This Won't End Well (EP. 464)

9:16Michael Batnick:the anxiety over the war seems to be behind us. And we were saying on the show, not that we could have foreseen anything like what just happened, but assuming that the war ends and assuming that crude oil doesn't go to 200 and assuming that the earnings momentum keeps going. And these are not long side assumptions, right? It was just, let's just assume things go back to the way they were before the war. And sure enough, they have. And we've had a hell of a rally. The S &P has gained 16 % in six weeks. Most since the GFC. And now the new worry, or part of the new worry is, oh shit, we're in a melt-up.

9:54Michael Batnick:And it's not every stock at all.

9:56Ben Carlson:It sure feels like this is a melt-up, doesn't it? Well, it is a melt-up. We are factually melting higher. Is this not the melt-up that makes the most sense in history though? Of any melt-up we've ever had, this one makes the most sense. What do you mean by that? I'm going to get into it. I just want to say, one of the things that people say when they worry about the melt-up stuff that you're hearing more and more, and it's funny because you hear this every three years in this bull market, is what inning are we in? Oh, I see we're at the part of the cycle where... Dot, dot, dot. You know, it's so...

10:31Michael Batnick:And like the people that say this, do they forget that they say this every single time?

10:36Ben Carlson:That's the problem. I've seen this movie before. I know it ends. This won't end well. Textbook late cycle behavior. year i all i want to tell people is if you don't have an open mind yet about this bull market when are you ever going to have it i i there's so many times in this when it seems like this run is over i think you just have to have an open mind that's the only thing i say um i did so i had matt recreate this i just shared this on our slack research channel i created this melt up chart last year last year and it shows the roaring 20s for the dow so this is 10 year returns the roaring 20s for the dollar were up almost 500%.

11:08Ben Carlson:Can I just...

11:09Michael Batnick:Suggestion. This chart, these are not melt-ups. A melt-up, in my opinion, is something that happens over a short time frame, one to three months. This should say measurable markets, because these are the great bull markets.

11:23Ben Carlson:That's not a quibble. But I think every one of these bull markets ended in a melt-up. How's that? You can see the end of the lines all just go whoop, and they go straight up. Okay, so the 1950s is probably the most underrated, underestimated bull market. And maybe that's the one that didn't end in tears, really. Because it wasn't until like the 70s where things got bad. So that was up 500 % as well. Japan in the 80s was up over 500%. The Nasdaq in the 90s, this is the one we're not even close. Well, kind of close. It was up almost 800 % in total in that 10-year period. The Nasdaq 100 now over the past 10 years is up nearly 650%.

11:58Ben Carlson:Higher than the Dow in the 20s. Higher than the S &P in the 50s. Higher than Japan in the 80s. and oh boy, this is just, this is an all-time run.

12:07Michael Batnick:It is an all-time run. One question that I would have about this period, I feel like out of the one, two, out of the five lines on this chart, this is the period that has the most bear markets, the most 15 plus percent pullbacks, 20 % plus pullbacks.

12:25Ben Carlson:Yes, yes.

12:26Michael Batnick:We've had a lot of resets.

12:28Ben Carlson:Yes, even in the 80s and 90s, it was only, there was only one 20 % pullback and it was 1987. There was one in 1990 that was like 90 % and change. So you're right. In terms of like bear markets, 2022 was a legitimate bear market. 2020 was a legitimate crash situation. I agree with that. So I want to talk about this on TCAT a little bit on Friday, but I think you could make the case that we'll have more of those periods where you have like a one or two month crash than like an extended crash going forward because of the way markets work now. Like we're going to have more bad months, like more gnarly months than we would have like really bad years in terms of like the magnitude of losses.

13:08Michael Batnick:So we're going to get into some of the stocks driving the melt up, but like you would have to believe, and Josh and I spoke about this a week or two ago, what are the odds that Micron has a 40 % pullback, like a pretty quick 40 % pullback over the next year? And I think we pegged it at like 75%. Now, obviously we're pulling that straight out of our butt, but, but Mike run, Mike run just had one like literally in some micron reported the best quarter ever. Um, I don't know if sales were up 10 times. I mean, it was a stupid quarter. They beat whatever it was. Ernie's were up five or three over year, literally last quarter they beat, they had the, they had an insane report and the stock sold off by 30%.

13:50And should that not

13:53Michael Batnick:have been the absolute top of the top. Now we've seen, we've, we've got another quarter and the numbers are just even more insane. But I repeat, in the first quarter, Micron had a monster, monster beat, and the stock sold off 30%. And that was, the stock went from 460 on March 18th down to 320 on March 30th. In 12 days, not even sessions, in like whatever, seven sessions, whatever that is, eight sessions, the stock fell 30 % to a low of 320. Ben, it's now at 800. This was at the end of March. It was at 320, and now it's at 800. All right.

14:42Ben Carlson:The good news here is that we're not talking about the MAG-7 anymore. We're talking about semiconductors. So this is from Bespoke. The market cap of semi-stocks in the SOX index, Sox index is now 22 % of the S &P 500 market cap. It was 6 % at the end of April 2025 over a year ago.

14:59Michael Batnick:Wow.

14:59Ben Carlson:6 % to 22 % in the S &P 500. Wow. This has to be a historic run. It is. So SanDisk is up 4 ,000 % in the last year. 4 ,000%. Go through all of them. Micron and Western Digital and all these different names. The SMH ETF is going bananas. Eddie Ardenny has this thing that's saying he calls it the AI-11 versus the MAG-7. And he shows SanDisk and Intel and Western Digital and Micron and all these different, all the South Korean stocks. And they are destroying the MAG-7. So the good news is we don't have to worry about concentration anymore with the melt-up, right? We've moved on from that worry. So that's good news.

15:42Michael Batnick:And you have to talk about the fundamentals. It's not just that investors are going insane. Although if you look at a chart, it sure seems that way.

15:51Ben Carlson:So this is why I said this is the melt-up that makes the most sense. Because if you look at the fundamentals, they've improved this year on the market.

15:59Michael Batnick:Micron is trading. This sounds hard to believe. We're talking about how much is Micron up year-to-date? I'll check right now. So Micron is up year-to-date, 180%. Yep. Those are baby numbers. Over the last year, Micron's up 800%. 800%. All right. So is this crazy? Is this a bubble? Does this make sense? Well, you have to look at the fundamentals. Micron is trading at 9.7 times 2026 earnings. 9.7. Sandisk, 11.5. Micron, looking out to 2027, The estimates are seven times earnings and Sandus is 8.4 times earnings. Now you might say, if you're just a casual listener, why are these stocks so, I'm using air quote cheap.

16:54Michael Batnick:These memory names are the most cyclical businesses ever. If you look at charts of their revenue or their margins or whatever, they swing wildly. And investors, rightfully so, we have seen this movie a million times with memory stocks. We're not going to pay up for them. Yeah, these stocks have been around for a long time. These aren't like new flash-in-the-pan stocks. So it's amazing that simultaneously a stock could be up 800 % and also trade at less than 10 times earnings. And it's because it is being, obviously, and we'll talk about this, it is being driven by an insatiable demand for compute.

17:34Michael Batnick:If you are a Claude user, you might have noticed some slowdown, some limits happening um dario said they grew what was the number uh 80 times in the last quarter or something like they cannot handle all of the growth so is this sustainable i mean that's another question uh another story who knows i certainly don't know what what earnings of micron are going to be a year two years out but the market is sort of discounting it the market is saying like yeah no you're trading at 10 times earnings that makes sense so if you if you charge

18:04Ben Carlson:These are from duality research. The forward PE for the S &P is at 21 times right now. That's below where it was trading in January, 2025. The market is up 30 % since then. Okay. The market has risen 30 % and the PE ratio has fallen because earnings are outpacing the market.

