Michael Batnik (2:03)

All opinions expressed by Michael and Ben.

Ben Carlson (2:05)

Are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.

Michael Batnik (2:09)

This podcast is for informational purposes only.

Ben Carlson (2:12)

And should not be relied upon for any investment decisions.

Michael Batnik (2:15)

Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

Ben Carlson (2:24)

Welcome to Animal Spirits with Michael and Ben. Michael, we did a live Future Proof show last week, so let's do a Future Proof recap. Sometimes investing based on your gut most of the time is not a good idea, Right? I think we can agree on that. If you're just investing based on how you feel, a lot of times you're going to be wrong. Going into Future Proof last week, there was a time, I'd say it was like a half hour period where you and I kind of thought, like, oh, no, what if this thing in year four loses its luster?

Michael Batnik (2:51)

No, no, no, no, no, no, no, no. There definitely was not. That was definitely.

Ben Carlson (2:57)

We were, we were, we were saying, like, what? We were positing what if. Right? What if.

Michael Batnik (3:02)

No, no, no, no, no, no, no. I don't misrepresent my feelings. This is important. I was just saying I don't know how much longer I can do this. It's four years. I'm in for another couple. But, like, I don't necessarily know if I want to be doing Future proof in 2030 in the same capacity that I'm doing it now. That's what I was saying. But then. Now back to you.

Ben Carlson (3:24)

Yeah. So we're just, we're just wondering, like, oh, man, like, what if this, I don't know, it gets stale or something and people have had enough of it and then we, we had this conversation, you know, it.

Michael Batnik (3:36)

I wasn't saying it was getting stale in 2024.

Ben Carlson (3:38)

No, we were, we were just, we were just worrying, like, what if this happens? And then we realized, oh, wait, 52% of the people here have never been to Future Proof before. Which is a number that blew my mind. I thought it would be mostly returning people. And then we walked out to the Sunday night cocktail hour, and you and Josh and I walked down the stairs and it's just a sea of people and the sunset is in the background and the palm trees and the beach and the vibes were just off the charts, immaculate. And we both go, oh, what are we talking about? That was ridiculous. This is so much fun. What are we thinking of? And it was again, it's like new all time highs every year. You think, oh, that's the all time high. It's not going to go. And it goes higher. That's my feeling of this year.

Michael Batnik (4:21)

Yes. So that, that part is definitely accurate. As we walked on the steps, we said, never mind. It is wild how big it's gotten. There was 5,000 people there. And I can't tell you, unfortunately, how many people were there that I didn't see that I wanted to. That's how big it was.

Ben Carlson (4:39)

Yes, there was. Yes. Same thing for me that those people, like, I know these people were there and I wanted to say hi to them and I didn't ever see them because it's like its own little mini city there now.

Michael Batnik (4:48)

It's unbelievable. But it is good to be back in the dock in our normal setting. The dock is unusually long this week.

Ben Carlson (4:56)

Well, we had two weeks between because we did kind of a retrospective show last week.

Michael Batnik (4:59)

It's 59 pages, so we're probably not going to get through everything. But let's do the best that we can.

Ben Carlson (5:04)

We'll see a couple more future proof things just to. Just to get. I want to say thank you to everyone. We had an Animal Spirits happy hour, which was a blast. The only thing that broke my heart was that the frozen drink machine got broken because it like tripped a. Tripped a breaker. And so we had non frozen Miami Vices, which was.

Michael Batnik (5:20)

What a shock.

Ben Carlson (5:21)

You can't do that. So it finally. By the time the concerts rolled around, it finally froze. But that.

Michael Batnik (5:27)

Well, there was two fails. There was two fails. The. The liquid Miami Vice and also not being armed with the brown rum for the floaters.

Ben Carlson (5:36)

Yes. We had some, though. We got some, didn't we?

Michael Batnik (5:39)

Did we?

Ben Carlson (5:39)

Yeah. Someone brought some. Yes. All right, read. Wait, Read your this guy email of the week. Because you. You mentioned this to me. I didn't see it.

