A Bubble is Coming (EP. 416)

Summary

Animal Spirits Podcast Summary: "A Bubble is Coming" (EP. 416)
Released on June 11, 2025
Hosts: Michael Batnick and Ben Carlson

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Introduction and Recent Discussions

In Episode 416 of the Animal Spirits Podcast, hosts Michael Batnik and Ben Carlson delve deep into the current state of the markets, exploring the potential emergence of a new economic bubble. The conversation builds upon their recent podcast with Dr. Daniel Crosby, where they examined the psychological impacts of money through Crosby's book, The Soul of Wealth, and the LinkedIn post, "The Joneses Aren't that Happy" (01:13).

Reverse Flex: A Modern Conspicuous Consumption

Batnik introduces the concept of "Reverse Flex," where ultra-wealthy individuals showcase their affluence in understated ways, such as driving modest vehicles despite their vast wealth. This behavior sparks a debate among listeners:

• Ben Carlson (03:05): Questions whether Reverse Flex is a positive or negative trend, suggesting that while he tolerates it, it shouldn't permeate all aspects of wealth display.
• Michael Batnik (03:07): Criticizes Reverse Flex as insincere, describing it as "a dick move" where the supposed modest display inadvertently highlights one's wealth.

The Looming Bubble: Market Dynamics in 2025

Batnik posits that the current market environment is the most intriguing they've witnessed in their professional careers, citing multiple cross currents influencing investor behavior:

1. Political and Economic Factors:

   • Trump and Tariffs (04:15): Ongoing discussions about the impact of tariffs on the global economy and the potential decline of the dollar.
   • Global Investments: Notable investments by companies like Netflix and Blackstone in Europe highlight a shift in global economic power (08:09).

2. Technological Advancements:

   • AI Industrial Revolution (04:26): Batnik emphasizes the transformative impact of AI, referencing Mary Meeker's comprehensive report. He warns that the average investor may be underestimating AI's influence, potentially leading to a market bubble.
   • Ben Carlson (05:31): Highlights the historical trend where groundbreaking technologies often precipitate market bubbles.

3. Retail Investors and Market Participation:

   • Rise of Retail Investors (05:58): The surge in retail investors now constitutes approximately 25% of all trading volume, contributing to increased market volatility and bubble potential.
   • Ben Carlson (06:11): Suggests that the heightened appetite for risk among retail investors may pave the way for more frequent bubbles.

4. Post-COVID Spending Habits:

   • Permanent Shift in Consumer Behavior (06:02): The pandemic has irrevocably altered spending patterns, a topic further explored through insights from companies like Marriott (57:30).

5. Federal Reserve Policies:

   • Interest Rates and Inflation (04:18): Debates around whether the Fed should cut interest rates to stimulate the sluggish housing market and address rising unemployment (24:32, 25:57).
   • Ben Carlson (26:07): Advocates for rate cuts, citing low M&A and IPO activities as indicators for potential monetary easing.

AI's Role in Shaping the Market

A significant portion of the discussion centers on Artificial Intelligence and its profound impact on various industries:

• Mark Rubenstein (26:07): Shares insights from his Substack, emphasizing how AI tools have revolutionized financial research by enhancing productivity and accuracy.
• Investment Strategies (30:21): Ben Carlson recommends a straightforward approach to AI investments by focusing on major indices like the S&P 500 or NASDAQ 100, suggesting that 35% of the S&P 500 is already benefiting directly from AI advancements.
• Potential AI Bubble Indicators (35:14): The hosts explore metrics such as Palantir's staggering price-to-sales ratio (105x) compared to industry giants like Coca-Cola, positing that such valuations may signal an impending bubble.

Retail Investors and Market Sentiment

The hosts analyze the behavior and impact of retail investors on the current market:

• Stock Market Ownership (10:20): Ben Carlson highlights a surge in stock ownership, reaching 62%, the highest since the late 1990s. He attributes this trend to the pandemic's influence in encouraging more individuals to invest.
• MAG7 Performance (38:13): Both hosts discuss the disproportionate performance of the MAG7 (Meta, Apple, Google, Amazon, Microsoft, NVIDIA, and Tesla) stocks, noting significant drawdowns in 2022 and 2025, yet contrasting them with historical market resilience.

Private Markets and Cryptocurrency Insights

The conversation shifts to private markets and the evolving landscape of cryptocurrency:

• Private Equity Challenges (50:33): They address negative trends in private equity distributions, emphasizing the complexity and lack of transparency in secondary markets.
• Cryptocurrency Integration (43:15): Ben Carlson argues that cryptocurrency has become intertwined with traditional finance, evidenced by the rise of crypto ETFs and institutional investments. This blending signifies a new era where crypto is no longer separate from mainstream financial markets.

Housing Market and Economic Indicators

A critical discussion unfolds around the housing market's stagnation and its broader economic implications:

• Housing Activity Decline (25:17): Ben Carlson points out that US existing home sales have plummeted to the lows seen during the Great Financial Crisis, attributing this to high mortgage rates and weakening demographics.
• Federal Reserve's Potential Response (24:32): The hosts debate the necessity for the Fed to intervene by cutting rates to rejuvenate the housing market, considering the long-term consequences of inaction.

Consumer Behavior and Economic Health

Through excerpts from company earnings reports, the hosts assess the health of consumer spending:

• Tractor Supply (57:30): Reports stable consumer spending despite cautious sentiments, fueled by seasonal product sales.
• Marriott's Insights (57:53): Observes a permanent shift in consumer spending patterns, with travel becoming a prioritized expense across all demographics.
• Dollar General (57:53): Highlights that a significant portion of customers have experienced reduced income, indicating potential future economic vulnerabilities.

Conclusion: Vigilance Amidst Market Excitement

As the episode wraps up, Batnik and Carlson emphasize the importance of remaining vigilant in the face of exciting yet potentially unstable market conditions. They caution that while technological advancements like AI present significant opportunities, they also carry risks of inflated valuations and market bubbles. The hosts advocate for a balanced investment approach, leveraging comprehensive research and mindful risk management to navigate the complex landscape of 2025.

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Notable Quotes:

• Michael Batnik (03:07): "It is like, I'm so rich, I drive a beater. It's like, come on, dude, don't flex on me."

• Ben Carlson (05:31): "We've never seen a case in history where a life-altering technology didn't cause a bubble."

• Michael Batnik (04:15): "The most interesting market environment I've ever lived through."

• Ben Carlson (26:07): "AI is deflationary."

• Ben Carlson (35:14): "Ben Thompson wrote a piece a couple weeks ago about just the amount of money that the big companies are spending on AI. How long is the market going to let them?"

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This episode provides a comprehensive analysis of the interplay between technological advancements, investor behavior, and macroeconomic factors shaping the markets in 2025. Batnik and Carlson offer insightful perspectives on the potential risks and opportunities, urging listeners to stay informed and cautious as they navigate their investment strategies.

Transcript

[Michael Batnik]

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[Michael Batnik]

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[Ben Carlson]

Learn more at tieroprice.com Explore ETFs Tieroe Price Investment Services, Inc. Distributor 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.

[Michael Batnik]

Positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Ben, good morning. How are you?

[Ben Carlson]

I'm doing good.

[Michael Batnik]

Okay. It's good to see you. I want to mention in case anybody missed it, on Saturday, Ben and I did a podcast with Dr. Daniel Crosby. Title is the Joneses Aren't that Happy. We spoke about his book the Soul of Wealth and the Joneses Aren't that Happy is a post that Daniel wrote on LinkedIn. That was the jumping off point for the conversation and it was great. I love talking about money, how it makes it feel.

[Ben Carlson]

I really enjoyed it because we dug deep and his book is great because it's almost like, I guess, short blog posts, the book. But he covers the whole gamut of how money impacts you, the psychology behind it. And we dug deep and I love those kind of conversations where you just think deep about money and obviously I think it's in a privileged place to think about that kind of stuff. But there are so many different ways that money can screw with your head and we get into a lot of them. On the show.

[Michael Batnik]

We got a lot of emails about a topic that we discussed, the Reverse Flex people that are super rich in the way that not just financially successful, but in the way that like, everybody knows they're rich. Money that you can't hide. Who drives like a beater. It's like a reverse flex.

[Ben Carlson]

And what. What was the consensus saying, that's a good thing or a bad thing?

[Michael Batnik]

It varies. Varies. We had a few people.

[Ben Carlson]

Here's the thing, though. If you're. If you're going to do the reverse flex, you have to flex in other areas, though. I'm fine with the reverse flex, but it's not on everything.

[Michael Batnik]

Nah, it's a dick move. It is. It's like, I'm so rich, I. I drive a beater. It's like, come on, dude, don't flex on me.

[Ben Carlson]

All right, so wait, but when I drive in a court again someday, am I. Is that gonna be a reverse flex or not?

[Michael Batnik]

It depends how rich you are.

[Ben Carlson]

Okay.

[Michael Batnik]

And you're never gonna be that rich.

[Ben Carlson]

Okay?

[Michael Batnik]

So. No. And I'm not talking about the person with a nice income. I'm talking about the uber rich person.

[Ben Carlson]

Yeah.

[Michael Batnik]

If you, if you have a nice income and you drive an Accord, more power to you. Like, that's, you know, you want to be frugal and spend your money in different ways and give them where to try to, whatever. That's one thing I never liked.

[Ben Carlson]

Yes. I'm never a fan of the. Warren Buffett has lived in the same house for you read Snowball, right?

[Michael Batnik]

Yeah.

[Ben Carlson]

Buffett literally had a racquetball court in his house. He was not living in this tiny little shack.

[Michael Batnik]

I've made this joke before, but what they don't tell you is he had a 90,000 square foot basement.

[Ben Carlson]

There you go. Underneath, Right?

[Michael Batnik]

All right. I want to make the case, Ben, that, and this just hit me this morning, just 30 minutes ago. I have to think hard about this, which I haven't yet, but this is a take that's baking in the oven. Three quarters baked, because I believe it. This might be right here, right now, in the year 2025. The most interesting market environment that I've ever lived through. Now, I haven't lived through all of them, but in my professional career, I think this is the most interesting one. And I'll make the case as follows.