18:21Michael Batnick:I was talking to Charket about this. I think this makes sense. And he's working on some numbers. Like, you know, we've shared a chart. He shared a chart. NVIDIA has gotten cheaper. If you just look at the forward PE. Okay. This is logical. it's one thing to trade at a premium valuation when your earnings are$8 billion. When your earnings are$60 billion and I'm making that number up and growing that fast, you can't have a premium multiple. The numbers are too big. Right. If NVIDIA traded a premium multiple, it would be 15 % of the index. So I don't, I don't, like I know the 4P has gotten cheaper.

18:56Michael Batnick:That is logical. That's true. The numbers are so big.

18:59Ben Carlson:The market knows you can't grow and engulf the rest of the world.

19:02Michael Batnick:Correct. You can't trade at a premium multiple with numbers that big. Okay.

19:06Ben Carlson:So this is one we've talked about before. It's valuation versus profitability. It looks at the forward PE ratio versus the forward profit margin. And this thing has continued to fall. It's risen a little bit, but it's way below the historical trend line right now. If you looked at this chart alone, you'd say, market looks kind of cheap based on margins and forward PE, which is nuts. Gungeon has one. The year-to-date change in the S &P 500 price, earnings, and valuation. and the P ratio has fallen 4 % this year, even though the index is up 8%. Nuts. This is why this melt-up is the most logical melt-up in history.

19:40Michael Batnick:Yeah. So who was I talking to about this? The word bubble to me, you have to be careful using it. I know I throw it around all the time, like whatever. It's just, you know, it's part of the common vernacular. But to me, a bubble is prices at which the future cannot match current reality. Cannot happen. Like there's no plausible outcome. There is no ace in the hole. There is no get out of jail free card. It cannot mathematically happen. And we're telling you that the stocks that you would think are probably in a bubble by looking at the price and it would be hard to argue, they're trading at 10 times earnings.

20:12Michael Batnick:Not to say they can't fall 70 % because they probably will. I mean, I don't know probably who am I to say, but they certainly can. And that would improve a bubble. Right.

20:20Ben Carlson:I don't have the exact quote. Cliff Asnes, I quote him in the book talking about Japan. He said a bubble is yes, when a situation where the future cannot possibly explain the present. Correct. And guess what? That was Japan in the 1980s. The fundamentals were so detached from reality. People saying that now aren't looking at the fundamentals.

20:37Michael Batnick:How many of your friends are asking you, Ben, about Micron?

20:42Ben Carlson:I haven't had many civilian market conversations in a while, to tell you the truth. I don't know if I put this in the doc.

20:51Michael Batnick:Oh, here we go. Okay. This is, you know how I talk about like, well, which trader are we talking about? when we're talking about like the mood of the market or everybody's this or everybody's that.

21:04Ben Carlson:You always get mad at me when I do that because you say, who are you talking about? Well, yeah, who are you talking about? You're making it up. Like everybody is this based on what? I think we have our good finger on the pulse based on the feedback we get.

21:17Michael Batnick:There's too many pulses.

21:19Ben Carlson:That's true.

21:20Michael Batnick:So Schwab Trading Activity Index, Stacks, had the largest decline in, oh man, I have the chart, but I don't have the data. I think it was the largest decline since like 2021, month over month. That's Charles Schwab, the biggest custodian on the planet. Okay.

21:40Ben Carlson:What would explain, what do you think would explain that?

21:42Michael Batnick:Not the point. And then next to that, no, that's not the point I'm making. Okay. Next to Charles Schwab, this is from, Daily Chartbook. Retail activity. Aggregate retail investor equity flows on our platform. This is from Citadel. Sharply accelerated in April after experiencing a brief pause from the record inflows to begin this year. The net buying on our platform last week alone was in the 98th percentile of weekly flows since 2019. Okay. Schwab has the biggest monthly decline in investor sentiment and activity. Not just sentiment, not squishy. Activity since 2021. And Citadel Market Makers, which is like Robin and all the traders, was in the 98th percentile of weekly flows since 2019.

22:29So there is no pulse up the market.

22:33Michael Batnick:There are a million pulses. Okay.

22:35Ben Carlson:Yes. And now that you say the explanation is obvious, people with more mature portfolios at this point are saying, all right, I'm not doing anything right now. I'm not touching this. I'm going to let it go. I'm not going to do one way or the other. And the other people are going, no, we're putting our foot on the gas. Okay. Correct. That makes sense. Back to the bubble talk. Warren Pies says, are we in a bubble? Is this 2000? My opinion, no and no. Remember, these questions have been in the air for years now. Fiscal policy remains one of the most important macro differences. In 2000, the government was running a 2 % surplus.

23:07Ben Carlson:Today, the deficit is 6%. And it's funny because he has all these changes. He looks at like today versus the 90s in this chart. It's pretty interesting. And it's funny because we heard this in the 2010s where people said, the only reason the market is going up is because the Fed has rates so low. The market is being manipulated. And they'd be the ones like on the sideline telling you to go to cash. In this decade, it's been, the only reason everything is up so much is because the government printed trillions of dollars. Then they want you to use that as a reason to get out. And it's like, no, no, no.

23:33Ben Carlson:That's the reason to still be in. That's one of the reasons why this is all a 6 % deficit. Guess where that money goes? Profits for companies. That's right. This is not the reason to get out.

23:46Michael Batnick:This is the reason to stay in. That's such a great point. So, I know we spoke about this last week. Was Google's beat in a 90 % beat?

23:55Ben Carlson:It was very high, yes. I want to talk about South Korea, though, for a second. Because this is another, if you look at the chart, and I feel like unless you're using a very long, because I put a bunch of these vertical charts on social media last week. Like, there's all these charts, SanDisk and WDC, and then if you look at EWY, which is a South Korean ETF, it just is going vertical. You really,

24:17Michael Batnick:excuse me, ooh, my voice cracked.

24:19Ben Carlson:You really do, you do need to log these charts. But why do you need to log it if it's so, if it's this short term? I feel like a log is fine for a long-term chart. For a short-term chart, I don't need a log. What are you talking about?

24:29Michael Batnick:Ben, the South Korea chart goes back to 2000. It's 25 years. Of course you have to log it. Hello? You literally have to log this.

24:38Ben Carlson:I know you're - I'm looking at like five-year, ten-year charts. I feel like ten years you're good with not logging. That's where I stand.

24:42Michael Batnick:The chart that I'm looking at in this doc goes back to 2000.

24:45Ben Carlson:That's fair. So South Korea for the last 10 years is up like 250%. It's up. All of that gain has happened in the last one year. Okay. All that entire gain in the last 10 years for South Korea has happened in the one year. Daniel Van Allen. I think I said his name right.

24:59Michael Batnick:By the way, the reason why you need to log these charts for people like, what the hell are you guys talking about? If a stock goes, if you're looking at a stock chart and it goes from 20 to 40 and the stock is, and the stock goes from 300 to 600, the move to 300 to 600 dwarfs it visually. But it's the same thing. So a lot just eliminates the point changes.

25:18Ben Carlson:But the worst people in terms of going into chart crime jail are the ones who narrow their charts very considerably. So it makes it look like the chart is going just from zero to a million, right? They make, especially on social media, people know how to narrow it. Anyway, so he shows the forward EPS for South Korean stocks. And look at this, also going vertical right alongside. And this went nowhere forever. Why? Because these are now AI stocks. This is remarkable.

25:44Michael Batnick:You don't see earnings per share charts looking like a meme stock very often. No.

