← Animal Spirits Podcast
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Every REA knows the tension. You don't want to turn people away, you don't want to require high minimums, and you want to help clients who are just getting started because that's where the long term relationships begin. But here's the truth. Those simple accounts? They take a lot of work. Account opening, trading, rebalancing and before long your staff and back office are underwater and trying to stay afloat. That's why established REAs are turning to Betterment Advisor Solutions. It's the platform built for segmenting your book and streamlining the smaller and simpler accounts. The onboarding experience is automated and paperless. The portfolio management is streamlined and tax efficient. The client experience is consistent and exceptional. Explore what segmentation can do for your firm today. Lower your operational lift, but keep your standard of service high. All with Betterment Advisor Solutions. Your biggest regret will be not doing it sooner. Learn more@betterment.com advisors today's show is sponsored by Y Charts.
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Your financial advisor. You already know the hardest part of the job you isn't finding data, it's turning that data into clear, confident conversations and visuals. Clients actually understand why Charts helps advisors research faster, visualize market data clearly and turn complex portfolio questions into client ready insights. On average advisors using Y charts save around 20 hours a month across proposals, research and client prep. And now with built in AI tools, advisors can quickly surface key takeaways, understand what changed and why, and spend less time digging through data. Whether you're comparing portfolios, stress testing strategies or answering tough client questions in real time, YCharts helps cut through the noise. Keep your clients focused on what matters most. Learn more@ycharts.com or click the link in the Show Notes to start a free trial and get 20% off your initial YCharts Professional subscription. New customers only. 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
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are solely their own opinion and do
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B
not reflect the opinion of Ritholtz Wealth Management.
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A
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.
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B
Welcome to Animal Spirits with Michael and Ben. Michael, something is happening in the market that I don't think people really thought was possible as recently as 1218 months ago. Everything is outperforming the S&P 500 this year and I'm going to start with the this is through the close on Monday. You know what? I got a bone to pick with you.
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A
Go ahead.
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B
Your attention, it's not there. I feel like we need to go to couples counseling.
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A
There's a lot. I'm sorry. I apologize.
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B
All right. I want it right here. What's going on in your life? You got problems?
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A
Yes.
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B
All right. Figure it out. I'm kidding. All right. Everything is outperforming the s and P500 this year. And so I got Russell. This is through the close on Monday. The numbers don't matter because things are changing today. But the Russell 2000 is outperforming by. It's like doubling the S and P. Small cap value. Outperforming by a lot. Large cap value REITs, mid caps, emerging markets, dividend stocks all outperforming the s and P500, some by a very large margin. I don't think that anyone thought this was possible before. And I think the only way people thought this could happen is if the s and P500 had been falling. And it's up through the close on Monday. Up close to 10% per year. And so I think that the idea would be. We talked about the dispersion thing last year, last week. Remember that happened in the tech bubble. And then you had this other diversification stuff work because the S and P didn't in the early 2000s. Now it's working when the S and P actually is having a pretty decent year. This is surprising.
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A
Yeah, because the Max 7 are not participating in the rally, and that is keeping a lid on the S&P 500 returns. It is weird. I. I don't think that anybody could have predicted that they would take a back seat and the rally would broaden out. It makes a lot of sense why this is happening. I saw it.
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B
But it's not even really keeping a lid on it, though. It's up 10% six months through the year.
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A
True, true, true, true. I saw a chart this morning that the average PE for Microsoft, Amazon, Google, and one other name are at their lowest level in the last five years. Uh, Microsoft is trading like death. It looks terrible. Not surprising. It is the largest software stock in the entire world. So AI is disrupting software. Okay, Makes sense. Obviously, Microsoft does many things. It's not just a software stock, but that's what it's trading like. Meta is trading terribly as well.
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B
Um, well, look at this next chart I have. With all the drawdowns. Microsoft is down 33%. Meta's down almost 30. Oracle is almost 50% off the highs. Netflix is still. Netflix is crashing again. Are you still holder there? Still on 45%?
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A
I own Netflix. I am down 30%. I don't think I've, I'm. I can't say ever in the last 10 years, I've never been down 30% on a stock. It's just not my style. I, I cut my losers fast. The re. Netflix is my smallest position and I'm very comfortable owning it here. In fact, I hope it goes a lot lower because I would be very comfortable buying a decent amount of. Yeah. Not to get on Netflix specifically, but the transition from a growth stock to a value stock is very messy. And I think that's what's happening right now with Netflix. All right, whatever. We don't talk about that.
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B
So we also have Google down a quick 13%, Amazon down 15%, Tesla's down 17%. Like this is to me. SpaceX is down 25% from the, from the highs. The stock's been trading for a week. Whatever. I think this is good news. The market is doing okay, and all these companies that people have been relying on forever are getting dinged. I think this is great news for the market.
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A
It's not great news if these are your biggest stocks. So I don't want to be insensitive. It sucks when people. I don't like when anybody's losing money. But if you zoom out to the macro level, assuming that these hyperscalers don't completely fall apart, because, Right. Like, yeah, it's, it's good now, but it's not. Microsoft's down 60. That wouldn't be so great for the overall, overall market. I think, I think the story makes sense. You're seeing the erosion of the halo that these stocks had. And I can't believe I just used Josh's word to describe that, but like the invincibility cape that these stocks had with all their, their gushing free cash flow. And finally the market is saying, hey, wait a minute, like, you're spending pretty much all of your free cash flow on capex. Asset light was good. Asset heavy, not so good.
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B
What if these companies, they literally disrupted themselves by doing this? Demoderan was on Kaiwu's podcast last week, the Intangible Economy. And he was talking about the fact that these companies, this is a huge, huge risk that they're taking. And he kind of said, listen, I don't know that they really understand the risk they took by doing this, by getting into the more physical world, by building the data centers and becoming less asset light and Maybe their margins go down by a lot. And that the fact that they're not as intangible as they once were, this is a huge risk. And is it possible that these companies disrupted themselves and all these other parts of the economy in the world are the beneficiaries of that?
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Yeah, I don't think, I don't think that they don't, that they didn't think about the downside of it. Like I think that they're probably spending a lot of time thinking about that. But they all said the same thing. This is an. We view, we view not participating as an existential threat. We have no choice. So.
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B
Except for Mark, basically.
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A
Yeah, true. But as Mark Zuckerberg, like, oh no, my stock's in a 30 drawdown. I made a giant mistake. I really don't think so.
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B
No, because he's, he's a, he's a psychopath. He doesn't like think about this stuff. Doesn't, doesn't, doesn't impact him at all. Right.
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I mean, well, that's the benefit of having a founder, CEO with biggest shareholder. He has the ability to look past rightly or wrongly. You know, we'll, time will tell. But a 30% drawdown, whatever, he's down to his last $300 billion.
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B
So I think a couple weeks ago we showed the exhibit A chart about the S&P 500 versus the 493 versus the Mag 7. And this is, this lead by the 493 is widening over both the S and P and the Mag 7. This, this is honestly, this is shocking.
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It is, yeah. We don't have a chart showing the difference between the two. Like over, over a three month period. I'm gonna guess that the 493 has not outperformed the Max 7 by this margin in a long, long time. And I'm here for it. I think it's wonderful.