[Ben Carlson]

For the setup going forward, the current.

[Michael Batnik]

Market today, right now, these are some of the cross currents that investors are dealing with. Number one, first and foremost, we have Trump and the tariffs.

[Ben Carlson]

Cross currents, Great, great ones.

[Michael Batnik]

Many cross currents. We have Trump and the tariffs, and we are still living through what the tariffs are going to be, where they're going to land, how they're going to impact the global economy and not to mention the global world order, the fall of the dollar, the mooning of gold and bitcoin, all interconnected. All right, so you've got that one. That alone would be a big one. Arguably one a. Yeah. You know what? I would say this might even be bigger. Is AI the industrial AI revolution. In fact, not might. Let me not caveat that this is bigger than Trump and the tariffs. The AI industrial revolution. I went through Mary Meeker's 340 slide presentation. Took me couple plane trips and several hours to get through. It was meat, meaty, very dense. And I think the average person, in fact, let me stop caveating. The average person and the average investor is wildly underestimating how impactful this is going to be. We're going to talk about it later in the show.

[Ben Carlson]

I agree. I, I've been spending a lot more time thinking about this too and I, I. It hurts your brain a little bit to think about the ramifications of it.

[Michael Batnik]

So a little teaser. A bubble is coming. I'm sure of it.

[Ben Carlson]

We've never seen a case in history where a life altering technology didn't cause a bubble.

[Michael Batnik]

Okay, then you've got maybe the wheel.

[Ben Carlson]

You think there's a wheel bubble back in the, back in the day.

[Michael Batnik]

Then you've got the rise of the retail investor. Big story, right?

[Ben Carlson]

Yes.

[Michael Batnik]

The retail investor makes up 25% of all trading volume. Something like that.

[Ben Carlson]

In our in the Compound and Friends live show last week I made the case. What if this is secular, this whole appetite for risk and that to your point, could mean more bubbles.

[Michael Batnik]

You've got the post Covid environment, a permanent shift in spending habits which we'll talk about later in the show. You've got the Federal Reserve. Will they or won't they when they will they cut interest rates? What are they going to do with potentially inflation on the back end coming to the back end of this year. And then you've got percolating under the surface, the rise of Europe. And I saw these two headlines from Carl Continu over at Blue Sky. I'm no longer on Twitter, not making an official announcement, but I, I deleted the, I haven't been tweeting in a long time but I deleted the app off my phone last night.

[Ben Carlson]

That's a big move. So now you're just checking on your desktop more.

[Michael Batnik]

Just checking my desktop. But I was, I was in bed with, sorry Tantra, I was in bed with Logan. And I mean I am ashamed to admit, but I have my Phone with me in bed while I'm putting them to bed. And it's horrible.

[Ben Carlson]

Yeah.

[Michael Batnik]

But this was the Charlotte book that counts back. I'm in bed with little Logan, my angel, and I'm like, yeah, the algo got me. I'm looking at murder videos. I'm like, oh, my God, this is sick.

[Ben Carlson]

The thing is, when you watch one video, you're watching a sports highlight or something. The next video is, like, two dudes brawling in the street.

[Michael Batnik]

Yeah. So.

[Ben Carlson]

But they know how to get you because. Because you're gonna turn away when two guys are just beating the daylights out of each other. Here's the thing. My Twitter thing is I finally opened up a burner account, and it's just news feeds. It's all the financial news.

[Michael Batnik]

So, you know, maybe I'll do that. I did that a few years ago where I just. Just follow just the people that keep our content going. And not to make this whole Twitter conversation, Obviously, a lot of great things happened there, and it's been instrumental. But. But that was. Charlotte broke my back.

[Ben Carlson]

All right, but no, but I just followed all the news organizations, like, financial news stuff, and there's probably 12 to 15 of them. And I was scrolling this morning and realizing, like, oh, this is a Captain Obvious thing to say. The amount of news that is produced is absolutely insane. It was almost overwhelming.

[Michael Batnik]

This also coincides with me getting an alert for screen time. I got 10 hours last week, and I said, all right, this is ridiculous. 10 hours. I was like, how many hours am I awake? Shame on me doing something about it. Okay, all right, so the rise of Europe. So, Carl on Quintanilla, put this on Blue Sky. Here's a headline from this morning. Netflix to invest over $1.1 billion in Spain until 2029. Blackstone plans to invest $500 billion in Europe over the next decade.

[Ben Carlson]

What if their executives just really want to go have meetings in Europe because it's so beautiful over there.

[Michael Batnik]

So, in conclusion, and I'm sure there's things that I've missed because this is just off the dome. I thought about this 20 minutes ago. This is right here, right now, June 2025. The most interesting investing environment I've ever lived through.

[Ben Carlson]

Okay, I appreciate the take. I don't think we're ever going to.

[Michael Batnik]

Beat March 2020, but that was a moment in time.

[Ben Carlson]

So you're saying this has, like, legs to it.

[Michael Batnik]

Yeah, yeah, yeah, yeah.

[Ben Carlson]

All right. But I still think that the changes that were seen from early 2020 to now, like, that situation led to this situation.

[Michael Batnik]

Yeah, but 100%. And that was a bullet point, like the post Covid world.

[Ben Carlson]

But I do think, and I said this to you earlier, you could make the case that the2020s. We're going to look back on this decade. Because it really does. The 2020 started immediately. Like there's this whole thing that the 1990s didn't end until 9 11. Right. And that's like the last real decade. I think the 2020actually has the potential to be the first decade since 1990s. Like we didn't have a decade. The first 20 years of this century. The 2000s and 2010s totally blend together. 2020s has the, like. This is going to be a decade where we look back on and go, oh my gosh, can you believe everything that happened then?

[Michael Batnik]

Yeah.

[Ben Carlson]

All right. That's a good take. I like it.

[Michael Batnik]

Thank you.

[Ben Carlson]

All right, here's some awesome news from the Wall Street Journal. And this gets down to Josh's theory of the reliance bid. Workers are putting away a record share of their retirement. The average savings rate in 401 plans. You saw this story already or not?

[Michael Batnik]

I did not read the article.

[Ben Carlson]

Okay. What percentage is the average 401 savings right now? 8.14.3% in the first three months of this year. Isn't that crazy? This, according to Fidelity analysis of their millions of accounts they manage. And that includes a 4.8% contribution from employers. So call it 10% from the individual, another 4 or 5 from the employer. 17 and a half percent of people increase their savings. Right. Just 5% decreased less than 1%. Stop saving altogether. This I have to say, I've always said, like, your goal when you're starting out should be double digit saving percentage. This. This number kind of boggled my mind. I did not realize it was this high.

[Michael Batnik]

You know, I have an analogy for this. Robin and I. Robin is frequently late. She's great at a lot of things, but being. Being on time is not one of them. She's always scrambling out the door, four bags, overpacking, rushing. Like, calm down.

[Ben Carlson]

So can you ever get out of the house on time with kids, though?

[Michael Batnik]

I can.

[Ben Carlson]

It's almost impossible.

[Michael Batnik]

Not. Not. I can. I was on my own for Logan's baseball games twice this week. Fifteen minutes early. The coach said, whoa, panic. What are you doing here? Hey, it's just me. Easy peasy, no drama. But my point is this. We were taking two separate cars to go somewhere and we're on the phone and I'm like, why are you driving so fast? She's like, so I could, so we can get there faster. Now, mind you, driving fast. The difference between I'm driving 62 in my crappy Jeep, she's driving, I don't know, 74.

[Ben Carlson]

However, you showed the death rattle on that thing or got rid of that.

[Michael Batnik]

Not yet. Not, not right now. But she's like, I don't know, half a mile ahead of me. I see her. You know what I mean? She's not making up that much ground.

[Ben Carlson]

Right. In a short, in a short distance, you can't make it that much time, regardless of how fast you drive.

[Michael Batnik]

Yeah, so. So we're going 23 minutes away. And she got there perhaps 40 seconds before I did. And you can't make up time by driving fast. You got to leave early. Same thing with investing.

[Ben Carlson]

There you go. He brought it around. Good analogy.

[Michael Batnik]

Thank you.

[Ben Carlson]

Yes. Take your time. But this is unequivocally great news. Here's some more good news from Gallup. Stock market ownership. It hit roughly 60% in the late 1990s from the dot com boom and that decade, the 80s and 90s, I think it was 19% in the early 1980s of households owned any stock in some form, individual securities, mutual funds, whatever. It went all the way to 60% by the 90s and then it flatlined because we had the last decade, and then it fell and it dropped to 52% in 2016. Now it's back up to 62%, which is close to an all time high. This is the great news about the pandemic and getting people to accept more risk. So we've seen an increase in the number of people who own stocks.

[Michael Batnik]

I think, you know, one of the takes that I'm, that I'm proud of is in 2020 and one, it was really popular to just destroy Robin Hood and what it's doing to our culture. And I'm sure I threw some of those takes in there. Like if I went back to the tape, I'm sure that I said that a few times.

[Ben Carlson]

The confetti stuff for sure annoyed me. But yeah, you're right, it, it's been a net positive.

[Michael Batnik]

But I think that I was fairly balanced. Now, you know, maybe this is just me misremembering and giving myself too much credit, but I'm, I'd like to think that I wasn't over that. That the introduction of people to the markets, I thought, at least I think, I thought was not a bad thing, that whatever gambling habits they might have Developed early. And sure, some of it sticks with people, but ultimately people grow up and grow out of it and reintroducing or introducing people to the market and saving and whatever. Gambling, eventually investing is on balance a good thing, even if it's not all good. So credit to Robinhood.

[Ben Carlson]

Yeah, they have 26 million accounts and 13 million of them. Half of them are the first brokerage account ever for that person. Just remember we had the whole thing where I invested in the Robinhood ipo and we had the argument about being bigger than Coinbase. And then I sold like a week later, I think. And Robinhood is now barely or a lot, I guess above.

[Michael Batnik]

It's bigger than Coinbase now.

