$1 Million is the Worst Amount of Money (EP. 459)

Summary

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Episode Overview

Theme:
This episode of Animal Spirits, titled "$1 Million is the Worst Amount of Money," is a candid and wide-ranging discussion focusing on the psychology and challenges around wealth, especially as individuals transition from "average" to upper-middle-class status. Through stories from market news, personal anecdotes, listener emails, and pop culture, co-hosts Michael Batnick and Ben Carlson reflect on topics like changing market dynamics, the emotional rollercoaster of portfolio milestones (especially the $1M mark), lifestyle creep, generational investing attitudes, and the shifting meaning of wealth and happiness in America. The unique tone blends humor, realism, and the unmistakable camaraderie Michael and Ben are known for.

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Key Discussion Points & Insights

1. Market Recap & Psychology

• Reflecting on One Year Ago & Market Resilience

  • [01:29] Ben recalls the market crash during last year's spring break and rebounding right when he was dolphin-watching.

    "From the lows a year ago, today, the S&P is up 32%. The Qs are up 40%. Not bad." (Ben, 02:35)

  • They question whether the market has become numb to geopolitical shocks, reflecting a behavioral shift.

    "Is it as simple as the market says, we just don't care as much about geopolitics?" (Ben, 02:57)

• Geopolitical Shocks & Market Narratives

  • Michael references research on market psychology: last year's "capitulation" colors today's expectations for another big flush, but it hasn't materialized this time.

    "I do think there is something to that." (Michael, 03:14)

2. Stock Market Drivers: Mega Cap, Value & Counterbalances

• The Role of Mega Caps and the Rest of the Market

  • Michael discusses data showing that despite the MAG7 dropping, the S&P isn’t down as much as feared (05:09).

    "75% of the decline through the end of March was the Mag 7—just a wild development. Other than that, the market's really gone nowhere." (Michael, 05:09)

  • Ben: "The other 493 have essentially held up their side of the bargain." (Ben, 05:24)

• Value’s Big Quarter

  • Michael highlights that value stocks (Russell 3000 Value vs. Growth) outperformed by the largest margin since 2001, a trend almost nobody’s talking about (06:59).

    "That's the biggest spread since 2001. I don't really see many people talking about this at all." (Michael, 07:24)

  • Micron’s surprising role as a positive market driver is noted (08:53).

• What Will Move Markets From Here?

  • Discussion about whether new escalation or different types of shocks are needed for further downside, as the market seems hardened to current headlines ([09:24]–[10:41]).

    "The market's ability to be shocked by more of the same news...is not going to happen." (Michael, 09:52)

3. Generational Investing Attitudes

• Schwab ‘Stacks’ Data on Generational Mood

  • Ben and Michael discuss how Gen Z is far more bearish than Gen X or Boomers; possible reasons include tech preferences and traumatic economic events in formative years ([12:08]).

    "Young people are particularly bearish on the stock market, which makes sense considering the AI economic anxiety." (Ben, 12:57)

  • Ben notes from history: after crises, it's young investors who tend to give up on stocks, not older ones ([13:05]).

• Wealth, Happiness, and Moving Goalposts

  • Michael relays the Wall Street Journal story of Randy Schilling, who amassed $3 million in retirement but still sees himself as an "average Joe" ([14:12]).
  • Despite massive economic progress (fewer poor/near-poor Americans, all income strata seeing large inflation-adjusted gains), there’s a collective sense much of even the “upper middle class” feels unsatisfied ([17:09]).

    "These numbers are mind bogglingly good, don't you think?" (Ben, 17:37)

4. The “Upper Middle Class Trap” & Wealth Psychology

• Why Don’t the Upper Middle Class Feel Rich?

  • Quoting Majuli's “Upper Middle Class Trap”:

    "People are paying more and getting less. It's a financial arms race that doesn't make any sense." (quoted by Michael, 19:59)

  • Michael and Ben discuss how once a person crosses a financial milestone, “the consciousness doesn’t change” as much as expected—leading to perpetual dissatisfaction.

    "There's just more people with more money that maybe as a society are collectively feeling, huh, this isn't as great as I thought it would..." (Michael, 19:14)

  • The role of lifestyle creep: Michael argues the negative connotation is undeserved; increased spending as income rises is logical, not inherently problematic ([21:20]).

• Enjoying Money While You Can

  • Ben talks about seeing elderly people out to dinner:

    "I don't want to wait till I'm that age to enjoy my money... Why am I going to wait? What's the point of having a bigger nest egg later in life when I can't enjoy it as much?" (Ben, 22:44)

  • Michael concurs, referencing personal loss and the importance of savoring life ([22:44]).

5. Listener Email: “$1 Million is the Worst Amount of Money”

• [23:24] Michael and Ben read and dissect a listener email wrestling with the psychological pain points of reaching $1M (mostly in retirement accounts):
  1. Emotionally, swings in market value are much more jarring.
  2. Ongoing contributions feel less meaningful.
  3. $1M is not “real retirement money,” but you also can’t really voice your feelings to anyone.
• Notable quote:

  "This might be the single worst level of realistic wealth a normal person can occupy..." ([23:26] — Listener email read by Michael)

• Ben contextualizes: Just wait, with time, compounding turns $1M at age 40 into $4-5M without further savings.
• Both acknowledge that as portfolios get bigger, the pain from even small percentage drops grows, and people tend to get more conservative as a result ([25:24]).

  "You mentioned this...if your portfolio size is bigger and you see a bigger dollar loss on a smaller percentage decline, that can screw with you." (Ben, 25:24)

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Memorable Moments & Notable Quotes

| Timestamp | Speaker | Quote | |-----------|-----------------|----------------------------------------------------------------------------------------------| | 02:35 | Ben | "From the lows a year ago, today, the S&P is up 32%. The Qs are up 40%. Not bad." | | 05:09 | Michael | "75% of the decline through the end of March was the Mag 7—just a wild development." | | 07:24 | Michael | "That's the biggest spread since 2001...don't really see many people talking about this." | | 17:37 | Ben | "These numbers are mind bogglingly good, don't you think?" | | 19:14 | Michael | "Maybe as a society are collectively feeling, huh, this isn't as great as I thought it would." | | 21:20 | Michael | "Lifestyle creep is a negative phrase. I think it should be celebrated...That is what it's for." | | 22:44 | Ben | "I don't want to wait till I'm that age to enjoy my money...Why am I going to wait?" | | 23:26 | Listener (via Michael) | "This might be the single worst level of realistic wealth a normal person can occupy..." | | 25:24 | Ben | "If your portfolio size is bigger and you see a bigger dollar loss...that can screw with you."| | 41:12 | Ben | "If you own a home with a lot of equity, you don't get to complain. The new you...in a really, really bad situation." | | 48:47 | Ben | "Airbnb created this brand new thing...Their stock has done nothing since they went public. Absolutely nothing." |

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Other Highlights & Pop Culture

Gas Prices, Homeownership & Scarcity

• Discussion about the psychological impact of round number gas prices, inflation, and the true cost of filling up cars ([27:14]).
• Aging housing stock and rising repair costs—many homes are 50+ years old, with big future renovation needs ([37:26]).

Private Markets & Redemptions

• Redemptions are spiking in certain alternative asset funds, but inflows remain—though Michael questions if data is stale ([43:54-44:13]).
• Commentary on how new many of these alt asset strategies in retail wrappers are ([45:22]).

Lifestyle, Spending & Consumption

• Airbnb, travel, and how tech has transformed family vacations but not necessarily delivered hyper returns for the innovators themselves ([47:19]).

  "Airbnb created this brand new thing...Their stock has done nothing since they went public." (Ben, 48:47)

Recommendations & Media

• Michael and Ben discuss recent movie/TV experiences (Crime 101 film, Rooster & DTF miniseries, Super Mario), and the nostalgia of enjoying sports again through their kids ([53:02]–[60:55]).

  "Viewing it through their eyes has made my love of sports come back to me." (Ben, 60:35)

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Timestamps for Important Segments

• Market Bounce & Psychological Narratives......[01:29]–[04:00]
• MAG7, Value, Market Drivers....................[05:09]–[09:24]
• Generational Investing Outlooks..............[12:08]–[14:05]
• The Upper Middle Class Trap..................[17:09]–[22:44]
• Listener Email: $1M is the Worst Amount......[23:24]–[26:07]
• Gas Prices & Homeownership Realities.........[27:14]–[41:46]
• Private Market Fund Flows....................[43:54]–[45:22]
• Airbnb, Tech, and Economic Value.............[47:19]–[49:16]
• Media, Movies, Family, Sports................[53:02]–[62:10]

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Summary in the Show’s Own Tone

Animal Spirits Episode 459 is classic Michael-and-Ben: dry wit, sharp market analysis, and a healthy dose of personal reflection on wealth, investing, and happiness. They dissect what it means to reach milestone net worths, how much the definition of "rich" has and hasn't changed, and why so many upper-middle-class Americans feel both grateful and oddly dissatisfied. The conclusion? Money is complex, progress is real, the goalposts always move—and it's totally normal to feel weird about it all, no matter where you sit on the wealth ladder.