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B
So we also got the, the net, we're recording this 9, 10am Tuesday before the market open, which usually when we record the NASDAQ 100 is down 3% opening pre market. The South Korean stocks got walloped last night. They're down 10% or something. This is the second time in what three weeks this has happened where we've had this like really big flush. South Korea falls a lot. The NASDAQ falls again. I think this is good news that they're having. They're having this, this pullback, these two steps forward, one step back. And people keep getting slapped on the wrist in these stocks to go, hey listen, if you Want these high flyers, these stocks that have gone absolutely bananas. You're going to have to deal with some give and take, some pullbacks. This is the market, the market biting the hand that feeds you, essentially. I continue to think this is good news until it isn't. And this happens more than, more often than not.
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A
But I've more on this later in the doc, but let's keep it moving.
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B
Okay? Morningstar had this piece of last week about the number of stocks that are in the triple digit club. And they looked at stocks this year that have, that are up 100% or more. So they said, sorry, in the past 12 months. So they looked at the Morningstar large mid market index. So they said in the past year, 42 stocks have more than doubled. That's more than twice the 10 year average. Or in the past six months alone, 12 stocks are up 100% each. Obviously a lot of them are dealing with AI infrastructure. Boom. And so they chart these out and it's the stocks that we've been talking about, sandisk and Micron and Western Digital and Dell and intel and all these companies. But then this is kind of cool. They looked at how the rolling 12 month stocks up at least 100%. And the biggest one here is the rebound from COVID when there was a huge crash. Then they came back. This is crazy. The SK Hynix. This is before the little fall yesterday was up over 300% on the year. Not the last 12 months, just this year, six months into the year. So the fact that you have these 10% flushes or these 3% flushes, the NASDAQ 100, that should be expected when you have gains this big. This is the thing that you talk about. The profit taking happens faster. It should happen faster when you have gains this big. But obviously it's funny because we keep, I feel like we've been saying all decades this kind of thing isn't normal. But we just keep seeing stuff that's abnormal becoming normal. These like these huge moves in, in short periods of time. What if that is just the new normal?
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A
That's such a good point. There is, there's no such thing as normal. Everything is, every market environment is a little bit different. I mean, what's normal? Like when we, when you say this isn't normal, where do people's heads go to a normal time in the market? 2015, I mean, what are they?
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B
Seriously, this century, there hasn't been one normal environment, if you want to call it that. So the Wall Street Journal had this chart the other Day showing change from the start of the war through last Friday. And it's gold oil in the semiconductor index. And if you would have said, hey, we're going to go to war in the Middle east, oil prices are going to spike 60% on the year or something, what do you want to own? And it's not gold because gold is down since the start of the war. Gold's down 20% since the start of the war, which is kind of crazy. Oil has essentially round tripped almost. It's now only up 10% from the start of the war and semiconductors are up 70%. So you'd say how do you hedge a war in the Middle East? By selling semiconductors?
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Duh.
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B
But I guess the point here is that there really are no true perfect hedges for every situation.
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Can I be you for a second? The best hedge is a diversified portfolio
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B
of semiconductors, oil and gold. I guess, yeah. Goldman, Goldman Sachs. I think Mab Faber had this one in his idea farm email and if people don't have that, it's pretty good. He, he puts, he pulls together all the best like long form research pieces and sends them out once a week. MEB and his team and Goldman Sachs had this, had some really interesting charts on valuation I thought were worth talking about. So they compare the CAPE ratio to the ROE on stocks, which ROE is always Buffett's favorite indicator. Right. And this is something that you and I feel like we've, we were really ahead of the game on this, I don't know, 10 years ago saying that valuations should be higher. And this is just showing that valuations have followed ROE higher. Which, which makes sense.
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Like I think, I think what we did a good job of was putting a little bit of context around the P. E Because I think a lot of the context it was just the number with no, with no look through to the fundamentals of what was actually driving the number.
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B
The funny thing is, so if you look at this next one, it's the trailing four quarter ROE and it's just shot higher this decade especially. And in my book I wrote a piece about, Buffett talked about how inflation impacts stock because the roe is relatively stable over time. He said it's like 12 to 14%. That's like the roe. He wrote this in the 70s and he's like, the roe really doesn't change over time. Which is kind of funny to think about now because actually technology did change it. It's in like this new level. And then finally this last one is just kind of hilarious.
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A
Wait, hold, hold.
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B
On.
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A
I don't want to leave this. This is so important. The return on equity was one of the most cyclical data series in all of finance. It was down, then up, then up, then down and back and forth for 45 years until these companies that we've discussed ad nauseum, rewrote the physics laws of business of what we thought was possible, what an incremental dollar invested can generate. And by the way, that is changing right now. It's going the other direction for the hyperscalers. And so what's happening with their stock price makes sense and it's really, really interesting.
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B
Yeah, you're right. This is like a new level. But look at the next one. This is kind of hilarious. It shows a semiconductor trailing twelve month net profit margin in this. It was at, I don't know, a low of 25% as recently as 2024. It's projected to be 49% in 2027.
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A
We spoke to Dr. Encore Crawford for a Talk a Book episode that came out on Monday. And she's one of the best voices in my opinion on what's happening in the semi space across all areas of the supply chain. And it's really easy to look at the price and say bubble, and I'm guilty of that too sometimes where I say, oh boy, don't like this. And you can have that opinion, but you really need to have an understanding, a little bit of an understanding of what is causing the margins and the earnings to skyrocket. And of course the stocks following suit.
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B
But the question is, what is this incentivize? If other competitors see a 49% net profit margin, what does that do? I don't understand this industry enough.
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Obviously nothing. My limited understanding is Taiwan Semi is not the type of company that you could just spin up. This is the most high tech, you know, like, you know the scene you probably didn't see the new Jurassic World where they walk into the.
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B
Did see it. It was awful.
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A
Okay. It was terrible. Where they, in the, in the opening scene where they walk into the T. Rex, the, the, what do they call that thing? The Domingus. The Dominus. I don't know, whatever it was. The fake. Yeah, the alien T. Rex where they walk in with those Hazmat suits and everything is like, like a, a Snickers rapper got in there and destroyed the, the integrity of the unit. That's what these fabs are like. Where they manufacture these semiconductors. The amount of technology in these places is to an extreme level that there's a reason why there's only one Taiwan semi. You can't just bring supply to the market. And that is why there is a bottleneck at almost every area of the chain. There is just a shortage. And this is not, I'm not saying anything that's not very obvious and, and potentially in the price of these stocks. But you can't just bring supply to the market. You can't just snap your fingers and fix the issue.
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It is interesting, in what feels like we live in a world of abundance now, when it comes to technology, that there still are bottlenecks.
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Great point.
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You'd think that. You would think they wouldn't exist anymore. It's kind of like, how is this Strait of Hormuz still a bottleneck for energy? But it is. There's still these, these points that make things difficult to expand as much as we want to.