[Ben Carlson]

No, but it's, it's 110% above its IPO price. Remember it had that huge run up right afterwards and then it crashed. I don't know, 95% or something.

[Michael Batnik]

I spoke about this, Josh, a couple of months ago. Schwab used to be like 14 times bigger than Robinhood and now it's less than four times.

[Ben Carlson]

Wow. Yeah. So Robinhood had a 90% drawdown and then came all the way back from it.

[Michael Batnik]

Don't see that too often.

[Ben Carlson]

It's crazy. All right. Larry Fink was in the ft. He wants more tax breaks for investors. Now a lot of people read this and go, go, oh, of course, the guy who owns an investment, you know, company wants more tax breaks and because he's rich too. But he's talking about tax deferred retirement account breaks. Right. He's, he wants to help more people invest in the economy. So he says, take Japan. Until recently, he had a no tax incentivized way to invest retirement, which is kind of crazy. No 401k, no IRA. Now, its NISA program is booming. Enrollment surpassed 25 million last year. Meanwhile, US lawmakers are weighing a market based twist on baby bonds investment account for every American at birth, which is the new Trump account. So I don't know if you looked at this at all. Yao Finance had a story on this yesterday. So this is.

[Michael Batnik]

Brad Gerstner has been pushing this.

[Ben Carlson]

Yes, I've been push. No credit to me. I have been pushing this.

[Michael Batnik]

Yeah, but you have to do anything about it.

[Ben Carlson]

He's actually, I've been writing about this for a while. So under the proposal, so from 2025 through the end of 2028, any newborn child will get $1,000 put into their account.

[Michael Batnik]

Love it.

[Ben Carlson]

And it's going to be automatically opened and it's going to be invested from what it Says in a total stock market index fund, I hope they use someone that is dirt cheap. Right. Vanguard or BlackRock.

[Michael Batnik]

By the way, Vlad was at the White House yesterday with Gerstner. Is this going to be talking about, is this going to be done through Robin? Is that the idea?

[Ben Carlson]

Possibly. I'm not sure exactly. Okay, so then you could make contributions up to $5,000. Now I saw a few stories that interviewed financial advisors and they're like, listen, this, this, the, the tax breaks aren't very great. You probably better off investing in a 529 plan. I don't care. The whole automatic piece of it. To me, I think that's quite great. Yeah, love this, like the fact that they get people invested in the stock market and I don't know all the rules and regulations yet about when they can take it out and stuff, but this is a case I've been making forever. So I think this is, this is great news.

[Michael Batnik]

I love it. You know, there's, there's a lot of cynicism in our society, understandably so. Especially when it comes from people like Larry Fink where we love to complain.

[Ben Carlson]

It's something that everyone loves to do.

[Michael Batnik]

But it's not all bad all the time. This is a good thing.

[Ben Carlson]

Yes, I, I totally agree. All right, so we talked last week about the cash holdings and how it's, it's kind of this like dichotomy of everyone's taking risk. But there's also these 7 trillion in money markets and there's all this money. So I got an email from someone who said, listen, I'm retiring at 65. And he said, so retirement has completely changed our cash profile. We're holding much more cash in short term bonds now than ever before in our life. That would decline over the next decade as these funds get spent and Social Security comes online for us. But he, he ran down his whole thing about how they were holding more T bills and more short term bonds. And, and I think that's going to be the case for a lot of people. So I think the trying to use like the cash holdings and some of this stuff as like a bullish or bearish sentiment indicator I think is going to be really hard for the next 5, 10, 15 years because of baby boomers. They're going to need, they're going to be raising cash for spending purposes. Right?

[Michael Batnik]

Yeah. But also, why not bonds? I mean if, if, if overnight rates come down to two and a half percent, that's going to look a lot different.

[Ben Carlson]

Yeah, but I mean, I think the whole I'm going to keep two years worth of spending in cash or something. I think a lot of people are going to do that.

[Michael Batnik]

Yeah.

[Ben Carlson]

So I think you've always made the case, pounding the table, that money market assets, those are sticky, they're not going to come out. I'm coming around to that idea and.

[Michael Batnik]

I think you're probably double pounding the table with fists. Fisting the table. Absolutely.

[Ben Carlson]

Something like that. So we mentioned the 2020-has been just mind boggling crazy. I looked at this the other day. I looked at all the annual returns we've had. You know, one bad year in 2022. Some drawdowns otherwise. But the decade now we're up over 100% for the decade. That's annualized at 13.7% per year, roughly 14% all things considered. Now the retort is yeah, we threw trillions of dollars at these problems and blah, blah, blah. Still, if you would have laid out everything we've gone through the pandemic, 14% unemployment, negative oil prices, 9% inflation, all that, what are you going to have for annual returns? No one would have said 14% per year.

[Michael Batnik]

The stock market has been outperforming, I don't know, happiness, contentment. That's well being.

[Ben Carlson]

Yes.

[Michael Batnik]

For the last X number of years.

[Ben Carlson]

Yes. It's a good thing the stock market is not powered by sentiment. Exactly. Yeah, I mean it is in some ways, but then again it isn't.

[Michael Batnik]

This, this makes, go back to a point you made a couple months ago. Like what would the mood be like if there was like a four year bear market?

[Ben Carlson]

Right, right. Not just like a, you know, run of the mill. Yeah, I agree.

[Michael Batnik]

All right. This is a bit of a face blower. Jeffrey Klein top tweeted. It's not just this year. As we have been saying for years, Europe has been outperforming the US over the past two and a half years. Since the current bull market began in mid October 2022, that outperformance is now 30 percentage points wild. He said it's still not too late to diversify if you're overly concentrating U.S. stocks, look at this. So MSCI Europe index versus the S&P 500. Who to thunk?

[Ben Carlson]

So this is from the bottom in 2022. I never would have believed this. It's a huge spread. And yeah, I've always had this thing where bear markets are resets in many ways. Which is funny because the pandemic bear market was a reset at first because small caps and value stocks took off. But Then you had the reversal and the growth stocks came back. But maybe this is one of those things. I never would have guessed this.

[Michael Batnik]

Not me.

[Ben Carlson]

All right. From Urian Timur at Fidelity. He looked at what happens after a 20% drawdown and then showing the rally, and this goes back to the 1900s, I guess, and showing that this is one of the quickest V shaped snapbacks we have now to be fair, it didn't go down as far as the other ones. Obviously. This was like barely, barely hit 20. Right. We had to round up or do intraday like you. Is it possible, by the way, it.

[Michael Batnik]

Didn'T hit 20% even intraday? No, no. On a closing basis?

[Ben Carlson]

Yeah. No, it didn't.

[Michael Batnik]

Are you finally coming around to the intraday?

[Ben Carlson]

No, but that was a. It was a bear market for sure.

[Michael Batnik]

Okay, thank you.

[Ben Carlson]

Even though it was brief. But are we almost ready to say. You can never say anything with complete certainty. Are downturns different now? Are they just going to be faster and more frequent than they were in the past?

[Michael Batnik]

They have been for the past couple of years.

[Ben Carlson]

So let's say you had two bear markets per decade on average going back to history and they lasted 36 months. Are we just going to have three or four now and they last six to 12 months instead?

[Michael Batnik]

I'm not ready to say that.

[Ben Carlson]

I'm starting to come around to. I'm starting to come around to this idea that everything moves faster and the market just prices stuff in so quickly and then moves on eventually.

[Michael Batnik]

But Even if it's 10 years from now, I mean eventually there will be a bear market that doesn't V shape or cover.

[Ben Carlson]

Yeah, there'll be a financial crisis and that will be last longer. I agree, but I think the run of the mill.

[Michael Batnik]

I'm going to reject that theory. I know things move quicker but. And we can say that recoveries over the last five years, 10 years really have been quicker. But to say that this is just what it's going to be on a go forward basis for the rest of our lives. Can't do it.

[Ben Carlson]

How about this? 75% of corrections in bear markets are just going to go quicker than they did in the past. I think a lot of them, that's the world we live in now because we process information so much faster.

[Michael Batnik]

I also, not to go too far down this rabbit hole, but I also think the way that companies respond to adverse economic conditions, the ability to lift a few levers, dial a few knobs.

[Ben Carlson]

And the government now you could say, well, eventually there's Going to be a policy mistake. Or the government's going to say, no, we're not. And that could be it. All right. I was perusing the latest JP Morgan guide to the markets and this caught my eye. The yield to worst and subsequent five year annualized returns for the Bloomberg US Aggregate Total Return Index. It's the forward five year. The yield currently is like 4.7%. That implies a return of around 4.7% going forward from here because take the starting yield go out five years or so. So my case is the 6040 is in pretty good shape, even if the stock market doesn't do quite as well as it has for the last five years. Fair.

[Michael Batnik]

Yeah.

[Ben Carlson]

The 40 piece is finally going to pick up the slack a little bit.

[Michael Batnik]

Yeah, that's good news. It's great news. All right. Not a ton of tariff news, thank God. Moving the market slightly, but Liberty Economics.

[Ben Carlson]

What if they just did the Larry David and pretended like we never did it in the first place? Would anyone really care besides the taco memes?

[Michael Batnik]

So the New York Fed did a survey and they asked manufacturers and service firms, what percentage of the price increase are you going to pass through to your customers? And the things that stand out are 100%. Like all of the cost increase was almost half of service firms and about 30% of manufacturing firms. And then on the other end, you had 20% of both. Ish. A little bit more said, they're going to eat it. They're not going to pass on the costs. And then, you know, the middle is a little bit flatter. But yeah, that's how it works. Costs increase, pass them on.

[Ben Carlson]

I wonder if the ones that said they're going to eat it are kind of lying too. If this is like a sentiment survey, are they really going to eat the whole thing? I don't know. Okay, let's just hope it doesn't come to pass. All right, I'm going to make it. You made a case earlier. I'm going to make a case. I think I've done this before, but I think the Fed should cut rates.

[Michael Batnik]

Let's hear it.