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For more, visit: Animal Spirits at The Compound

Transcript

[Michael Batnik]

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[Ben Carlson]

This episode is sponsored by Clearbridge Investments. Stocks whose businesses are run on real assets were making a comeback before conflict broke out in the Middle east and can provide a predictable source of cash flows as volatility increases. Position your investment portfolio for wider equity participation with fundamentally driven Clearbridge active equity strategies. Clearbridge, a Franklin Templeton company. Go to clearbridge.com to learn more.

[Podcast Host/Intro Narrator]

Welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnik 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.

[Ben Carlson]

Welcome to Animal Spirits with Michael and Ben. Michael, One year ago today, pretty much I was on spring break. The stock market was crashing. The S and p was down 19% from the highs. The Q's were down 22% at that point. Then I went on a dolphin cruise. The stock market rose 9.5% in a day. I think I got a slack cruise. A cruise where you go look at dolphins. You go on a boat and you ride around and you see dolphins. Surprisingly, let me give you a little factoid here. Dolphins don't like just roam around the ocean willy nilly. They stay within like a mile of where their house is or whatever, whatever you call it. They don't really leave the area that they're part of.

[Michael Batnik]

What's the interest rate for dolphins today? The mortgage rate?

[Ben Carlson]

That's a good question from those lows.

[Michael Batnik]

Is that a true story? Dolphins stayed stay to their lane.

[Ben Carlson]

That's what I learned on my dolphin cruise, that they don't really leave their little area where they live. So that's why when you go on a dolphin cruise, the guys know they're going to be there.

[Michael Batnik]

Well then how would you explain dolphins in Point Lookout, Long Island? Because this is definitely not where their roots are from.

[Ben Carlson]

But they are. You just don't know it. You don't look enough. That's probably a weather pattern thing. All right. From the lows a year ago, today, the S and p is up 32%. The QS are up 40%. Not bad. How much of that situation is coloring what's happening in the equity markets today? Or is that too easy of a narrative?

[Michael Batnik]

What do you mean?

[Ben Carlson]

I think just the fact that the geopolitics last year sent markets crashing. This year, they're not. Is it as simple as the market says? We just don't care as much about geopolitics. Is there any psychology from last year that's coloring this year, or is that too cute?

[Michael Batnik]

Well, I was reading a report from Duality Research and he made a good point that you're. That you're talking about where it's like people are waiting for the flush. And I think there's a subset of market commentators that say it's not over until you see capitulation. Now, that happens with every pullback. The same people are always waiting for capitulation. But particularly with the fresh memories of geopolitical uncertainty last year ending with a flush and a capitulation and the lack thereof this year. I do think there is something to that. Yes.

[Ben Carlson]

Okay. I. I think it. I think it makes a lot of sense. Makes sense that that's psychology behind it. Does it make sense that the market's not downward? I don't know. I guess we'll see how long this lasts for.

[Michael Batnik]

Ben, I wanna. I wanna give us a plug and you a plug. So in my inbox seven minutes ago, we're recording Tuesday morning, 9:07 on the east Coast, I got an email from exhibit A. And you've heard us talk about exhibit A here before. It is a software company for financial advisors, a communications tool. And we just put out a new feature where Ben is ghost writing a monthly report for advisors that are subscribed to the service. The website is exhibit A4advice.com if you want to learn more. And I just downloaded it, and I gotta tell you, man, this looks like a million bucks. And obviously I'm biased, but that doesn't mean it's not true. So one of the charts that's in here is a chart that. Did Josh and I use this or you. I can't remember. It's. We're showing the S P 500 at the start of the year 6846 and the S P 500 as of today. And as of today was March 31st, 6529. And all of this is branded in your colors. Okay, so in between those two bars, we have what is driving the downward move in the index.

[Ben Carlson]

Yeah, it's the attribution, right?

[Michael Batnik]

Yes, that's right. It's basically all the Mag 7. Microsoft took 94 points off. Google took 37 points off. Apple 29 points off. 75% of the decline through the end of March. Was the Mag 7 just a wild development? Other than that, the market's really gone nowhere.

[Ben Carlson]

Yeah. So the other 493 have essentially held up their side of the bargain. But it's crazy that a company like Microsoft could knock 100 points off the S and P. That's kind of nuts. But the thing is, everyone who was worried about concentration, they were looking at it in a vacuum. If the MAG7 fall, this market is toast. And obviously the market is in a little minor correction. But they didn't think of the fact that there could be a counterbalance the other way of these other industries and stocks.

[Michael Batnik]

You're 100% right. In 2025, if you pulled the average investor and said, do you think it's likely or possible or however you want to word it that the Mag 7 can fall 15%, whatever, they're down and the S&P493 be positive to up, would it be less than 10%, say. Yeah, that seems plausible. I. I probably wouldn't have. Certainly would not have been the base case.

[Ben Carlson]

Yeah, no, it's surprising. And also. Yeah.

[Michael Batnik]

Because everybody's like, oh, concentration when they go, what's left?

[Ben Carlson]

Yes. And what's left actually has, has worked. One more plug for the exhibit A thing. Chart kid. Matt picks all the charts for me. I just do the writing and they format it and the wood they form the report looks really, really nice too. They did a great job.

[Michael Batnik]

So I believe that. I believe that the current narrative, which is the war is dominating all the headlines, market and otherwise. Right. Had we had the war not happened now who's. Who's to say, you know, what the market might be doing, but whatever. Okay.

[Ben Carlson]

My point is we'd still be talking about AI, let's be honest.

[Michael Batnik]

Well, yes, but one thing that has not been discussed almost anywhere is the fact that the Russell 3000 value index outperformed the Russell 3000 growth index by 11.7% in the first quarter. That's the biggest spread since 2001.

[Ben Carlson]

Whoa.

[Michael Batnik]

25 years. And I don't really see many people Talking about this at all.

[Ben Carlson]

Yeah. The Wall Street Journal had a piece in this. They show the Russell 1000. 1000 value, the same thing, it's 11 or 12%. Crushing the Russell growth. So Russell 1000 value is up two and a half percent. Russell 1000 growth is down 9%. Pretty crazy. So the S&P down 4% is again, not that bad, all things considered. So value stocks are actually again, the counterbalance.

[Michael Batnik]

So Matt made a chart for me that I'm going to use for. What are your thoughts tonight? The top, because so I said if, if the MAG7, if these stocks took $2 trillion out of the S and P and the market's not down that much, what's driving the other side of the bus? Like, what's holding the market up? And by far the biggest contributor to the s and P500 is Exxon. 30 base driving, 30 basis points, and then it's Walmart. And number three, this is wild because this is not a particularly huge stock. Although I guess the market cap is probably 200 billion at this point. I'm guessing maybe more. The company that I'm talking about is Micron. So Micron, which is up, I don't need to guess. Let me just pull up my charts right here real quick. Okay. Holy shit. $426 billion. So just off by hat. By a double. So Mike, Mike, Micron doubled in the last year. Well, dude, Micron was a $200 billion stock way back in October,

[Ben Carlson]

so less than a year.

[Michael Batnik]

So Micron is up, Is that right? Okay, so it's off the highs. Micron is up 30% year to date, but it was up 60% as of this writing.

[Ben Carlson]

JP Morgan had this chart in the guide to the markets that said the top 50 performing s and P companies by sector and energy has 17 of them, but tech still has 14. So as bad as the Mag 7 is doing, there are still other tech companies that are doing okay this year, which is kind of surprising, I guess. There's just so many of them, they have to be included in there somewhere.

[Michael Batnik]

I know this is short term thinking, but whatever. Does there need to be another, like, oh boy, here we go again. For the market to take out the recent lows, or could we just, could we just drift lower?

[Ben Carlson]

Because whatever this, See, it feels like a death by a thousand cuts type of scenario. What else could. I mean, oil is already shot up. Does it just. Oil need to just keep rising little bit by little every day? What's going to cause oil to spike 20% in a day? Again, we already had that.

[Michael Batnik]

Right. Like the market's ability to be shocked by more of the same news. I think is not going to happen. There needs to be something different now. Maybe, maybe further escalation would do it. Probably because I think the market at this point is pretty, is, is pretty optimistic that the war will be over sooner than later.

[Ben Carlson]

I feel like we keep saying that too but I guess it's just the longer this goes and maybe it is earnings season starts happening. Is it already too late for companies to even have an earnings impact from this? Probably. Right. It's not like higher gas prices are going to impact earnings already in a meaningful way.