25:51Ben Carlson:Well, look, it tracks the price, the stock prices exactly. This is fundamentals and prices matching up with one another. But obviously, people have pointed out, two stocks make up 50 % of this index. So if you think we're concentrated here, so it's SK, Hynix, and then Samsung. And of course, those are now AI plays. This is kind of crazy from Charter. South Korea overtook Canada, become the world's seventh largest stock market. So South Korean stock market is now bigger than Canada and bigger than the United Kingdom. Imagine telling someone 100 years ago, South Korea is going to have a bigger stock market than the UK.

26:25Ben Carlson:I've talked about this before. People keep saying that the US is the fall of the Roman Empire. No one ever talks about how the United Kingdom is literally the fall of the Roman Empire. They were like the modern Roman Empire. And their stock market is now smaller than South Korea, a country that in the 1950s was destroyed and split into two. How could you ever possibly explain that to someone 75 or 100 years ago? They wouldn't have believed you.

26:48Michael Batnick:Exciting times we live in. Nobody knows where this is going.

26:53Ben Carlson:But this is another, this is another, so emerging markets are going crazy this year. Mark Zaccardi says they're up 23 % in the last six weeks. Best rally in 17 years.

27:03Michael Batnick:Best rally in 17 years. Because emerging markets went from like an energy index into a technology index.

27:14Ben Carlson:Isn't this one of those things where you finally go, oh, I think it's good to see some of these companies overseas taking part in this boom? Yeah. Right? Taiwan Semiconductor and South Korean stocks and emerging markets finally going nuts. It's good to see that it's not just the US anymore. Because I do think that's going to be one of the things we see with AI. That's my prediction. What's that? the internet didn't really, like Tom Friedman, the internet flattened the world or whatever, right? But the US was still kind of the winner. I really do think AI is going to like absolutely bring in globalization even more from a knowledge, talent, business perspective.

27:55Ben Carlson:I think this is going to be the thing that does it.

27:58Michael Batnick:Financial advisors. I had a podcast on talking wealth with Michael Kitsis, where we discuss the future of AI in our industry. And I think that, I mean, you could spend four hours on this conversation. We are going to be dealing with a much more engaged and educated consumer, which is great for everyone. Well, it's not good for bad advisors. If you've been asleep at the wheel doing the bare minimum, that's not good. But an educated customer makes for a better customer, similar to my HVAC story. and I am so excited for our future, for our industry.

28:36Ben Carlson:This is, it's, yeah, these are exciting times. That's a must listen podcast or video. It was very good. Check out our Talking Wealth YouTube channel. Here's my thinking. I think the 2020s is the most disruption that financial advisors have ever had in their history.

28:50Michael Batnick:And I don't think, I don't think, I don't think that people are ready for it.

28:54Ben Carlson:But think about it. Think about what we did in 2020. We leveled the playing field in terms of when Zoom calls, when people became okay to do Zoom calls, I know there's still people who say, I'm only going to go to the financial advisor who lives in my town. There's some people who still do that. But it flattened everything in terms of communication. People are now accepting of video calls and taking a service from someone who doesn't live in the same city they're in. That happened overnight. Now AI is going to come. And you're right. If you don't have the knowledge base and the ability to deal with a more knowledgeable client, or prospect?

29:30Michael Batnick:10 years ago, you're done. We were explaining what a fiduciary was, the difference between us and a wire house. Now the customer comes to us so much more educated, which is great for both sides. A friend of mine who's an advisor yesterday texted me about this. So watching you and Michael right now in Fun Story, I literally had a conversation like this last week. The client ended up staying with me instead of going somewhere else in part because everything I told them was closer to what Claude said than the other guys did. Wow.

30:01Ben Carlson:It's interesting. So, all right. So, Gunjan at the Wall Street Journal. This is a great story. I asked Chad TPT to manage a stock portfolio. Here's how it did. So, she said, she gave these prompts. You're a future financial advisor managing my long-term portfolio. Here's my age range. My goals is growth. My time horizon is long-term. My risk tolerance is kind of middle ground. It's a million-dollar portfolio. Taxable account. Have at it. and I mean it's not the worst the portfolio is fine right totally fine it looks like a robo-advisor

30:35Michael Batnick:it's totally fine

30:35Ben Carlson:yes it looks like a robo-advisor I'm sure they stole a lot from it now in the article like you could poke some holes in it like hey there's too much cash here

30:43Michael Batnick:it's fine it's better than fine it's totally good

30:46Ben Carlson:yes you could quibble with it but obviously if you get this as the output you say no no I don't want that that's way too much of this change this change that but this is just it's just it's just further taking us down the line of certain things being commoditized. Like the simple asset allocation is a commodity. Like there's advisors are going to have to find a way to stand out. And that's why I think, so you guys had Eric Belchunas on the compounded friends last week, which was very good. And his point of like active ETFs kind of taking back their corner a little bit. This is why I think I would be bullish on active ETFs going forward.

31:19Michael Batnick:Well, let's give ourselves a plug. We don't do that a ton on this show, but we are, So we spent the last, when did we start working on Porterhouse? In the winter?

31:31Ben Carlson:Been a while, yeah.

31:33Michael Batnick:I can't remember. So we started working on an in-house momentum strategy for Red Holtz Wealth Clients Only. And the premise was based on Josh and Sean do a best stocks list on CNBC. They've been doing it for a while now. and uh it's one thing to have a list of stocks like a screen where it's like all right i want to own basically the premise is i want to own good i want to own great stocks i want to own the best stocks the stocks that are working today and i also want them to be good companies so that when the tide goes out they don't fall 80 percent right because there's a lot of shitty stocks there's a lot of shitty companies that make for good stocks in any given moment we didn't know how to turn a list into a portfolio we tried like but we're not we're not quants It's not our...

32:20Ben Carlson:Yeah, portfolio management versus a buy list is a huge leap.

32:26Michael Batnick:So we've used momentum ETFs and versions of that for a decade plus, I think. But we've never done it in-house. So we partnered with Franklin Templeton, and we built a momentum strategy that is launching in June for Ritthulz Wealth Clients Only. we've been invested in it Ben and I since January and we've been you know working through some of the kinks and stuff momentum just went on a historic run so I wish we were able to get people invested earlier but anyway this is a plug obviously we will have a link in the show notes if you want to reach out to us and learn more about what we're doing there

33:06Ben Carlson:but I think that the AI point of this story is that turning those rules and those ideas into an actual portfolio strategy that is in terms of the trading and the turnover. And there's a ton of decisions you have to make. And I think you could put together a back test that looks awesome. And it's not a real world portfolio. There's real world considerations you have to do when making a rules-based portfolio like this. And it's more concentrated. And one of the reasons that I like the strategy for me personally, remember I said a million times I'm giving up on stock picking. This is a strategy that will own stocks that I would never in a million years be able to force myself to own at the time.

33:42Ben Carlson:In a momentum strategy like this, it's rules-based. That's why I like it because it takes me out of the equation. I would not buy these stocks on my own.

33:48Michael Batnick:I shared this with our advisors yesterday. One of the stocks we own, again, this is an incredible environment for momentum. The strategy might not ever have a better period than it's had the first six months, five months of the year. We own a stock, doesn't matter which stock, a stock that I would ever buy, that is at $2 ,500 a share. And I said to the advisors, I would have bought this at$1 ,000 and sold it at$1 ,200. And that's the point of having a rules-based strategy. And I said, actually, you know what? I wouldn't have bought at a thousand because the stock was at 500, like not even a year prior.