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A
Ben, one of my favorite categories in our doc is the investor behavior section. And I know we're on this beat a lot, but I'm going to keep doing it because I think it's important. There's so many different sources of investor behavior and different pieces of data that you could point to and say, see X, Y, Z. Yeah, back to your
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B
shoeshine thing from last week.
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A
Whatever narrative you want to spin about the market, you could find it in various sources of investor behavior data. So, for example, according to Citadel Securities, Frank Chapara tweeted this. The day of SpaceX's blockbuster IPO marked the largest single day of net retail stock buying ever recorded by the firm, which handles roughly 35% of US retail trading volume. And in fact, nine of the 10 largest trading days ever observed on our platform have occurred in just the last month, including seven during the first half of June alone. Okay, so factually, factually, there is a mania around the SpaceX IPO. Retail traders are having a moment of euphoria. They are trading a lot, A lot, a lot, a lot. Now, is it all bullish trades? I don't know. I don't know how much money went into the 2x SpaceX negative leveraged ETF, the inverse, which by the way was down 43 in two days. I think it does. So bullish bears, they're trading their asses off. And then I'm on the daily chart book this morning and I see equity positioning. Now, this says consolidated equity positioning. It's a weighted average of Z scores for positioning indicators. And they're looking at. This is from DO Deutsche bank asset allocation. Okay, So I think they have, like a pretty good view on whatever pool of investors they're looking at. And if you're looking at this, you see nothing. Equity positioning sits in the 42nd percentile, still far from crowded, leaving plenty of room for further upside. So you see this, you go, huh, how do, how do you square this with what I just said? And then I see another one, discretionary. So again from Deutsche bank, they break down discretionary versus systematic stock equity positioning. And again, nothing there. Discretionary investor is 41st percentile. Systematic is 40 percentile. Exposure to equities in terms of like, how, how allocated you are. And you say, you scratch your head. You're like, I don't, I don't get this. Make it make sense. All right, well, there's another chart from Bloomberg that shows speculators are getting shorter in equities. This shows the net positioning of the S and P, the nasdaq, the Dow mid cap futures as a percent of open interest. And it's getting more negative. Huh? They're getting more short in the market. And then you say, okay, okay, well this makes sense. We're looking at the prime book. So hedge fund exposure, gross and net to semiconductors. And it is parabolic. It has gone from 8% at the beginning of the year to 22% today. So hedge funds are all in on semiconductors. And then you see retail piling to semi stocks. Flows for all US semi ETFs listed on Bloomberg. Completely, completely insane. All right, so like there's just so many different sources in here. Sissy. Yeah, everybody, everybody is overweight. Semis.
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B
There is the DRAM ETF. Has it went for, we said 10 billion last week, now 20 billion.
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Okay, so clearly, clearly, clearly everyone and their mother is all in on semis, rightly or wrongly. Is it going to fall 30%, 40%? Is it going to double from here? Who knows? But there's a lot of, there is a lot of optimism, perhaps beyond optimism with retail behavior and professional behavior in semiconductor stocks. But everything else, at least according to the charts that I just shared, and I'm sure there's others.
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B
Well, Kevin Gordon had one from Vander Track. He said retail single stock net buying is falling to the lowest since COVID
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A
Make it make sense.
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B
I don't know if they just moved all to the, the ETFs or what.
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A
So anyway, I guess my, my point is I love, I love these charts as much as the next guy, but I think they're really noisy. And I think you should just consider the source, not in terms of like the underlying data, but who is showing you the Data. And what narrative are they trying to spin? Because it's very easy to make any case based on any of these charts.
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B
Yeah. What was the Munger, the Munger quote from a few years ago? If you're not confused, you're not paying attention. Something like that. How about this one? I've got it. I've got a theory. So Citadel had this really good report that they put up monthly and they said household cash as a percentage of total financial assets is now 8%. That's higher than it's been at any time since 1990. Okay, what's your theory for why household cash as a percentage of total assets is so much higher than it's been in the last. Since 1990. 20 years ago, right?
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A
Yeah. Okay. The.
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B
In my mind, 1990 is always 20 years ago.
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A
No, 1990, that was. We were. I was. That was 13 years ago. Okay. The only thing that I can think of without having thought about this prior to the last 10 seconds is people are putting money aside to save for a house.
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B
I didn't think of that one. I'm going to say no, here's my thought. Okay, here's my. I have two theories. I put this out on Twitter and I ask, because this is another one of those, and you go, how could you have a speculative mania when people have more cash than ever? And I think there's two things going on here. One is just we lived through a period that was so long with like financial repression and no rates, and now finally you can get 3 to 4% in cash. People are okay with that. I think this is just baby boomers deciding and people trading down from fixed income going, I got nailed in bonds when, when the interest rates rose. I'm going to keep more money in cash and I'm retiring, so I need some money in cash. So I think, I think this is mostly a baby boomer phenomenon. That'd be my theory.
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A
I subscribe to that theory. That's good. That's better than mine.
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B
It's. It's another surprising thing though, right? You go, wait, this is a speculative mania and people are holding more cash than ever. This is the episode of surprises, I guess. By the way, SpaceX, I believe, debuted at 150 when it first opened. Is that correct? Ish.
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A
I think it opened. Yeah, something like that. Yep.
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B
It's back down there at pre market today. So it, it round tripped. So who, who is the bag holder in that scenario then? No, because the index funds, it didn't really. It's still getting there. Right. So who counts as the back holder.
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A
Now I guess people that bought at the top and are still holding on, I don't know.
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B
All right, anyway, it, that was, but,
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A
but, but, but the amount of trading happening that happened in SpaceX.
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B
Yeah, the volume was crazy.
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A
There's just so much volume. So I, I mean is it a, is anybody holding the bag? I don't know. Everybody's trading their ass off. Some people made money, some people lost money.
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B
Okay, did you put this survey in here? 8% of investors believe there isn't a bubble in AI related stocks.
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A
Oh, okay, this is interesting. So sort of getting back to what we spoke with Dr. Crawford about and something that I take and I want to be careful saying this, a little bit of worse where they're still early does. Early might be the wrong word here. I, I think what I'm trying to say Ben, is I love that there is still so much doubt now just because, just because everybody thinks that this is a bubble, that doesn't mean it's not. Ok. So I'm be very careful. It doesn't mean, just because everybody thinks that doesn't mean everybody's wrong. But it does mean that there is a lot of doubt. There are still a lot of people that are non believers that these things aren't going to come crashing down. So the AAII sentiment survey, they asked is there a bubble in air related stocks?
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B
And
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A
no, there isn't a bubble. Only 8%. Now to be fair, I don't, I don't think that I would say that because I think that you could credibly make the case that there is a bubble in some areas of the, of the AI industrial complex.
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B
This is also the way that this survey is worded. It says 51% of people said some but not all AI related stocks are too expensively valued.
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A
Yeah, that's, that's probably what I would, that's where I would fall. Anyway, whatever.
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B
The fact that there has been people who have been calling for a bubble for 12 years in a row, just because those people continue to call a bubble doesn't mean there's not going to be a bubble at some point. Right. So you can't use that as a like disqualifier, like hey, this person's still calling a bubble. That means it can't be, you can't use that as a disqualify.
