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- [00:00]
Michael Batnik
What growth strategy are leading reas using that most firms don't? Segmentation Some clients needs are sophisticated and require deep ongoing planning. Some clients needs are simple like those in the wealth accumulation stage. The smartest firms know planning shouldn't look the same for every client, but the experience should always be exceptional. And now it can be with Betterment Advisor Solutions. It's the platform built for segmenting your book and streamlining those smaller and simpler accounts. The onboarding experience is automated and paperless, the portfolio management is streamlined and tax efficient, the client experience modern and consistent. And the impact isn't just felt by your clients, it's felt across your entire practice. Imagine a back office that's humming, a team that's thriving, and a service model ready to scale. Betterment Advisor Solutions. Your biggest regret will be not doing it sooner. Learn more@betterment.com advisors.
- [00:48]
Ben Carlson
Today's episode is sponsored by Clearbridge Investments. Amid rising geopolitical tensions and continued market uncertainty, investors are looking for stability. Even before recent developments in the Middle east, stocks backed by real assets were gaining momentum and can offer more predictable 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.
- [01:20]
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 their roots, 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.
- [01:50]
Michael Batnik
Welcome to Animal Spirits with Michael and Ben. Update on my H Vac issues so I got, I got a quote from one of the guys and I had like four guys come in here and the first one that I got, he prepared me a very nice detailed proposal and it was $18,000 plus. I also need to whatever, whatever. I forget what the details are, but the cost ended up being like $29,000. So I took his proposal and I uploaded it into Claude and we started having a little chitty chitchat about what my options are, what should I be doing. And this was oh moment for me with AI and there's obviously been a few for, for me along the way and for everybody listening who's who's experienced the technology. It started asking me questions and it was leading me the horse to Water and teaching me about the difference between modular units and on, off, and this and that. And so I. I spent a couple. A couple minutes getting educated on the different options that I have. And then later in the day, I was speaking with a company in our space who. It's like an LLM for advisors, basically, is long and the short of it. And part of what they're. What they were showing me is you upload a document and you ask questions and it's giving you advice and should I do it with conversion and like, it's leading you, right? Like asking you yes or no questions and then the decision tree and then taking you through the journey. So the takeaway for me was pretty, pretty clear. The information asymmetry gap in the knowledge economy and really everywhere. Not even just the knowledge economy. Like, when you go to a mechanic and you don't know anything. I remember Josh saying years ago, like, talking about the. The younger generation of investors that you can't bullshit them. And I remember him saying, like, they'll fact check to you right in front of your face. They'll just open Google and say, like, is this true? And with the LLMs, it set on steroids. So I thought this has. This has implications for everybody. Like, everybody, of course. And I thought about our industry, and I think there are a lot of advisors that frankly are asleep at the wheel that don't see what's coming. And I am definitely not being hysterical and saying that, that advisors aren't going to be valued or anything like that. But the information gap, the knowledge that we have of about the planning, the tax, the this, the that, that's. That's going to disappear pretty damn quickly.
- [04:42]
Ben Carlson
It's table stakes now. Right?
- [04:43]
Michael Batnik
Table stakes.
- [04:44]
Ben Carlson
Just as a side note, the fact that you started out this podcast talking about your H VAC system shows that this was probably the most boring week we've had in the markets in a long time.
- [04:51]
Michael Batnik
Thank God.
- [04:52]
Ben Carlson
It was finally like, all right, not. Not a lot going on. I know people are still screaming about oil prices and what the. How the oil market. Market is messed up. No one cares about it, apparently, until the markets tell us to. Right. You're right. The stock market, as you said last week, is so much more important. Financial markets tell us when we should be paying attention to something and when we shouldn't.
- [05:10]
Michael Batnik
Absolutely. Of course they do. So I love it. I think, I think that.
- [05:13]
Ben Carlson
Wait, hang on. Did you actually, like, get a better quote from your H Vac because of this?
- [05:18]
Michael Batnik
Well, so. So the long and the short of it is. I am spending $6,000 on a split level unit in my bedroom. I'm going to close off the ducts in my bedroom and have more air flow through to the rest of the house. And we're going to start there.
- [05:31]
Ben Carlson
Okay, that makes sense. You have different gauges. So you have like one temperature gauge for your bedroom, one for the rest of the house.
- [05:37]
Michael Batnik
Anyway, we could spend 30 minutes on the implications for advisors and I do plan on doing a talking wealth episode about different thoughts.
- [05:43]
Ben Carlson
I was asked this last week at an event like, what is the implication? I think for the wealth management business what it means is that anyone stuck in the middle is screwed. The big firms are going to get way bigger because they're going to have really great AI models and systems and the little firms will have a niche. And if you're stuck in between there, you don't have a niche and you're not huge and can scale, you're screwed. How's that?
- [06:04]
Michael Batnik
It's going to be hard. It's already hard. It's already a hard business. It's not going to get any easier. But think about, think about what this does to the efficiency of the overall system when the ability of people with knowledge to rip off those without closes or shrinks.
- [06:22]
Ben Carlson
True counterpoint. Google has existed for a long time and it maybe made people dumber. I'm just throwing it out there that
- [06:28]
Michael Batnik
this, that's a bad counterpoint.
- [06:31]
Ben Carlson
No, you're, you're existing in a world of Econ101 where everyone is a rational actor.
- [06:35]
Michael Batnik
No, no, no.
- [06:35]
Ben Carlson
I know so much slap and misuse of this stuff and I think that's the part that you're missing is that yes, if you take advantage of this stuff, it's going to be, it can be so helpful for your knowledge. You can learn anything now. And like you said, it can, it can poke and prod you to ask questions. Hey you, you just learned about this. Why don't you read this research paper about like that. That stuff is fantastic. But will people be motivated enough to use it correctly? What's the. I don't know. That's, that's my big question is like who will use it?
- [07:03]
Michael Batnik
Yes, you're a hundred percent right. So I don't, I'm not suggesting this happens tomorrow. I'm not suggesting that everybody is going to act like you. And I do, I understand a lot of the economy, a lot of the population, you know, is on a sixth grade education. But the ramifications cannot be overstated. Of, of what's going to happen.
- [07:21]
Ben Carlson
I agree. And this is one of the reasons, I think, if we're taking a step further to financial markets, why the, the idea that I'm just going to invest in the US and not the rest of the world is nuts. Because the rest of the world, things continue to be flattened for the rest of the world in terms of knowledge and opportunities. And if you think all the good ideas are now going to come up just out of the U.S. you're nuts. So.
- [07:41]
Michael Batnik
All right, this morning, speaking of AI, OpenAI misses key revenue user targets and high stakes sprint toward IPO. That was a Wall Street Journal headline and some of the names, the Mag 7 names that are, that are really tethered to the OpenAI story, like Oracle in particular, are getting smoked.
- [07:56]
Ben Carlson
So it's funny that they're treating this like a public company already.
- [08:01]
Michael Batnik
Yeah, well, it will be soon enough. Oracle is down 7%. So. All right, here's what they said. OpenAI recently missed its own targets for new user and revenue stumbles that have raised concern among some company leaders about whether it will be able to support its massive spending on data centers. CFO Sarah Fryer has told other company leaders that she is worried the company might not be able to pay for future computing contracts if revenue doesn't grow fast enough. Here's the LOL. OpenAI recently raised $122 billion in what was the largest funding round in Silicon Valley history. But the company has signed up for so much computing power that it expects to burn through that amount in the next three years. Are you kidding me?
- [08:41]
Ben Carlson
Jeez.
- [08:42]
Michael Batnik
It expects to burn $122 billion in three years. And let's just say that that's even remotely right. A hundred billion dollars, 123 years, 4 years, 5 years, whatever. Holy mackerel.
- [08:53]
Ben Carlson
Are they screwed?
- [08:54]
Michael Batnik
Is open a screwed? I think that's, that's crazy talk. Screwed. They just raised $120 billion. That buys you some time.
- [09:01]
Ben Carlson
You just said three years.
- [09:03]
Michael Batnik
Is OpenAI screwed in the, in the,
- [09:06]
Ben Carlson
in the race to AI supremacy? Are they too far behind Anthropic at this point?