Michael Batnik (5:46)

Okay, for those of you who missed last week's episode, you might be a bit lost here, but I implore you to go back and relisten because this might become a thing on Animal Spirits. I did a bit on the difference between this guy and there he is. And. And actually the other day, Kobe like surprised me in. He like popped out of a window. I don't remember where we were. And some of us with laughed and I said this guy. And I didn't really mean to him. This guy. My own son. All right, Kobe is this guy. He's also. There he is. He's both. But anyway. All right, so this guy of the week email. This came in a couple of days before Future Proof. And the email was longtime listener, first time caller executive at a top four bank. You guys have each had your fair share of horrible to bad takes over the years. From Miami Vices to a low IPA intake count to horrible car choices and worst music selections. This started off great. Bush and other musical specials at Future Proof have to top off the list of horrible takes across the years, albeit said respect for doubling down and sticking to what you like, regardless of feedback. Word of caution, the reception at the festival will not be what you anticipate. Thank you for what you're doing. Keep up the great work and it goes on a little bit more. But anyway, man, is this, this guy of the week email. What a. You could say it's a boner of the week email. I mean, could this have aged more poorly? Talk about, talk about how great was Blues Traveler and Bush? Are you kidding me?

Ben Carlson (7:27)

Yeah, I had a lot of fun last year at Third Eye Blind and, and it wasn't even close. We had so much fun. And Bush is one of those bands that, I mean, if you, if you list all the rock bands in the 90s, they're probably not in the top 10, maybe not in the top 15. There's so many good bands.

Michael Batnik (7:42)

Yeah, I would agree with that.

Ben Carlson (7:43)

And you, you realize that I, I haven't really thought of them since that first album. I have, I have a little.

Michael Batnik (7:48)

They might, they might be 15, 15, 20.

Ben Carlson (7:50)

I have like a 90s rock playlist that I put on sometimes in my jogging and I'm a little lethargic and need a little pick me up. And I've had little things in Machine Head on there forever. But beyond that, I haven't really thought much of Bush.

Michael Batnik (8:02)

And you were very excited to hear Little Things.

Ben Carlson (8:05)

Yeah, I jumped the gun a couple times.

Michael Batnik (8:06)

There's a little. Little Things.

Ben Carlson (8:08)

It is kind of funny when you hear one of these bands you haven't heard in a while and they play a song, you know, everyone kind of goes, yeah, like, yeah, everyone gets really excited. And I think the biggest upset of the whole week was Gavin Rossdale still having the same 90s hair he had back then, like just tucked behind his ear. And you and I both said, man, that's a, that's just a great looking man.

Michael Batnik (8:27)

Unbelievable.

Ben Carlson (8:28)

He's still, he still kind of got it. The funny part to me was I, I was. We were talking in the cocktail hour before the shows were starting with some of the people from Future Proof. And we were, we were brainstorming bands we could get to come next year. And I was thinking of other 90s nostalgia bands. And what they said was, no, here's the problem. These bands are all so expensive these days because millennials have money now and millennials are like showing up to their tours in force. So it's like, even these Bands that haven't had a hit in 20 years or whatever are charging premium prices because of millennials. So here's the thing, because you and I also saw Oasis. So the millennial nostalgia was just off the chains for us last week. How do you invest in millennial 90s nostalgia? Because that's going to be a massive bull market.

Michael Batnik (9:13)

Live nation.

Ben Carlson (9:14)

I guess so.

Michael Batnik (9:15)

One of my favorite parts of the Bush concert was speaking of generations. So Sixteen Stone came out in 1994. A lot of our people at the event weren't even born. One of our colleagues, definitely a lot of our colleagues wasn't born, but one in particular. And this gave me just the biggest smile ever. So Gavin Rossdale did swallow, just with his angelic voice chords. Voice chords? What are those things called?

Ben Carlson (9:48)

Yeah, so it's acoustic vocal cords.

Michael Batnik (9:49)

My God. Geez. Sorry, my brain is a bit fried. And one of our colleagues, who wasn't familiar with Bush because he was probably born in 1997, 98, took out his phone and was singing along, and I texted her. I was like, dude, that was. That was just unbelievable. Thank you for doing that. And he said, couldn't let you guys have all the fun.

Ben Carlson (10:14)

It was. Yes, it was. It was like a full moon in the background. And it was. It was just.

Michael Batnik (10:18)

I have you on video. Look at the moon.

Ben Carlson (10:20)

Yes. So we enjoyed ourselves.

Michael Batnik (10:23)

This is a great email that came in that you responded to recently on Animal Spirits. You guys discussed why the young generation isn't partying like we used to. Why is Burning man just filled with a bunch of aging millennials? I don't get it. Why are they living for the moment? Why aren't they drinking themselves into oblivion and hooking up with as many people as possible? I listened to you guys discuss this, looking fondly back to those days yourselves, saying that they're going to regret not partying more. And I have to ask, was it really all that good? The lack of purpose, the aimlessness, the sense of shame the next morning, the depression, the regrets and scars you'll carry the rest of your days. Was it really all that good? Or we all just pretending it was because that's what everyone else said? I suspect the latter. You're anchored to that way of thinking. But here's where the next generation is at, and I think they're absolutely right about it. Longtime listener, I appreciate the show. Just thought I'd chime in and try to explain the oddness of the next generation. Watch the clip and ask yourself. We'll be happier. Okay, thanks, guys. All Right. So, Ben, you responded. Nah, it really was awesome. Some of the best challenges of my life. No depression. Made a ton of friends and memories, lived it up a new. No regrets. The younger generation is the one that's depressed all the time. Wasn't a problem back in the day. And I know social media is the main culprit here. Listen, we have fun. We had fun and we still have fun. How much fun was Oasis?