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A
Correct. Somebody worded this better than I'm going to be. But they said usually and again, not disqualifying what we just spoke about, usually tops happen because everybody's Looking to buy, right? Like, there's. When. When there is nobody left to buy, there will be a top. Yeah, but there's still. There's still so many people that are just saying, like, this can't continue.
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B
But to your point about there being so many different investors, there is no, like, everyone in the boat anymore. It's not gonna. That's not gonna happen. There's too many diverse set of investors today.
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A
There is no everyone. All right, let's talk about spending. Um, Mike Sicardi tweeted this from bank of America. Consumer spending momentum is remarkably robust, with total card spending rising 5.1% year over year in May, the strongest growth in nearly four years. Now, of course, there are some reasons for this, gasoline being one of them, but. Strongest growth in nearly four years.
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B
I got a question.
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A
Whatever you want to say, people are spending.
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B
We. We've talked about this before. I need someone to explain this to me. So the average credit card rate is somewhere in the range of 20 to 25%, depending on who you ask. Right. It's really, really high. They pay out the rewards. I know you spend the 2 to 3% at the vendors, but I keep getting these. I think I sent you a picture of one. I keep getting these things for, hey, 0% rate for 21 months or something. How do we live in a world where the credit cards can charge 25% but also 0% for 21 months?
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A
Because the 25 pay for the 0.
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B
That is insane to me. That, that. So we did, like a 0% financing for our flooring. We did last year. Of course I'm going to take it. They gave me 0% for 18 months. When that runs up, I found a 0% for 21. I'm going to roll some of it over to that and just keep having the 0% go, like, why? And slowly paid off. Why wouldn't I do that? I can't. I just can't believe that that's actually an option that they give.
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A
This is like. This is like the reverse Robin Hood stealing from the poor to give to the rich.
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B
It kind of is. And obviously you're. When you apply, they don't give you a huge limit. And also your limit, I'm sure, is determined by your credit score. Not that Bragg got a good credit score, of course, but I can't believe that these things exist in today's day and age. That's all I'm saying.
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A
Now you could say that like. And I'm, obviously, I'm sensitive to this argument that these rates are Punitive. There is a reason why subprime borrowers have to be charged a high rate. It's because they're risky to loan money to. I know that sounds cold, but like,
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B
and this is completely unsecured debt.
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A
Right.
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B
There's no recourse.
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A
Right. All right. More decent economic news from bespoke retail sales breadth in this month's report was remarkably strong with just two sectors showing negative growth. So it's not just gasoline. Following these results, our diffusion index, which measures the six month average net number of sectors expanding, ticked up to the high end of its recent range. Good news.
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B
All right. Wait, the diffusion thing got me. I don't know that. That's just a lot of terminology.
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A
Don't worry about it. Don't worry about it. It's, it's very technical. You want.
- [27:56]
B
But if, if you look at one, if you look at that chart of retail sales that just had the one. It, it sprung up from COVID And obviously part of that is inflation. It's not everything. But that, that was another thing that is on a completely new level. Like the trend was broken forever and we just spend more and, and everyone has just moved on. It didn't come back.
- [28:14]
A
All right, hold on. The market is open. Let's see. Nvidia.
- [28:19]
B
Ooh.
- [28:20]
A
Nvidia is down 3.4%. Let's take a look at the.
- [28:22]
B
The Nasdaq is down 2 1/2 percent. Probably finishes green by the end of
- [28:26]
A
the day to the point that we were making earlier about everyone in semis. I mean, everyone in semis. Yeah. There's going to be bigger air pockets. So Micron is down 11. Sand, this is down 11. I think Micron reports after the bell. Guess what? Micron can. And probably, probably whether no Micro could fall 30%. Matter of fact, I keep. I know I said this every episode. It just did. In March. Micro could fall 30% in a week and still be in an incredibly strong uptrend. Like the shakeouts are probably going to be just as fast as the rise. So no pain, no gain, as I said.
- [29:02]
B
Yeah, exactly. All right, cool one from strike strip economics here. They look at new business applications. I think this is one of the things, I think.
- [29:10]
A
Wait, why we. Why do you skip that? Rich people complain of the worst. I think it's a good topic.
- [29:14]
B
Oh, you want to do that? Okay.
- [29:16]
A
Yeah. These are the absolute worst.
- [29:19]
B
Yes. So this is from the Wall Street Journal. Okay. America's economic anxiety is rising up the income ladder and they ask people a set of questions. Do you think America's political and economic systems are stacked against people like me and the upper middle class. People in 2017 said 29% said yes. In 2026, 65% of people said yes. And also, do you lack confidence that their life will be better for your children than it is for theirs? In 2019, it was 64% said yes. 2026, 86% said they lack confidence that their children would have a better life than theirs.
- [29:49]
A
Stacked against is. Give me a break.
- [29:52]
B
Yes.
- [29:52]
A
Now, I. I know. I know that it's hard to live in. It's hard to live in expensive areas. Long island being one of them. I am sympathetic to that. But stacked against you? Come on.
- [30:04]
B
There are people who actually have. The system is stacked against some certain people.
- [30:09]
A
Yes. We are not one of them.
- [30:10]
B
You're in the upper middle class. Yes, Just that rich people. This is such a big pet peeve of mine. Rich people who pretend or say they're middle class or complain about their lives when there's other people who have actual complaints that are worth telling. I hate it. All right. This is what makes America great. New business applications. This is something we never could have possibly foreseen. When we remember all the conversations we had, like, what is Covid going to do? Like, what is the thing that it's going to change forever? And there was a lot of wrong predictions. There was some. Right. This is something no one ever would have predicted that you'd see this huge increase in business applications. There's a reason for it back then. So Ernie Tedeschi and team at Stripe wrote about this. They said the PPP program, there was a small business loan program that required an ein, a little else for eligibility. So you got like these loans. And it was like, hey, guess what? If we make it easier for people to start businesses, they're going to start businesses. And you saw this huge rise in business formation, but then it stuck. And now you're seeing another acceleration. And the team at Stripe is saying there is no program now that's causing this. What's causing it? AI. And so they. They break it down by saying it's easier for people to start businesses now because of AI. And I think this is. This is actually a very good. This is a great thing that's happening. And look, look at the numbers. From 2005 to 2018 or so, these numbers were stuck. They. They didn't move much at all. And now we've essentially seen more than a doubling of business applications of people starting their own businesses. Because it's easier.
- [31:36]
A
Yeah. There is a lot to celebrate about what's happening in the country. It's very, very easy to lose sight of that given all of the negativity. And a lot of the negativity is genuine. I'm not trying to sweep the negativity under the rug. There's a lot of, a lot of shitty, terrible things happening to a lot of people. But there's so much good stuff happening too.
- [31:57]
B
Just think about how delusional you have to be to start your own business though. It's really, really hard.
- [32:02]
A
It's pretty psychotic.
- [32:04]
B
But so many people do it in this country because like there, there's this idea that yes, these surveys talk about things getting worse, but you don't start a business if you don't think that it's going to work or that you're not some somehow optimistic. I think that's all right.