- [09:13]
Michael Batnik
Screwed is a strong word, but I hear what you're saying. They've, they've made some missteps for sure. And I think Anthropic has definitely taken the title from them or the belt. All right. We've been speaking a lot about the stock market and what it's doing and why it's doing what it's doing. And we keep coming back to one thing and it's earnings Right, like that's, that's it. That's the whole kit and caboodle, is it? Kit and caboodle, yes.
- [09:36]
Ben Carlson
Where did it come from? I don't. Probably Shakespeare.
- [09:38]
Michael Batnik
So the S&P 500 blended and actual. So what's already reported and what's expected to report? 13.7% year over year growth, technology, 43% growth. And even if you take out Nvidia and Apple, I think it goes higher, I think it goes to 45%.
- [10:01]
Ben Carlson
Jeez. So they're still driving earnings growth even though they're spending so much money. Pretty amazing. Like this whole, this whole thing just might happen.
- [10:12]
Michael Batnik
Which whole thing?
- [10:13]
Ben Carlson
The whole thing of we're going to spend a lot of money on AI and it's going to work. The ROI piece. I don't think anyone believed that was possible. When, when you first started seeing the numbers of. Oh my.
- [10:24]
Michael Batnik
I still think there's a lot of, there's a lot of skepticism that Meta and Amazon and whatever, all the other companies that are spending, having $600 billion
- [10:32]
Ben Carlson
in capex, if there's one obvious risk that's going to cause excesses to happen in a big downturn, like AI has to be. Has to.
- [10:40]
Michael Batnik
Yes, both things are true. But do you think, do you think that the leaders of these companies are really that dumb? They're just pissing away money?
- [10:48]
Ben Carlson
I keep giving this example. Facebook literally changed its name to Meta and then they got rid of the whole thing. Are they really dumb enough? They can be.
- [10:56]
Michael Batnik
That's one example, a pretty big example. You think they're all, they're all collectively stupid people?
- [11:02]
Ben Carlson
No, I, I don't think they're collectively stupid, but I think the fact that they all decided if, if one person is going to jump off the ledge here, I'm going to do it too. Like, we have to all jump.
- [11:11]
Michael Batnik
Oh, come on. Literally the first thing your parents say is, if your friends jumped off the bridge, would you. Yeah, specifically. Come on. I know, I know it's. I know it's cute to say like, yeah, Meta was stupid, but. Come on.
- [11:22]
Ben Carlson
But I'm saying the techniques are holding hands, jumping off the bridge together. They just, they all said like, everyone in the boat, let's go.
- [11:28]
Michael Batnik
I think that's like two. That's like a jackass comment, like, too cute behavior.
- [11:32]
Ben Carlson
But don't. Isn't that what happened, though? They all decide it's, it's a big circular thing. They invest in them. They invest in them. Like they're all into this regardless of what happens. But they said, like, remember, they all said, I'd rather overspend than underspend. That's the risk.
- [11:43]
Michael Batnik
But like, I, I just don't think that they're all willing to risk at all and them just com. This completely flop. Like, I was looking back in three years, like, what the hell were they doing? Possible, obviously, but I, I would not. I would not bet on that.
- [11:55]
Ben Carlson
It sure doesn't seem like that. Right? I agree. It doesn't seem that way now. But. But the thing is all this. Ben can still create excesses.
- [12:01]
Michael Batnik
Sure.
- [12:01]
Ben Carlson
That that's the thing. Um, okay, so last week we talked about how this bull market is like, fast approaching the 1980s, 1990s one. I wrote a little piece on this, and I just want to talk about how crazy this whole run has been. So we're now. This is from the bottom. And a lot of people, every time I write about this, someone we work with, I'm not going to name any names. His name rhymes with Larry. He sends me something saying, you can't start a, a bull market from the bottom. Like 2009, you can't start a bull market. And my argument is things are different now. Like, all bull markets almost start from the bottom by now, by definition. Because that's when, like, things move faster. Now this is how markets work. Regardless, splitting hairs. The S&P 500 was up almost 17% per year from the bottom in 2009. So that's 17% per year for 17 years. Okay. The.
- [12:48]
Michael Batnik
I can't believe I. I can't believe it.
- [12:50]
Ben Carlson
The 2020s have a higher annualized return than the 2010s did. The 2010s did 13.4% per year. 2020 did 15 are doing 15.1% per year right now.
- [13:01]
Michael Batnik
Wow.
- [13:01]
Ben Carlson
Totally different environment. Here's another crazy thing. Despite all the government spending, and I want to, I want to unpack this one a little bit. Okay. That was a podcast line. So some people here who are younger might not remember this, but when the Fed took rates to zero and the government printed money to save us from the great financial crisis, there were tons of people who said, the dollar's gonna collapse. We're gonna have hyperinflation. This was not just like some perma bears spouting off. This was real people saying, like, oh my gosh, the Fed took the rates to 0%. This is going to cause a massive crisis down the line. Just wait. From 1982 to 1999, biggest U.S. bull market in history, arguably CPI was up a total of like 80% essentially. Okay. Cumulative inflation was 80% from 2009 to 2026. Cumulative inflation is 56% despite the 9%. Huge upswing. Right. Because it was so low. So zero percent rates. And I put the Fed chart in here. We've had, we had zero percent rates essentially for eight, nine years. They never led to a financial crisis. Of course, there's no headlines that say, like, hey, this thing some people thought would happen didn't happen. That's not a headline event. This thing didn't happen. Guess what? But there was all these people saying like, you can't take rates that low without having a financial crisis. It has to happen. We never had one that, that all that spending, all the monetary qe, all that stuff. The dollar was stronger throughout most of the 2010s. And we. Inflation wasn't that much higher than it was in the 80s and 90s. This has been like a miracle of a bull market. You know those stories of people like prematurely born babies, they're like, oh my gosh, they were born at like 30 weeks. They're in the incubation thing for so long and they're like, they can't believe it. They survive. That's this bull market. This is the incubation bull market. It's a prey. It survived. I can't believe it. I'm just taking a step back and like giving flowers. Kudos. Whatever you said a couple weeks ago to this bull market, it is, it
- [15:04]
Michael Batnik
is something to marvel at for sure.
- [15:07]
Ben Carlson
This is why bull markets are so important. Like I, I think most investors make their money during a bare market by just hanging on and not capping out and selling. But if you miss this kind of bull market because you got scared and you went to cash or you tried to time the market or some doomer scared you out of it, this can impact your investing lifecycle for decades to come if you miss out on something this big. Yeah, yeah, this is, this is why you stay invested.
- [15:33]
Michael Batnik
And I think the longer this continues, the more it feels like this, this, this has to end eventually. And eventually being sooner than later.
- [15:42]
Ben Carlson
And it will. But does it, Is it a bang or a whimper? A bang would be a crazy financial crisis. A whimper would be returns are lower than average going forward for five to seven years or something. Yeah, pretty incredible. All right. We've talked a lot about markets moving faster. Intel has one of the craziest charts I've ever seen. Because this thing was in a 70% drawdown. It came back, dropped, came back, dropped, came back.
- [16:08]
Michael Batnik
It was dead.
- [16:08]
Ben Carlson
It Was dead money basically, essentially in the last, I don't know, six months has taken off like a rocket ship and completely erased a 70% drawdown and then some to go back to all time highs that hadn't been reached since the dot com bubble. Markets move so fast these days and obviously there's reasons for this. The government taking a piece of intel and where they sit in the tech stack has something to do with it. But this move is absolutely insane for a company this size. What's their market cap at this point?
- [16:38]
Michael Batnik
I don't know.
- [16:39]
Ben Carlson
$300 billion. Yeah.
- [16:40]
Michael Batnik
How much? I guess three. I have no idea.
- [16:43]
Ben Carlson
I don't either. We both guessed that. I feel like for an also ran Tech Company, 300 billion ads. 250. 300 billion is a big gap.
- [16:53]
Michael Batnik
Wait, where did you get 250? It's 427.
- [16:56]
Ben Carlson
Oh, nope, I put the wrong ticker in. Okay.
- [17:00]
Michael Batnik
Wow.
- [17:00]
Ben Carlson
I'm going to get Philip Morris. All right. Overnight markets just blinking. You missed it these days.