Ben Carlson (11:35)

That was amazing.

Michael Batnik (11:36)

I'm. I know. I don't know if this is, like, controversial or whatever. I. Listen, everyone is going to do what they want to do. I'm not telling anyone to do what they don't want to do. Yeah, but we like having a good time. I'm not going to apologize.

Ben Carlson (11:47)

Yes. There's nothing wrong with it if. Yes. And you again, you don't have to be one of those people that has to drink to have fun. We.

Michael Batnik (11:54)

That's. That's what I have to do. You can do whatever you want to do.

Ben Carlson (11:57)

Yeah. It is funny because in college, obviously, I overdid it a lot because I am an introverted person and I found that drinking made me more extroverted and sometimes that I would take that too far, to my detriment. And I do look back and I don't have any regrets, but I do think, like, man, I probably embarrassed myself more than I should have in some ways, but.

Michael Batnik (12:12)

But I don't know. That's part of the fun of it. I mean, listen, it's a line that's being.

Ben Carlson (12:16)

Yeah, that's being young. And you figure out when you go.

Michael Batnik (12:18)

That'S how you become. That's how you become. There he is.

Ben Carlson (12:20)

Yeah, exactly. So anyway, teach their own. But. Yeah.

Michael Batnik (12:24)

So I'm a trendsetter, am I not?

Ben Carlson (12:27)

With the bucket hats, With.

Michael Batnik (12:28)

With the fanny pack.

Ben Carlson (12:30)

Yeah, I. I wore a fanny pack. I wore it as a messenger bag, though, so it wasn't really fanny pack.

Michael Batnik (12:35)

I didn't wear fanny pack. Did you. Did you. Was it practical? Did you get use out of it?

Ben Carlson (12:39)

I did.

Michael Batnik (12:40)

Are you going to wear it again?

Ben Carlson (12:41)

I had my charger. Yeah, I got. I got a bright Nike one and I got a lot of compliments on it, too, so.

Michael Batnik (12:45)

Okay, so fanny pack and bucket hats.

Ben Carlson (12:47)

So in your. It was your call to go see Oasis, like, 10 months ago, and they said, they announced it happened to be the same weekend as Future Proof. And I felt like I liked Oasis. I had their first album. I wasn't a. I wasn't a major fan, but I enjoyed them. I thought this would Be cool. And the more closer we got to the concert, you start hearing these stories from the other concert goers about how it's amazing. And I've been thinking about it for weeks after the concert and it's like the hype was just growing. The hype machine was growing. And I thought, like, can it really be that good? And it was, it was epic. It was so much fun. The again, the vibe was just unbelievable in the concert. They put on a great show. It made me realize there just are no rock bands anymore. Like, oh wait, people used to like play rock and roll. They don't really have that anymore. And it was just, it was amazing.

Michael Batnik (13:32)

How great is California?

Ben Carlson (13:34)

Well, that helped too. It was at the Rose bowl and the. So the, the scene was amazing with the mountains in the background and the sun setting and yeah, it was wow. And it really, really was this tight knit age range. It felt like 35 to 50ish, probably. So it did felt like it was all older millennials, young Gen X. That had to be 90% of the people there. And I don't know, it was just, it was awesome. It was so much fun. We stayed at an unbelievable show.

Michael Batnik (14:07)

We stayed at an Airbnb in Burbank. And the houses there are so interesting. It's like these little tiny things that were built in The, I don't know, 60s, I have no idea. But there was a pool house and I think a lot. I think a pool house is like pretty common. So there's a pool in the backyard and a little pool house which I stayed in. And there was, there was a lime tree with like actual fresh limes.

Ben Carlson (14:31)

Yeah, we used it in our beers.

Michael Batnik (14:33)

It's, it's interesting how I feel like California is sort of, I don't know, it's like, I don't know, look down is the wrong word. But through the lens of social media, which is, we're gonna get to later, unfortunately, people like, you know, it's a snarky California. It's, it's one of the greatest places in the world.