- [32:17]
A
Let's, let's, let's pivot, let's pivot to the dark. It's enough positivity for one day. Am I right? Okay, so Tim Ferriss wrote a, a post describing that his books sales are crashing. Now. Tim Ferriss is probably the modern day king of the self, the self help. Like the, the, the.
- [32:36]
B
Wait, this is not dark. I think I'm, I'm gonna go on record and say this is a good thing.
- [32:40]
A
Yeah, no, I'm telling you why. No, I totally agree. I'm just saying the transition to AI Doomerism. I think this is a great thing. But he's all like the, the, the, the self help hacker book, right? Like the Four Hour Work Week, the Four Hour Body, the four this that he basically said there's still his stuff
- [32:54]
B
that he talked about in the Four Hour Body that I do today. Still. Like there's, there's some workout stuff in there that he laid out that it's, it's like it's a really big book and most of it was useless to me, but there was some stuff that I still use to this day from his book, from that Four Hour Body book.
- [33:09]
A
So his catalog will sell roughly 80 fewer print copies in 2026 than it did in 2022. And of course the self help books are being displaced by Claude because you could ask it anything and I think that's great. But Ben, what's your take on this?
- [33:23]
B
No, I, that the self help genre, I think it's useless to 95% of people. I think you read one of these self help books and you go, yes, I'm going to change my life. And then you don't do anything. It just gives you this initial pop.
- [33:37]
A
And so I have, I have very mixed thoughts on this because.
- [33:41]
B
Sure though that this is all AI related. Is it, is this too much of a causation thing or is this, what if this is just. What if this is just a Tim Ferriss thing? I don't.
- [33:50]
A
No, let's just say it's 8. Let's just say it's 80% AI. Maybe Tim Ferriss has run his course. He's. His book's been out for a long, long time.
- [33:55]
B
Yeah, that's the thing.
- [33:56]
A
This is pretty. This is pretty.
- [33:59]
B
I wouldn't, I wouldn't have thought this, but it does make sense.
- [34:02]
A
I think self help is sort of like how some people feel about religion. Some people like say religion is, is, is bad for reasons X, Y and Z and it's, it's, it's nonsense, blah, blah. Okay, fine, you might feel that way, but there are genuinely people that get
- [34:19]
B
a lot out of, gives people hope.
- [34:22]
A
Right. Okay. So I think self help is the same.
- [34:24]
B
That's true. But you, when you read your first self help book, you are sort of energized and charged and like, I'm going to change the world or my change myself. At least most of the time it doesn't happen.
- [34:34]
A
I think the number I read, people are mad. People are mad at the self help creator. It's not mad, but it's like, oh, that person's a charlatan. Right. They're getting rich by telling people what to do. I think that's generally the complaint.
- [34:44]
B
There shouldn't need to be more self help books. But it's true that sometimes the way the message is crafted just needs to be changed.
- [34:49]
A
And sometimes people find comfort in that stuff. So I don't want to be too big of a hater.
- [34:54]
B
No, no, listen, there was someone who said like, hey, Ben, there's nothing new in your new book. And I thought like, well, yeah, someone told me a long time ago. Someone told me a long time ago, hey, listen, no one goes to church on Sunday expecting to hear an 11th commandment. Sometimes you just need. Boom.
- [35:12]
A
Love it.
- [35:13]
B
Sometimes you just need to be reinforced. So that's why self help books will always. But I gotta say, this is not one of those outcomes I would have predicted. It's pretty interesting that this is happening.
- [35:24]
A
Yeah. So add this to the mile long distance.
- [35:27]
B
But don't you think. Sorry, one more thing. Don't you think podcasts are also part of it too? I think podcasts have replaced books for people Always say, like, oh my gosh, no one's reading anymore. I think podcasts have replaced book for a wide, for a big segment of the population. Of course, why would I want to read Tim Ferriss's books when I could listen to his podcast? I'm sure that's part of it too.
- [35:45]
A
Yeah, it's easier. All right, so add this to the mile long list of things that we might look back on and say, what in the world? How was this not more clear that X was going to happen? Here's a tweet from Sharish. They are putting data centers in the ocean now. Panasa, a startup from Portland, just raised $140 million. They build floating platforms that sit out at sea and run AI. No power grid needed. The ocean's waves make all the electricity. The seawater keeps the ships cool. Big floating balls bob up and down the waves. That motion makes power. The power runs the AI chips inside, backed by Tito Thiel Co. Now worth almost a billion dollars. All right, why not? I mean, what do I know?
- [36:25]
B
Sure, it looks like a scene. The picture looks like a scene from a Star wars movie.
- [36:28]
A
Sure, why not?
- [36:30]
B
It is funny because there's obviously roadblocks to data centers. And now that that's a lot of municipalities and cities are saying, no, we don't want them here. Obviously it's so important for these hyperscalers to get this stuff out that they're going to put them wherever they can. They keep talking about putting them in space and in the ocean and it is kind of insane.
- [36:47]
A
So I guess part of the push and pull that we keep talking about is we're looking at the prices of semiconductors, we're looking at the valuation of SpaceX. And it feels how it feels, let's be honest, we all feeling a certain way, right? Like this feels, this feels like 99. What time is it? Who knows? And I'm reminding myself of what Gavin Baker said where he's like, look at, think about all of the shortage of compute that we keep talking about and just think about the fact that literally less than 3% of the world, maybe even less than that, is actually even using AI. And so like, all right, well that's one end of the spectrum versus the other. And how do you think about like investing through those two prisms? And it's hard.
- [37:32]
B
I do think it's helpful to read both finance people and tech people right now to keep yourself balanced. I feel like if you just focus on one, not the other, you're not seeing both sides of this and you're not having a more balanced view, right? Because the, again we've talked about, the finance people tend to be lean, more bearish on this stuff, the tech people more bullish. This is a generalization, but I think it's important to read both accounts. All right, I'm going to keep it positive here. I'll give a Talking wealth plug again. So Talking wealth is our YouTube channel and podcast for financial advisors. We talk about everything, all things wealth management. Last week you had Jason Wank on the show from Altruist talking about their new AI platform called Hazel.
- [38:08]
A
We're putting out, we're putting out good stuff.
- [38:10]
B
Yeah, I was thinking though, like ChatGPT calling it ChatGPT was like one of the biggest fumbles in history. The fact that they didn't call it a name like a verb or a noun or name, that there has to be a rebrand at some point to call it something. Because every new AI system now is a name. Right. It's kind of a cutesy name. Right. You have to make it something people will latch onto.
- [38:31]
A
Just drop the GPT, just chat.
- [38:34]
B
Yeah, you're right.
- [38:35]
A
Where's Justin Timberlake when you need him?
- [38:37]
B
So I talked to David Lau this week and that's gonna come out on Thursday, I believe. And he is in the insurance industry. And I asked him like, hey, AI has to somehow have an impact on the insurance agency industry, right? Like, because it's, it's quantitatively based, it's numbers based actuaries, these types of things. And what he told me is that, okay, so we have, we have a financial advisor group come to us and they have thousands of clients and within those clients there might be two to 300 different insurance policies in the, and in the, you know, and they could be, what are they called? Why am I blanking on the. The term when you receive monthly income. Annuities. Thank you, my brain. So you have three annuities and there's all these different legalese terms. And he said, now we can just. He said in the past we would have kind of given a blanket statement on these things. Now we just upload statements for 2 or 300 of these annuities and we can give perfect analysis, like, hey, you should probably trade that one in for a new one. And he's like, we're doing work we couldn't do in the past.