- [17:07]
Michael Batnik
Really wild. All right. It's the end of an era. Tim Cook is retiring and going back to things that people got wrong. Like every. Nobody was like, don't worry. When Steve Jobs died, it was a huge worry.
- [17:24]
Ben Carlson
It was in. So it was in the fall of 2011 and that was also when the European debt crisis was in full swing. The S and P was almost in a 20% bear market. It fell 19% and change. And Apple was. People were like, this is it, it's over. Not to pat myself on the back and toot my own horn. I was buying Apple then because I said there's no way this company's over. Like they got such a long run with the iPhone. But it was not like people are like, oh yeah, Tim Cook's going to take over and it's going to be great. This is a multi trillion dollar company.
- [17:54]
Michael Batnik
So I've shared this chart before. The numbers are so ridiculous that like I had to fact check them. Since he became CEO 15 years ago, Apple's market cap has added $684 million a day. $684 million a day.
- [18:15]
Ben Carlson
So 250 billion per year, 4.8 billion per week.
- [18:23]
Michael Batnik
4.8 billion a week. Here's something that that Tim Cook deserves credit for. Mark Rubenstein has a great substack called then interest. He wrote about Apple Pay. Apple pay is used by 785 million people worldwide. It is accepted at over 90% of US retailers where it has a market share of 14.2% in online payments and 5.6% of in store purchases. Cook said on his latest earnings call that last year alone it eliminated $1 billion in fraud.
- [19:00]
Ben Carlson
I still don't know how to use it.
- [19:01]
Michael Batnik
Stop. You're kidding, right?
- [19:04]
Ben Carlson
I've used it like five. At a store. I've used it like five times.
- [19:08]
Michael Batnik
You just double tap.
- [19:09]
Ben Carlson
I know. I've used it to pay for stuff on my phone.
- [19:12]
Michael Batnik
Obviously, you're too embarrassed to tap your phone. You still take out your wallet.
- [19:17]
Ben Carlson
I just. Yeah. Use a credit card.
- [19:19]
Michael Batnik
Okay. You know your credit card. You know you can link your credit card to.
- [19:23]
Ben Carlson
Yeah, that's what it's linked.
- [19:24]
Michael Batnik
Okay. All right, Just checking. Last thing. I'm putting Apple revenue context. We've shared this before in terms of the services, the segments of Apple, comparing it to other companies. I just want to.
- [19:36]
Ben Carlson
If you stack dollar bills all the way from here to the moon of Apple's revenue. Right.
- [19:41]
Michael Batnik
It would go to the moon in Project Hail Marion back.
- [19:44]
Ben Carlson
Yeah. It would go to Tau Ceti.
- [19:46]
Michael Batnik
So the iPhone did $226 billion in revenue in the last 12 months. That's more than Nvidia.
- [19:55]
Ben Carlson
That's pretty nuts. Is that true?
- [19:59]
Michael Batnik
Nvidia's done $216 billion in revenue over the last 12 months.
- [20:03]
Ben Carlson
Holy smokes. Okay, that's a mind blower.
- [20:06]
Michael Batnik
That's. That packs a punch. Services, $113 billion. Tesla, $97 billion. Johnson and Johnson, $96 billion. Not bad. Wearables, $35 billion. AMD $34.6 billion. So watches and AirPods more than AMD. The Mac, 33 billion. The Big Mac, 27 billion. McDonald's.
- [20:41]
Ben Carlson
I got it.
- [20:42]
Michael Batnik
More Max than McDonald's. And then finally the iPad. $29 billion and whatever again. McDonald's 27 billion. Charles Schwab 25 billion. Pretty good business.
- [20:56]
Ben Carlson
Just think if they could actually get a functioning AI assistant on the phone for you.
- [20:59]
Michael Batnik
Speaking of that, multiple people have recommended a product called Whisper Flow, which I downloaded, and it does work very well. It's kind of a pain in the ass because every time you use Talk to Text, you have to, like, open the app. It's inside the messages, but so it takes you to a new screen and it's annoying. And it says, we wish you didn't have to switch apps to use Flow, but Apple now requires us to activate the microphone. It does work a lot better. It does work a lot, lot better. Hey, Apple, buy Whisper Flow or build something better, you cheap pricks. I'm talking about the Knicks. And it kept saying, next I'm like nicks. And even if you say, well, why
- [21:44]
Ben Carlson
don't you just type? Everyone can type really fast on their phone. Why don't you just type?
- [21:48]
Michael Batnik
Well, if I'm walking, I'm not far walk. Or if I'm driving, I don't want to.
- [21:54]
Ben Carlson
That's fair. Because if you're. If you're walking somewhere, a sidewalk, wherever, a store, and someone goes into zombie mode on their phone in the middle of everyone, I feel like you should be able to, like, either arrest that person or give them a shoulder to the back because the. You just stand there in the middle of everyone.
- [22:10]
Michael Batnik
Oh, yeah.
- [22:11]
Ben Carlson
In the way.
- [22:12]
Michael Batnik
Says the person who climbed out of his window.
- [22:15]
Ben Carlson
Yeah, I want to make it a lot. Yeah, that's fair. All right, let's talk about something I was wrong about.
- [22:20]
Michael Batnik
But what's good about Whisper Flow is at least you can say like, no, no, no, delete. And it will delete if you. If you type that into server. If you say in Siri, it will type out no, no, no, delete.
- [22:31]
Ben Carlson
Okay. Oh, I gotcha. Okay, I won't use it. Talk about something. I was wrong about two things, actually. Airbnb. Look at the stock price. This thing went public in 2021 and I bought it at the IPO. And the entirety of the gain in Airbnb's share price is from the opening day pop at the ipo, which. How many people actually got subscribed to that? Not many. This stock has gone absolutely nowhere. They completely changed an industry. They created an industry out of thin air, effectively. They were. They were going to be the Uber of homes. And I. It. It's. It's changed the way that my family vacations, obviously rental houses existed, but Airbnb made it so much easier. And I think them getting into it made like a place like vrbo 10 times better too, because we use them a lot as well. And the stock has done absolutely nothing during a boom in technology stocks hand up. I never would have expected this.
- [23:26]
Michael Batnik
Well, two things. It came. The valuation when it came public was obviously very rich. But ironically, ironically, stock's looking pretty good for the first time in a long, long, long, long time. It's might be breaking out here. Ben, do you still own it?
- [23:41]
Ben Carlson
No, I got rid of it a long time ago. It didn't do it. It's not doing anything. So, yeah, I don't know. It came. I think it came public at what, a hundred billion dollars or something?
- [23:48]
Michael Batnik
Yeah, I. Forget it. I think it was a hundred times sales type of thing.
- [23:51]
Ben Carlson
But that's the, the easy thing to say is, oh, it came. It was way too pricey. But you would have. If this turned into a $600 billion company, you go, oh man. It was cheap at the time, of course.
- [23:59]
Michael Batnik
Well, yeah, well, now we have more information. But no, I mean, no, there was people saying like, this is a crazy valuation ipo.
- [24:06]
Ben Carlson
Yes, I do remember that. But it was a crazy time. But one more thing. Zillow. I was bullish on the housing market through the, all the early 2000s, late teens, early 20s. And I said Zillow was the best brand in housing. Everyone checks it all the time. I think they have 2 or 300 million users or something that check the website. Like, look at. Not that many people obviously buy houses. This stock has absolutely stunk.
- [24:29]
Michael Batnik
Suck.
- [24:31]
Ben Carlson
Absolutely horrible. I don't know. It's in a 50% drawdown still. I think I bought it after it was down 40%. I still lost money. I don't. It's crazy how the name brand. So I, I nailed the housing thing. Nailed it. I was bullish on housing at the perfect time. Housing went crazy and Zillow stock stunk. Well, this is why I'm not a stock picker.
- [24:52]
Michael Batnik
I've, I've been way wrong on more stocks than I've been right. So you're not alone. I think, I think everybody listening, if they're being honest with themselves, hey, turns out stock picking is kind of hard.