Ben Carlson (14:50)

There's a reason people are willing to pay so much money and so much taxes to live there.

Michael Batnik (14:54)

Yeah.

Ben Carlson (14:54)

Because it's a great. I was thinking though that the person about the party. Email. So my brother was a huge fan of concerts and it was never really my thing. I was always more of a comedy show guy, but he loved going to live music and I've just thought I. So it's been like seven months since he died. I've been thinking like, I really Want to enjoy these moments more and like in the moment, have more gratitude, like. And I feel like that was the feeling that we had this past week there of like, let's like be in the moment and actually really enjoy it and, and appreciate it for what it is. And so I think there was a.

Michael Batnik (15:24)

Lot of that, that, that Tuesday night when we did the concert, that was legitimately one of the best nights of my Life. Like top 10, most fun I've ever had. Being with like my best friends and.

Ben Carlson (15:36)

Watching it was so much we had.

Michael Batnik (15:38)

In the last, you know, 10ft in front of us. Unbelievable. So anyway, future proof. I don't know what else to say. It's just incredible. And I. That's, that's the start of my fiscal year is September future proof. I can't wait.

Ben Carlson (15:54)

It is like a. From the summer, right?

Michael Batnik (15:57)

Yeah, it's just, it is just the absolute best. All right, so let's talk about the stock market.

Ben Carlson (16:03)

Yeah, but, but if you haven't come yet and we didn't just talk you into it, we're never going to because you have to come if you haven't been so.

Michael Batnik (16:09)

Steve Deppy, tweeted, looking at the forest, I still see an overriding sentiment of this can't continue. No euphoria anywhere. Interestingly, when the S&P 500 records a four month winning streak that closes at a new all time high, it's continued nine and 10 months later, 18 times in a row, anecdotally. And maybe this is like the, I don't know, you know when you say like people are saying, I think I'm guilty of this. I know you do this a lot. It's like the voices in your head, people are saying, it's people in your brain, you're just making it up. You're projecting. Oh, people saying this can't continue.

Ben Carlson (16:44)

No, it's usually like one person on social media. Then you say people, it's person. But you say people.

Michael Batnik (16:48)

No, but I think it's projection. So. But, but, but Steve says yes, this can continue. So again, four month winning streak, new all time high. When this has happened the last 18 times, it's been higher nine and 10 months later.

Ben Carlson (17:03)

So I saw another one that I.

Michael Batnik (17:04)

Saw another one be broken, but like that's pretty damn good.

Ben Carlson (17:08)

And we're coming into a Fed rate cut potentially. The other one was this morning, I think Bespoke had it that when the Fed cuts 12 months later, it's like 100 chance of the stock being up, separate being up. And it's up 15 on average. Yes, these rules are made to be broken. But you're right. Here's one further euphoric thing. I think. How is it possible for a company like Oracle? I think it was $700 billion market cap before it had this big pop. How can it rise 40% in a day? I think it finished up 36% but it was up 40%. How can a company that big rise that much? That to me is absolutely insane.

Michael Batnik (17:43)

So I hand up. I don't know what Oracle does. It's like data enterprise storage software, cloud storage for the AI layer of the data store. I don't, honestly I don't know. But, but I did, I did some learning and there's a reason the market is not dumb. There is a good reason why this happened. So Eric Newcomer wrote, seeing a 48 year old database company suddenly grow by more than the size of a salesforce over the course of a trading day is one of those occurrences that makes you wonder about the moment we're in. It's at once incredibly incredible, uncanny and terrifying. Like your grandfather doing a family reunion, gathering everyone around, tossing off his walker and doing, Parker, what the hell is going on? So Wall Street Journal says, in the case of Oracle, the answer is OpenAI of the massive contracted revenue increase Katz disclosed, which was $363 billion. Okay, that was out of nowhere. 300 billion of it came from the ChatGPT maker. The Oracle contract will require 4.5 gigawatts of power capacity, roughly comparable to the, to the electricity produced by more than two Hoover dams or the amount consumed by about 4 million homes. So it was out of nowhere. That's why it was $363 billion in revenue, contracted revenue that was not disclosed in the previous quarter.

Ben Carlson (19:00)

Yeah, so they're, and they're also saying that I guess for this, their cloud infrastructure division, the projection last year they made like $10 billion and it's projected by the end of the decade to be 144 billion. So 14 or 15 times that. And if you look at the chart they show it here looks like Nvidia essentially in their data centers, which is. Yeah. So to your point, the stock market took this new information. How does the information like this not get out of there though? How does it, how do they keep this close to the vest? And one more question. Does OpenAI make any money?