- [39:30]
A
So sick. You know, this reminds me of my annuity days or my insurance days were in which I never sold a single policy to anybody outside my family. But there was, there was like people whose literal job it was to run the numbers. I mean, obviously, of course, it was a job. See ya.
- [39:47]
B
But he's saying, the thing is, we keep talking about AI, like what task is AI going to replace? And you know, that's fine, but what task is AI going to allow you to do that you couldn't do before? He's like, listen, we never could have done this before. We couldn't have looked at that many policies and that much data and that many prospectuses. He's like, AI can do it for us now in the blink of an eye. And that's a cool thing. I think that we're not thinking enough of, like, what are the things we can do that we didn't do before? Speaking of which, Midjourney. I knew Midjourney as this company where I think you started doing this first, where you could type in a prompt and it would give you a picture. And this is before it was easier to do on all the LLMs. Right.
- [40:24]
A
My kids love this. Make a picture of Venom fighting Darth Vader.
- [40:28]
B
Yeah. So I had a mid Journey account. I think I paid for it at first. Now I don't need to anymore because I'm paying for the other stuff. Last week, Midjourney decided that they came out with this full medical body scan that you could do a full. And remember, didn't you just do this or something? You did a full body workup of something.
- [40:44]
A
I did blood work.
- [40:45]
B
Now I remember we got a few people who said, hey, Michael, you might not be. A few medical people reached out and said, hey, Michael, you're not be covering everything by doing this full blood work. Blah, blah, blah, blah. And I think a bunch of people said this too. I just think it's kind of cool that we can have something like this. That the future is going to be crazy is all I'm saying. Like, stuff is coming and I think it's really cool to see this, even if this is not a foolproof, because there's a lot of medical people. No, wait, wait, wait. All right, one more piece of good news. Are you. I can't imagine you're into the World cup at all. You a World cup guy?
- [41:15]
A
Not at all.
- [41:15]
B
Okay. You were under the NBA. I kind of got into it. My kids are enjoying it. It's funny because my kids get a lot of their sports takes from YouTube. Right? They watch YouTube Kids. And my. So my son, his NBA takes are just all kind of broke. Because whoever YouTube, he follows on YouTube. You know, he's telling me like, this,
- [41:35]
A
this person, James Harden is so much better than Jalen Brunson.
- [41:38]
B
Yeah. So I have to like. So he's like, oh, Ronaldo is the goat, not Messi. And I'm like, no, no, you don't realize. Messi's like, he's the best player ever. You. You don't get it. You're listening to the wrong YouTube person. So Messi had like five goals. Anyway, there's all these stories going. ABC News had this story about how people from Europe are coming in and they're going viral because they're talking about. I'm sure you've seen some of this stuff on Twitter, the people in Europe going viral, talking about the normal things we have in America. And so here's something from ABC News. Many, many visitors have expressed surprise at conveniences Americans often take for granted, including free ice refill stations, 24 hour retail operations, and the overall friendliness of the consumer. And they interviewed this person. He said, what Americans consider ordinary is often extraordinary to visitors. And obviously there's some of this when Americans go to Europe too, right? There's things that they have that we don't. But I think, I think it's just a great thing that it's funny. They said. Travel researchers have long found that tourists do not simply consume landmarks, they consume daily life. And it's like the people, not the places that matter anymore. And I just think that there's this, this thing on social media that we should all hate each other. Right? And it's so cool to see people have, like, positive experiences. Right? And it's like we hate the Europeans and they hate us. And the European mind can't comprehend. It's like, no, no. When they come here, like they're, they're optimistic and positive, kind of the way we are when we go over there. I think it's just, it's really cool to see.
- [42:55]
A
I agree. Very cool. Love it.
- [42:57]
B
Yeah. All right.
- [42:59]
A
All right, let's do some stuff on prediction markets. So Schwab is getting in the game. Prediction markets are, are. They're not going away. They are going to be a lot bigger in the future than they are today. I don't know.
- [43:10]
B
How big can you really see Schwab customers using them?
- [43:14]
A
Yeah, just. Just for some binary bets. Like, is it going to be a big part of their business? No, I don't think so. But will the S&P 500 be up on Fed Day? What I think there is, there is an appetite for this.
- [43:28]
B
I just feel like the degenerate economy stays to the original degenerate places and not. I feel like if like Vanguard and Schwab try to get into this stuff, it's not going to work.
- [43:36]
A
You know what, maybe what's the harm in term in turning it on?
- [43:40]
B
Fair, right?
- [43:41]
A
It's like it's not, they're not going all in like whatever they're going to offer it where appropriate. They're not going to like let you do sports parlays or anything like that.
- [43:47]
B
But that's the thing. As we've seen, that's what it's used mostly for sports parlays.
- [43:51]
A
It's like it's still like 90 plus percent sports.
- [43:54]
B
Right?
- [43:55]
A
All right, I did like this. I've been, I've been critical of, of some of the stuff that's happening, but I do like this. So credit where credit is due. Cashew plans to require users disclose where they work to make certain trades. This is from the Wall Street Journal. Calia is planned to require that participants in some prediction markets disclose the identity of their employers after an advisory committee recommended tighter security measures to combat potential insider trading and market manipulation. Duh. I mean who says no? Who says no to this?
- [44:23]
B
It's pretty easy.
- [44:24]
A
This, this happened. Accounts belonging to military spouses on Cali made accurate bets on whether on when former Venezuela president Nicholas Maduro would be ousted just days before he was seized by US officials in January. At least one of those accounts was referred to federal investigators with this. I mean, what the. No, straight to jail. You can't do this.
- [44:45]
B
That sounds like traders. Can you imagine someone in like betting on when D day is going to happen? Back in the 40s or something?
- [44:51]
A
Gross.
- [44:52]
B
It is very gross.
- [44:53]
A
I didn't miss this one. A Google employee was charged with insider trading and polymarket. He made more than. This person made more than a million dollars. Using non public information to bet on who would be the most searched people of 2025.
- [45:05]
B
Gosh.
- [45:06]
A
Oh, here's a tweet from, from Ryan Chern speaking about what people are actually using it for. This is the primary source of prediction market nihilism. Two years ago, prediction market volume was over 90% politics and economics. Today these same categories are under 6% of total volume. So it's basically it's all sports and parlays and sports.
- [45:24]
B
The idea was yeah, you're going to be if. Because sometimes the market doesn't react to the headlines very well the data. But it's like, no, you don't have to worry about that. Overreactory action by the market. You can actually bet on the actual outcomes, but no one wants to use it for that.