34:20Michael Batnick:And one of the great things, and last thing, and then we'll move on. One of the great things that we're so proud of and excited about this strategy is most momentum strategies that are in the market are fully invested at all times. And so in like a bear market, it'll be relative momentum. So which stocks are doing the best versus the crashing index or the bear market index? So it can own a lot of staples and like boring names, not the strategy. If there are no stocks that meet the criteria of what we're trying to do here, which is own the best stocks that are good businesses, if none of those exist because every mark, because it's just a washout, eventually the buy list will shrink to zero and we won't own stocks.

34:55Ben Carlson:You know who that reminded me of when we initially put these rules in is that's how John Borman used to run money. If there was no stocks going up, he would go to cash. Remember him? Of course I remember him. Great man. Rest in peace. Yeah. But no, but that's how I loved his discipline was if there's no stocks that meet my criteria, I'm not going to buy any. Anyway, yes. Interesting strategy. Something that I, in my book, I write a lot about the benefits of being rules-based and making good decisions ahead of time and doing like all the hard work ahead of time. We put in, I don't know, six, eight months on this strategy before implementing it because we wanted the rules to make sense.

35:31Ben Carlson:And you do the heavy lifting up front so you don't have to do it in the moment. That's, to me, that's how I become a successful investor.

35:39Michael Batnick:because this strategy, the momentum one and everything else will have periods where it absolutely sucks shit. And you have to know in advance what that environment looks like. And you just eat it because everything, everything is seasonal. Risk and reward. Am I right, Ben? That's true.

35:56Ben Carlson:All right, Greg, it's funny because we have an artificial intelligence header in our doc. Our doc has all the different headers, 20 different headers or something of the topics we're talking about. And we have one that's artificial intelligence. And now AI is in every under every heading, it seems like. Anyway, Greg Epps says, AI is distorting practically everything about the economy. It makes growth look better and the job market look worse. Maybe an AI investment bust wouldn't hurt so much after all. This is like a contrarian take.

36:20Michael Batnick:An AI bust would hurt so much after all.

36:22Ben Carlson:All right, so here's his, I don't necessarily agree with this, but I think it's worth considering. So he says the hyperscalers, according to Morgan Stanley, are going to spend$800 billion this year, $1.1 trillion next year. At 3.3 % of gross domestic product, next year's figure would exceed projected spending on national defense. It is funny because that sounds super duper high, but it's like, that's 3.3%. But obviously, that's still in the grand scheme. So he shows, look at the chart here that shows AI CapEx versus defense betting. It shows next year, yes, it's going to pass it. So here's why he thinks this wouldn't be the worst thing if it rolled over.

36:59Ben Carlson:And I totally disagree with this. Like, if AI rolls over, there's probably going to be a recession. I would...

37:04Michael Batnick:The most recent action in the stock market has definitely brought me over to the side of Josh's wealth effect. Now, I am not like an on-off wealth effect guy. I think there are periods of time where the market really doesn't lead to a lot of spending activity. But I think now -

37:19Ben Carlson:2010s was one where the wealth effect didn't really have an impact, I'd say.

37:22Michael Batnick:Yeah. 2020s, yes. But especially in recent times, there is so much wealth in the stock market. People are borrowing against their portfolios. People are spending money. And I'm not saying that's good, bad, or going to last forever. But I'm just saying today, it is definitely driving the way that people make decisions with their spending habits.

37:40Ben Carlson:I've got a great story about barring answer portfolio coming up later. All right. So he says overall U.S. growth is low if the AI stuff turned down, right? But less than you think, just 33 counties account for 72 % of data centers. So construction drought wouldn't ripple that widely. Stocks and profits would fall, but the average worker who depends more on wages and wealth would barely be affected. Oh, well, that's true. And the mood might improve if bosses stop talking about doing AI. That's true.

38:03Michael Batnick:The average worker would probably be relatively unimpacted unless there were a recession.

38:10Ben Carlson:Yes, that's a problem. There's no guarantees. There's no always and there's no never. I would put the odds of a recession 90 plus percent if the AI spending rolled over. I would put it very high.

38:24Michael Batnick:Well, let me just so we're defining this. When you say rollover, do you mean like rollover to like 80 % of current spending or like a hundred and a half?

38:30Ben Carlson:If it was a big pullback, like, all right, this isn't working. We're pulling back. And I don't know how to define that. But I think it's one of those things where like pornography, you know when you see it. Remember that thing? I think that's all right.

38:41Michael Batnick:I agree with you.

38:42Ben Carlson:I don't think it would be a soft landing if all of a sudden there was a huge pullback in AI spending.

38:47Michael Batnick:I don't know why I put this in this part of the doc. Oh, this is under the economy. Oh, there we go. Okay. That's why. So on the Disney call last week, we haven't seen any change in consumer behavior from elevated gas prices thus far and aren't currently seeing a material impact on the remainder of the fiscal year based on forward bookings. Disney World bookings are pacing up strongly. And even with our 40 % increase in cruise capacity, book occupancy remains in line with the prior year.

39:14Ben Carlson:Disney's the one company, like you always say, listen to the earnings calls. Disney's the one company where you'd listen to the earnings calls and go, this stock must be on fire. True. Right? Yeah.

39:26Michael Batnick:But I think I like to listen to the calls more in terms of what's really happening with the economy.

39:30Ben Carlson:Yes, I agree.

39:31Michael Batnick:As opposed to reading the headlines. We talk a lot about the K-shaped economy. And let me be clear. It is absolutely K-shaped. I don't know if it's like an even K. I think the upper K is a lot bigger than the lower part of the K. And my point is, we act like it's only rich people and everybody else. Disney is like everybody else in the upper, I don't know, upper 60%, 50%, whatever it is. Disney's extremely expensive. Yeah. And it's not just for the top 1%. Somehow, someway, there are a lot of people going to Disney. I agree.

40:09Ben Carlson:There definitely is the top 1 % there and they cut the lines and they use the passes and they pay for the guides and stuff. But it's Disney. If you look at the people there, it's a wide range of people. It's a wide segmentation of the population. It's not just one subset. It's not just the top 10 % that go to Disney.

40:26Michael Batnick:All right, Josh shared with us an article on artificial intelligence from Bailey Gifford. I'm going to read two parts of it. This was, in my opinion, the best thing I think that I've seen on what AI is going to do to our brains, the way that we process information, the way that it impacts society as a whole. Did you read this?

40:44Ben Carlson:Yeah, it was, the piece came out a couple months ago. Oh, did it? Okay, I missed it. Someone shared it on social media last week. Maybe Jesse Livermore or something because I read it too. Okay. Very good.

40:52Michael Batnick:All right, so here we go. This is already breaking the apprenticeship model that has transmitted professional expertise for millennia. Junior lawyers, accountants, and doctors have traditionally built competence by doing grunt work under the supervision of senior practitioners. The work was tedious, but the learning was real. You develop judgment by doing the thing badly at first with someone more experienced correcting you. If AI handles the grunt work instead, the learning pathway disappears. This is not hypothetical. Shopify's chief executive recently told his teams that before requesting additional headcount, they must first demonstrate why AI cannot do the work.

41:29Michael Batnick:From an investor's perspective, the logic is sound. It drives efficiency, widens margins, and makes the companies leaner. I own Shopify shares. I understand the rationale, but every role that AI absorbs is one that a junior employee would have once learned by doing. The efficiency gain and the training loss are the same decision viewed from different angles. That's such a good line. The efficiency gain and the training loss are the same decision viewed from different angles. Then the consequences for white-collar professionals are already visible. Entry-level hiring at major technology companies has fallen more than 50 % below prepandemic levels.