[Ben Carlson]

Let's do it. Rip the band aid off. So the EU has already cut eight times. I believe they're back down to 2%. And people keep saying, well, they're getting ahead of the tariff stuff. Well, why don't we get ahead of the tariff stuff? Trump actually said if inflation should come back, then he can raise the rates to counter saying, look, if the Fed cuts rates and inflation comes back, you can always raise them. Back again. Torson Slack M and A activity is about the lowest it's been. I don't know how they actually, this is by deal count, global M and A activity, very weak IPO market, pretty darn low. This is from Renaissance Capital, which is, tracks all the IPO stuff. The IPO market is just, it's heating up a little bit. There's a few more IPOs, but compared to the past, it's still pretty darn small.

[Michael Batnik]

But so what? The Fed should cut because there's low M and A and ipo.

[Ben Carlson]

This is, this is the big, this is the big one, though. US existing home sales are now at the lows of the great financial crisis. David Kelly says the national association of Homebuilders market index fell to his lowest level in 18 months, while single family building permits fell two year low. High mortgage rates, high prices, weakening demographics are all impeding home building. So I think the, we need, we need to have more activity. I think the housing market is the big one here.

[Michael Batnik]

I agree fully, fully on board.

[Ben Carlson]

And a lot of people say, well, if the Fed lowers rates, that doesn't mean that longer term rates are going to come down. But the Fed could say, hey, we want lower mortgage rates. I think they could say that.

[Michael Batnik]

Yeah, it does. I mean, maybe it doesn't, but you would think, okay, I agree with you. To me, the big one is.

[Ben Carlson]

And then AI is deflationary. Put it all together, I think the Fed should cut.

[Michael Batnik]

Neil Dutta agrees. Neil Dutta said slowdowns don't always stop on their own. And in this case, it feels like a policy response will eventually be needed. Between now and then, the pressure on the economy will continue to build. Even if tariff noise subsides. The longer the Fed waits, the more they will end up having to cut later. I, I agree with you. I agree with Neil. Matthew Klein did his, his piece. He, he's, he had a piece saying the Fed should not be cutting rates.

[Ben Carlson]

Right. I think the Fed is always late though. And I think that they, I think they like it being late. I don't, for some reason they like it.

[Michael Batnik]

So. But just to push back on the IPO market a little bit, the IPO market, even though we're not getting a tidal wave, we are getting more activity and the deals are scorching. Hot core weave. I put at 40, it's at 160. Circle did it double the first day. Mike Zakari tweeted that Chime Financial IPO demand blows past share supply ahead of pricing, exceeding the number of available shares. By more than 10 times. So there, there is a speculative frenzy going on in some corners of the market.

[Ben Carlson]

But is it speculative because there aren't enough IPOs? Right. There's appetite for it, but there's not enough companies that are going public either way.

[Michael Batnik]

Either way. That argument to me falls on deaf ears that the Fed should cut because there's not a lot of M and A and IPO activity.

[Ben Carlson]

I just think that, yeah, that's, that's down the list. But I think housing activity is a really big one and it's really important for the economy and it's essentially just slowed to a crawl.

[Michael Batnik]

Totally, totally. Yeah. Cut.

[Ben Carlson]

And it does seem like the business. I was talking to a friend this week saying that, listen, our company has essentially completely stopped hiring new grads like that. That's a thing people have been talking about lately and that's like, that's an AI worry. And I don't know for sure if that AI worry is going to come to fruition, but there's a lot of people who are just. It's the tariff stuff and I think the labor market is slowly starting to, you know, stop a little bit.

[Michael Batnik]

We haven't spoken about it yet on the show, but both Neil Dutta and Cali are definitely putting a lot of notice on the cooling labor market. Market seems to be unperturbed for now, but something to keep an eye on.

[Ben Carlson]

It is crazy because the unemployment rate basically hasn't budged in 18 months or so. It's been like 3.9% to 4.2%.

[Michael Batnik]

Yeah. Both Neil and Cie say, but like if you look past the headline number under the surface, there are some concerns. Not nothing red, but maybe a little bit of a yellow.

[Ben Carlson]

Yes. I, I just think for whatever reason, the Fed never wants to try to get ahead of these things. They've never done it.

[Michael Batnik]

Yeah.

[Ben Carlson]

And so if we get have to get a 50 basis point cut again at some point, that probably what's going to happen.

[Michael Batnik]

All right, let's talk about artificial intelligence. So Mark Rubenstein has a substack called Net Interest. It is one of my absolute favorites. He writes about financial services companies and it just turned five years old. That went fast. Been there since the beginning. I think he said one major development. So he did a reflection on the last five years. One major development has been the integration of AI tools into my research process. While the core analysis remains human driven, AI has enhanced my ability to process vast amounts of financial information and surface relevant insights. For a solo operation like mine, the impact has been profound. I once considered recruiting London business school students for research support, but AI has largely filled that gap. Sorry, MBAs. I now use AI to analyze earnings transcripts, source relevant publicly available research, and edit my writing all in a fraction of the time it once took, allowing me to focus more on the interpretive work that adds value.

[Ben Carlson]

I was a pretty slow adopter of it and now I'm using it. It's now a daily thing, maybe like an hourly thing, where I'm constantly using it and asking questions and did I miss anything? So I have a scenario for you. So let's say like this. It really does ramp up productivity and millions of jobs are at least disrupted or they're not filled or whatever, or they're not put out there. So that's disinflationary or deflationary. So I'm picturing an economic environment of rising unemployment. And I said this at the live show, like, what if we get rising unemployment but not a recession? I could see that deflation. And then, but then you have rising profit margins. Profits and margins. There's going to be a ton of people who are really angry at the.

[Michael Batnik]

Stock market and that does not sound far fetched at all.

[Ben Carlson]

Right. That's when people are going, these corporations are doing better than ever. Their profit margins are rising and I'm out of work. Right. This is when people get really, really mad at corporations in the stock market. Yeah, I don't know, maybe.

[Michael Batnik]

I could easily envision a cover of the Economist right along those lines. So we got an email that expresses the sentiment. I'm confident AI is still early and going to take up many white collar jobs in the next few years. Could you speak about what a bold but responsible AI investment would look like? 40 years old, W2 jobs, Standard Investments. So he said, this is the kind of tweet getting my attention. And Buco Capital.

[Ben Carlson]

Wait, so this guy wants to know, like how do I invest in this potential?

[Michael Batnik]

Yes. So Josh wrote a blog post years ago just by the damn robots. Yeah, that was a early prophetic post from Josh. So Buco Capital, one of the best on Twitter, said, I asked Gemini and ChatGPT to construct a portfolio based solely on the new 300 plus slide. Mary Meeker AI trend report. So my take is this. As I mentioned earlier, a bubble is coming and allow me to present some charts from Mary Meeker. I understand a lot of people are listening.

[Ben Carlson]

Wait, hang on. Before you get into this, my simple Ben answer is just you own the S&P 500 of the NASDAQ 100.

[Michael Batnik]

Yeah. I mean, 35% of the S and P is now direct beneficiary of. Of AI.

[Ben Carlson]

Yeah, I, I think that's if, if you don't want to get too cute about it, that's the simplest route.

[Michael Batnik]

All right, so she has a chart. I believe we mentioned this because she pulled this from Stripe, from Stripe's annual letter. But she's showing the top 100 AI companies versus the top 100 SaaS companies. The median time to annualize revenue of $100 million. I'm sorry, faster. Ramp to. Okay. To 5 million. My bad. To 5 million. It took SAS companies 37 months. It's taking the median top 100 AI company 24 months. SAS was revolutionary or evolutionary. This is revolutionary.

[Ben Carlson]

Everything is faster.

[Michael Batnik]

So she has a few slides in there, and I only grabbed a few, but she has many highlighting different companies and how fast they're growing. So Corey, for example. Corey, revenue is up 730% from 2022 to 2024. Q1 revenues were $982 million. That's up 420% year over year. Like I said earlier, the, the. The core of IPO. It IPO to 42 months ago in.

[Ben Carlson]

That first week or so. Remember, it kind of just went nowhere and fell because I think because of the tariff stuff.

[Michael Batnik]

Still now it's at 160, 40 to 160. Palantir, certainly in the AI category. Palantir. So she has a chart showing the global public market cap leaders. 85%, 83% of them, 25 out of 30 are based in the U.S. by the way, Palantir now has a market cap of $302 billion. What? It's just behind Coca Cola. I have a chart in here showing Coca Cola.

[Ben Carlson]

That's crazy.

[Michael Batnik]

Coca Cola's market cap from 1990 to today versus Palantir, which IPO'd a couple of years ago. And basically the bridge has closed. Palantir is trading at 105 times price to sales.

[Ben Carlson]

Hang on. What does Palantir do?

[Michael Batnik]

AI defense. I don't know.

[Ben Carlson]

It's one of those companies that it's stock goes up.

[Michael Batnik]

That's what it does. Zoom. The poster child for the bubble in 2021 traded at 125 times sales. Palantir not so far behind 105. Now I know there's a Palantir army. Don't come at me, please. I understand that there's things going on other than press to sales ratio. I understand the explosive economic growth and margins and moats and blah, blah, blah.

[Ben Carlson]

Plus their CEO has that little thing here.

[Michael Batnik]

Yes. Nevertheless. Wow. $300 billion market cap. Palantir just behind Coca Cola. Unbelievable. All right, there's a company called Scale AI. It did $335 million in revenue in 2023. It did $870 million in 2024. There's a company called Vast Data. It's data infrastructure engineered for insight. Okay. Basically went from zero in 2019 to $2 billion in sales in 2025. And this one caught me, caught my attention. I actually went to the website. I'm like, wait, what is this?

[Ben Carlson]

Now?

[Michael Batnik]

It says specialized AI, Legal workflows. So Harvey, this company called Harvey, it went from 10 million to 70 million A in 15 months. In 2024, we saw four times annual recurrent revenue growth and expanded from 40 customers to 235 customers in 42 countries, including the majority of the top 10 USA law firms. So they're doing something in law with AI to enhance productivity. I, you know, not my world. But my point is this. If you are not inside of this and you are not aware of what's going on, you will be very soon. All of us will be. And it's coming like a freight train. And there will be a bubble. If we're not in one already.