- [45:37]
A
Polymarket got busted. There was an investigative report done by the Wall Street Journal. They looked like they were getting rich on polymarket, but none of it was real. That's a headline. Basically, they let me. Not let me just read it. In his videos, George Makihara appears to have a lucrative side hustle making bets on polymarket. In January, the college student posted a video that showed him winning a hundred thousand dollars on a wager that President Trump would publicly say the word McDonald's that month. The bet was 1 of 4, 145 that Makihara appeared to place in Polymarket's website between January and mid May based on his videos bets adding up to almost $410,000. But none of those bets were real, according to a Wall Street Journal investigation. So apparently they paid a lot of influencers to post fake trades and fake wins. And not awesome.
- [46:33]
B
Oh, I thought this guy was faking. But polymarket was trying to show they
- [46:37]
A
paid a bunch of influencers to post fake shit. The Journal reviewed 1,105 videos posted by 10 creators endorsed by Polymarket's contractor between December 2025 and mid May. Seventy percent of the videos that creators place a bet. Clues in the video showed that none of the bets, $1.9 million in total, were real. Oof. These 118 videos depicted creators winning almost $900,000. In reality, those bets would have lost more than $166,000. Not awesome. Not awesome.
- [47:13]
B
Yeah, that's oof. Not good.
- [47:16]
A
Yeah, that sort of stuff is frowned upon.
- [47:18]
B
So the fact that this is all sports betting, what if just another better platform for sports betting comes along? That's. How are these companies. What moat do these companies have at all? Because they just stole from DraftKings and FanDuel. If you're not going to use it for politics and economics and obviously when the presidential election comes around, it'll be more politics based. But I don't see what kind of moat these firms have. It's regulatory, but that, that's not a motive. Regulations can.
- [47:47]
A
Oh yes, yes it is. These companies spend tens of millions of dollars on legal and lobbyists and all that sort of stuff. It's definitely a moat.
- [47:57]
B
All right, well, yes, obviously it helps when the president's son is on the board or something. What happens if there's a change in office? At that point, these companies are hugely under pressure. I don't know. All right, let's talk about crypto. I want to talk about Ethereum. Because look at the price of this thing. It's essentially back to almost the 2017 highs, which was like 1400 ish. Okay. I remember this piece. Packy McCormick wrote this in 2021 called Own the Internet the Bull case for Ethereum. He talked about Patrick o'. Shaughness. He had Justin Drake on business breakdown to discuss Ethereum. James Wang. James Wang wrote a great post on Ethereum's Q1UP results. Bloomberg's Joe Weisenthal wrote about a post about finance normies getting eth pilled. Generally a lot of the smartest people I know are getting very excited about Ethereum. And the idea was, remember, it's like, hey, if you could invest in the HTT or HTML or whatever, that's like what Ethereum is, right? It's smart contracts. It's you're, it's like the smart way to set up Bitcoin. What happened? What happened to this thing? It just seems to be nothing happening with it. Why was everyone so wrong about this?
- [49:02]
A
If you're asking me what happened to the Ethereum network and the prices, I don't know that I could give you a great answer.
- [49:08]
B
What happened to this thing being like I'm going to own the Internet? Ethereum is owning the Internet. Smart contracts. A lot of people were saying this. I want to know what happened because I feel like a lot of this stuff, we have the hype and then there's no explanation afterwards when the hype doesn't come true.
- [49:23]
A
Well, what's really interesting is, is that crypto is having a moment. It's just the blockchain and not the tokens. And I know that sounds like punch yourself in the face, but I'm serious.
- [49:36]
B
That was the funny meme. Like I'm bullish on the blockchain, not bitcoin.
- [49:39]
A
But I'm serious. Look at what's happening to all of the exchanges are getting destroyed. That's more of, that's more of actually a Kalshi listing their perpetuals issue than a crypto thing. But look at Visa and MasterCard. These stocks are getting hurt pretty bad. Their, their multiples are coming down and a lot of the chatter is do
- [50:02]
B
you think that's a stablecoin thing?
- [50:03]
A
Is because of stablecoin and the future of crypto and what's going to happen there. And just this week, one Andrew Cuomo, the former governor of New York, will co chair a joint venture between the owner of the New York Stock Exchange and the crypto exchange OkX, the two companies the project Will focus on taking New York Stock Exchange listed assets and tokenizing them or putting them into blockchain wrappers. So there is stuff happening.
- [50:33]
B
Yeah. Visa is 12% off the highs. Come on.
- [50:36]
A
Visa is 12% off the Highs.
- [50:38]
B
Yeah.
- [50:39]
A
That's it.
- [50:40]
B
Yeah. I'm just saying I want an explanation for what happened because there's a lot of people saying, like, this is it. This smart contracts. These are the things. Nothing happened with this stuff.
- [50:51]
A
All right, well, here's an explanation. They were wrong. I mean, what more do you need?
- [50:55]
B
All right, fine. I just think it's good to remember that. I think people lost their minds in 2021. Remember this thing? Beeple sold an NFT for $69 million. You remember this? This is one of my favorite posts from Drew Dickson. He posted this. Ethereum Rock was selling for $2.2 million, and he put it against a house in Florida on the water that was also selling for $2.2 million. And he said, which one would you choose? I think people forget people lost their goddamn minds in 2021.
- [51:21]
A
For 2021 was the drunkest experience of investor euphoria that I've ever witnessed.
- [51:30]
B
It's kind of. I mean, I know that we had a lot of stocks that fell 50, 60, 70% back then. And obviously Bitcoin had a crash. It is kind of crazy that it didn't really spill over to the rest of the market, which obviously wouldn't happen these days if AI really blew up. You wouldn't have that scenario where the market only falls 20% or something.
- [51:48]
A
Yeah.
- [51:49]
B
Anyway, I just think it's a good reminder that people really lost their minds back then. I think that period was way more of a speculative mania than the current one. And I don't think it's close.
- [52:03]
A
Oh, I agree. I totally agree. That was a speculative mania. This current environment is different. I'm not saying that it's not speculative. Of course there was an element of that. No doubt. But it's being driven by real shit.
- [52:17]
B
Yes. There's way more real stuff going on.
- [52:20]
A
Earnings and margins.
- [52:22]
B
Right. All right. This is a chart from Morgan Stanley. I don't know how many people would actually believe this. They look at affordability going back to 1991, and they break down affordability, basically showing the current levels it's fallen, because I think incomes have risen. So this is monthly payment as a percentage of income now is the same as it was in 2007. 2004. Ish. And then, like 1994. How many people do you think would believe this, if you showed them this, that affordability is not that many. Right. I think one of the hard parts for this, like the affordability thing might be the same is in terms of income because incomes have risen, but it's just the activity is so much lower and that's what makes it harder because yes, you, you can't, there's not enough houses to buy in most places. So even if you have the ability to buy, it's hard. Mike Simons, look at this thing like, how is it going? How is the speaking of normal that there being no such thing as normal? How long will it take to get back to normal level of activity? And he's showing if rates are at 5.5% or 6.5% and he's looking at these different ranges and he's saying it's probably somewhere like the early 2000 and 30s. And it's funny because getting back to their news, there being no such thing as normal. There hasn't been a normal housing market this entire century. Right. We went from a housing bubble in the early 2000s to a housing bust. I don't think you could even call the 2010s normal because people were still such shell shock.