- [25:02]
Ben Carlson
It's true. And this is why. All right, two things are true. All right, One, there are way more degenerates in the economy right now. Everything is a casino, everything's a market. People are gambling more day trading, zero day options, prediction markets. Two, there are way more people who are behaved and that swamps the degenerates by a factor of, I don't know, a thousand. Here's some ETF.comv becomes the first ever ETF to cross $900 billion in assets. Here's some of the story. V has pulled in $36.9 billion this year so far, more than any other ETFs on a pace to surpass 100 billion in annual flows for the third consecutive year, a feat no other ETF has ever accomplished even once. So I know we. That you get. There's a lot of press today about how everyone's a gambler and no one invests in financial nihilism. This is the opposite of that. Vanguard. Vanguard is $12 trillion in assets. BlackRock is fast approaching $15 trillion. This is not the behavior of a bunch of people who are gambling. This is the behavior of people who are putting money away at a low cost in a tax efficient product and leaving it alone.
- [26:10]
Michael Batnik
This is the classic, like if it bleeds, it leads. Nobody wants to read these articles. They're boring as shit, but they dwarf the degenerate economy 5,000 times over.
- [26:20]
Ben Carlson
Yes, I found this article on Twitter. I think the article had zero retreats and one like, no one cares.
- [26:27]
Michael Batnik
Nobody cares.
- [26:29]
Ben Carlson
And this to me is the investor class winning. And this is why it's so hard to beat the market now, because most of the suckers have left the poker table. The only people left are the really smart people trying to beat the market.
- [26:43]
Michael Batnik
Well, that's not true. The degenerates are the, they're the easy pickings. That's why there was an article in the ft. Jane street made more money last year.
- [26:56]
Ben Carlson
I did see that. Yes.
- [26:57]
Michael Batnik
Yeah, Jane street more money made more money than Walmart. What? So your point is well taken. But except for the last part. The suckers have not left the table. They're, they're, they're. Actually, there's more suckers than ever, even though there's more investors than ever.
- [27:11]
Ben Carlson
How about this? On a market cap basis, more suckers have left the table. The sucker, the suckers at the table don't have a lot of money.
- [27:19]
Michael Batnik
Well, but, but it's worse because the professional suckers, and they're not suckers. So I don't want to be disrespectful. Yeah, the professional active managers. These are extraordinary bright people that set the market prices. They do every single day. They're still there, but their market cap has shrunk Fair. All right, this is not a great story from the Wall Street Journal. Doug Horner has seen plenty of customers walk into his Northeast Ohio Mercedes Benz dealership who are more on their trade ins than those cars are worth. But being $40,000 underwater on a pickup truck is a scary sign of a growing trend. I'd say. A prospective buyer recently sought to trade in a Ford F150 Lightning for a Mercedes GLE Coupe. That potential customer owed about $87,000 on the pickup truck. Horner estimates the Ford pickup truck was worth about $47,000. Check this out. In 2026, buyers with negative equity financed an average of nearly $56,000 for a new car in the first quarter, about $12,000 more than the typical new vehicle buyer. And that translates to a monthly payment averaging $932 for negative equity borrowers. The highest level Ever recorded. So Robin's Audi.
- [28:36]
Ben Carlson
Wait, they could have interviewed you for this story.
- [28:38]
Michael Batnik
Robin's Q7. I pay $1,270 a month and I know that car does not cost that much money, but I was underwater, you know, a lot, big league underwater. Now my, my, my intention with my previous car that I was underwater on was, all right, well, just drive it until we pay it off. Right? Like, I don't love that.
- [29:03]
Ben Carlson
That's the obvious advice for this guy who owns 87, owes $87,000. Guess what? Don't buy the Mercedes.
- [29:09]
Michael Batnik
Yeah.
- [29:09]
Ben Carlson
Wait it out.
- [29:10]
Michael Batnik
Of course. So it's not a catastrophe in general, it's not fun being underwater. But just drive it until you finish the payments and then.
- [29:20]
Ben Carlson
Yes, exactly.
- [29:22]
Michael Batnik
With our car and unfortunately know this is, this is not like super unique to us. The car started having problems and we were putting more money into the negative equity. Remember my engine, my engine was busted and it was going to cost like $188,000 to fix. I was like, no, like we already are underwater $20,000. I'm not putting $18,000 into the car for a new engine. So we had, we had literally no choice but this. But if you are underwater, you just, you just drive it until, until you're done and then that's it. But isn't this the pandemic, everything up?
- [29:55]
Ben Carlson
Yeah. Isn't this a one time thing? This isn't like something that's going to keep happening. This is the car prices got so
- [30:01]
Michael Batnik
out of whack it'll normalize in a few years. But yeah, we're working off all of these, all of these overpriced pandemic purchases.
- [30:09]
Ben Carlson
Yes, but so that average payment of 900, it's crazy how high car payments are now. Yeah, just nuts. All right. Last week I talked about how we're in a new era of higher, just higher inflation. 3% is into 2%. What that means is also that we're in higher wage growth environment as well. So this is the Fed wage tracker. I think the Atlanta Fed does it. And you can see through the 2010s it was kind of rising, but it's, we're just in a higher shift. And now that inflation's turning back up, guess what else is turning back up? Wages. And look at the job switcher thing is still much higher if you switch jobs. So wages remain much higher. And I still think most people, if you ask them honestly, would rather have the 2010s. I would rather have lower inflation and lower wage growth than Higher inflation and higher wage growth. Most people would say that.
- [31:00]
Michael Batnik
Oh, yeah, people hate inflation. It's. It's tearing our country apart.
- [31:06]
Ben Carlson
It's funny because we just. We just keep making it worse. Spending more money, going to war.
- [31:13]
Michael Batnik
I can't stop spending money, Ben.
- [31:14]
Ben Carlson
Ever since inflation started.
- [31:16]
Michael Batnik
Look at this thing. This is my new workout tool.
- [31:20]
Ben Carlson
What is that? That looks like a sex toy. What is that?
- [31:25]
Michael Batnik
So this is. I'm not a boxer, but look. Right,
- [31:33]
Ben Carlson
So instead of paying your 200 fee for a personal trainer, you're gonna do that. Listen, that looks like something my dad. So my dad would always. The infomercials back in the day of the exercise tools. My dad would always get taken for those.
- [31:45]
Michael Batnik
So I. I actually bought two things recently. I bought this thing and I'm. I'm using it. I don't know if you could tell. I'm starting to feel results.
- [31:52]
Ben Carlson
Where did you see. Is that an Instagram purchase?
- [31:54]
Michael Batnik
Yeah. Of course. All of my spending happens in Instagram.
- [31:59]
Ben Carlson
Okay. So my dad would always get taken for the infomercials. And he had this one thing called a body blade. And it was like this long thing, and you would. You'd hold it and you'd. You'd shake it and it would like, put resistance against you.
- [32:10]
Michael Batnik
And it was the Shake Weight. The thing.
- [32:12]
Ben Carlson
Oh, yeah, the shake everyone. You'd get one of those for someone at like a white elephant gift party in Christmas.
- [32:20]
Michael Batnik
I don't remember the body blade. So your dad had this. Well, you listen, your dad's in great shape, so get a.
- [32:26]
Ben Carlson
Just get a membership to a gym. What are you doing?
- [32:28]
Michael Batnik
I can't. I don't have time for a gym.
- [32:30]
Ben Carlson
Go to the gym.
- [32:31]
Michael Batnik
I don't have time.
- [32:32]
Ben Carlson
You're an early riser. Kids go to school.
- [32:34]
Michael Batnik
No, I'm not.
- [32:36]
Ben Carlson
I thought you wake up pretty early.
- [32:37]
Michael Batnik
What am I going to the gym? I get up at 6:30.
- [32:40]
Ben Carlson
That's pretty early. All right, let's talk about A.I. oh, you. You go first.
- [32:45]
Michael Batnik
So for the first time, and maybe I'm oblivious to this stuff. In fact, I think I am. But it's. It's. It became overwhelming. The AI writing. I just canceled one of my substack subscriptions. I was reading. Like, wait a minute. This is like, this is so.
- [33:02]
Ben Carlson
It's a huge turnoff. When I. When I notice it, I. I immediately check out and I leave. I'm not reading. If I can tell it's AI Read. I'm not. Sorry.