42:01Michael Batnick:Generative AI doesn't eliminate entire occupations overnight. Instead, it hollows them out from within, automating 30 % or 40 % of an employee's workload, leaving fewer entry-level roles and compressing opportunities for career progression. The result is organizations that get more done with fewer people today, but have fewer ways to train the people they will need tomorrow. This creates a widening gap, not just between companies, but within them, between a shrinking cadre of AI fluent senior professionals and a growing population of graduates who cannot get a foot on the ladder that those seniors once climbed.

42:34Ben Carlson:This is why I think that I don't know how long it's going to be, three years, five years, 10 years. There's going to be an overreaction the other way. And people going, why did we, why are we so short-sighted? And we didn't train people and we didn't hire people. that we saved some money in the short term, sure, but it hurt us in the long term.

42:50Michael Batnick:Well, this is where, this is the other side of the pendulum. I'll quote them one more time. AI will most likely produce three trajectories for those without pre-existing expertise. Some will build careers around orchestrating AI itself, though the evidence suggested that their work will be more fragile than they realize. Others are already moving into physical trades and care work where human presence still matters. The rest will be caught in the gap Too late to build traditional expertise, too early to benefit from whatever new institutional structures eventually emerge. And this is the point.

43:25Michael Batnick:The last group, this last group is most politically consequential because historically, large populations of educated but unemployed young people are among the most reliable predictors of social instability. and there's no doubt about it, no doubt in my mind that this is the path that we're on and it's obviously not all good. It's obviously not all bad. There's great parts of it. There's bad parts of it but this particular bad part of it is not going to be good.

43:57Ben Carlson:We talk to a lot of young people and hear a lot of the young voices and we have some conversations internally about, man, at this age, how are they so jaded already? How are they so pessimistic and cynical and like at that age, they should be wide-eyed and optimistic and the thing is, I actually understand why they are like they are. Why they're so cynical. Why they see what, they not only see what's happening with like the housing market, but they see what's coming with AI and so they, this like financial nihilism and just like, what's the point? I understand where that comes from. But it's also, it's very depressing.

44:30Ben Carlson:So when I came up, my very first job, I had education, but I knew nothing. And my boss said, listen, you're going to work as an analyst for us for two to three years. How did you get your first job? It was kind of like my resume got passed around to passed around and passed around and landed on the right lap, you know? And I looked for a small company. And here's the thing. My job doesn't exist today. I was literally a performance analyst. I would go, I would get the statements every month and I would calculate, we had a model on Lotus 1, 2, 3, and I would calculate the performance. I input the numbers.

45:03And the thing is, those two or three years,

45:06Ben Carlson:I still use that to this day. My boss, every Friday, he'd bring us on a whiteboard and teach us something about asset allocation or investment guidelines. But understanding how performance worked and getting to know the range of returns for stocks versus bonds and how cash performs, that stuff, learning that by hand for me was so helpful and helped me understand how markets actually functioned. And if you take that away from people, it was such a great learning experience for me. Again, I still use like, I'm so fluent on Excel and stuff today and calculating returns and doing charts because I went through that period of training.

45:41Ben Carlson:If you take that training away, I don't, I mean, it is, it is being taken away. So you're going to have to learn on your own. Now that's the thing to learn. It's, it's up to you to learn if no one's going to train you.

45:54Michael Batnick:I would encourage people to read this article because they talk about the physiology of the brain and what happens when you outsource your thinking, like the actual chemical balance of what happens.

46:04Ben Carlson:He talked about how 200 years ago, what is it? 12 % of the people world's adults could read today. It's 87%. He's like, listen, when we acquired literacy, it rewired our brains. AI is going to do the same thing in a different way.

46:15Michael Batnick:And I mean, they were like looking at the brain with like, like science, like not like, not like, oh, with words, like, oh, your brain was rewired. No, no, no, no. Literally, your brain matter changed. All right. So the CFO of Uber on their call, just staying with this depressing topic, I would say candidly, when we set up budgets for 2026 in November, we underestimated the amount of impact the AI tools could have. And as Dara said, we are trading that off against incremental headcount. It's scary.

46:45Ben Carlson:If I was a politician, I would be jacking up any tax rate. Tax the robots. I would say we're going to lower taxes for you, the citizen. We're going to take the shit out of these robots and AI companies. We're going to take all of their wealth. Sorry. We appreciate it, but we're going to take a lot of this.

47:02Michael Batnick:All right. Do you have a story about Chipotle AI customer service, Ben?

47:05Ben Carlson:Oh, yes. So weekends are full. You said last week you talked about how busy you are with kids. This weekend, every weekend, it seems like my daughter had three basketball games in a tournament, straight into a soccer game, and my other daughter had a soccer game, too. So five games in one day. on Saturday. So my daughter say, listen, we're gonna be busy. We want like some protein. So get us Chipotle for lunch before our games. Okay. So I ordered Chipotle. I go there and we got it early because their game started early. So I got the Chipotle like 1115. And they're like, and all these people are waiting.

47:35Ben Carlson:Hey, anyone? And I can see all everything's empty. There's no food out yet. You know, like we opened late. Nothing's ready. If you're here for a pickup order, it's not going to be ready. Sorry. All right. Can you cancel my order? No, we can't cancel. You did it online. All right, fine. Whatever. See you later. So I left. Then we get to dinner. My daughters, after their games are done, they said, actually, we want Chipotle now. We want, I still want it. We didn't get it. So I ordered again. This time I did DoorDash because we just got home. I didn't want to go back again. And they, DoorDash brings our Chipotle.

48:02Ben Carlson:Guess what they brought? Our order from the morning that had been literally sitting out since 1130 AM. They must've made it after I left, but they didn't pick up my new order. They picked up my old order. All the food has been sitting out for six hours or something.

48:16Michael Batnick:And of course, you just hit it up in the microwave and didn't say anything to anybody.

48:19Ben Carlson:Oh, no. Yeah, no. It was hard. I probably would have done it if my wife wasn't there. Let's be honest. But she's like, no, throw it away. Unreal. So I thought like, I deserve a refund for this, but I don't want to go through the process of like calling a number and getting a refund. But then I went on their website and I asked Chatty PT, like, how do I get a refund from these orders I didn't get? And they said, oh, go to Chipotle.com. They have an AI agent. Did it work? I typed it in. I said, what happened? and they said, is this the order you're talking about? And they brought it up. I said, yes.

48:45Ben Carlson:Give me a refund. What happened? This is what happened. Here you go. Here's a refund. It happened in 30 seconds. Very cool. It was like my first good experience with an AI customer service agent.

48:54Michael Batnick:So I've been complaining about voice with Apple. Apparently, I don't enunciate my words, Ben. Eric Newcomber, there was a post. He wrote, customer support and dictation loom large as voice startup leaders prepare for a world of talking machines. So this is, this is inevitable. Obviously this is going to be great for everybody. I assume, except for the people whose jobs it takes. And I'm not saying that flippantly, that's obviously not great for them. Um, all right. Uh, there's a company called Sierra. They just raised$950 million at a$16 billion valuation. Holy shit. Um, Sierra's agents are widespread enough that they, they've already talked to each other on the phone.

49:40Michael Batnick:I'm not familiar with this company I assume we will be shortly but then they also spoke about Whisperflow an app that I am now using on my phone sort of his company takes great care turning your stream of consciousness into correctly punctuated pros what Whisper does is as you're using it the first five, six times it learns your common patterns that really small detail is what adds to the delight so Ramp actually recently found that Whisperflow is the third fastest growing software vendor how about that? so I was complaining that it's kind of annoying because Apple won't let you just, you know how Apple has a microphone icon?

50:12Michael Batnick:When you hit the whisper icon, it takes you out of the app. It takes you into the whisper app, which then takes you back in. And it's mildly irritating.

50:19Ben Carlson:It's like watching sports on a streaming TV. Like it's harder. It's mildly irritating.