[Ben Carlson]

Do you also think most people just. It's going to be integrated into their lives in a way that they don't even realize they're using it?

[Michael Batnik]

Yeah, sure. One of the, one of the companies that she highlighted was customer service agents. You know when you're like, no, no, I said customer support. Like that whole stuff is going to be upended. All of it.

[Ben Carlson]

Here's my thing. I agree with you about a bubble. I would be more surprised if we didn't get a bubble than if we did. Like I've been saying since the early days of ChatGPT. Like, history tells us that anytime there's an innovation like this, you get a bubble because people pull forward expectations.

[Michael Batnik]

And there is the thought that without hyperbole, this will be the biggest revolution, technological revolution, we've ever seen. And I wouldn't fade that.

[Ben Carlson]

Ben Thompson wrote a piece a couple weeks ago about just the amount of money that the big companies, the hyperscalers, as you call them, are spending on. And he's like, how long is the market going to let them? Like, how far would their free cash flow margins have to fall before the market finally slaps him on the wrist and says, okay, if you're not seeing the returns yet, that's like the only case against it is, is there this immaculate handoff of the baton from all the, all the investing right into returns that and the market says you know what, we're not going to let you or buy these companies 50% lower.

[Michael Batnik]

So, so that is the question. That is the question. And in her slide deck, what she has a lot. And I'm going to talk with Josh about this, about the hyperscalers and the capex as a percentage of revenue and it's crazy how much they're spending. And yes to your point, their free cash flow margins of, of Meta, Microsoft, like Amazon, Google, it has gone down pretty substantially as they just dump money into these things and the market doesn't seem to care right now, giving them.

[Ben Carlson]

The benefit of doubt. Like what, at what point does the market start? That's the thing where I always say that we got everything we wanted and more from the dot com bubble. Like I think the stuff people were asking for the 90s, they would probably be shocked at how much stuff we have, just YouTube and Spotify and all these things and we still had to go through the dot com blow up to get there. Like can we get the AI handoff without that? That is the question.

[Michael Batnik]

Now I, I would be remiss if I didn't say it because I understand this might sound like oh Michael, so bullish. Lol. Top the stock market. This really is neither here nor there. But I do just want to throw this out that the stock market has gone straight up for the last month basically uninterrupted. And you know, I'm not calling for a 5 cent pullback tomorrow, but it feels like things have gotten too easy in the stock market in the very short term.

[Ben Carlson]

Yeah. And you had the chart last week that we shared on exhibit a of the Mag 7 drawdowns that they've seen already. This, this in 2022.

[Michael Batnik]

I have that here. So just, just, just pin in this for one second because we're right there. So there's a great chart shared from Daily Chartbook via Vanda Track and they show the retail purchases of the Mag 7. So it's a 10 day moving average percentage of total retail inflows. And interestingly, people bought the shit out of the Liberation Day dip and credit to them. They've been selling ever since. If you look at the retail purchases, they've been going straight down.

[Ben Carlson]

Wait, just because the purchases are going down it doesn't mean they're selling though, right? Just means they're not buying as much.

[Michael Batnik]

Yeah, yeah, yeah.

[Ben Carlson]

That is Interesting. So they only buy when like they see.

[Michael Batnik]

They only buy the dip. I mean, okay, here's another one.

[Ben Carlson]

You can't really call, can't really call it a fat pitch, but you can call it like a, a meatball kind of.

[Michael Batnik]

It was a fat pitch. It was a fat pitch. JP Morgan has a great chart. Retail portfolio weights in Mag 7 have been declining. Look at this. In the summer of 2024, it hit 10% in Mag 7. Now it's under 2%.

[Ben Carlson]

Huh?

[Michael Batnik]

Right. Big time.

[Ben Carlson]

Huh.

[Michael Batnik]

So Ben, to your point, last week you mentioned this, but look at this. The drawdowns for Apple in 2022 were 37.7%. And again, 30, 31. Is that 31 or 37? I can't even tell. In 2025, Nvidia fell 63% in 2022, it fell 37% in 2025, Tesla fell 49 in 2025, Meta fell 34% in 2025. I am sick and tired and this is the last time I will say this. I think for now I'm sick and tired of people just like mocking the retail investor. All they had to do was buy and hold the Mag 7.

[Ben Carlson]

Right.

[Michael Batnik]

There's been two monster drawdowns in the last few years.

[Ben Carlson]

Amazon, Facebook, Nvidia and Tesla all fell more than 50% and some of them fell even more than that. So instead of like a. Because the dot com bubble, but the NASDAQ crashed more than 80%. That was a complete wipeout. Amazon fell 95%. We're not going to get that.

[Michael Batnik]

No, right.

[Ben Carlson]

That's not going to happen.

[Michael Batnik]

Because when that happened, Amazon was still hemorrhaging. I mean, Amazon was obviously a fundamentally different business, but their free cash flow is wildly negative.

[Ben Carlson]

Yeah, none of those companies were making money. That was the problem. But thinking through, what if there is an AI bubble? What could that look like? Could we just see, back to my point about faster markets. Could we see a series of like 20 to 30% drawdowns in these as they work through?

[Michael Batnik]

Oh yeah. Oh yeah. Now somebody might say, Michael, what are you talking about? Did you hear what you just said 5 minutes ago? Palantir is trading at 105 times sales. What do you mean there will be, There can be a bubble now if somebody wants to say we're in one right now. Okay, I'm not going to fight you. The market cap for Core Weave is currently. And again, I'm, you know, don't really know much about the fundamentals of this company. But the market cap of core weave is $75 billion.

[Ben Carlson]

Knowing human nature, things can always, always, always get stupider. That would be if, if this AI stuff and people really start, oh, my gosh, paying attention to it. To your point, I don't think what percentage of the population really is paying attention to this. Right.

[Michael Batnik]

Nobody. How many of your friends are asking about the AI trade?

[Ben Carlson]

It's, it's minimal. I've had a few AI conversations with friends, more about, like, how you use it at work and stuff, but it's, it's tiny in the grand scheme of things.

[Michael Batnik]

Tiny. All right, we've, we've shared these charts before, but it's kind of wild. If you index the MAG7 versus the remaining 493 stocks. Damn it, I, I, I didn't put the tweet in here, so my apologies, whoever I'm lifting this from. Looks like a Goldman chart, but I can't remember the Max 7, you know, up and to the right and the remaining 493 stocks. Not great performance, but okay. This is kept waiting. This is how it works. It's like saying, well, take, take KD and Steph off the 2016 Warriors. No, you can't. This is part of the deal.

[Ben Carlson]

There's another chart, and that's why I think that's the. If you really want to make an AI bet, the easiest play is just that. And you wait. You let the stock market pick the winners for you.

[Michael Batnik]

So here's another great one. And we've, we've mentioned this before, but bears repeating. They have a chart showing the MSCI ACWI xus. Now we're looking at.

[Ben Carlson]

That's just the rest of the world.

[Michael Batnik]

The rest of the world. We're looking at earnings per share versus the S&P493. Kind of remarkable. They track each other almost identically, Right?

[Ben Carlson]

Yeah.

[Michael Batnik]

And then again, there's the Max 7, which is on its own chart. And this is, this is it. I know we keep repeating ourselves, but this has been the dominant story. Nobody could have imagined, certainly myself included, in 2015 and 2018 and 2019 and 2022, that all of these sort of things were going to happen. That the margins and the moat, which is going to keep getting wider and wider. Maybe we're at an inflection point. Maybe AI is the big disruptor that comes for everybody or some people.

[Ben Carlson]

Yeah. And if the people are getting out of the MAG7 trade, they're going down to the next tier, the Palantirs and whatever they're looking for the next Nvidia that's going to be in the top 10. Michael Semblas was on Odd Lots recently. He said AI is the stock market bet of the century. And the bet part is just not that it's going to change the world, and it probably is, but it's also just the amount of money that's flowing in there that is the bet.

[Michael Batnik]

That's it.

[Ben Carlson]

Yeah. I tend to agree that's it.

[Michael Batnik]

So not to say nothing else matters because it's stupid. Hard to tune out the drawdown to the bear markets because they're coming along the way. There's no doubt about it. We just had one. But you got to keep your eye on the ball now. The story will crack eventually. I don't know when, but you're right. Crypto. We haven't spoke about crypto in a while.

[Ben Carlson]

No. Last week you and I were talking. We were in Chicago. We were looking at all the Bitcoin ETFs and how much money they have. And we looked at Ibit, which is the iShares one. That's the biggest one, has over 70 billion in assets. I think the Fidelity one had 30 billion. It's a huge thing. I saw some. I can't remember who did it, and I'm not throwing shade at this person, but someone tweeted that they came to our event last week and they're a crypto person. They said, hey, so I went to a tradfi event and I.

[Michael Batnik]

People talking about our event.

[Ben Carlson]

Yeah, we're tradfi guy. But people in crypto use the word trad fi and it's. I think it's a derogatory term, don't you? That's not a night.

[Michael Batnik]

It depends. Not always.

[Ben Carlson]

Okay. But I feel, for me, it feels like a derogatory term. And I have a secret to share for the crypto people. Crypto is tradfi. Now, bitcoin is tradfi. You have $100 billion plus in crypto ETFs. And that's been the big story of the past year for crypto. Crypto's tradfi, when stablecoins come. Stablecoins is the big thing for crypto. Like, that's the. That's the rails to get people on or whatever. That's the entrance ramp.

[Michael Batnik]

I mean, you're 100% right.

[Ben Carlson]

Where's TradFi?

[Michael Batnik]

Where's crypto without the ETF?

[Ben Carlson]

If TradFi doesn't come into crypto, crypto is. What are we talking about these days?

[Michael Batnik]

Bitcoin's what, 40,000?

[Ben Carlson]

So sorry. Crypto now is TradFi.

[Michael Batnik]

Yeah. So BlackRock.

[Ben Carlson]

And there's nothing wrong with. There's nothing wrong with that. That's what. That if you're a crypto person, that's what you want.