- [33:08]
Michael Batnik
So I will never read this person again. And like, on the Flip side. So Nick Maguli just wrote his 500th blog post, and guess what? It sounds exactly like Nick Maguli. There's such a difference between, like, what somebody writes, warts and all, versus just something that's like, made by the computer. I don't want to read it.
- [33:29]
Ben Carlson
So when I first started my blog and I thought about doing it, I went through and I read. Remember the one thing back in the day in the early 2010s, the blog thing was you'd have on the side, it would list the 20 most popular blog posts you did or something. They don't. They don't do that anymore. But you. So I went through and I read like all the old blog posts from Eddie Elfenbein and Josh and Barry and all these people who were blogging. And the one thing that I took away from that is, oh, these people write in their own voice. That's what you have to do. That's how you stand out. You don't just like, have this monotonous robotic thing. And that's what. That's. So people who write in their own voice, I think, are going to be able to stand out more. That's what I was trying to do. Okay, I got some AI job anecdotes. So I was in Oklahoma last week. I was speaking at the annual Oklahoma CFA conference. Very nice place. It was kind of. It was very toppy, though, because it was in downtown Tulsa in this like, art deco kind of place. And they just re renovated this place and it looks like a Great Gatsby kind of Hall. Like 1920s, very roaring 20s. So it was very toppy. Anyway, talking to people there and sat next to. They had all these college students there who were there because they were in this equity contest. And so their professor was there. So I asked the professor, I said, how. How is the job market for young people? Because I keep hearing about it. And he said, it totally depends on what your major is. Every finance student we have is getting placed in a job that's not a problem anymore. He said, people in finance are getting hired. It's the humanities and other jobs that are not getting hired. So he said, it's totally dependent on what you're going into. Another one. I talked to one of the largest asset managers that there is. I will not name them. They told me about how they have built their own AI system internally. Okay. And they use it for their equity research analysts, the buy, sell, hold people. Right. So he asked me a question. He said, we built this whole AI tool. It allows us to more efficiently track every company. We're following every company in our universe. We can track them way more efficiently. It's unbelievable how much more efficient this has made us. He said, do you think our employee headcount has gone up by 40% or down by 40% since they implemented this new tool that allows them to track more companies? What do you think, more or less employees?
- [35:28]
Michael Batnik
I mean, I would think the answer's obvious.
- [35:30]
Ben Carlson
Right?
- [35:31]
Michael Batnik
Okay, right. But. But now that you're asking it that way, is it the opposite of what I would think?
- [35:36]
Ben Carlson
Yes. He said, actually no. We've hired 40% more people on this staff. He said, you know why? The whole line used to be in the past that these small cap stocks and mid caps are totally under follow and that's where the alpha is. He said, guess what? There's so many stocks that aren't being covered that weren't covered before. We can. We can cover a wider universe now and it's allowed us to hire more people because we can, we can produce more research to sell.
- [35:58]
Michael Batnik
Interesting.
- [35:59]
Ben Carlson
So we actually have hired more people and it wasn't a huge number. I thought that was very interesting. Anyway, I think if there is going to be a moment for AI that resets certain parts of the labor market, and my whole point here is you're not going to know which ones they are. I think it's going to be hard to guess which parts of the white collar labor economy are going to be impacted the most. So this is Ernie Tedeschi, now writing for Stripe Economics, which is a great substack. And he shows the decline of travel agents over time. And he said it's kind of a slow burn, but it really happens during recessions. That's when you see this massive waterfall of travel agents going away. And I think that's going to be what happens the next recession. That's going to be the big tell. When you're going to have people who have big layoffs and they don't get hired back, that's when you're going to know, like, okay, this is the industry. These are the industries that are really impacted here. You're going to see a huge divergence in the recessions. Do people get hired back or not? I think that's where that's gonna be the tell.
- [37:00]
Michael Batnik
There was an article in the Journal that I've had up for two weeks. I haven't read it yet. I don't know why. The CEO preaching straight talk about AI and job losses. It's the Verizon thing. Did you read this article?
- [37:10]
Ben Carlson
No.
- [37:11]
Michael Batnik
Okay, well, I got home okay.
- [37:14]
Ben Carlson
Sorry. I guess I said the headlines.
- [37:16]
Michael Batnik
Okay. I got home on. On Sunday between kids sports games and my Internet was out. Like, just out, like no Internet connection. So I called Verizon and I'm going through the automated thing and I was just getting so frustrated, like, pressing zero customer service. Sorry, we cannot record. It's like, are you kidding me? How is this not any better at all? Like, at all? It's the most frustrating thing. How are these automated phone solutions, like, not immediately overnight better? And I understand that, that, like, they're not dumb people. They, you know, they're trying to fix it and they know it's frustrating.
- [38:00]
Ben Carlson
I always just say, talk to an operator, talk to an operator, talk to an operator. It never works. So how many content jobs do you think is going to create? Because the Wall Street Journal had this piece about how big brands boost creator spending and they say dove parent Unilever has led many other large companies into its embrace of creators. The company now has 300,000 people recommending its products, up from 10,000 two years earlier. So this is like the. And I know this from having daughters. Like the whole skin care, beauty, whatever, is such a huge thing. That's a, That's. This is one company with 300,000 creators. And it just got me thinking about all the jobs that exist now that didn't exist in the past. Uber driver, doordash driver. But people who are content creators, right? People who just go create content on YouTube and TikTok and Instagram, podcasts, whatever, social media managers. Like, what is that? What is AI going to lead to that we're like, oh, yeah, obviously it's like AI fact checkers. There's going to be in house AI experts. Like, they have it now. AI video producers, they're going to have to be more data managers because the data is going to be so much more important. There'll be like AI governance people, but there's going to be all these jobs that exist from AI that we just don't think about.
- [39:12]
Michael Batnik
Totally.
- [39:13]
Ben Carlson
I'm trying to look at it on a positive. All right.
- [39:17]
Michael Batnik
We got, we got a few emails from Austin residents saying that our explanation last week was totally off the mark. And I think the gist of it was like, more supply leads to lower prices, right? Like they built more and prices came down. Somebody said, I've lived in Austin for 20 plus years and I listened to your talk about Austin. There has been a boon in the building, especially apartments, but to say that more housing Alone is the reason for lower rents is way oversimplified. I can't tell you just how much of a boomtown Austin has been. And since the pandemic that slowed way down, the fallen rents is as much demand as it is supply. So, I mean, that was pretty much the. The long and short of it.
- [39:53]
Ben Carlson
I don't buy. I don't buy it. The. The fact that the pen thing is slowed down and they built more. That's. That's supply.
- [40:02]
Michael Batnik
Well, this. That's what this person said. This person said the fallen rents is as much demand as it is supply. I think what we spoke about last week was only supply. Oh, there has been. There has been a massive slowdown in Austin.
- [40:14]
Ben Carlson
Okay. So he said there's still 18,000 people moving here the past three years. That's a huge slowdown. It's not like they're seeing a net migration, though.
- [40:23]
Michael Batnik
That's not what he's saying. Don't move the goalpost. This person.
- [40:25]
Ben Carlson
Yeah, he is. I'm reading it. He's saying there's been a huge slowdown in people coming here because they were adding way more people per year before the slowdown.
- [40:34]
Michael Batnik
Is demand slowing down?
- [40:38]
Ben Carlson
Sure, but this wouldn't have happened if they didn't build all those apartment buildings. I'm. I'm disagreeing with the feedback here. Sorry. Great email. I don't believe it. It's the supply. They built more apartments. That's why. That's why prices fell.
- [40:51]
Michael Batnik
This is a weird. This is you failing to it. You. This is a weird take by you. This person said, this is. The fallen rents is as much demand as it is supply. Which part are you disagreeing with?
- [41:03]
Ben Carlson
I'm saying it's more supply than demand.
- [41:04]
Michael Batnik
Okay, but last episode we didn't speak about demand at all. And this person's saying, hey, it's not that simple. Yeah, it's. Don't be so defensive. This person's right.
- [41:13]
Ben Carlson
It's not being defense. I'm just saying it's.