50:23Michael Batnick:So I've got a bone to pick with Apple, Ben. And it's not just because of whisper flow. I have two bones and one bone is bigger than the other. So as you know, my beloved Knicks are doing quite well and I am on multiple threads with Knicks fans. Perhaps this exists already, but it would be great if I were able to send messages to multiple groups in a more efficient manner as opposed to copying and pasting, copying and pasting, copying and pasting. Right? That could get you in trouble though. Well, I mean, if you're drinking, it could get you into trouble. But I want to be able to set up groups.

51:07Ben Carlson:Just saying the wrong thing to two groups at once and one person's in the group you need to know? That sounds risky.

51:12Michael Batnick:I'm pretty good. I'm pretty good with tax. All right. So I would like that feature. If I could request that feature, if Tim Apple is listening.

51:18Ben Carlson:I just want to say that the Knicks are going to the finals. I don't want to jinx you, but there's no way the Cavs or Pistons are beating them. The Pistons are... I'm not an overconfident fan. No, there's no way the Knicks are losing.

51:29Michael Batnick:Neither of those teams have the guys. Not that anybody wants to hear me talk about the Knicks or the Pistons, but the Pistons' second and third scorers are Tobias Harris and Duncan Robinson. I don't know how they won so many games.

51:37Ben Carlson:They have one star player and the rest of their team is all role players. I don't know how they got so far.

51:42Michael Batnick:And they have no bench and the Cavs are the Cavs. We don't need to get into that. Okay. So Tim Apple is a parting gift to your billion plus users, please. But here's the real thing that I implore you to consider strongly. We had a spring flag football group chat. Guess what, Ben? spring flag football is over. In fact, it ended a month ago. This is a lively group. There are lots of dings. I tried to mute the conversation. It's still dinging. It just, you know, for whatever reason, this particular conversation, it won't mute itself. And it's a lively bunch. It's a great...

52:25Ben Carlson:Why are these parents still talking to each other after the football season's over?

52:28Michael Batnick:Nice people, okay? Nothing wrong with people. Not like right against people. but I've been saying to Robin for weeks and weeks. I got to leave. I got to get out of here. Why is this? Why are these people still making jokes? The season ended six weeks ago. It's enough.

52:41Ben Carlson:I'm not good in group tech situations. My wife's like, will you respond please? I'm like, no, I don't want to respond. I didn't ask to be added.

52:48Michael Batnick:A group was created with like 25 plus people on it. So I knew that when you leave, it says the number has left. Can I Irish? I want to Irish exit a conversation. Okay.

52:59Ben Carlson:I agree.

53:00Michael Batnick:Why do you need to force, why do you need to embarrass somebody? Now, I thought I was being a hero. I thought, listen, well, if I go first, it will give other people permission who are afraid to leave. We can all leave. It's over. The party has ended. Let's all go home. But, yeah, why can't I just leave? Now I have to get embarrassed and now the group is like, oh, well, Michael left and now Robin's still there and she's embarrassed. Come on. That's true.

53:21Ben Carlson:Yes. A subtle leave. I agree. Just let you leave.

53:25Michael Batnick:Again, I wasn't, I didn't, It has to be added to the group. So in other words, if people just add your number to a group chat and you want to leave, you get shamed.

53:36Ben Carlson:I think it's a great, if you leave a group chat, it's a great flex. Like, oh, oh, okay. I see how he rolls up. Yeah, but I mean,

53:41Michael Batnick:I'm not the most friendly guy to begin with. I think people probably think I'm a jerk.

53:45Ben Carlson:Yeah.

53:46Michael Batnick:So Scott Galloway and Ellison do this great thing. I don't know if it's new. It's new to me where they have a bunch of topics where they go back and forth and they each give their own take and like a paragraph. I like it. It's a good format.

53:56Ben Carlson:Yeah, it's a good news. By the way, quick plug. I was on Prof G podcast last week. Oh, hell yeah. Ed and then Ramit talking about actually the$500 ,000 paycheck to paycheck. Because if we talk on this show, good conversation.

54:09Michael Batnick:So this, this particular formats like PTI, um, in a, in a blog. I like it. So I like it too. I was dead wrong on this. I think I, I, not, I think I severely underestimated the scale of GLP ones and their impact on chocolate and alcohol. It's a real thing. Shares of the world's top-listed beer, wine, and spirits makers have shed more than$830 billion since 2021. The outlook for booze companies doesn't look promising, according to a study of 14 ,000 Weight Watchers members. Roughly 50 %

54:45Ben Carlson:Oh, there's another company that's going under. Weight Watchers. What do you need Weight Watchers for when you have those epic?

54:50Michael Batnick:Roughly 50 % of patients who drink alcohol prior to starting a GLP-1 decrease their alcohol consumption after starting the drug. Unbelievable stuff.

54:58Ben Carlson:Speaking of weight loss, Ben. I'm sure you have people in your life who've taken Ozepic or people that you know. Like the weirdest thing about it is you can tell when someone has taken it. Not like because of the weight loss. Like there's something about it in the face. I don't know what it is that you can tell that someone's done it.

55:13Michael Batnick:Well, it's the weight loss.

55:15Ben Carlson:No, but like it looks different than they would have if they would have just lost the weight on their life.

55:19Michael Batnick:Because it's radical weight loss. Yeah. It's one thing to lose eight pounds. There's nothing to lose 27. So yeah. I thought about it. Like I always say thought about it. I didn't like really deliberate. I was like, should I just take one of these things? Because my belly, it's not great.

55:35Ben Carlson:Keep doing, if you do it, they'll keep doing the planks because you lose muscle. So keep those planks up.

55:39Michael Batnick:I'm planking my ass off and I got, I wasn't going to do this, Ben, but this is my last purchase for pushups. This thing is money, Ben. What is it?

55:51Ben Carlson:Oh, different pushup.

55:52Michael Batnick:Because you know what? I swear to God, my wrist started to hurt by doing push-ups on the floor. But this, you could target multiple areas of your... So you pick them... But look, you could like pop it out and pop it in. All right, anyway. But you know what I did? I did... So Peloton... You know how I used to use a trainer?

56:11Ben Carlson:You have the weakest arms of any person ever. You can't do planks and you can't do push-ups? I could... No, bones.

56:16Michael Batnick:Weakest bones. My bones are brittle. But I did a Peloton workout class. I don't need a trainer. I can just do Peloton.

56:24Ben Carlson:Oh, that's true. So you still, yeah, you can just do lifting and other stuff through Peloton, right? Yeah. That's a good idea. So all this time, because you probably use your Peloton bike in what, four years? Four years. You've still been paying every month for the membership still, though.

56:38Michael Batnick:I suppose. When you see me in a year and you say, hey, Michael looks different. It's not Ozempic. I've just been hitting the...

56:47Ben Carlson:Duncan says, if we don't get a fitness sponsorship out of this, I don't know what else, So obviously you're on Instagram again because you're buying all this junk you don't need.

56:56Michael Batnick:All right. You know what? Instagram. Well, Instagram is very hard to live without for me because I'm posting a lot of our socials there. I love it. So here's my new thing. This brick thing, I have two of these. One at home and one on the road. One in my backpack. So if I brick my stuff, lock all my apps, which I always do. That's my default. And I forget to unbrick it and I'm out. that's it. I just...

57:22Ben Carlson:I've never seen that before. So that thing actually blocks the apps that you can't use them.

57:26Michael Batnick:My apps are blocked. I cannot access them.

57:29Ben Carlson:Now that is a... If that's not a thing about behavioral psychology, I don't know what is.