[Michael Batnik]

Well but that doesn't matter because it's always, you know, it's about outlook forward looking.

[Ben Carlson]

Yeah.

[Michael Batnik]

Yeah. Nobody cares about what they're going to report in terms of impact by the war. Okay.

[Ben Carlson]

I think the sentiment is just why won't you go down? Dammit. The stock market. That's it still.

[Michael Batnik]

Yeah, I mean I hear what you're saying. I feel like we keep talking past each other. Nobody's like wanting that. I think people are just wondering that.

[Ben Carlson]

Yes. But I think it just surprised by it.

[Michael Batnik]

Yes, yes. I don't think anybody's rooting for that. Well certainly some more.

[Ben Carlson]

Maybe it's because maybe it's one of those situations where yes, the initial shock of the war was a risk no one saw coming. Now that risk is out in the open and people are able to deal with it and understand what's happening even if we don't know how long. All the unknowns involved in it. There's no more left field with this. I don't know. I give understanding the stock market just gets harder and harder. I think it doesn't, the longer you do this it doesn't get easier to understand. It's not like ah, I figured it out.

[Michael Batnik]

I'm not taking the other side just for the other side's sake. But I, I, I think that this is pretty straightforward why the stock market is down more like earnings estimates keep going up. Why are we that that that's it.

[Ben Carlson]

I think you're right and it's just that the gas prices don't have as big of impact as they used to. I don't know.

[Michael Batnik]

That's, that's it. We don't need to overthink this. I understand the headlines like yes, you would think that the market is down more on you know, it's horrific human news.

[Ben Carlson]

But okay, so this is another situation where I, I guess AI still matters more all the AI spend and the earnings are still growing and who cares? Yeah, I can buy that.

[Michael Batnik]

That's it.

[Ben Carlson]

All right.

[Michael Batnik]

All right. Looking at, brought this from Schwab. They put out this monthly report. We talk about what are their different cohorts.

[Ben Carlson]

What's it called? Stack Stacks or T or stacks.

[Michael Batnik]

What do I call it?

[Ben Carlson]

You?

[Michael Batnik]

I just called it stacks. I call it stacks. What does it stand? I know we've done this before. I can't remember. Who cares? All right. Looking at broader trends among clients, long term bullish sentiment among members of Gen x born between 1965 and 1980 fell slightly in March. Negative sentiment in Gen z born between 1997 and 2012 declined even more, widening the gap between those groups as Gen Z remained the most bearish and Gen X the most bullish. Millennials and boomers also. Okay, so young people particularly bearish on the stock market, which makes sense considering the AI economic anxiety. But also, let's be honest, the stocks that these people are likely to buy, all of the, the fun stocks, they're getting destroyed.

[Ben Carlson]

So couldn't you also say that the older generations have just lived through more of this stuff and don't freak out as much as the younger generations?

[Michael Batnik]

I don't know if that's true.

[Ben Carlson]

I wrote about this in my book and remember with the death of Equity story, infamous story from BusinessWeek, they interviewed all these people for the book. And the people giving up on stocks after 1970s were mainly young people. Old people held tight and kept buying. Young people were like, all right, I'm done. No way. I don't, I've seen what happens. This is a bad decade. I'm out of stocks. I think there's something to that where young people are give up easier. It was same. Remember millennials said, I'm done with the stock market after 2008. No way. I'm going. I saw what happened to my parents and my portfolio. No way.

[Michael Batnik]

So I, I have to think more about this. But my knee jerk reaction would be the young people today and the young people back then are very different, have very different attitudes towards investing based on available technology.

[Ben Carlson]

Number two, emotions are still emotions, though.

[Michael Batnik]

That's true. But the older people have a lot more to lose. Right? Like if, if you have a $1.7 million portfolio versus a I'm just getting started portfolio, those are, those are, those are different things. But yeah, maybe, I don't know.

[Ben Carlson]

You know who has a lot to lose? Randy Schilling from Corpus Christi, Texas. Let's talk about my favorite stories there

[Michael Batnik]

Was a story in the Journal. More Americans are breaking to the upper middle class. And for the first decade of Randy's career, he lived in an apartment, worried about paying for vacations. And then in his early 30s, he landed a job at a chemical plant that paid about 15% more, plus bonuses. He bought a house on a golf course in Houston. Promotions and pay raises followed. And boom. Before he, before he even realized it, he saved more than $3 million for retirement. Joe, Randy said, I view myself as an average Joe. I don't have to have a fancy car. I don't have to have the greatest TV. Randy's 58, but when I want something, I go get it. So this is, this is the story. There's a lot of Randy's out there.

[Ben Carlson]

So $3 million in just retirement. People always ask, like, does that money count include home equity? That's always the. This guy is just $3 million in portfolio. That's. That put you in the top 5%. I have a message for Randy. Go buy the TV, Randy. TVs are very cheap. They get cheaper all the time. Go get the biggest TV you can find.

[Michael Batnik]

So I was, I was, I was in, I was in Walmart last week and, or this week, I should say. 65 inch TV, I think I saw for like 300 something dollars.

[Ben Carlson]

It's amazing. Every year they get cheaper and bigger and better.

[Michael Batnik]

I am, I am still flabbergasted that there are DVDs, new DVDs, like Five Nights at Freddy's, like, or whatever. I mean, whatever's new. There's. Who's buying that? Obviously somebody is.

[Ben Carlson]

So the technology that still exists. That boggles my mind. We got a rental car here and couldn't figure out the carplay. It wouldn't work. It just the, it kept going in and out. So we had to put FM radio on. I can't believe FM radio still exists. As someone who is exclusively carplay in all my vehicles, podcasts, audiobooks, music. The fact that FM radio still. And trying to explain FM radio to my kids, my. Go to the next song. We can't go to the next song. This is it. You have to wait for the next song. Why is someone talking?

[Michael Batnik]

I agree with you. And here's, I guess here's like an analogy for that. Analogy might be the wrong word. But oftentimes when I'm driving my wife and we're looking at small, you know, small stores on the, on the, on the main road, she'll always say, like, how are these companies still in business? I think or how are they making any money? And my answer is just because there is a store on the side of the road that is open doesn't mean the person behind it is killing it.

[Ben Carlson]

Right.

[Michael Batnik]

Like I'm sure most of these business are not very, very profitable. And same thing with fm. Like obviously it's a, it's a shell of what it used to be and it's, you know, ice cube that would probably melt forever.

[Ben Carlson]

All right, let's get back to the numbers here in this story. So the whole, the whole story here is that more people are moving from the middle class to the upper middle class. So they say. And they say in 2024, 19% of Americans were considered poor or near poor, down from 30% in 1979. That's an amazing statistic.

[Michael Batnik]

Pretty good.

[Ben Carlson]

That's a huge decrease. And they also show, adjusted for inflation, the upper income class has gone from 144,000 in 1970 to 256,000 today. 70% increase. There's been a 60% increase in middle class from 66 grand to 106 grand. And even the lower income has seen a 55% increase. And this is again adjusted for inflation. Okay. These numbers are mind bogglingly good, don't you think?

[Michael Batnik]

Yeah, ridiculously good.

[Ben Carlson]

And they interview a few people and this is interesting. The people who are on now, these newly upper middle class rich, whatever you want to call it, they interviewed one guy who said instead of worrying about paying for groceries, now he worries to make about his children not becoming spoiled in a town where some teens drive luxury cars to high school. And I know you and I have talked about this ad nauseam. I don't think it's a mystery anymore why people like this are unhappy just because there's more people than.

[Michael Batnik]

Hold on. Randy seems pretty happy.

[Ben Carlson]

Yeah, Randy's doing okay. But there's always the stories about why do these people still feel middle class or why do they not feel rich. And when they are by any measure in human history, some of the richest people ever, ever hear it's because last week we talked about how there's these super rich people. And then I think just the fact that there are more luxuries today that exist. Look, I, I feel like I'm turning, slowly turning into a boomer. We were out to dinner last night. We talked about how the vacations we give our kids are 10 times better than the vacations that we got as kids.

[Michael Batnik]

Correct.

[Ben Carlson]

And I, that's just a sign of progress. So you kind of say, oh, this we didn't have that. But the fact that they do, the next generation now does have that. Not everyone does, obviously is a sign of progress. I think all these numbers are just a sign of progress and that's why people don't feel as rich as they objectively are.

[Michael Batnik]

I also think there's a, there's like this thing where once you have a certain number, whether it's income, net worth, retirement, assets, I think you think you're supposed to feel different.

[Ben Carlson]

Yes.

[Michael Batnik]

And then you just.

[Ben Carlson]

Not as satisfying as trying to get the goal itself.