- [41:14]
Michael Batnik
You're being defensive. All right. Bethany McLean and two other authors from Huntbrook wrote a piece on Hamilton Lane, a publicly traded alternative asset manager, which they are short, and they gave credit to the Journal and the FT for highlighting the accounting shenanigans that are commonplace across the industry. It's not just Hamilton Lane, but basically, they buy companies that are private equity backed, called secondaries, and they're buying them for. The secondary market has boomed because there's been a lack of exits. And you hold the company for three years, five Years, seven years, eight years. And there's no exit. Like investors are willing to take a, a quote discount to I guess quote again, air quote nav. And so the explosion of secondaries happened. Fair enough. All you know that all is above board. But the problem is that Hamilton Lane will buy a company for 80 cents on the again, air quote dollar and then just mark up to dollar. It's like buddy, if you could buy a company for 80 cents, it ain't worth a dollar. Now fine, you buy something for 97 cents, yeah, it's probably worth a dollar. And not only that, but then they're, they're obviously doing that to charge fees on that and that's responsible for a large portion of the growth of the last three years. Like a large large portion. So they wrote last year Hamilton Lane brewed another accounting portion, changed the way the firm is compensated. It used to be paid incentive fees when gains were realized, meaning when the underlying assets were actually sold. Now it can collect fees regularly based simply on increasing its own marks. The change allowed Hamilton Lane to pull forward fees that may have taken years to accrue. Thanks to the new fee structure, Hamilton lane took in $58 million of incentive fees from the private assets funded in a year that ended in March 2025. In a statement, Hunter Brook addressing the issue, the company said that because semi liquid funds typically reinvest proceeds rather than distribute them, traditional carry calculations based on distributions are less appropriate, making NAV based carry a better fit.
- [43:26]
Ben Carlson
So they do this because their, their employees need to be paid. Right. They're worried they're going to lose employees if they, because they're not getting carried, they're not getting the fee, they're not getting the 20% of the 2 and 20 because there's no, oh, there's no.
- [43:40]
Michael Batnik
It might, it might not be that quite that innocent. They also wrote later in the article about the CO CEOs I believe getting a huge restricted stock grant with performance based, you know, numbers in there like every other executive pay package.
- [43:56]
Ben Carlson
So okay, so you're going, are you going from a long, long the private equity industry to short now?
- [44:00]
Michael Batnik
No.
- [44:01]
Ben Carlson
Paper wise?
- [44:02]
Michael Batnik
No, no, no, no, no, no. I think that. Well first of all Hamilton Lane is particularly exposed because they are much more in the retail space. They are much less of an institutional based company as opposed to like Carlisle, for Carlisle for example. So the gist of that is like these easy, these, these easy markups. It could go the opposite easy come, easy go type of thing.
- [44:28]
Ben Carlson
The stock is in a 55 drawdown. Which is actually not as bad as Blue Owl which is still 66 down from the highs.
- [44:34]
Michael Batnik
No, I, I, I, I am not pounding the table that I think that like the private credit credit stuff is overblown because how would I know how bad the loans really are? But I do think so. Is there smoke?
- [44:45]
Ben Carlson
Yeah.
- [44:45]
Michael Batnik
Listen, Obviously if there's 25% of your of your portfolio is loaning money to these software names that are in, in trouble. Yeah, you're have a few write downs but this is why my take is like yes, some of these funds will have maybe negative three year returns. Like forget about the 9 to 11% returns. Like maybe it goes, maybe it goes to 2%, maybe it goes to negative 2% CAGR for the next three years. Do I think that there's going to be like blowups that take down like an entire industry asset class? That's where I think it's hyperbolic.
- [45:15]
Ben Carlson
This is why it's easy to pound the table on both ends of the spectrum though because it's so hard to understand what's going on with these portfolios.
- [45:21]
Michael Batnik
Yeah, how would we know?
- [45:22]
Ben Carlson
That's the thing, we don't. That's why you can say like there's way more trouble underneath the surface than you realize or no, no, things are actually fine. Like people on the outside don't know.
- [45:30]
Michael Batnik
Correct.
- [45:31]
Ben Carlson
That's what makes it hard.
- [45:32]
Michael Batnik
We're speculating.
- [45:33]
Ben Carlson
Goldman Sachs. This one was flatter on social media and this shows a survey from Goldman Sachs. And I had to look this up because I kept seeing the numbers on social media. So I went to the actual source map favor posted it, it says 40,000 or 40% of people who make $300,000 of 500,040% of people who make $500,000 or more live paycheck to paycheck. Okay, 40% people who make a half billion dollars a year report living paycheck to paycheck. Now here's how they define this though. I looked because a lot of people look at this and go see lifestyle creep. It doesn't matter how much money you make, if you spend it all, you're never gonna get ahead. And like they take this stuff at face value. My way of looking at this is two things. One, surveys are broken. Two, brains are broken. That's way more of a reason here than people who make a half million dollars aren't saving any because it also it asks primarily living paycheck to paycheck means I find it tough to make progress on any long term financial Goals. That's.
- [46:31]
Michael Batnik
Oh my God.
- [46:32]
Ben Carlson
That's what they, that's how they define living paycheck to paycheck.
- [46:35]
Michael Batnik
That. You said that, Ben. Because almost always we never see the questions.
- [46:40]
Ben Carlson
I had to go to the actual report to find this good for you. I find it tough. And the funny thing is it says people who make 200 to $300,000 a year, only 16% report living paycheck to paycheck. Then all of a sudden it jumps to 40% for people make a half a million. This survey is throughout the window.
- [46:56]
Michael Batnik
I find it tough to make progress on any long term financial goals. Now that means you live paycheck to paycheck, right?
- [47:04]
Ben Carlson
If you make half a million dollar a year, what if your, what if your long term financial goals are I want to own a big house right on the ocean, I want to fly private. Well, I'm not making any progress or those goals.
- [47:13]
Michael Batnik
So I think most people find it tough to make progress on any long term because it takes time.
- [47:20]
Ben Carlson
Yes, that's the problem.
- [47:21]
Michael Batnik
Unless you have a windfall, it takes time to hit your goals. Isn't that like the nature of what a goal is? It's something that you strive for. So by definition it takes time to reach.
- [47:33]
Ben Carlson
Yes, I.
- [47:34]
Michael Batnik
And nobody's goals are what they can accomplish tomorrow. This is such nonsense.
- [47:39]
Ben Carlson
That's why that's not paycheck to paycheck. And there's also a lot of people who max out their 401k and also also the Roth IRA and their HSA and their 529 and maybe make a brokerage account and then say I'm living paycheck. Paycheck after all that, you know. But I also think the other part is social media has just broken brains. Like we, we're not meant to see how people, how the other, how other people live. How the better the top 1.1% live. Like we see that on a daily basis. We just, we our brains weren't evolved enough to see that all the time.
- [48:08]
Michael Batnik
I just don't think social media is great for society. But I think it's just had all sorts of impacts that we can't quantify. So look at this chart from. Go ahead. We about to say something.
- [48:17]
Ben Carlson
How much does that thing weigh?
- [48:20]
Michael Batnik
I don't know. It's not that heavy, but it's got some good resistance. Look one to five. One to five. I'm on five. Not to brag. Derek Thompson.
- [48:30]
Ben Carlson
More than 20 on 20 on that. You got ripped off. I think it was 30 okay, that's not bad.
- [48:35]
Michael Batnik
Derek Thompson wrote a post like, if Americans are so rich, why they so unhappy? Something like that. And the gist is, well, there's a bunch of things. It's inflation, it's social media, it's all that. But it's the, the pandemic broke everything. Yeah, look at this chart. I forget where he pulled this from. Reported happiness, 1972 to 2018. It was steady. You know, you had your ups and your downs, but basically you could draw a straight line through it and then permanent crash, never to be recovered ever again.
- [49:08]
Ben Carlson
Yeah, I agree.