57:33Michael Batnick:It works. I literally need this because I can't... So listen to this. Hold on. What is this? I have been unbricking to go on Instagram to post but my shopping is going to crash because I'm not really on it the way that I used to be. I'm on it and then I brick it. I post and then I brick it.

57:51Ben Carlson:this one is the worst. This thing. That's the worst. So you having to break your thing. So you've seen my neighborhood, right? It's a little cul-de-sac. There's 20 houses. It's not big. But there's like a 15 speed limit. And there's tons of little kids who play in the street all the time. And there's probably five or six teenagers on the block now that all drive. And they drive like maniacs. I'm the old guy yelling. Little road? Come on, you gotta yell. They drive so fast. So they finally had a homeowners association meeting. I wasn't there. And they said, hey, sorry, we're putting in speed bumps.

58:25Ben Carlson:You have to. And I'm like, oh, I'm like, I don't. Speed bumps are so annoying. But guess what? You have to. It's the only thing that, you know what I saw, though? The teenagers drive by. They fly over the speed bumps. They don't stop. They just like they're going to wreck their cars because they don't slow down. They just drive over them as fast as they can. But that sometimes you need the speed bumps. You need the brick to stop your behavior. All right. I got to. I got to. Dude, I was.

58:46Michael Batnick:I was waking up. Oh, here's another thing.

58:52Michael Batnick:So my bedroom, the people that built the house that I bought, there is so much sunlight in my bedroom, Ben, from both sides, both the front and the back, because there's windows in the front and there's doors, windows in the back, and there's curtains in front of the doors. But then on top of the doors is a half cylinder, I suppose, window. and the sunlight just shines through in the morning and the sun rises at, I don't know, 5.50 or so, whatever. So I'm freaking up at six o 'clock every morning because the sun is blasting me and I was spending 45 minutes on Instagram, hence the brick. I need it.

59:36Michael Batnick:I can't help it, okay? But you know what else I did because of this damn sunlight, Ben?

59:43Michael Batnick:I got a sleep mask.

59:47Michael Batnick:I can see that. I don't know what else to do. I would like to wake up naturally without the sun just blasting me in the face. But you ever sleep with a sleep mask? I'm guessing not. Who sleeps with a sleep mask? Who the hell sleeps with a sleep mask? I can see that for you.

1:00:01Ben Carlson:All right, I've got a soccer dad update on crypto. I mentioned this like a year ago. Some of the soccer dads approached me.

1:00:05Michael Batnick:Did you say soccer dad update on crypto?

1:00:07Ben Carlson:Yeah, so probably about a year ago, some of the soccer dads approached me in the sidelines and said, hey, Ben, get in this Bitcoin conversation. I said, oh boy. And these guys are like, one of the guys, one of the dads was an evangelist and he brought the other guy in. And the guy said, listen, we were having old fashions last night and he talked me into buying Bitcoin. So at the game this weekend, they said, all right, Ben, we've got an update on crypto. And they kind of had a sheepish grin on their face. Like, oh, you know, like when your kid does something wrong and they don't want to tell you.

1:00:31Ben Carlson:I'm like, all right, guys. They're like, you kind of into Bitcoin a little bit. Yeah, I own some. I told them I sold half of it when it hit 100. And I was like, oh, cool. They're like, here's what we did. When it was at 100, we went to our crypto brokerage and we borrowed it. We borrowed against it. And I said, okay, what are you borrowing at? They said, ah, 6 % or 7%. I said, that's not terrible, I guess. It's like a margin loan, okay? So we bargains it, but they said, but the crypto brokerage won't let us then take that margin and buy more crypto. So we took the money off the platform.

1:00:58Michael Batnick:Oh, no.

1:00:58Ben Carlson:Yeah, I said, that's smart, okay? And I'm not going to name the crypto exchange, they said. And they said, but what we did is we put the borrowed money into one of the micro strategy call option ETFs, thinking this is free money. And guess what? it's not free money. This strategy has crashed. So for the past six months, we've been having to feed more and more money into our brokerage account for crypto to cover the margin. It has to be, because the margin, I guess the rules were higher than I thought. I don't know. 80%. It's a very high number that they have to keep. So they said for the past year, we've just been funneling all of our money to keep this margin up.

1:01:38Ben Carlson:And luckily, crypto has come back a little bit.

1:01:40Michael Batnick:Were they laughing about it? Like, was it? Yes. Okay.

1:01:42Ben Carlson:They were laughing like, I can't believe we did this. Like, what were we thinking? You know what?

1:01:47Michael Batnick:Everybody goes through this. Everybody does something stupid with investing. God knows I've had more than my fair share. And you got to pay the piper. It's the only way to learn. But at least it sounds like it wasn't catastrophic. No.

1:02:02Ben Carlson:And I think one of the guys was probably into it more than the other. Because one of the guys just kind of followed the other guy's lead. But yes, anyway, it was.

1:02:11Michael Batnick:I skipped over this data point. Back to the GLP-1 stuff. This is a face blur, Ben. Never would have guessed this. 5.8 % of Americans, at least according to Gallup. I don't know if this is 100 % accurate, but whatever. 5.8 % of Americans in the first quarter of 2024 were using a GLP-1, and now it's 12.4%. And that's actually old. That's actually a year ago. I kind of believe that it's sort of in the ballpark.

1:02:39Ben Carlson:and also that number will never be lower than it is today correct the new york times is something on longevity which i think is interesting so it said a longer life can lead to financial financial concerns and they talk about like the the pros and cons obviously of living a longer life and it says like outliving your savings is becoming more and more pronounced for a lot of people so you take a 65 year old couple there's a 64 chance so two-thirds chance or so that at least one partner will live beyond 90 so we always talk about why people don't want to spend down their money? Like, why don't people just do it?

1:03:08Ben Carlson:Like, this is one of the reasons people are freaked out and terrified. They're going to outlive their money. This is also interesting from the wall street journal. They, the great wealth transfer that we've been talking about forever, right? Uh, baby boomer money has to come down at some point. It's going to be passed down. So look at all the money they have. And they look at like when those inheritances will happen by generation, they're showing like the amount per and it'll be gen X at first, obviously. And then that rolls over. Um, but most of these inheritances aren't going to happen, especially for millennials until like the bulk of it until I don't know, the 2030s and possibly into the 2040s.

1:03:45Ben Carlson:Like if your parents are living longer, again, we've talked about this. We, we know people, everyone knows someone, a millennial who their retirement plan is my rich parents are going to give me their money. Like we know those people.

1:03:56Michael Batnick:And it's, it's going to be, it's listen, I'm not mad at anyone. This is life, but it's, it's just, it's going to be, um, I don't know if funny is right or whatever, but odd or whatever. When people's parents die and they just like immediately like 10 X their life.

1:04:10Ben Carlson:Yes. Or I know people now who live beyond their means and don't save anything because they know that that it's, it's coming. Yeah. Which guess what I would, I would too. That's normal. But the thing is, if people are living like you, the planning for this threading the needle. Oh, what if you don't get the money until you're 65? Right, right, right. Well, that's when it could happen for a lot of people. That's the point. Like the wealth transfer is not, and also,

1:04:37Michael Batnick:I think there's a ton of people and everybody who's around our age can like, yeah, of course. We all know people like this whose parents just subsidize a ton of their lifestyle, whether it's the kids' camps or whatever, right?

1:04:50Ben Carlson:Oh, yeah, definitely. So the other thing is that no one ever brings up when they talk about the wealth transfer. So I was on Melissa Joy's podcast She's a fellow flyover type person. She has this women's money wisdom. And we talked about women and money a little bit and about my book. But she talked about, we talked about how the first wealth transfer is not going to be to the kids. It's going to be from mostly, if it's a man and a woman married together, it's the husband dying first and the woman living five or 10 years longer and them getting the money. That's going to be the first wealth transfer is women are going to control so much more of the money.