[Michael Batnik]

Yeah. So there's just more people with more money that maybe as a society are collectively feeling, huh, this isn't as great as I thought it would. And there's also another side of this. There's, this is like multi layered. There's too many of these people. So it's become less special and it's a great thing. I mean, obviously think about, think about

[Ben Carlson]

Randy in his thing saying, I don't drive a fancy car. And then the other guy is saying, there's teenagers who drive luxury vehicles. Imagine being a person who saved a ton of money and you drive a Honda and you see a teenager driving Mercedes and you go, what the. Are you kidding me?

[Michael Batnik]

So I think it's less about that, although that certainly is a part of it. I think it's just like the cost of having money is expensive.

[Ben Carlson]

Yeah. The goalpost move.

[Michael Batnik]

You feel like, you feel like, wait a minute, I've got X amount of dollars and it doesn't feel like that. And I don't feel free. So Majuli wrote over the last year, he wrote a post called the Upper Middle Class Trap. Over the last year, I've come to an unsettling realization. The upper middle class is caught in a trap and many of them don't realize it. Homes are smaller even as prices rise. Lending to reported that from 2014 to 2024, the average size of new single family homes shrunk by 11% even as a price per square foot surge by 74%. All of these trends point toward the same thing. People are paying more and getting less. This is what I call the upper middle class trap. Right now, the upper middle class is in a fierce competition for a marginal improvement in lifestyle. They're working more and relaxing less to purchase products and services with clearly declining quality. It's a financial arms race that doesn't make any sense. I think it makes perfect sense. But I get that he's doing that. You know, he's, he's writing.

[Ben Carlson]

So yes, it's It's a human nature thing. And, and honestly I've come to the realization that like people talk about lifestyle creep in and goal posts moving. I actually think that's a healthy thing if you have a good relationship with it. Yeah, but there's a lot of people who don't have a good relationship with it. And to your point, reaching that, that whatever the milestone is that you thought you were gonna get the income level, the net worth level, the house size, the car, whatever it is, and you get it and you go, then you get used to it and you go, ah, wow. Okay.

[Michael Batnik]

And then, and then you're like, wait a minute, there's. Where'd all the money go? How come there's not more money in my account than I thought there? Because, so I, I also. Can we, can we come up with a, a better phrase? And lifesty creep is a negative word. Lifestyle creep is a negative phrase. I think it should be celebrated. You're making more money and providing for your family. Now if you get into trouble and you're over leveraged, that's a different story. That's not lifestyle creep. That's being financially irresponsible. But you're supposed to make more money and spend more money like that is. You're right. That's, Isn't that what it's for? Are you supposed to afford your money? What's the point of that?

[Ben Carlson]

And my, my thinking has changed completely on this, I'd say in the last like five years. But I, I was walking around Florida the other day and I saw two old couples leaving dinner. Okay. And you know, some old people where they, they just sort of, they have the hunch walk.

[Michael Batnik]

Yeah.

[Ben Carlson]

And they like, okay, something's wrong with their back. And the two, two older gentlemen were both heading the hunch walk. And the, the women were kind of slowly. And they look like they were just in declining health. And I see that and I think I don't want to wait till I'm that age to enjoy my money. I texted you, I said I'm not going to wait. That's not. You don't want to be at that stage where you can't enjoy it anymore. And I think that sort of idea too has taken hold of a lot of people that, why am I going to wait? What's the point of having a bigger nest egg later in life when I can't enjoy it as much?

[Michael Batnik]

Yeah. That's foundational for my thinking. My mom died when she was 56 years old. Not that she had any money to spend but life is short. Enjoy it. All right, we got a. We got an email with the subject line, worst amount of wealth. There is a scene in succession. Greg is excited to get $5 million. Tom and Connor proceed to tell him that's the worst amount of money.

[Ben Carlson]

One of the great scenes in succession. History, for sure.

[Michael Batnik]

Yeah.

[Ben Carlson]

I love that.

[Michael Batnik]

What's the phrase? 5 million is. Maybe it's just 5 million is worse. All right, whatever. Poorest rich guy, tallest dwarf, et cetera. Oh, 5 million is a nightmare. That's what it was. I recently turned 40 and my wife and I crossed $1 million in investable assets.

[Ben Carlson]

Congratulations.

[Michael Batnik]

Almost entirely in retirement accounts. And I have to tell you, this might be the single worst level of realistic wealth a normal person can occupy. Let me make my case now. This is. This is like half tongue in cheek, okay? This person's not like, you know, this person's not an asshole.

[Ben Carlson]

It's a little hyperbole.

[Michael Batnik]

Yeah. Small market downturns erase an entire year of your life. My wife and I were down about 6% in March. You know what 6% of $1 million is? My wife's entire teaching salary gone in a month. This is obviously not true. I mean, right? Like, it's compared. Like, it's like stock versus flow type of thing. This is. This is not the way to think about your portfolio. But I understand what he's saying. You can't contribute enough in a year to matter. Roth IRA limit this year is $7,000 on a $1 million portfolio. That's less than a 1% contribution. Even when I include my 401K, Y, 403B, Roth, et cetera, we're still talking about 5% annual contribution. That's a good thing. That's compounding, bro. That means that your portfolio has outstripped your ability or outgained your ability to contribute meaningfully to. Now this is the.

[Ben Carlson]

This is the midlife portfolio crisis here.

[Michael Batnik]

Yeah, these are. These are champagne problems. You still can't retire. Not even close. A million dollars sounds like retirement money. It's not retirement money. Not even the same zip code as retirement money. The 4% rule says I could pull 40k year before taxes. That's nothing. I'm yelling at him, joking, smacking him in the back of the head. It's like, dude, you're 40. What are you talking about retirement for? What is this portfolio be worth when you're 60?

[Ben Carlson]

Right?

[Michael Batnik]

And then lastly, you can't complain to anyone. This is the coolest part. I can't tell my friends I can't tell my family the moment the number leaves my mouth. The conversation is over. No one cares. So instead I'm emailing a podcast at 4:45 on a Friday. Look like a completely normal person. Anyway, I understand this. We all get what this person's saying. He's not genuinely looking for sympathy. But you're 40. Like what are you talking about?

[Ben Carlson]

Yeah. You're not going to spend it yet. And guess his portfolio in 20 to 25 years with a 7% annual return. If I'm doing my Buffett back the head, he's going to be worth like 4, $4.5 million. If he just doesn't do anything to his money, he's going to be worth way more.

[Michael Batnik]

So congrats. Just wait 20 years. Then you'll really be in the nightmare scenario. $5 million.

[Ben Carlson]

You mentioned this. I think there is something to the fact that if your portfolio size is bigger and you see a bigger dollar loss on a smaller percentage decline, that can screw with you. And this is why people slowly but surely get more defensive and conservative in their portfolios over time. Because they don't want to see that anymore. They already won the game anyway. That's a fair. Some people are going to go, oh, boo hoo. But I think that's a fair email.

[Michael Batnik]

Yeah, listen, all this is fair. We're all people. You're allowed to feel how you feel. It's not like this person's got $19 million and he's complaining. Right. This is. This is a very common feeling.

[Ben Carlson]

Yes. Let's focus all of our hate on the super wealthy. The 0.1%.

[Michael Batnik]

Correct.

[Ben Carlson]

Those jerks.

[Michael Batnik]

This is surprising. The Bloomberg from Cameron Dawson via Daily Chartbook. The Bloomberg Economic Surprise Index has jumped higher in recent weeks thanks to data. Surprising to the upside.

[Ben Carlson]

I gotta be honest, I don't know what this thing measures. It looks good. I don't know what it measures.

[Michael Batnik]

I believe it measures surprises.

[Ben Carlson]

It's the name of an old ship.

[Michael Batnik]

I don't know. I don't know how it's quantified.

[Ben Carlson]

Right. But it's different, obviously.

[Michael Batnik]

Yeah. Like you beat the number or you miss.

[Ben Carlson]

Yeah.

[Michael Batnik]

Goes up in good times, down in bad times. Fair enough.

[Ben Carlson]

Yes. All right, let's get back to oil. CBS News calculated how much it costs to fill up a gas tank of a different size or style of car. So a Toyota RAV4 is like $60 to fill up. Toyota Camry is 50 ish. F150 is almost 150 bucks to fill up. And it probably doesn't matter for most people. Is that fair? Like, economically?

[Michael Batnik]

I don't know when we start saying most people.

[Ben Carlson]

No, no, I'm saying. I'm saying again, for the economy. I just don't think if you're in the bottom 20 or 30 or 40%. Yeah, this is. It hurts. It's painful. But I guess you see a number like 150 bucks to fill up a car and you go, jeez, unbelievable. When I first started driving in the late 90s and gas was like 95 cents a gallon, I would put $5 in my car. It's funny, because in my high school, brain would be like, I can't fill it up. All the way. Too much money. I'll just put five bucks in.

[Michael Batnik]

Nobody filled their tank up in high school.