- [53:49]
A
No.
- [53:50]
B
And they weren't building. And then 2020 is of course, is not normal. So I, I don't think you could, you could plot a path out saying what's going to happen in a more normal environment? Because there's no such thing as normal in the housing market.
- [54:01]
A
I mentioned a couple, I mentioned a few times on the show that I think housing might be, might be turning a corner. We saw a jump in existing home sales and I point to some of the stocks that are, you know, working a little bit. And then I look at Zillow and I say, well, maybe not so. Zillow stock is 66% off its highs in the last three years. But it made a new, it made an all time high earlier. So it's 85% off the all time highs. It in 2021. During the mania, it had a $48 billion market cap. It is now under 7. Holy.
- [54:36]
B
I made the mistake of buying this company. It was down 40% then I think it dropped another 30 from there. I'm like, all right, fine, I'm out. This is shocking to me with how, how strong of a brand that they have.
- [54:47]
A
Yeah, you would think the Zillow brand alone is worth, I don't know, make up a number. 15 billion.
- [54:54]
B
It's shocking. So 48 to 7 billion. Holy cow. And still just getting Hammered all the time.
- [55:02]
A
Is there any, like, takeover activity possible for a name like this? I mean, at some point, if it gets to $5 billion, like, I don't
- [55:10]
B
know, who would be the buyer?
- [55:13]
A
No idea. Private equity.
- [55:16]
B
Yeah. All right. The latest Social Security report came out. They do this annual report every year, and they look at. They run the numbers based on the demographics and how much payouts have happened. And they look. And they said between now and 2032 or 33, they can handle 100% of the payouts from all the taxes coming in the current Social Security fund, by 2034, it'll drop to 83%. That's a projection. By 21, the year 2100, still be 65% based on. So in 2034, when it drops 17%, what happens? Do they cut Social Security benefits, or does the government actually just decide we're going to. We're going to pay more?
- [55:57]
A
They'll pay more.
- [56:00]
B
Right. They'll just go into debt to pay it. I.
- [56:02]
A
All right, we have five minutes to wrap this up, because Verizon is on their way to my house. All right. Toy Story 5 monster open with $160 million. According to Eric Davis, that is the biggest opening of 2026, the biggest opening for a Toy Story movie, the second biggest opening ever for an animated movie, and the second biggest opening ever for Pixar behind the Incredibles 2. I thought this was great. I mean, obviously, it's Toy Story. Like, they don't. They don't miss. It was wonderful. It's a great movie.
- [56:31]
B
You watched it already? Did.
- [56:32]
A
I. Did I. Did I fall asleep twice? Yes, I did. But my kids loved it, and it was good.
- [56:37]
B
I agree with Tarantino. This should have ended after the third one. I know why they keep making these, but I thought the f. Like, the. The way that they wrapped the third one up, I thought it was perfect. The kids left and they didn't need to make more of these, but I get why they're doing it.
- [56:50]
A
All right. Widows Bay. This show had a lot of hype, and I think, like everybody else, when there's a lot of hype, you underreact. I think that probably is what happened to me. I like the show just fine. When you describe the premise of the show and the way that the show came out, it's a ridiculous premise. The island is haunted and blah, blah, blah. I mean, it's nonsense. And it was a serious show. Like, they. They did a really good job with it. I just don't know that I loved watching it. And again, maybe it was because I thought like, maybe I was just infected by the hype machine. But what, what are your thoughts? Did you love it? Because I didn't love it. I liked it.
- [57:25]
B
See, I never got into the hype machine at all on this. For some reason I didn't listen to anything on it. I just, I heard about it. So I'm taking the other side of this. I liked it. I. You said, you said this is a one season show. I thought they left. They probably left way too much on the table in terms of like two open ended at the end to want a season two. But I can't wait for season two. I like, I really, really liked this show. I thought it was very good.
- [57:45]
A
He was good.
- [57:46]
B
And it just, it made me kind of want more. I wish they would have done a little more with the finale. My wife was like, oh, that's it. That's the payoff. It wasn't much of a payoff at the end.
- [57:55]
A
It was a sad.
- [57:55]
B
I enjoyed it. Yes. And I'm excited for season two now. So I stayed away from the hype machine, so maybe my expectations didn't get too inflated.
- [58:04]
A
Okay. I watched the Hand that Rocks the Cradle. They did on the rewatchables. It's on Netflix.
- [58:09]
B
I watched it too.
- [58:10]
A
I'm pretty sure I saw this movie in the 90s, but I can't quite remember.
- [58:14]
B
I watched it one time in the 90s on TNT or something.
- [58:17]
A
Okay. It's such a. It's such a 90s movie. First of all, great title. Are you kidding me? The Hand of the Cradle.
- [58:23]
B
Yes.
- [58:25]
A
And it's just, it's just a classic 90s thriller. Like by the way, it's not rewatchable like it is. That is not. I guess it's only just like they did it for the rewatch because it's like, it's hilarious. It's like, right, that's.
- [58:36]
B
That's a movie you watch once and don't need to revisit.
- [58:38]
A
Yeah. Ever, ever, ever. But it did remind me. It's like they don't make thrillers like that anymore. Just like the slow burn thriller which was a staple of the 90s and Apple did revive it. Cape Fear. Cape Fear feels like a modern day thriller.
- [58:55]
B
The Apple TV show because it's a remake of a 90s movie.
- [58:58]
A
Yeah. They're doing a good job there.
- [59:00]
B
All right. I know you gotta learn. I got a quick story here for you. I gotta tell.
- [59:04]
A
Two minutes. Go.
- [59:05]
B
I have a good morning lady at my office. So I walk out of my office a couple weeks ago and this lady walking in with three purses and sunglasses on and coffee. And she goes, good morning. And I said, hey. And I don't know who this is. I said, hey, good morning. And she said, that's all I get? And I said, oh, come on. She's like, you're a man of few words. I'm like, okay. I'm like, I don't know you. Anyway, I walk out of my office this morning. I'm going to the bathroom. This woman is 10ft behind me. She says, good morning. And I thought she's on the phone or something. And she said, excuse me to me, and I'm walking to the bathroom. I said, I said, are you talking? Are you talking to me? She said, yes. I said good morning to you. You could say it back. And I said, I'm sorry, I didn't realize you were talking to me. I'm 10ft ahead of you. And. And she said, geez, you could have said. I'm like. I wanted to be like, hey, what. What's going on here? Sorry.
- [59:52]
A
I like. I like it. We. You know, positivity in the world. I love it.
- [59:55]
B
That is funny, I guess. Yeah. She wants more than a good morning and.
- [59:59]
A
All right, next give. Just give her a hug next time, I guess.
- [60:02]
B
So. What do. What do you want from me, lady? Gosh.
- [60:04]
A
All right. Animal spirits. Part of the compoundnews.com whereas confused as you are about the stock market and where it goes from here, interesting times. All right, we'll see you next time. Thank you for listening. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration block. Or finally break down that long article you've had open for weeks. Gemini in Chrome is here for it, ready to make anything online make sense. There's no place like Chrome. Check responses. Setup required. Compatibility and availability various 18.