- [49:10]
Michael Batnik
It's, it's Covid. All right. On the, on the flip side, going back to my transcript stuff, new week, same story. The consumer is in pretty good shape. Key Corp. The consumer is in great shape. If you look at all of our credit metrics, if you look at the fact that these tax refunds from the big beautiful bill will exceed what they did last year. If you look at spending, spending is kind of up mid single digits year over year. I might spend these up maybe double digits. So on the consumer side, the consumer, actually, our consumer's in good shape. Synchrony Financial. And then the consumer is still in pretty good shape. It's been very consistent over the past few quarters. We're seeing signs of strength when you get spending patterns. Wells Fargo. The economy is still extremely strong. Loan demand is decent. Delinquencies on the consumers are extremely well controlled. Listen, we're not making this up as, when this, when this changes, we'll, we'll read the new quotes.
- [49:56]
Ben Carlson
Someone asked me, I'm going to be doing a lot of podcasts in the month or two ahead. I've already done a lot for a book because this is what you do. You go on a podcast book tour. And I was on a Seeking Alpha podcast and they asked me about, like, how I think about earnings reports. And I said, I think it's, it's a great macro. Tell. I said, I don't like. I'm not a forensic accountant that digs into the numbers. That's not my forte. But if you listen to like the credit cards and the banks and the retail about how they talk about the consumer, I think it would have saved you a lot of poor economic takes over the past four to five years.
- [50:27]
Michael Batnik
Earnings calls over headlines. If you want to hear about what's actually happened to the consumer, don't read the Wall Street Journal. No offense. You could pick any publisher. I love the Washington, but all right. I listened to the Kindergarten Coffee Watchables. And I thought this was a movie that I had seen in theaters because I had just seen it so many times as a child. Came out in 1990. Did I see this when I was five? Probably not.
- [50:51]
Ben Carlson
I showed it to my kids about six months ago, and they. Because we were going through an Arnold phase, and they absolutely loved it.
- [50:58]
Michael Batnik
It's so. It's so good.
- [50:59]
Ben Carlson
He's just a. One of one.
- [51:02]
Michael Batnik
Yeah.
- [51:03]
Ben Carlson
The accent, you can't. You can't recreate that. The accent is just perfect. How he says words.
- [51:08]
Michael Batnik
So that was. Did you listen to the Rewatchables episode?
- [51:10]
Ben Carlson
Yeah, I did.
- [51:11]
Michael Batnik
Thoroughly enjoyable.
- [51:12]
Ben Carlson
That's good.
- [51:13]
Michael Batnik
All right. The most watched movies right now on streaming. So the. The shitty movie Thrash
- [51:24]
Ben Carlson
garbage.
- [51:25]
Michael Batnik
So bad. 904 million. What is that? Minutes? Hours, whatever it is. Oh, oh, minutes. There is minutes. It's not. It's eight times. Number two. Netflix is so dominant. Number two is Balls up, which.
- [51:45]
Ben Carlson
Wait, wait. So here's the thing. You. You talk about people using AI to like better themselves. You know what everyone does when they go on Netflix? Instead of searching around, they go to the top 10. And, oh, this thrash movie is number one. I'll watch that. That's what people. That's the amount of research people do. They look for shortcuts. I've never heard of any of these other movies, by the way. None of all these other four movies. I've never heard any of them.
- [52:05]
Michael Batnik
So I started watching Balls Up. I fell asleep after 10 minutes. But it's. It's Mark Wahlberg. And who's the guy from. Let me just Google his name. Paul Walter Hauser. So he invented a condom for the Olympics. Like, they're like this. This. They're the biggest. They're the sponsoring condom brand, and it goes over your penis and your testicles, and it's called Balls Up. Okay, so haven't finished it, but is
- [52:34]
Ben Carlson
that a Keanu Reeves movie on Apple tv?
- [52:36]
Michael Batnik
All right, so check this out. What is Apple doing? So Apple made a movie with Jonah Hill, Keanu Reeves, and Cameron Diaz, and
- [52:47]
Ben Carlson
seriously, I've never heard of it.
- [52:49]
Michael Batnik
It. Well, it got a 29 from the critics, which is sort of not relevant for comedy, but it got 30 from the audience, so, you know, it's straight trash.
- [52:58]
Ben Carlson
It's got a 4.5 on IMDb. Holy cow.
- [53:02]
Michael Batnik
Anyway, Netflix is so dominant, it's. It's eight times number two. Number three is Outcome, the Keanu Reeves movie. Number four is the Truth and Tragedy of Mariah Wilson, another Netflix movie I've never heard of. I watched the most recent one, Apex. It was so. It's with Charlize Theron and Perrin Edgerton.
- [53:22]
Ben Carlson
Okay. George wanted to watch that one so bad.
- [53:25]
Michael Batnik
Don't let him watch it. It was like. But like, I know we've mentioned this a million times. There's just something hollow about these Netflix movies.
- [53:33]
Ben Carlson
Yes, obviously, like, this was.
- [53:35]
Michael Batnik
It was just garbage. Really, really, really not a good movie. All right, also in streaming news. So Peacock is now where a lot of the NBA playoff games are homed. Housed.
- [53:50]
Ben Carlson
Yes, I learned this by. We went to a restaurant to try to watch the Pistons game. Like, all right, so we don't have Peacock.
- [53:55]
Michael Batnik
So. So they reported earnings last week and they posted a first. First quarter loss. This is comp. From comcast. Peacock lost $432 million. They've lost $6 billion cumulatively. I mean, that's a lot of money.
- [54:15]
Ben Carlson
No, Lucas Shaw had 11 billion since they debuted in 2020.
- [54:19]
Michael Batnik
Oh, okay, so I just pulled. I just pulled this from since 20. Okay, so. So 6 billion was. Since 2023.
- [54:26]
Ben Carlson
Okay, so since they debuted, they've lost $11 billion in 20. Since 2020.
- [54:30]
Michael Batnik
Subscriber growth is. It's growing a little bit, you know, 46 million, up from 41 million in the previous quarter. But look at their churn. So Lucas Shaw has a chart. Peacock has started to draw in lots of viewers with live sports, so football, basketball, Olympics. But it struggles to keep them as the worst churn of any service by far. Look at that.
- [54:52]
Ben Carlson
So who do they. Who do they combine with? Like, they need to. Obviously they need to be consolidated into someone else.
- [55:01]
Michael Batnik
I don't know if. I don't know. I don't know what happens, but it's not. It's not working. All right, I was right about this, Ben. No offense. You were wrong. Michael Jackson is a Michael Jackson. Michael, the Michael movie is a smash hit.
- [55:14]
Ben Carlson
So I heard. They didn't go into the later stuff of his life.
- [55:17]
Michael Batnik
No, no, no, because the family had. The family was. You know, they had. They were $97 million domestically. Biggest opening for ever for a biopic of any kind. Biggest opening of the year for a live action film. First biopic in history to surpass $100 million worldwide in a single day. Monster movie. Monster movie.
- [55:37]
Ben Carlson
Okay, you be watching this one. I won't be watching it.
- [55:40]
Michael Batnik
I'm not watching this one. $217 million worldwide. Huge numbers. That's Matt Fellany. No, I don't love these. I don't love these movies. I like the Queen, but Bohemian Rhapsody, but I just, I just don't care about them. I didn't see Bruce. The Bruce one?
- [55:55]
Ben Carlson
No.
- [55:56]
Michael Batnik
Didn't see the Elton John one. Oh, I saw the Bob Dylan one, but I fell asleep on the plane. It's not my thing. All right, real quick. Prediction markets, which are essentially just gambling. Sports gambling websites. Somebody posted this chart. Outside of sports, Poly Market owns the market. So Calcia is 87 sports.
- [56:22]
Ben Carlson
Wow.
- [56:23]
Michael Batnik
Poly market is only 39 sports.
- [56:26]
Ben Carlson
Okay. So most of it. So they have both platforms at 12 billion in volume. Wow. Okay.
- [56:32]
Michael Batnik
But Calcia is predominantly sports, which is why they're fighting so heavily with, you know, for their survival, I guess, with the States and whatnot.
- [56:40]
Ben Carlson
Okay. I saw this tweet, Ben Eisenhardt on Twitter. Being in your early 40s is weird, man. People around your age are in every stage of life. You have people who are grandparents, you have people who have newborns, people who are grandparents.
- [56:52]
Michael Batnik
I don't have people at my age that are grandparents.