[Ben Carlson]

No. I would put $5 a week in my Honda Accord and it would last me all week. Then I put $5 in the next week. So $150 seems like an insane amount of money. But I think even if you Inflation adjusted it, $150 to fill up a huge truck is probably not that much historically. Even though it seems like an outlandish

[Michael Batnik]

number, it does seem like an outlandish number. Look at Mike Antonelli, happiest man in the world, talking a lot about how the people online might be upset, might not be that happy. Look at this guy. He just texted us. Look at that smile. Where is he? I can't tell. Where do you think Michael Antonelli is?

[Ben Carlson]

Oh, it's gotta be Disneyland. Happiest place on Earth.

[Michael Batnik]

Happiest man on Earth and the happiest place on earth.

[Ben Carlson]

Okay, so the Wall Street Journal decided to look at the counter. So their whole thing that everyone's been saying is, listen, inflation adjusted prices for gas aren't that bad. There's higher fuel efficiency in cars. That's true. Like your Jeep ev, does it still work? The electric part of it?

[Michael Batnik]

Don't get me started.

[Ben Carlson]

Okay, My wife asked about getting a hybrid for her next vehicle, and I thought, I. I don't know.

[Michael Batnik]

Oh, wait, wait, hold on. Actually, you. You. This is an interesting point. So I've got a month left with my car. I almost died on the highway again last week. So Robin's. Robin's Audi, which is a car that I was $25,000 underwater on for listeners that weren't with us back then. I. I took it this morning for an oil change. I didn't pay for the prepackaged service where everything is free because I'm already paying an arm and a Leg for this piece of car, $390 plus tax for an oil change. And I said, hold on, that sounds like a lot.

[Ben Carlson]

He just, welcome, Lord, $390.

[Michael Batnik]

He said, It's a 3.0 engine. I said, I so what does that even mean? So it's more, more oil. I'm like, people are the worst.

[Ben Carlson]

Okay, take it to a valve way next time.

[Michael Batnik]

So anyhow, my, so yeah, my Jeep did the, did the Jeep death wobble thing on the highway the other day. So Robin, Robin has the car today and she's taking the boys to basketball. And I said, don't drive over 60 on the highway because you'll get the death wobble. And she looked at me, she goes, this is. What are we doing here anyhow? So I've had multiple people ask me about the Wrangler because it's a great looking car. You've got the, the electric roof. Like it's a cool looking car, right? And it's, it's, it's affordable. I think I pay, I don't know how much the new one is, but I pay like 600 something for my car, which is a steal, right?

[Ben Carlson]

Jeeps, look, are one of the coolest looking cars that there is and they will never go out of style.

[Michael Batnik]

Here's the problem, Ben. Anytime somebody asks me how I like the car, you know, I, I fly off the handles. But I found myself in an awkward position multiple times where a couple months later I see them with the car. So here's my new move. Yeah, car looks great, doesn't really drive that. Awesome. And they just leave it at that. They can make their own decision, right?

[Ben Carlson]

Yeah, true. So the Journal says the biggest difference is, yeah, all that stuff is true. Inflation adjusted energy is a small part of household budgets, but it's the speed of the increase that gets to psychology. And so they said gas is a dollar and five cents higher than it was five weeks earlier, which is one of the fastest increases we've had in a long time. And they said that they did a study. Economists have found that round number prices for retail items have salience with consumers. A 2010 Brookings Institute paper found that people were unhappier on days when gasoline rose above $354 a gallon. I do think there is some psychological line in the sand of $4 a gallon, $5 a gallon, that could have like some weird consumer sentiment impact. Even if it doesn't really hurt household budgets as much as you would think.

[Michael Batnik]

It's just another thing. It's just Another thing that's going up in price.

[Ben Carlson]

I guess so. But it's the one thing that the prices are everywhere. I think that's the. That's the difference. Maybe gas prices don't matter. Is that what you're saying?

[Michael Batnik]

That's not what I'm saying.

[Ben Carlson]

Okay, like what other price should we put on a big billboard like that so everyone knows what it is all the time? The price is genuine.

[Michael Batnik]

The S&P 500. Everybody would be much happier.

[Ben Carlson]

That would be kind of cool if at the gas station you saw the Dow and the S and P and the NASDAQ right below gas prices.

[Michael Batnik]

Here's what should be accompanied by the gas price. If you put $10,000 into the S&P 500 in 2010, here's what it would be worth today. And yes, I'm cherry picking.

[Ben Carlson]

True. Okay. Torren Slack says that AI is having no signs of impact on youth unemployment rate.

[Michael Batnik]

Well, Tor Slock is wrong. I don't know.

[Ben Carlson]

Bottom line is. Listen, the bottom line is there's no sign that AI is increasing unemployment among younger workers. And there's also no sign that young people or recent college graduates are having a harder time finding jobs at the moment other than demographics. So he should put these charts in here. And he shows the unemployment rate 16 years and plus or 20 to 24. And you can see that there's not a lot of movement there outside of like the regular unemployment rate. And then he also shows among college graduates 22 to 27, it's increased a little for men or it's increased a little for females, but it's fallen for men and they're kind of at the same place essentially. So you could say this is cherry picking. There's other data that supports this. I think this data, I still think the AI impact mixed with the COVID impact, that stuff we're still dealing with. I think it's still too early to see the AI impact of the labor market. I kind of agree with him.

[Michael Batnik]

Oh, you agree with him?

[Ben Carlson]

I agree with him.

[Michael Batnik]

I just reject this. How many stories are we hearing about young people and the difficulties with getting a job? Maybe unemployment rate doesn't capture the numbers. Right. I don't buy this.

[Ben Carlson]

But you're talking about anecdotes. He's talking data.

[Michael Batnik]

I don't know that the unemployment. I'm saying I don't know that unemployment rate is the right data to be looking at.

[Ben Carlson]

Isn't that the best labor market indicator we have?

[Michael Batnik]

I don't know.

[Ben Carlson]

You've been going to the war with data lately.

[Michael Batnik]

What about hiring? What about hiring rates?

[Ben Carlson]

But doesn't the unemployment rate takes that into account because it's people looking for jobs?

[Michael Batnik]

I don't know about that. Well, if you believe the government data.

[Ben Carlson]

All right, you're dabbling in conspiracy theories lately. I. I kind of like it. You know, go for it.

[Michael Batnik]

I think this is an anti conspiracy theory. I think this is complete horseshit. Anybody with a brain understands that companies are less eager to hire young people. I don't care what the unemployment rate is today. Now, if he's saying. If he's saying that. So maybe I'm projecting on him saying that AI is not having an impact and it's not going to in the foreseeable future. He's not saying that, but that's how I'm taking it. All right, well, anyway, what's the point of this chart? It's like, all right, so nothing to worry about, I guess. Like, why post this?

[Ben Carlson]

The point. I think the point is that a lot of people think the impact should be happening now, and it's not happening yet.

[Michael Batnik]

Okay, well, then in that case, fair enough. All right, here's a chart that blew my face off. David Senra had the founder of Door Dash on the show. I haven't listened to it yet. And there. There's a chart of US Food delivery market share by consumer spend percentage. And Door Dash just destroyed grubhub. I don't know the dynamics or the economics or the incentives or the technology or whatever. Doesn't. What? I don't. I don't know, but DoorDash.

[Ben Carlson]

Get it?

[Michael Batnik]

Either DoorDash ate Grubhub's lunch. Get it?

[Ben Carlson]

So Grubhub went from 70% of food delivery in 2016 to 10%. That's insane. So this. This feels like an Uber Eats is just kind of flatline. I actually use both GrubHub and DoorDash I don't have because I think I get a credit card deal on one of them and an Amazon deal on another one. So I don't really have. I don't. It doesn't really. It's. It's the same to me. I don't notice a difference when I use one or the other. Maybe it's. Maybe DoorDash has done a better job of partnering with restaurants. Like, if you order Chipotle, their delivery, they partner with DoorDash. Or if you go to rest, so maybe that's where they've done.

[Michael Batnik]

Grubhub used to be public. What happened to it?

[Ben Carlson]

I Don't know. So I have a conspiracy theory I want to run by you. Speaking of doordash. So on vacation, kids have to have a lot of sunscreen. We put sunscreen on my little daughter. She has very fair skin. Like five times yesterday she still got burned. I think that spray sunscreen is either the doordash of sunscreens or it's a total conspiracy theory. And it doesn't work because you, you spray like one bottle in a day. Essentially. I don't think it works. I think spray sunscreen is a racket. Thoughts? I think it's, it's, it makes you, it's easier to do because you don't have to like lather up and put it all over the kids and stuff. But it doesn't work. It works 25% as, as well as putting lotion on a kid for something.

[Michael Batnik]

So Grubhub burned $7 billion in equity. Sold for $650 million in 2025. Okay. Yeah, it was, it was, yeah. Stock fell bottom. The sale to wonder food delivery startup. I don't know. I don't think sunscreen is a, is a, is a. I think.