[Michael Batnik]

Well, it depends which.

[Ben Carlson]

But you can't pretend like it's, it's separate now. It's the same thing.

[Michael Batnik]

Yeah. BlackRock's Ibit took in a record amount of monthly flows in May. Baltunas has his chart showing how long it took to get to $70 billion. Now obviously GLD Voo, it's not an apples to apples comparison because ETFs were much different in 03 when, but nevertheless, 341 days versus 1700 days for VO. Pretty remarkable. And this is what we've been looking for. Baltunas also tweeted a nice look at the breakdown of holders of the spot Bitcoin ETFs via 13F filings Advisor has surged up the list now to number one by a mile. These 13F filers make up 20% of total assets, but in my opinion that is likely to rise to 35 to 40% as more adoption comes. And James Seifert is the origin for this data. But look at this Investment advisor.

[Ben Carlson]

See, it's funny, Rias have so much more power now because the idea at the beginning of crypto was just wait till the institutions come. You can see endowments are on there. Insurance companies, but they're much smaller than. I mean they're, they're drop, dropping the bucket compared to advisors. Right. This is why all the private, the endowments. Endowments and insurance companies, like the institutional, like they're tiny.

[Michael Batnik]

Tiny.

[Ben Carlson]

Wow. Pensions. Look at how family offices are very small compared to investment advisors.

[Michael Batnik]

And so here we are. Bitcoin is at an all time high and I'm not getting any questions from friends and family. Are you?

[Ben Carlson]

Not really. I guess there's just so much going on now. Are you. It's hit 110 that that was your top of your range. You're ready to.

[Michael Batnik]

Oh, by the way, in terms of, in terms of interesting moments in markets, I mean I mentioned bitcoin briefly but like holy shit, Bitcoin a new asset class at all time highs.

[Ben Carlson]

Yeah, yeah. It's now just be. No one has the conversation anymore. Remember at the beginning it was, listen, you put 2% of your portfolio in it and if it goes to zero, who cares? No one never says anymore, well, if.

[Michael Batnik]

It goes to zero, yeah, that that risk has been taken off the table.

[Ben Carlson]

So wait, so do you I. I was looking at this as we were talking. Do you know how much money is in V now, which is the Vanguard S&P 500 index fund. This is going to be a trillion dollar ETF. It's $660 billion.

[Michael Batnik]

Well, Jeffrey.

[Ben Carlson]

Unbelievable.

[Michael Batnik]

I have this tab open. I haven't had time to read it yet. Sorry, Jeffrey, but I will. The Vanguard Total Stock Market index fund has $1.7 trillion in assets.

[Ben Carlson]

Oh, it does? Oh, my. Oh, if you include all the ETFs and all. See that? This is just ETF as well, right? Holy smokes. That's unbelievable.

[Michael Batnik]

7Trill. All right, this is. This was a headline. JP Morgan plans to offer clients financing against crypto ETFs. And why wouldn't they? They're in the. They're in the money making business too. But obviously Jamie Dimon has been, I was about to say, fairly vocally harsh. Let's take out the fairly. He's been very anti crypto.

[Ben Carlson]

So this is just margin loans against Bitcoin ETFs.

[Michael Batnik]

Yeah.

[Ben Carlson]

Okay.

[Michael Batnik]

Yeah, why not?

[Ben Carlson]

I wonder what those rates are. All right. Real estate done with crypto. All right. Older millennials just got super lucky. So this is the share of first time home buyers again from Torsten slack. And in 2010, it was 50%. The share of first time home buyers buying a house. That's crazy. Went from 50% to 24%. So still, it's been falling a lot. And you could say that wasn't normal either. It should. Half of all home buyers shouldn't be first time home buyers. And the thing is, there wasn't a lot of activity back then either. But that's pretty. If you were an older millennial, you timed things perfectly. Like there's going to be a divide. I feel like everyone puts baby boomers in the same cohort, even though it's like an 18 or 20 year window. Right. Like, my dad was born in 1947. Hope I'm not getting that wrong. He was a big part of the baby boom. I think people in like the early 60s are still called boomers, but that's a completely different part of the demographic. Right. The difference between older and younger millennials is huge. There's going to be a massive difference there.

[Michael Batnik]

Now you could say we also got effed graduating to the teeth of a financial crisis.

[Ben Carlson]

Oh, yeah, the labor market was awful. Yeah.

[Michael Batnik]

Every generation has its shit.

[Ben Carlson]

I mean, without fail, I heard a lot of. In 2008, 9, 10, I heard a lot of people just say, like, you should be happy. You even have a job, right? A raise.

[Michael Batnik]

I didn't have a job.

[Ben Carlson]

Wow.

[Michael Batnik]

I was paying 400 bucks a month for my job.

[Ben Carlson]

Hey, you're a waiter there for a while, right?

[Michael Batnik]

Speaking of real estate, this caught my eye. Now I know this is apples and I don't know, pencils. Not a, not a direct comparison, but holy mackerel. From Mary Meeker's presentation, she compares data center build time. Now we're talking a fully operational data center. 750,000 square feet, which is the equivalent of 418 homes that took 122 days to build. I don't know where, I forget where this was. It took 122 days to build this thing versus the average home. That's 1792 square feet on average. Takes 234 days to build.

[Ben Carlson]

Much more money on the first one than the second one. Obviously. A little bit of incentive investment. A little bit more incentives. It is. I've, we've built three homes in the course of our home owning lifetimes. It is such a onerous process with all the permits are holding us up here or that this is holding us up and that this, we can't do this until we do this. And it is one of those things where I don't know, until they just 3D print a house for you or something, it seems like it's always going to take while it's, it's never going to be easier or more efficient. It's all like rules and regulations and stuff, I think.

[Michael Batnik]

All right. Private markets are getting a decent amount of negative press these days.

[Ben Carlson]

A lot.

[Michael Batnik]

Yes, you're right.

[Ben Carlson]

The negative press is. I think it's warranted in some ways, but in other ways it's like this whole industry is not garbage. Like there wouldn't be this much money in it if it didn't do something for investors.

[Michael Batnik]

I think we all understand the downsides and there will continue to be reporting about it because, because it's, it's valid. There is a lot of shitty behavior that is happening that is coming that we need to be vigilant against. But there's a chart that is, is going around that's been going around. We've seen it before. This is from Bloomberg sources. Pitchbook. Private equity distributions have plunged. Investors haven't yet gotten all their cash back since 2016 vintage. Okay, okay, okay. But it's a cliff, right? It basically goes to zero from like 2021 to today. And you might see this be like, oh my God. Investors aren't Getting their money back. Yeah. Obviously, if you invested two years ago, you're barely getting your money back. Duh.

[Ben Carlson]

These funds, they're not trading stocks. Most of these funds have a 7 to 10 year window in which they can invest the capital. And a lot of them have an extension that they'll let investors vote on, saying, we're going to go an extra two years because we need more time to invest. It's a long period just to get the money invested.

[Michael Batnik]

I mean, this. This chart is hot garbage.

[Ben Carlson]

Right? This is the way. This is the way it should look.

[Michael Batnik]

Yeah, exactly. But getting back to the point that, like, remaining vigilant because. My God, is it coming. The tidal wave. We've spoken a lot about this and we will continue to. Ben Johnson has a chart showing the number of launches of interval funds. And this is just gonna go.

[Ben Carlson]

Yeah, this. Cause this is how advisors invest in this.

[Michael Batnik]

Yeah, but this is gonna. This is gonna hockey stick higher.

[Ben Carlson]

Ben Johnson was at our live event.

[Michael Batnik]

Yeah, he was. Shout out to Ben. I saw this headline this morning. I've not had a chance to dig in. Maybe we'll talk about this next week. Withdrawal requests at Starwood Property fund are at $850 million. The fund sold $1.6 billion worth of property from December to May to meet redemption requests. Not great.

[Ben Carlson]

But this is why those interval funds have, like, a 5% cap on how much they can and will sell. They don't want everyone rushing for the exits at once. So Bill Gurley was talking about.

[Michael Batnik]

Wait, hold on. One thing, one thing. One last thing on this. And. But also, the fund sold $1.6 billion worth of property from December to May to meet redemption requests. They sold it. There was so much money out there.

[Ben Carlson]

Yeah, so. So it's not like they got. They had to lock it up and gate it because they couldn't sell it. That you're in.

[Michael Batnik]

Who knows what type of return they got. But, like, there. My point is, there's so much money. My God, there's so much money.

[Ben Carlson]

Yeah.

[Michael Batnik]

Distressed funds. Lol.

[Ben Carlson]

So Jason Zweig wrote a piece about secondary funds and how they work. And it's kind of a weird thing where you buy the fund at a discount, then you immediately mark it up and it looks like you have the. So it's. It's hard to. Like, people are trying to wrap their brains around that. So Bill Gurley, quote, tweeted this, and he said an all private, all the time world will be much messier. A much messier world with even more opportunists and charlatans. Transparency is an investor's friend. Darkness. I can't even say that word. Obfuscation is not.

[Michael Batnik]

That is a tough word.

[Ben Carlson]

Yeah, it is, but it looks better when you write it than say it. Bill Gurley is a venture capitalist. He's in this world. So he's not, he's taught, he's talking his book. He's not saying like, he's not a guy from the outside.

[Michael Batnik]

Right.

[Ben Carlson]

He's a person in this world. And I'm sure he gets, he gets a lot more transparency because he's such a big, well known investor.

[Michael Batnik]

But so for people that are not.

[Ben Carlson]

Familiar, his point is true.

[Michael Batnik]

The, the meat of the story was, and I want to talk to some people and find out how common this is. And is this shady or are there like. Yeah, no, this is how it works. And, and also there's something else. So Jason reported on a fund company, I think, was it Hamilton Lane.

[Ben Carlson]

Yeah.

[Michael Batnik]

Who bought distressed assets or whatever, bought assets in the secondary market at a discount from their nav, immediately marked it up to the nav, and then it's taking performance fees on that. Now I saw some other people tweeting about this and I want to talk to somebody to get more information that, yeah, this is how it works. But there's also clawbacks and high watermarks and they have to do all of that, otherwise this goes backwards. Now, I don't know, I, this is like a little bit outside my lane, but it certainly sounds, it doesn't sound great.