- [56:54]
Ben Carlson
Yeah, that'd be weird, I guess. Late 40s, you have people dating 25 year olds. You have people celebrating their 20th wedding anniversary. Some of them look 60 and some of them look 30. All the bases are covered in your early 40s. I was thinking about this recently. I can be being that like you're, you're at a touch point where you're like, you're thinking about, you're right in the middle of like retirement age and like your 20s. And I, I guess I'm just, my point is, I understand where the midlife crisis comes from. Being at this age. I totally get it. I get why it happens to so many people. Because you look back and you go, oh my like super duper fun days like my, Woohoo. Those days, like those are gone.
- [57:29]
Michael Batnik
I've been thinking about this a lot as well. I saw somebody recently who, who I haven't seen in a while and they, they looked old. And I thought, well, yeah, we are getting old. So I, I, I've been thinking a lot about life and our age and our kids and all that stuff. And I still very much view myself as like a baby because I was the youngest of three kids. So I grew up the baby. I was a jackass for, for people that have not listened to every episode. I was an idiot in high school. I got kicked out of college twice because I was just a clown. I, you know, didn't take anything seriously. And I still very much identify with like being that person. But and also obviously, like, I very much more identified, thank God. At this point in my life with like, not being that person, but that push and pull between, like, I still feel like I'm 25, but I need this thing because my body is breaking down. Yeah, man, it's real. It is.
- [58:21]
Ben Carlson
I'm just saying. I totally get where it comes from. I read all the stuff about, like, how it happens and why it happens. And guess what? It's everything people tell you before and you kind of like brush it off when you're younger. Like, eh. Like it's all true. Everything they tell you is true. The time goes fast with kids. All the. All that stuff. It's so. It's true. Funny how that works.
- [58:42]
Michael Batnik
That's right then.
- [58:44]
Ben Carlson
All right, recommendations. I got two non recommendations. I was on a flight and I like, I'm going to try some new release movies. And I tried the Housemaid, that's a Sydney Sweeney one. And I tried Mercy with Chris Pratt. And for me, they're both sucked. Well, they're both five minute movies. I. Five minutes and I rip the cord. I cut my loser short. Both of them. Like, I'm not going to like these movies.
- [59:06]
Michael Batnik
I can tell five minutes in Housemate is a good airplane movie.
- [59:10]
Ben Carlson
Okay, I could just tell, like, I'm not going to. I'm not going to like this.
- [59:12]
Michael Batnik
So Mercy was. Mercy was.
- [59:15]
Ben Carlson
I mean, it was an obvious Minority Report ripoff. Two minutes into the movie and you could tell it's going to be worse. So what's the point of watching it, right? I did finally finish DTF St. Louis. Just one of the weirdest shows ever. Very funny. So weird. Yeah, I enjoyed it. It was very weird. But then someone emailed us last week and said, hey, the guy who wrote and produced all these and the showrunner for DTF St. Louis, he also wrote and did one of my favorite shows on Amazon called the Patriot. And my brother pounded the table on this show for me forever. And so I'm like, you know what? Fine, I'm gonna watch this. And I'm about five episodes in. And so again, it's the same guy who did dtf. And it's got to be tonally one of the weirdest shows ever. It's a dark comedy slash dramedy, but a guy in the CIA did it
- [59:57]
Michael Batnik
give you a toner.
- [60:00]
Ben Carlson
It's. It is one of those shows where the people who love it will like, fall on the sword for this movie or this show. It.
- [60:06]
Michael Batnik
But I'm sorry to interrupt. That was a weird reference. That was. I didn't. I know that was A sexual innuendo that I did not make up. That that was a reference to a movie called Pitch Perfect. A toner is a musical boner. So I'm just for the audience.
- [60:18]
Ben Carlson
Okay, Sorry, I'm behind on Pitch Perfect references. I did not get that reference.
- [60:22]
Michael Batnik
Okay.
- [60:24]
Ben Carlson
But this is the kind of show where you either love it or you hate it. There's no in between. You're like, oh, my gosh, this is my kind of comedy. It's very subtle and I really like it. And I know, I bet a lot of people would probably hate it, but if you like DTF St. Louis, you should probably at least give it a try.
- [60:40]
Michael Batnik
Okay. I feel like you were talking to me when you said people would hate it. Would I hate it?
- [60:43]
Ben Carlson
Okay, well, you liked DTF St. Louis.
- [60:45]
Michael Batnik
I loved it, but I don't know that. Yeah, I think his Baitman and the other guy were so good.
- [60:49]
Ben Carlson
True, that was part of it. But it's got John Lock from Lost, the guy who played Joe Picket in the Joe Picket series on Paramount. Anyway, that's what I got. One other thing. I've realized something. Why movies of the past 10 years or so just don't hit anymore? Marty supreme is on HBO, right?
- [61:09]
Michael Batnik
Awesome.
- [61:09]
Ben Carlson
It's a one. But every good movie from the past 10 years is. You watch it once and that's it. You never rewatch it again.
- [61:15]
Michael Batnik
Yeah, it's not rewatchable.
- [61:17]
Ben Carlson
There's like, no good movies are rewatchable anymore. That's the problem.
- [61:22]
Michael Batnik
Top Gun, Maverick, by the way.
- [61:24]
Ben Carlson
Okay, that's fair.
- [61:25]
Michael Batnik
They're making a third.
- [61:26]
Ben Carlson
Yeah, they probably shouldn't.
- [61:27]
Michael Batnik
Yeah, yeah, they should.
- [61:28]
Ben Carlson
I'll go. Obviously I'm in Tom Cruise. Probably die. Let's be honest. One of these. He should die.
- [61:35]
Michael Batnik
Did he? I thought. I thought he did die in the last one.
- [61:37]
Ben Carlson
Nah, he should have. Okay. That's my thing. There's no more rewatchable movies anymore. Like, even if they're good, high quality movies, they're very few that are rewatchable. I think that ended in, like 2015. Rewatch a bit. And it's probably because there's no comedies anymore.
- [61:50]
Michael Batnik
Yeah, that's probably right. Oh, speaking of that, though, I did see on Instagram a quote from Jonah Hill and he said, I'm back. Like, he basically said, I spent the last decade being all serious and not happy and get ready to turn your brain off because I'm back to making the stupidest you've ever seen and I can't wait. There was nothing better. There was nothing Better than Jonah being Jonah.
- [62:10]
Ben Carlson
He's one of the best, like, sarcastic line readers that there is.
- [62:14]
Michael Batnik
The best. The best. So that.
- [62:16]
Ben Carlson
No recommendations for you? No horror movies this week?
- [62:19]
Michael Batnik
Well, been busy with playoffs, so that's been cutting into my. My. My watch time. I did watch the Hulk Hogan doc. I think we spoke about Hulk when he died. Were you. You were not a wrestling fan, right?
- [62:29]
Ben Carlson
I mean, until I was, like, eight.
- [62:30]
Michael Batnik
Okay, so I wasn't, like, a weirdo, but, like, I watch him, like, in middle school. Like. Like DX and the attitude era. Nwo. Like, that was a big part of my seventh and eighth grade childhood. And Hulk Hogan was like. He was. He was bigger than wrestling. I mean, obviously, right? He was, like, one of the legitimately the most famous people in the world for as big as the Rock is. And Stone Cold was like. Hulk Hogan was as famous as, like, Michael Jackson globally.
- [62:59]
Ben Carlson
And then he had the reality show. Remember that one?
- [63:01]
Michael Batnik
Yeah. Hogan Knows Best. Sure do. So if you're a wrestling fan, nothing in there that you don't already know, but I enjoyed it. Okay. Okay. Okay. All right, Ben. Everything else good?
- [63:13]
Ben Carlson
There's not a lot to talk about in the market these days.
- [63:15]
Michael Batnik
Oh, there's tons to talk about.
- [63:17]
Ben Carlson
You think so?
- [63:18]
Michael Batnik
Oh, yeah.
- [63:18]
Ben Carlson
Okay. I think the stock market, just for the last week or so, is boring again. That's all I got.
- [63:24]
Michael Batnik
Certainly more boring than March, which is a good thing. Okay. Animal spirits@the compoundnews.com appreciate everybody's emails. Hope everybody's getting ready for spring weather to roll around. I sure am. Thank you for listening. See you next.