[Ben Carlson]

Well, your guy who puts a lot of sunscreen on because you have a bald head. So you don't want to get. So do you use, would you use spray on your head or do you rub it in?

[Michael Batnik]

Well, I wear hats.

[Ben Carlson]

That's true. But I see when we go places that are warm, you put a lot of sunscreen in your head for good reason.

[Michael Batnik]

Oh, you got it.

[Ben Carlson]

Because you don't want to. Yeah, yeah.

[Michael Batnik]

Sunscreen, sunscreen works. Nice try though.

[Ben Carlson]

No spray sunscreen. The spray stuff.

[Michael Batnik]

The spray stuff.

[Ben Carlson]

I think it's a racket. The spray bottles because. And it's gone immediately. The other stuff everyone has in their medicine cabinet, a bottle of sunscreen lotion that's like 13 years old because that's of last forever. Okay. From the Wall street journal. The typical US home is 44 years old and needs tons of work. So they break down the age of America's homes and they break them down by 14 years or less and then by 10 year increments from there. And something like 30 million homes are 55 years or older, which is kind of insane. There's only 10%, 12% of homes that are 14 years or less. So obviously we're not building a lot of new homes and they're just saying in the years ahead there's going to be a ton of work that's going to. Remember the email we got wasn't it? Just last week the person said, I bought a new house and all I did was put a ton of money into it. There's going to be a lot of that in the future, especially as the boomer houses that have owned for 30 years turn over. And young people realize, like, not only is there cosmetic stuff I want to do, but there is structural stuff I need to fix. The new water heater, the new AC unit, the new H vac, whatever.

[Michael Batnik]

The, the. There's a few homes in my neighborhood that are listed and the floor is like $800,000 for a, I don't know, two, 600 square foot high ranch. So not the greatest layout, not a super desirable house. But $800,000 is about, about the floor. And these are houses that need a complete gut job. And I just don't know, like 200

[Ben Carlson]

grand of work probably.

[Michael Batnik]

Who has the money for that now? It just, it just has to be coming from parents. That's it. There's no other explanation. You can't put down $200,000 on a 6.5% mortgage and then also put 150, $200,000 into a house. Nobody has a type of money, so

[Ben Carlson]

this should be a new type of mortgage. Listen, I need to borrow a million dollars, not 800,000, because I need to put money into the house and it's going to increase the value. That'd be a good financial product. But the Wall Street Journal also says that repairs are way higher than they used to be. So you and I have both dealt with this. Structural repair costs grew 14% in real terms between 2022 and 2024. Plumbing jumped 24%. Again, this is after inflation. This is funny because it says financial advisors traditionally suggest setting aside 1% of a home's value for annual upkeep. Some say for these older homes, it's more like 2 to 3%. What percentage of the population actually does this? Percentage of the home values.

[Michael Batnik]

While the same percentage of the population that does a year in cash for a living emergency. I mean, nobody does that. The housing market is in, is in disarray. Home Depot stock. I don't know if disarray is the right word here.

[Ben Carlson]

It's just in hibernation.

[Michael Batnik]

No, it's. It's worse. Whatever the worst word is on the planet. What's the worst word on the planet? That's what, that's the housing market.

[Ben Carlson]

I said the word debacle to my kids yesterday and they asked me, what does that, My son always ask me, what does that mean? What does that mean he's trying to use new words? And his new word this week is nonchalant. And he goes, dad, I don't know where he got it from. He goes, dad, you're very nonchalant. And I said, you are. What do you think nonchalant means? And he said, I don't know. Just like, you know, you're nonchalant. You're like, you're kind of cool. And I'm like, oh, really cool. I'm like, okay, I'll take that. Yeah, but I guess I am. But here's the thing. Back to the housing thing. There's $34 trillion in home equity. So if you own a home with a lot of equity, you don't get to complain. The new you, the person you mentioned, you buy a house, you have to sa the down payment and put the renovation cost in. That person is in a really, really bad situation. If you have a ton of equity in your home because you bought it three plus years ago, three years or earlier, then you don't get to complain because you have a ton of equity in your home. You can just pull that equity out to fix the home up.

[Michael Batnik]

All right, so, Ben, are stocks forward looking

[Ben Carlson]

sometimes?

[Michael Batnik]

Good answer. So Home Depot seems to be. Home Depot is the, is the stock that in my opinion most accurately represents the overall level of housing activity. Would you agree? It's for builders, it's for buyers, it's for owners. It's for, it's for everybody. There's housing activity going on. Home Depot stock is. Home Depot. The company is, is, is working. Forget about the stock. The company's working.

[Ben Carlson]

Right, okay.

[Michael Batnik]

Okay.

[Ben Carlson]

What is it down right now? I have no idea. Is it down 20% from the highs?

[Michael Batnik]

Worse than that. So Home Depot. Yeah, eyeballing, it looks about right. But let me just, let me just math this real quick. Home depot is down 27, 26% from its highs and it is at the lowest level since December 2023. Now we know why Home Depot stock is getting destroyed. It should be destroyed. The business is not faring very well. Do we not think that housing is Home Depot saying that this is, this is going to be a minute, that rates are going to be higher for longer or is the market rates already

[Ben Carlson]

have been higher for longer?

[Michael Batnik]

Yeah, yeah. So anyway, this is not, this is. If you use Home Depot to gauge for future housing activity, maybe you should, maybe you shouldn't. You know, I don't know. But not looking great.

[Ben Carlson]

Okay, interesting animal spirits factoid, because we have a lot of people who email us saying flyover states or col Salitas. This is in a. There's a Atlantic story talking about people are moving to Midwest now because the Southwest has been too. Or Southeast has got too expensive for some people. So they said. One of the first known uses of the term flyover country in print came from Midwesterner in 1980 issue of Esquire magazine. Thomas McGuain, a native of Michigan, said, because we live in a flyover country, we tend to try to figure out what is going on elsewhere by subscribing to magazines. 1980. Didn't know that. That's all I got. People moving to the Midwest, it says. But I'm sure these are on the edges. All right, you want to do private markets or not? Here's an interesting thing to me. So the Blue Owl is the big story saying that redemptions for two of their funds were 22%, 41%, which is a massive, massive number. So they capped them at 5%, which they're. That's in the rules. That's that they're. They're right. But they also said under the 5% limit, the larger Blue Owl fund will pay out redemptions of 988 million, but it also received 872 million of new investments. So a lot of these stories don't. These aren't in the headlines, these numbers, that these funds are still bringing money in. Who is still putting money into these funds right now? Where's the money coming from?

[Michael Batnik]

So was that. Was that. That was in the first quarter. Is that what that report is?

[Ben Carlson]

Yeah. So you think maybe that's a stale number? Like these people made those. Filled the paperwork out before all this stuff happened? Maybe.

[Michael Batnik]

I would assume that there's approximately. I don't wanna say zero dollars going right now, but there's. That has to be stale.

[Ben Carlson]

Okay, that makes sense to me because again, it's not like this stuff happens. One day you put the money in, there's a lot of paperwork involved, and you have to put a note of interest. Okay, that makes sense. The thing is, all the private credit funds are rightly showing. Like talking about loan quality and the fact that default rates historically have been pretty low, but no one cares about that stuff. If this much money is rushing out, that's. That doesn't matter at all. In a crisis of confidence, no one cares about the loan book.

[Michael Batnik]

That's true. That's true. It also doesn't matter because it's like, I don't care what happened. I care what we think is going to happen to the loans. That's. So these funds.

[Ben Carlson]

Yes, these funds are also relatively new. They talk. There was a big profile about Cliff Water in the Wall Street Journal, and they say Cliff Water's fund, cclfx, for example, was the only one of its peers to have withstood the COVID market downturn in 2020. And then they put a parenthesis, a footnote noted that no comparable funds operated during the downturn. So this is still such a new asset class for people to invest in. And these fund structures are still so new. And that's one of the reasons, I think, that we're having all these problems. This is new stuff for people, for investors.

[Michael Batnik]

You know, it's also new stuff. Ben, you and I are going to be doing a podcast in Washington, D.C. next week.

[Ben Carlson]

That's right.

[Michael Batnik]

Wednesday, April 15th. Tax Day in the capital's country. Nope. The country's capital, Washington, dc. We'll be talking to Alex Morris of FM Invest. If you're around, come say hi.

[Ben Carlson]

I can see us doing a nice long walk across. That's a great, walkable city to see all the sights. Fantastic. It's the kind of place that the first time you walk around Washington, D.C. and you see the monuments, it is kind of mind blowing.

[Michael Batnik]

I walked around D.C. kind of recently. Josh and I were there. This was during the shutdown, actually. It was very bizarre. There was nobody there.

