it's not necessary. Yeah. Okay. So where do I want to start? Oh, The Wedding Crash is rewatchable. Okay. When did this happen? So I listened to this with Robin on the car on the way upstate. and August 2018. Now, if you rewind back to 2018, this is really a trip down memory lane. Not that 2018 was that long ago, but for the first hour, I think it was Bill, Chris, and Sean were talking about how inappropriate the movie was. And it was a lot of throat clearing about, first of all, the premise, of course, right? Like think about what the movie was actually about.

1:04:30Oh, just saying like it wouldn't fly today. Yeah, and then there was just a lot of gay jokes, and the only part of the joke was you're gay. I guess I don't really watch old movies and even think that. Of course you don't. No, of course you don't, because it's a comedy, and it's to make you laugh, not to be taken that seriously. Right. But Robin was like, why are they doing this? Because it was the height of the Me Too movement. Ah, okay. That makes sense. Right, and it was just like, it was so weird to listen to now. I mean, that is the kind of movie that probably would never get made today. No, of course it wouldn't.

1:05:02But none of those R comedy movies would have gotten made. Like, you know how I know you're gay? That whole part from 40 Old Virgin, that would never happen. Right. All of that stuff would never be made today. Not saying it should be made, but like at the time, of course, we didn't think about it. But anyway, it was just so interesting. Listen to them. Instead of talking about how funny the movie is. Yes, it was an hour. It was so much time on why the movie. How problematic it is. Interesting. It was really like, huh. Anyway, what else? I don't really like relitigating the past. Of course not. For a movie?

1:05:31movie? Especially for a movie, yes. So speaking of just things that just pop up on the streamer, they're like, oh. You ever hear of the movie called Father Figures? That's an old one of those one, right? Ed Helms? You saw it? I think I've seen it pop up before. I never watched it, no. So it's top ten on Netflix. A lot of laugh out louds for me. Oh, really? It was good? We spoke last week about when is it appropriate to recommend something before you finished it with the book or movie. I'm 45 minutes in, so I feel like I've got a decent hand on the movie. I don't know how it's going to end. It's probably not going to end great.

1:06:03Who cares? Comedies usually tail off at the end. Yeah, whatever. Who cares? Guess what? Multiple laugh out louds for me. In fact, there was one laugh out loud where Robin was falling asleep and she told me to turn the movie off. Okay. Yeah, father figures. All right, so anyway, so I saw Moana 2, and look at this chart from Axios. Look at that spike in PG at the box office. Big year for family-friendly movies. PG-rated films made up one-third of ticket sales at the domestic box office. That was the problem with Red 1. It was PG-13, so there's a lot of swear words. And it's like, should this be for kids?

1:06:33Okay. So we've already gone late, so I'm going to skip all this. But there was a really great article, I think by Ben Cohen in the Wall Street Journal, about how Moana became a sensation. And it did not do monster numbers at the box office. But of course, it became a huge hit on Netflix first, by the way. It was on Netflix first because Disney Plus was not a thing. So it was the number one movie on Disney Plus, or number one streaming movie, I should say, in 2020, 21, 22, and 23. So Moana 2, I took my kids to see it. There was a line for Moana 2. There was a line for Wicked. Like you, Ben, I got sold out everywhere.

1:07:07So the only, my local theater, there's no assigned seats. Ah, that's a blast from the past. Yeah, so Moana 2 was supposed to be a straight to Disney Plus type of thing. And it shows. I thought the quality of the movie was really not great, like at all. And the music stunk. Really? And the reason why Moana is so incredible That's why everyone loves the first one. is because the music is incredible. And Lin-Manuel Miranda was not part of the second one. My kids loved it, obviously. Right? All the kids seemed to love it, which is, you know, I guess all I did. Kids have the worst taste. They like everything.

1:07:43But - When is the last time a kid didn't like a movie? True. Right? Kids like everything. But yeah, I was really disappointed. But as a Disney shareholder, I'll take it because the movie is doing mega numbers. as is Wicked and Gladiator seems to be doing well. So movies are back. Big time for movies. Big time for movies. Our theater was packed. Okay. All right, Duncan, sorry for making you do the long edit. Although, do take homage with some of your comments, so. You did this on purpose. All right, Ben, welcome back. You look great. You've got some life, some color back in your skin. It's not going to last.

1:08:29Okay. Where do people find us? AnimalSpirits at the compoundnews.com. Where do people email if they want to become an advisor for us in California? You can email us or you can email hiring at RedHole12.com. Personal emails, as always, personal responses. Thank you for listening. Thank you for watching. We'll see you next time.

1:08:56Thank you.

From the publisher

On episode 389 of Animal Spirits, Michael Batnick and Ben Carlson discuss: US exceptionalism in markets and the economy, losing all of your retirement savings, yield sells, financial nihilism, the downfall of the CFA, the greatest trades of all-time, a 10 year outlook on housing prices, the bull market in podcasts on YouTube, the psychology of tipping, and much more!

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