1:05:20Ben Carlson:And the financial industry is not prepared for that. for women having control over the bulk of the assets. That's going to happen because women live longer than men. Anyway.

1:05:31Michael Batnick:I saw, oh, I saw Sean posted this. I didn't confirm the accuracy. Our guy, Sean, posted or slacked to us that they're filming Ghost in Queens where he lives.

1:05:46Ben Carlson:Oh, Channing Tatum is going to play the role. You can't do this.

1:05:51Michael Batnick:This cannot happen. no that does not need to be remade it just doesn't that is a perfect movie and it came out when it should have came out and it aged wonderfully and just no yeah I agree

1:06:11Ben Carlson:some things you shouldn't touch

1:06:12Michael Batnick:I don't remember the first time I saw a ghost I was probably a baby and I probably cried like a baby I was probably like 8 years old when my mom showed me that movie I watched a movie over the weekend Ben that made me cry okay uh the movie is called remarkably bright creatures are you familiar with this one it's on Netflix

1:06:31Ben Carlson:I saw the tile for it I didn't watch it

1:06:34Michael Batnick:oh I spoke about this yesterday with uh with the gang okay my

1:06:38Ben Carlson:okay my wife asked me if I wanted to watch this watch it should I should I I should watch it okay yeah

1:06:42Michael Batnick:it's it's it's an airplane movie okay um but I I cried and I did not see myself crying it was a surprise cry and I loved it okay I'm a huge tear guy makes me feel good um when the last time

1:06:55Ben Carlson:Sally Field was in a movie

1:06:56Michael Batnick:right oh here's a here's what I was asking you what's the last movie that made you cry and I have a guess cause you're not a crier you're not a movie crier

1:07:08Ben Carlson:you know what it was uh okay what's your guess Rudy now I don't see the thing is I'm a Michigan fan so I could never cry for a Notre Dame movie

1:07:17Michael Batnick:alright fair enough I suppose you know what it was

1:07:19Ben Carlson:Field of Dreams okay

1:07:21Michael Batnick:yeah that'll get you but it was

1:07:22Ben Carlson:right after my brother died. And a few of the dreams came on and he had to catch with his dad and I lost it. I'm going to cry thinking about that soon. Yeah, I got… And my daughter looked at me and she's like, oh my gosh. Okay. I've got… I have an idea for a movie production company. Okay? Here's what my movie production company is going to be called. 95 minutes or less. Okay? One of the greatest things about 80s and 90s movies is how short they were. Some movies deserve the longer treatment. There are some movies that just are better when they're two hours. You need some time. But most movies…

1:07:52Ben Carlson:should be 95 minutes or less. That would be my thing. Hey, listen, if you're a director, a producer, an actor, you come to do a movie at our studio, that's fine. Here's your constraint. 95 minutes or less. That's it. It's also cheaper to do a movie. Cut all the fat away. Yes. With you. So I watched Send Help on Hulu. Have you seen this one with Rachel McAdams? I loved it. Okay. I thought it was really good, but it was one of those movies that if it, I looked at it and it was like an hour and 52 minutes or something. And I felt like, it's just a little long for this kind of movie.

1:08:21Michael Batnick:Yeah.

1:08:21Ben Carlson:if they would have trimmed 15 minutes off of a movie it would have been fantastic

1:08:25Michael Batnick:you're right but you're quibbling but also I saw the movie I am quibbling I saw the movie in the theater and it rocked hard it was boy what

1:08:32Ben Carlson:just a weird weird movie but very like enjoyable it was it was bizarre

1:08:37Michael Batnick:if you don't like that movie you don't like movies

1:08:39Ben Carlson:that was a great

1:08:40Michael Batnick:that was a great time

1:08:41Ben Carlson:my wife is usually a fall asleep on the couch kind of person when we're watching stuff and she's like I'm staying up for this like I want to see the end of this I really want to know what happens it was uh it was very weird but in a, I guess, a delightful kind of way. All right. You talked about your friends and neighbors last week, how you're still into it. I watched the most recent one. They did a funeral episode. I love, this show is so good. It's too much damn time with kids, Ben.

1:09:01Michael Batnick:I have no time for TV anymore. I haven't seen past the first episode.

1:09:05Ben Carlson:I can't believe that it's still, I thought it would be a one season show and then it would get bad, but they did a funeral episode that was so realistic about what an actual funeral is and how it plays out and how awkward it is and dealing with your family and people saying the wrong stuff. And they nailed the funeral perfectly.

1:09:20Michael Batnick:Chris was telling me about this yesterday. He said, did you see the funeral scene yet? It's so good. Yes.

1:09:25Ben Carlson:I can't believe how good this show still is.

1:09:27Michael Batnick:You know, I agree with you. I thought it was a one and done. Isn't it weird or funny how we just like, oh yeah, we just watch TV shows on Apple now. Right.

1:09:37Ben Carlson:It is. I know. And then you look at it and they're like, oh, there's another actor in their own TV show or movie on Apple I never heard of?

1:09:42Michael Batnick:Cool. I watched the drama, an A24 movie.

1:09:47Ben Carlson:Okay. I was interested in this one.

1:09:49Michael Batnick:So the drama is by the same guy that did Dream Scenario. And the progression of the movies, in my opinion, was very similar in the sense that maybe the last third wasn't – I didn't love the last third in either of the movies.

1:10:02Ben Carlson:I never watched Dream Scenario.

1:10:03Michael Batnick:Okay, you should. At least it's worth it just for the first half. Okay. So the drama is a great premise. Robert Pattinson and Zendaya are getting married. and they are doing like a wine tasting with like their two best friends, you know, like prepping for the wedding in terms of like what they're going to, what wine they're going to serve. And one of them says to the group, hey, let's play a fun game. What's the worst thing you've ever done? And they all go around and Zendaya says something and the movie comes to a screeching halt where they're all like, what? And whatever, People might not love how it ends, but whatever.

1:10:44Michael Batnick:It was definitely…

1:10:46Ben Carlson:Oh, is that a theater movie for you or it's on streaming now?

1:10:49Michael Batnick:No, it's on… Oh, I rented it, but it'll be streaming soon. My type of movie. I enjoyed it. All right.

1:10:56Ben Carlson:I'm in.

1:10:57Michael Batnick:Okay.

1:10:58Ben Carlson:All right. That's it. I'm coming to New York tomorrow. I will be in town. I will be doing the Compounded Friends with you guys this week. Visit week three.

1:11:06Michael Batnick:So, Ben's on the Compounded Friends. We are having a party for our porterhouse launch. With the momentum strategy that is for Ritholt's Wealth Clients Only that we spoke about, that's going to be a lot of fun. A lot of people in town for that one. You've got your book. We've got...

1:11:22Ben Carlson:This is like the busiest month of my life. And it's great. I love it.

1:11:29Michael Batnick:We're releasing new stuff at the firm.

1:11:30Ben Carlson:I got a new book out. Please go buy it. I'm going to do some sort of giveaway and ask the compound. Sign copies if people want to watch. Oh, yeah, absolutely.

1:11:40Michael Batnick:I'm trying to remind myself that we will be sick again, metaphorically speaking. And, you know, things are good right now.

1:11:47Ben Carlson:That's what I'm trying to remind people. Like, the bad stuff will happen. It has to. Pretty good. Enjoy the good times while they last. That's right.

1:11:55Michael Batnick:All right. Animal Spirits at the compoundnews.com. Thank you so much for everybody for listening, for sending emails. Thank you to Duncan and the production team. We will see you next time.

1:12:09Bye.