[Ben Carlson]

It's fun times. All right, I got some travel thoughts.

[Michael Batnik]

Wait, hold on. Before you get to your travel stuff, I asked Rob. Hey, Rob, pull the. Pull all the Animal spirits recordings for 2025 and tell me how many times I say the word ostensibly. So how.

[Ben Carlson]

How was he able to do this? He pulled the transcripts.

[Michael Batnik]

Yeah, you were. This might have been your worst take. Remember last week I said. I said one every three episode, tops. And I'm still taking the under. Okay, so Ben tried to roast me for saying the word ostensibly very frequently. How many. How many times do you think I said it in 2025? By the way, this includes all Animal Spirits properties. So we did two episodes. So we did 100 and something episodes last year.

[Ben Carlson]

15.

[Michael Batnik]

Wow, that's backpiling if I've ever seen one.

[Ben Carlson]

You said the expectations.

[Michael Batnik]

Six, buddy.

[Ben Carlson]

All right, I'm gonna have to audit these results and also have them cross reference the compounded friends

[Michael Batnik]

six times. Get out of here. All right, travel. What's going on?

[Ben Carlson]

So another. I talked about vacations being different. The fact that Airbnb houses now exist. I know that rental houses have always been a thing. I Don't know when I grew up how my parents would even know how to find a vacation rental house because we never did it. So at our stage in life, you and I both have relatively young kids. Having the ability to stay in a house and rent a house, Airbnb, vrbo, whatever the. It's just so much easier to do. And having that, having a house with kids at this age with laundry and a TV and the ability to relax, it's such a game changer. I can't even overstate how. And it's funny because Airbnb obviously created this brand new thing essentially, and their stock has done nothing since they went public. Absolutely nothing. They have gotten no economic value out of this thing they created.

[Michael Batnik]

Well, that's not true. New shareholders happened. They created a lot of money in the private markets.

[Ben Carlson]

True, right.

[Michael Batnik]

Because what was not, I mean, not to be a dick, but like, seriously, what, what did it go public at, valuation wise?

[Ben Carlson]

Yeah, it was 100 billion. And I think it's, it's, yeah. Not too different from that. So there was, there's been a lot of people who have said, listen, the Internet came out. And since the Internet came out, there has been no change in trend line for economic growth. The Internet created no economic growth whatsoever. It didn't change the trend. The Internet made us all more efficient in a lot of ways, but it didn't add to the economic output in meaningful ways. And I almost think that AI in a lot of ways is going to do that at the beginning.

[Michael Batnik]

I have a question for you. Is that not a case of numbers lying? Like, what do you mean Amazon created no value? No economic value? I just. Nonsense.

[Ben Carlson]

You're right. Maybe it changed, but it's like it didn't increase gdp. Like GDP didn't see a meaningful increase. So you're right. Maybe it boxed out and it took value from other places and GDP would have been lower absent that. But that's a point people have made. The Internet has not created a huge amount of more economic growth.

[Michael Batnik]

It didn't change the trend line of GDP growth.

[Ben Carlson]

Correct. So I think AI, especially at the beginning, maybe everyone thinks like it's going to change everything in the future. I think in the beginning it's going to be a lot like that. Because think about it. So AI is a great travel agent, right? Someone gave me six. One of our Adam, who lives in Naples, Florida, one of our advisors gave me like five restaurants. He said, I said, I just want a place by the water, give me some options. He gave me like five restaurants. I said, these are our favorites. We had to drive down from Fort Myers to Marco and on the way is Naples. So we put in the. I put in these five restaurants into chat. And I said, give me one that's on the water. Good drinks, good for families, but also not too far off the beaten path. And we've been doing this on a daily basis to plan stuff out. AI which makes people a lot less adventurous, obviously. But what economic value does that create for this society? No, it just makes our experience a little better. I think AI is going to do a lot of that for people. But AI is an amazing travel agent. Is it not? When you have questions about something. How does this work? Where do I go park? How does. You know? It's. How do I find this? It's awesome. All right, one last thing. I have a huge announcement to make. Huge, groundbreaking announcement. After years of research. No, no, come on. After years and years of research. Extensive research. Okay. I put in the time. I think I had my first Miami Vice 15 years ago. Okay. I'm willing to name the best Miami Vice that there is. I've found it. I've tried it multiple times. I get excited every time. There's a restaurant called Stilts at a Marriott property in Marco island. And they have the best Miami Vice, something they do to their pina colada. It's just creamier. They put little flecks of coconut on top. So this picture I put in here, it's literally the perfect mix. It's the perfect Miami Vice. It can't get better than this.

[Michael Batnik]

All right, shout out this place one more time.

[Ben Carlson]

It's called Stilts in Mar. A very cool place overlooking the ocean. It's. It's called Stilts cuz it's raised.

[Michael Batnik]

You know why? You know what else I feel like? Maybe it's just the picture that you took. This looks. This looks perfect. The way that the floater seeps into the drink as opposed to just floating on the top. And then you spill it out as you walk like this. This does look perfect.

[Ben Carlson]

You're right. That's a. That's a downside of some of them. If. If the floater is going everywhere and you spill it on yourself. My kids always make fun of me because I take pictures of my drinks and send it to you guys when I'm on vacation and you're taking another picture drink again. Really cool.

[Michael Batnik]

This is a picture perfect. All right. This is. We spoke last week about club soda seltzer. Somebody said, michael, there's a big difference between the Two club soda has added sodium seltzer. Does not. If blood pressure or hypertension is at all on your radar, you're much better off with plain seltzer. Okay, not to confuse you the issue, but if, if heartburn or acid reflux is an issue, you're better off the plain water. So I've been taking Nexium every day for about five years. Nexium is to prevent acid reflux. I get serious heartburn when I eat, like, meat. That can't be healthy, right?

[Ben Carlson]

Does it work?

[Michael Batnik]

Yes.

[Ben Carlson]

Does it actually work or not? Tums wouldn't do it for you.

[Michael Batnik]

If I skip a day, I feel it. Louis CK Told a joke like how he went to the doctor when he was over 40. Like, nobody cares, but when you're over 40, it's like, whatever. His ankle was hurting. The doctor said, just take like eight Advil a day. And he said, eight Advil. It's not, like, bad for my liver. He's like, what? What would you say if I was an athlete? Doctor said you're not an athlete. So I guess, you know, you gotta. You gotta.

[Ben Carlson]

I thought about this more. About. What do you call it? I think I call it. It's funny because I call. I call it. I, I don't say soda. I say pop. I remember people in New York when I would order at a restaurant or make fun of me, but I think I call it soda water. I think that's my term for it. Okay, now that I've thought about it

[Michael Batnik]

more, Ben, I, I, I discovered something about myself, kid, I don't love. All right, so we're talking. We're talking about movies now. I don't love the garbage crime genre, and I, I don't know if I'm giving credit to Chris Ryan and Sean Fantasy for making this term up, but. So I watched Crime 101.

[Ben Carlson]

That's one of the Hemsworth brothers.

[Michael Batnik]

Yes. It's got a great cast. Chris Hemsworth, Ruffalo, Halle Berry, Nick Noy. Remember that guy, by the way? Nick no. Is 85 selecting Barry Kogan. Who else is in it? Monica Barbaro.

[Ben Carlson]

So this is. They have cops, but they also have. This is one last job to get the heist. Is that the idea? Probably.

[Michael Batnik]

Yeah. Yeah. Now, don't get me wrong. So. So the movie was like. I just didn't. It wasn't that good. It was. I had, like. I had a good enough time watching it. I'll watch the next one. Right. I watch these movies. I don't, like, dislike them. It's Just not my favorite genre. I didn't really realize it fully until I just checked the reviews after I watched. I was like, it was fine, whatever. 89 from the critics, 85 from the audience. And I realized that there's a disconnect. So, like, Heat is obviously the best version of this type of movie.

[Ben Carlson]

Right. So maybe people overrate these movies. Is that it?

[Michael Batnik]

I don't know. Yeah, I get. And I do love Heat, and I can't wait for the prequel. But he's a sequel, so here's what I compare it to. For me, it's like barbecue food. Now, if I'm in the area of barbecue, I will eat the shit out of it and I will enjoy it, but I don't seek it out.

[Ben Carlson]

Okay.

[Michael Batnik]

Right. Like, I don't. I don't eat. I don't like. I like barbecue food. I just don't eat it at home. It's not my favorite. It's not my favorite genre. So crime 101. Yeah, it's okay.

[Ben Carlson]

I'm kind of surprised that I don't love those movies. Like, a movie like Ronin, I think, is like one of the perfect types of that movie. I think that's one of the most underrated 90s there is. Awesome car chase scenes, good twist at the end, great. You know, European. They have better car chase scenes than we do here. Yeah, I like best versions of that just fine. Okay. So I think that movie is amazing.