[Ben Carlson]

When I worked in the institutional investment world and we invested in some secondaries, we thought it was great because we would invest in it, they'd buy it at a 40% discount in our IRR immediately look great because they market back up to 100 cents of the dollar. Right. So for us, and I don't remember how the performance fees work for all of those, but the, as an investor, you were going, this is awesome. Look at, look at how great I am.

[Michael Batnik]

I mean, here's, here's maybe a stretch, but imagine a hedge fund manager bought a stock that was trading at 50 down from 100, and they just marked it at 100 and just started taking. Carry on that.

[Ben Carlson]

Right.

[Michael Batnik]

Like I bought out a discount.

[Ben Carlson]

But the private equity manager would tell you that, no, the marks on this are true. The reason there was a discount is because it's hard to get out of these things. There's no market for it.

[Michael Batnik]

Right.

[Ben Carlson]

So I can actually see both sides in this one.

[Michael Batnik]

Well, if there's no market for it then how do they sell?

[Ben Carlson]

Well.

[Michael Batnik]

True.

[Ben Carlson]

All right, so your point is the can you trust the marks and you don't know until they have a liquidity event which we don't have.

[Michael Batnik]

The fees are real, the marks are questionable.

[Ben Carlson]

True.

[Michael Batnik]

All right, so we reference the transcript all the time and I want to make the case that transcripts are more valuable than macro data or at least, at least as valuable.

[Ben Carlson]

So following the company earnings reports and then the quarterly earnings calls.

[Michael Batnik]

Yeah. So I pulled a couple of quotes that bear with me. I want to read some of this.

[Ben Carlson]

Well, they've been really helpful for us for understanding the consumer for the past few years for sure.

[Michael Batnik]

So Tractor Supply president said, I'd say what we're seeing on the consumer is really not much difference in this last two or three years. I think consumers continue in their rhetoric and in the qualitative comments talk about being cautious and even some modest kind of confidence kind of variations we've seen over the last few months. But if they can practice in terms of their spending. Consumers are holding up very well as the weather has come out and has come out and the spring has finally arrived. Our seasonal products are selling very well. So when the sun's out, the business has been very good. Here's the CEO of Marriott. If you and I had been sitting here a year ago and you had said to me imagine a circumstance where your biggest market gets to a 52 year low in consumer confidence. How do you think about average? I mean how do you think about revolution Par Was that revenue per average room? I guess that sounds about right. I don't know what my answer would have been. I'm fairly certain it wouldn't have been north of 4% growth. Th okay, so this is what I, I mentioned earlier that the postco spending environment is a permanent shift. I I lifted that from again the CEO of Marriott, he said one of the takeaways from our perspective, we talk often about the shift in consumer spending patterns. Pre pandemic you had younger demographics already prioritizing travel and experiences and how they deploy their disposable income. When we look at the credit card spending data today, that phenomenon has spread across demographics and feels pretty permanent. And I think that the shift is offsetting some of the indicators that would have historically led to much softer revpars.

[Ben Carlson]

I think a lot of people look at travel as a necessity these days. It's not a discretionary purchase anymore. It's like no, we are going to travel. I think a lot of people just have that feeling.

[Michael Batnik]

Here's sofi and they serve. Probably not. Probably they serve the median financial person in terms of income, maybe lower. Just because it's younger people.

[Ben Carlson]

Probably. Yeah, younger.

[Michael Batnik]

I would say we underwrite on the personal loan side to a 7 to 8% average life of loan loss. Losses are trending well below that. Okay, all right, here's some of the downside because it's not all roses from TransUnion. There's unemployment, which we mentioned earlier. The only I think concern that we see at this point is with the unemployment rate. If you unbundle the number, the percentage of consumers that are working part time but wish they could work more hours has increased in a material way. And that could be an early indicator of a slowdown in the jobs market. And then lastly from Dollar General, during our recent customer survey work, 25% of Dollar General customers reported having less income than they did a year ago. And nearly 60% of our core customers noted that they felt the need to sacrifice some necessities in the coming year. So shout out to the transcript for this. I am subscribed to their substack. If you're interested in this, I suggest you check it out. But also, Ben, this goes back to the point. So like you could read this and be like, see, there's cracks, there's cracks forming on the lower income side. But what we said earlier last week, that data point from Savita that the lower income consumer is responsible for 2 percentage points of earnings per share in the S and P. They don't matter to the stock market. Not talking about the human side to the stock market, it's the hyperscalers.

[Ben Carlson]

And that's why if AI really is this big booming productivity tool, then the stock market, what if it doesn't care about a rise in unemployment? That, that sounds really dark. That sounds really stupid to think in your head, like, of course it's going to care. But what if it, what if it leads to more productivity and it doesn't care that that's a world I'm like preparing myself for. All right, two things. On the personal finance front. A bunch of people sent me this because I'm a big truck fan. As you know, Wall street apes. I don't know what this is. How is this legal American Finances a truck that costs $111,000. He makes 84 payments of $1,900 and the amount he will pay in total for the truck is 160ish. So that's because he's paying 10% interest on this. 10% interest. The finance charge is almost 50 grand. So the total is 160. They want to know. This person says, I don't care what anyone says. This is usury. And the bankers doing this should be locked up. No, no, no, no. The person making this purchase should be locked up. Take away their checkbook. Take away the credit card. This is insane behavior. 10 at 10. 10.6% borrowing cost. Sorry.

[Michael Batnik]

All right, hold on, hold on, hold on, hold on, hold on. I'm doing some math. Bear with me. So this person.

[Ben Carlson]

See when people say, ben, why do you hate trucks so much?

[Michael Batnik]

Yeah, my bad, my bad, my bad. I completely misunderstood. I thought that after the car.

[Ben Carlson]

No, no, no, no. Yeah, that's almost what it looks like. Okay, so that's the.

[Michael Batnik]

Yeah, this.

[Ben Carlson]

The.

[Michael Batnik]

The wordy of this really threw me off.

[Ben Carlson]

Yeah.

[Michael Batnik]

All right, so. Yeah, so that's. Yeah, that's called interest. I'm sorry.

[Ben Carlson]

Yes. Yeah. You're making a decision to do this right. And that's the going rate of interest. That's the. Jamie Irons people are willing. Willing buyers at blah, blah, blah. Okay, so this is crazy. I never look at this stuff, but I booked a hotel room in Chicago yesterday because we're going there for the Morningstar conference in a couple of weeks, and they're worse than hotels, are worse than Ticketmaster. Destination fee, 25. City tax, 16. This is for a one night stay. State tax, $35. Destination fee tax 4.35.

[Michael Batnik]

The city and the state. That is what it is. But the destination fee and the destination fee tax is hot garbage.

[Ben Carlson]

Right. That's just like a. We know you're going to pay if you. And people say, well, we don't mind taxing tourists. We'd rather tax tourists than people who live in our city and state. And I know people will pay these because. But it's just. It just seems, I don't know, gross.

[Michael Batnik]

Not.

[Ben Carlson]

Yes.

[Michael Batnik]

Yeah.

[Ben Carlson]

Unnecessary.

[Michael Batnik]

Can I ask you a question about. About laundry?

[Ben Carlson]

Okay.

[Michael Batnik]

So I have a bench in front of my bed.

[Ben Carlson]

Okay. Is that where you put the clean clothes or the dirty clothes?

[Michael Batnik]

Well, here's the rub. They're not dirty. Or are they? If you put on a hoodie to go out to a little league game and you come back an hour and a half later and you drop it on the bench, should that be washed?

[Ben Carlson]

No, no, no. Hoodies and jeans, those are fine for multiple wears. T shirts. Wash a T shirt every time. You can't rewear a T shirt.

[Michael Batnik]

So I've been having the same with Robin lately. Stop. I wore that for an hour. That's not laundry. Because the more times you wash something, the more the quality degrades.

[Ben Carlson]

Yeah, the kids. If the kids wear it, then you wash it because they're animals.

[Michael Batnik]

T shirts, automatic wash. I'm smelly. T shirts get washed.

[Ben Carlson]

I agree. Sweatshirt, sweater, jeans. Those are. Of course, you don't wash those every time.

[Michael Batnik]

Okay, we're on the same picture.

[Ben Carlson]

All right. Just an idea for. Because we did our live show last week in Chicago, do you think that live shows and events have a different feel since the pandemic? Like, do people appreciate them more now? And obviously, our. Our events were always trying to have a little fun because we, you know, we had people at a bar for an hour before our show. And at future proof, it's outside on the beach. But I've been to a bunch of other things where I've spoken at conferences. I feel like people now appreciate the live because there's so much more zoom. I feel like they appreciate it more being in person.

[Michael Batnik]

Yeah, I think. I think. Well, we didn't really do it. I don't. We don't. Big frame of reference. We weren't really on the road that much preheated that we're doing live shows.

[Ben Carlson]

Yeah. I just think every sort of conference I've been at, like, I think people appreciate them more than they did before. I think that's one of the outcomes we've seen from the pandemic.

[Michael Batnik]

So at the live show, I got a little bit roasted, and you know what? It was fair for my attire. Normally, I am the least dressed person on the stage, and I dressed pretty nice in our Chicago event, and it was embarrassing. I don't know what I was thinking. That's not me.

[Ben Carlson]

I totally signed off on it. I thought you looked good. You had some nice leather loafers on. I thought you looked good. I think people are just not used to you dressing like that. That's the thing.

[Michael Batnik]

Neither am I.

[Ben Carlson]

You had, like, a. You looked like a total. I said, you looked like you could work for Steve Cohen. You had a vest on with a nice shirt. You. And I went shopping.

[Michael Batnik]

It felt like I was wearing. It felt like I was wearing a costume.

[Ben Carlson]

That's why people were roasting you, because they're not used to seeing it. But I thought you looked nice.

[Michael Batnik]

Okay, thank you.