[Michael Batnik]

All the Geor Butler movies, like, I watch all them. Not all them. I w. And, you know, whatever.

[Ben Carlson]

They're.

[Michael Batnik]

They're just. They're just fine.

[Ben Carlson]

I think the thing is, they've gotten junkier over time because the good stuff has already been. Already been done.

[Michael Batnik]

Yeah. I. I'm really enjoying Rooster and dtf. I know I keep saying this every. Every show, but are you watching those or.

[Ben Carlson]

No, I'm probably three episodes in for both of them. I. I'm enjoying both as well. HBO still got it.

[Michael Batnik]

So here's great news about DTF. It's only. It's a miniseries. It's like 20. How long are the episodes? Are they. Are they even 30 minutes?

[Ben Carlson]

30 to 40. I'm. I'm a sucker for the miniseries too. If I see that it's a miniseries and it's six or seven episodes, I will definitely give it a try.

[Michael Batnik]

Seven episodes out.

[Ben Carlson]

Yes. And you know, there's going to be finale to it as well. You know, it's going to end. It's not going to be a cliffhanger.

[Michael Batnik]

And I. I love Rooster. There's no bad guy. It's just like a nice show.

[Ben Carlson]

Yes. Steve Carell, Brain off kind of show.

[Michael Batnik]

Yeah. Very, very low stakes. I took my kids to see two movies so far this break. We're home spring break. Not a lot of people are home. So we're, we're trying to fill the time. Movies is a great solution to that. Hoppers was an awesome kids movie. It's like at the Avatar premise. In fact, they explicitly say it in the movie.

[Ben Carlson]

My kids like that one. I didn't see with them.

[Michael Batnik]

Hoppers is great. Good clean story. Made sense. All right. We saw Mario in, in the giant IMAX yesterday in New York City and the kids loved it. It was Kobe's favorite movie. Even better than Goat, which was like his. His previous favorite movie. It was. I heard shot in Amanda saying this, like how they just said it was like, yeah, just creatively bankrupt. I was like, they're just being haters. Like they're being like movie snobs. How bad could it be? It was really tough. Like there was there. Because I think there was. There was no plot and it was just. There were so many different characters. It was just like really confusing. I fell asleep a few times. Whatever. Who cares? It's not for us. It's for the kids. And the kids love.

[Ben Carlson]

Kids don't care.

[Michael Batnik]

Every.

[Ben Carlson]

Kids don't.

[Michael Batnik]

Yeah. Kids don't care. Kids don't care.

[Ben Carlson]

Have terrible taste in movies.

[Michael Batnik]

Every kid loved it.

[Ben Carlson]

So every, every movie they see is their favorite movie. All right. I haven't been watching much stuff because I'm on vacation, but I did on the way down watch Is this thing on? It's the Will Arnett movie and Bradley Cooper wrote and directed it. Okay. It's a movie about Will Arnett does turns into a stand up and they use the comedy seller in it actually, which is kind of cool, but it's bizarre. And here's my one takeaway from the movie. Bradley Cooper needs to chill out. He needs to stop taking himself so seriously. Okay? So he decided he. Because he was the best when he was on Wedding Crashers and all the comedy and Hangover and all the comedy movies. He did right. He was perfect for those roles. Then he just said, you know what? I'm graduated from comedies and I'm going to become a serious filmmaker. And he's done like some great movies. So I thought Star Wars Born was really interesting until I still think it was kind of weird. The guy peed himself on stage. I don't know. That was a choice but he wrote and directed this movie and it's a movie about. It's a sad movie about stand up comedy. Okay, so it's. What's the wife's name? The one from. I'm blanking. She's from Jurassic Park. Get her and Laura Linney confused.

[Michael Batnik]

Laura Dern.

[Ben Carlson]

Laura Dern is her. And Will. I'm not giving too much away. I think it's in the previews. Her and Will Arnett get a divorce at the beginning of the movie. And then he. That somehow leads him to do stand up. But at one point he walks in and does an open mic at the Comedy Cellar, which probably is impossible, but the way that they use standup. But the standup is not funny. I don't find myself laughing at a movie about stand up. And I feel like that doing a movie about stand up is almost impossible to do. I thought funny people did it really well. That's probably the only one I can remember. Actually did a good job of it. But most. And that Pete Holmes show on HBO was good.

[Michael Batnik]

Crashing was so good.

[Ben Carlson]

You can't do a sad movie about stand up comedy. It doesn't work. So I think Bradley Cooper needs to chill out a little bit. That's my take on this movie.

[Michael Batnik]

You know what, that's great advice.

[Ben Carlson]

I like very high quality movie, great acting, great cinematography, whatever.

[Michael Batnik]

Everyone loved early Bradley Cooper, but then he also did Maestro, the Leonard Bernstein movie that no one literally nobody cares.

[Ben Carlson]

Yeah, you're right. That does mean like it's. It's a movie about stand up. A guy trying to be a stand up comic. But it was took itself way too seriously. That's where I landed. One more thing. So I, my love of, of sports was waning in like my mid-30s ish. It's like, you know what? I've been a huge sportsman my whole life. I just, I can't make myself care as much as I used to. I kind of saw it. My love of. And especially college sports just kind of like, ah, whatever. It's becoming more professionalized and I don't care as much anymore. And then now my kids are getting into it and so Libby got really into it. Michigan won the national title in football three years ago and got really into it and took her to a game. And it was a fantastic memory from you taking her to a game and them winning it and watching it with the kids and seeing them get excited. And then this year, finally my son George got really into the basketball team. And I guess it helps that it's the best Michigan basketball team ever. And we went to one of the games and it was so much fun last week. And then we watched the Final Four this weekend, and they won. And they got to know all the players. And just viewing it through their eyes, I think has been. It's made my love of sports come back to me. And obviously, it helps when your teams are winning. We've won. I told them, like, guys, we just won two national titles in the last three years. Like, don't expect this to happen all the time. But it was.

[Michael Batnik]

That is very special.

[Ben Carlson]

And my son said, I'm nonchalant, but they also get to see the lunatic version of me watching sports, you know, because the game last night was really ugly, and Michigan almost blew it, like, three times. And I'm a complete lunatic. That is during the game. And I'm sure you have this, too, where in your kids. You're like, who is this person? Why is this lunatic person acting like this during a sporting event?

[Michael Batnik]

The only time in my daily life that I get excited,

[Ben Carlson]

I think me too.

[Michael Batnik]

But I mean, like, physically, you know?

[Ben Carlson]

Yes.

[Michael Batnik]

All right, Ben, on that point, I wanna. I wanna play something. Let me share my screen here.

[Ben Carlson]

Okay.

[Michael Batnik]

How much do the officiating change this guy? I mean, is there. Fine. I mean, what. I mean, that is. That is. That is how you use this guy.

[Ben Carlson]

Dan Hurley is this guy. I can see that. That's pretty good.

[Michael Batnik]

That's the coach of UConn, I guess. What? The calls didn't go their way.

[Ben Carlson]

Oh, he's a maniac. He was very against the calls in the first half, and they got all the calls in the second half, so I thought it balanced out pretty good. But that's. That's your job as a coach to complain about the. The officials. The other cool thing about, like, being obviously, having your team win, it is amazing. But. So my son was decked out in Michigan head to toe yesterday. Michigan hat, Michigan shirt, Michigan shorts, and Michigan sandals, like, way too much. But everywhere we walked around the island, people would say, like, go blue. Like, because obviously everyone has a win from Michigan on spring break right now. So that part of it is. Is really fun. I. I highly recommend having your team win a championship. Great, great experience.

[Michael Batnik]

I did it twice for the Giants. It's been a minute. It has been a minute. All right, Ben. Enjoy the rest of your vacation.

[Ben Carlson]

Give me. Give me a market update.

[Michael Batnik]

S. P down 1%. Yeah, we were talking about this on. On. On. On tcaf. Zuccardi had a good chart. Bottoms are messy now. I don't know if this is the bottom or not, but like a, a V sheet where it's just like you never look back. Like. Yeah, that happened in, that happened last time in 2025 during the tariff tantrum. That's unusual because it's not like if, if there's been enough damage to individual stocks. And there certainly has. It's not like everybody goes back in the pool immediately absent a headline. Right. Because there's headlines that take you up, Heather. Oh, no, we're going up, we're going down, blah, blah, blah. So we'll see.

[Ben Carlson]

We'll probably do a correction that has some head fakes, bounces. I think we're due for that. Will we get it? Probably not. Will we get what I feel like getting? Your expectation of what a correction should be like is probably not what you're going to get.

[Michael Batnik]

Never is. All right, Animal spirits at the compound, news.com thank you very much for listening. For those of you who are in the D.C. area, we'll be there. Fminvest.com if you're looking to learn more about the event, personal emails, personal responses, we'll see you next time.