[Ben Carlson]

All right, story time. So we were. We took an Uber in Chicago, and we got in, and the guy is blasting Creed, right? And. And he said, do you guys want something else?

[Michael Batnik]

Oh, yeah. Like, I was. That was hilarious.

[Ben Carlson]

And you said, no, Keep your creed on, man. It's okay.

[Michael Batnik]

I said turn it up.

[Ben Carlson]

Yeah. And then we had a discussion about, like, you were like, do people really like Creed? Or they like it ironically? Because sometimes you can't tell. And I feel like the Internet has allowed people to. Ironically, but also really like stuff more because other people, like, like it with them. Right? It's. You can. You can find your groups about this stuff more easily than you could pre Internet days.

[Michael Batnik]

It's hard to unpack that. That's a good point. Because my friends were asking me this if I want to go to a Creed concert this summer, and I was like. Like to. To let. Like to laugh. I don't.

[Ben Carlson]

Right.

[Michael Batnik]

I don't understand. Like, do we. Do we like Creed?

[Ben Carlson]

The lines have been blurred between, like, do I actually like them ironically? I've said this about the Guy Fieri theory. Like, at first everyone hated him. Like, you know, highbrow people. But then it's like, actually, I like him ironically, and now people just like him. That's how things work. And the funny thing is, is that we got out of that Uber, went back to the hotel, and I go for a run on the. What's that highline thing called? 606. And, you know, I listen to my Run Bread Preid. Okay, this is a good question. Hey, guys, can you elaborate on your movie show rating on a 0 to 10 scale? I would consider 5 average, but it seems that your system is different. In the most recent show, you guys talked about a show that was bad, but Ben gave it a 5.4. Is 6.4 now average for you guys. So I said 5.4. And this was the Mountainhead one. Here's the thing. It was a high quality movie, but it was a bad movie. Like, good acting, but not good. So that's.

[Michael Batnik]

I've heard people. I've had heard some people zag and say they actually like it.

[Ben Carlson]

Oh, that. That's just contrarian behavior. Trust me, I rarely go below a five. Five for me, is bad. It has to be really, really bad to get in the fours or threes.

[Michael Batnik]

For me, you know, I have a. I have a whole list of my movie ratings.

[Ben Carlson]

Like the Tree of Life. I remember that one with Brad Pitt.

[Michael Batnik]

I never saw. Never heard of it.

[Ben Carlson]

Is that what it's called? It's like a 2.5. Duncan probably likes it.

[Michael Batnik]

Okay. I'm a harsh critic, even though I like band movies. Like, how about this? I don't know why this problem. My head. Deep Blue Sea. I love that movie. I Love that movie. I saw it in the theater. You know what? I would give it six. Eight.

[Ben Carlson]

Okay. Yeah, that. Yeah, those ones have to be in the sixes, right?

[Michael Batnik]

I mean, just. Just if you give Deep Blue Sea over 7.5, you're a clown.

[Ben Carlson]

That's true.

[Michael Batnik]

Like, acknowledge that I love that movie, but you can't rate it high. Let's. Let's be real.

[Ben Carlson]

All right, so we've been watching the Better Sister lately on Amazon. I think we're halfway through. It's a miniseries, I think. Eight episodes. Jessica Biel and Elizabeth Banks. Are you watching it? So that looks. Sounds like a show you and Robin watch together, right?

[Michael Batnik]

So we're in bed the other. The other morning, and she pops it on. I think she was on the second episode. And I'm like, this looks good. I'm like, what's going on here? I watched 20 minutes. I said, why aren't you watching this? She goes, I'm watching it. I'm like, yeah, but obviously this is, like, this is good. Obviously, I would like it. And she's like, okay, well, I just started. And so I'm like, well, what the heck? So then we went to Chicago, and now she finished it.

[Ben Carlson]

See, it's rich people, husband is murdered. Hampton's New York City apartment. It's Corey.

[Michael Batnik]

What's the guy's name? Stole Stoller.

[Ben Carlson]

Yeah. And, yeah, it's. It's great. It's worth watching. I think I have the most.

[Michael Batnik]

Hang on, Hang on. By myself.

[Ben Carlson]

I don't. Yeah, I think. Yeah. I mean, the ending could totally fall apart, but I. I think. Yeah, I think it's. It's pretty good. I think that the. The chemistry between Jessica Biel and Elizabeth Banks as sisters is really good. I think I found the most 1990s movie of all time.

[Michael Batnik]

Ooh.

[Ben Carlson]

So that the algorithm got me. I rewatched Days and Confused for some reason the other day, and then it gave me Mallrats, and I have not seen. And Mallrats is one of those nostalgic movies.

[Michael Batnik]

It's on Netflix. I almost pressed Play last night. So funny it's on Netflix.

[Ben Carlson]

So I put it on. And this is one of those movies that, for some reason, the timing and the place of when you watch the movie totally messes with, like, how much you remember it. And this is one of those movies in high school and college, my friends and I watched all the time, and I haven't watched it sooner.

[Michael Batnik]

It's a sailboat.

[Ben Carlson]

Yeah. I haven't watched it since, but I rewatched it and I did. I think I memory hold. There's some really, really dumb parts in it, but if you can overlook those, this is the most 1990s movie of all time. Because it's only an hour and 25 minutes, which wouldn't happen today, that takes place in a mall. Obviously, the mall was the center of the universe for people in the 90s. That's where me and all my friends would meet every Friday night. We'd meet at the mall and we'd go to a movie.

[Michael Batnik]

Wait, wait, wait, wait. I have to pile on here because you. You said, like, there was, like, a moment in time. You remember things. I remember seeing that for the first time in Josh Cohen's basement, and it was definitely inappropriate. What year did that come out? Was that 93?

[Ben Carlson]

No. Later than that, probably. Maybe. I don't. I don't actually. Yeah, 90 made is 93. Maybe.

[Michael Batnik]

And holy Gazoli, is that. Oh, 95. Okay. All right, so I was. I was 10. Appropriate. What a movie.

[Ben Carlson]

Yeah, there are. I mean, there are some inappropriate parts, but. So here's the other 90s parts, besides them all. It's got Shannon Doherty in it from 90210.

[Michael Batnik]

It's got some piss and piss.

[Ben Carlson]

Ben Affleck, pre teeth getting fixed. He got pre Hollywood teeth. Claire Forlani, who was like, had a thing. And then Meet Joe Black happened and she fell off. It's got one of the London brothers. I think it's. I think one of them was in Days of Confused, and one of them was in this. And this was the party of 5:1, which I also watched, obviously, the hidden pictures thing where you. I could never do those.

[Michael Batnik]

I never saw them.

[Ben Carlson]

I could never do them. I could never. Oh, just cross your eyes. And I could never do them. Jason Lee as a sarcastic. Like, sarcasm was a personality trait in the 90s. Like, being sarcastic was the thing. All the pop culture references, that was more because of Kevin Smith. But it's all Star wars on the.

[Michael Batnik]

Bob had their own movie.

[Ben Carlson]

And do you remember the khaki coat with the corduroy collar? Everyone had one of those in the 90s. This is the most 1990s movie ever.

[Michael Batnik]

Yeah.

[Ben Carlson]

And I'd give it for the nostalgia premium. I'd give it a 7:2.

[Michael Batnik]

Ooh. Hi.

[Ben Carlson]

Me and my friends used to quote this movie all the time. Again, it's really, really dumb.

[Michael Batnik]

But I mean, the scene where Kevin Smith goes through the dressing room with his head.

[Ben Carlson]

Yes. Yeah, it's great. All right, then. Two kids movies we watched recently My daughter is working through the sports movie still. We watched Rookie of the Year where the guy breaks his arm. Yeah, it really. I forgot John Candy was the announcer. I hadn't probably seen this since I was 10. And then the Electric State is a Chris Pratt movie with the girl from Stranger Things on Netflix. Straight to Netflix Movie. Never heard of Awful, Terrible, Like a robot War. And my son loved it.

[Michael Batnik]

Okay.

[Ben Carlson]

I worry about his movie taste.

[Michael Batnik]

George is. George is going right down my highway. I love it.

[Ben Carlson]

I feel like he wants. He keeps asking us to watch horror movies, and I won't let him. But he's going to get there someday.

[Michael Batnik]

Okay.

[Ben Carlson]

That's all I got.

[Michael Batnik]

All right. I have one recommendation, and it is a double table pounder. I finished, started and finished. Thank you to all who recommended Mobland.

[Ben Carlson]

Ah, the Tom Hardy one. I watched one episode. I need to get back into it because I love Tom Hardy.

[Michael Batnik]

I did the same thing. I watched one and I was just like, a little bit like. Yeah, it didn't.

[Ben Carlson]

That's.

[Michael Batnik]

Holy.

[Ben Carlson]

Keep going. Okay.

[Michael Batnik]

Double table pounder. It's Tom Hardy, Pierce Brosnan, Helen Mirren, and it's two families in London going to war. It's kind of like the Gentleman, except a little bit less silly. Like a little more serious, but not too serious. It is dark and violent and.

[Ben Carlson]

Okay, I'm gonna get back into that one.

[Michael Batnik]

It's good. It's good. And I'm looking forward to season two. How about that?

[Ben Carlson]

Tom Hardy as the enforcer. He's perfect for that role.

[Michael Batnik]

You know how normally, like, I'm like a one one season type of guy.

[Ben Carlson]

Yeah.

[Michael Batnik]

I'm signed up for season two, opening day.

[Ben Carlson]

Good to know.

[Michael Batnik]

Yeah. Yeah. It was weird, though, because the first episode, same thing. I was like, yeah. And then that. It gets going in a serious way. Okay. All right. We went deep today. We went long.

[Ben Carlson]

Yeah, we mentioned it a few times. But thanks to everyone who came out in Chicago. Our production team did an amazing job putting that event together. It was. It was spectacular.

[Michael Batnik]

And especially Daniel. But everyone, but especially him, he was up super late. So.

[Ben Carlson]

And we. We're hoping to do more of those. So In Chicago and elsewhere. But thanks everyone who came. Animal spirits@the compoundnews.com. see you next.