Michael Batnik (19:32)

Yeah, they don't make, they're not, they're not like cash flow positive.

Ben Carlson (19:38)

Right.

Michael Batnik (19:38)

I think they're, they're losing money. And I was they don't, I think Altman said they don't expect to be, to be making money until 27 or 29. I can't remember what he said, but.

Ben Carlson (19:47)

Yeah, it's got to be.

Michael Batnik (19:48)

What's the revenue? Their revenue is $10 billion. 13 billion, actually. So, so Trump wants to do away with quarterly reports and make them semiannual. And my first, my first thought was like, are you insane? What is it like? More disclosure? More, more of that a good thing. And then my second thought, like immediately I had three thoughts simultaneously. So that was my knee jerk reaction. My second thought was, well, do they really need to report every 90 days? Maybe it is overkill.

Ben Carlson (20:19)

It would make the stock market way more boring though, don't you think?

Michael Batnik (20:22)

And maybe there's a lot of money wasted, a lot of time wasted. I can't imagine how much money these companies are spending preparing for these reports. All that goes into it. And anything that makes it easier for companies to come public is a good thing. Right. And this is one of those. This, this would decrease the burden a little bit.

Ben Carlson (20:42)

I think that, I think that's honestly a cop out. The whole, it's more cumbersome to be a public company. I think. No, it's definitely private capital. I think there's just more private capital that makes it easier to stay private.

Michael Batnik (20:51)

Because it's harder to go. Because it's more annoying to go public. The tour, the two are not unrelated. It's the, the reason why there's so much private capital is because going public sucks. All right. And then my concluding thought was, nah, it was like the, the meme, no, we need court. We need. Because you know what, if we don't have reports and if we don't hear from the companies every 90 days, they're going to take advantage of their investors.

Ben Carlson (21:17)

Yeah, there's way more shenanigans going on.

Michael Batnik (21:19)

There's, they're, they're going to lie. And when I say that, I mean all of them, obviously. But investors, I think will, will be harmed. And I was thinking about this because I, I just listened to a book, Apple in China. And in 20, I can't remember what the year was, but Tim Cook got lambasted for not disclosing some of the problems in China. And there was like a class action lawsuit, I believe. And so if Apple was playing games, imagine what the average company would do if they only had to talk to their investors twice a year.

Ben Carlson (21:52)

Yeah, I think it would hurt individual investors. It would help like hedge funds and like it'd Be like taking Reg fd off the table. I don't, I don't.

Michael Batnik (21:59)

It's not black or white. I have to think more, more about this, but it's not that, that crazy. I don't think I like it though. All right, one last thing. So I don't know if I clipped this from the Journal or Eric Newcomer. So I apologize, but is there any chance we don't get a bubble? And let me read this clip. The OpenAI and Oracle contract, which starts in 2027 is a risky gamble for both companies. OpenAI is a money losing startup that disclosed in June it was generating roughly $10 billion in annual revenue there. It is less than one fifth of the 60 billion it will have to pay on average every year. Oracle is concentrating a large chunk of its future revenue to one customer and will likely have to take on debt to buy the AI chips needed to power the data centers.

Ben Carlson (22:43)

I would say 80% chance of a bubble. It has to be. I don't see how we get through this without some sort of at least mini bubble.

Michael Batnik (22:51)

Now let's define this. All right, I'm going to say in order for something to qualify for a bubble, that means that it has to get to levels through which in no scenario can they fulfill the promises that are being discounted into the price. And therefore the bubble will pop and prices will fall 70%. So through that lens, what do you think? Do you still think 80%? Because that's pretty high. But that's what a bubble is. A bubble inflates to a large enough level so that it pops and falls a lot.

Ben Carlson (23:25)

70% is a pretty high bar. I'd say 50% is pretty. For a mini bubble.

Michael Batnik (23:29)

No, no. Well, but, but that, but that's not a bubble. If the market could fall 50% just, you know, not just because, but I would say to, to, to reach the record books of the dot com mania, of the railroad railroad of, of the 1930s, you gotta fall 70% if you want to be considered in that category.

Ben Carlson (23:47)

Okay.

Michael Batnik (23:47)

And that's where a lot of the comparisons are coming from.

Ben Carlson (23:49)

All right. I'm on record saying I, I don't think there's any way we could see the dot com bubble just because these companies have so much make, so much cash flow, even if they get ahead of their skis and fall 40.

Michael Batnik (23:59)

So yeah, there's also, there's also a big, big difference between a 50% fall and a 70% fall. It's not 20%, it's much bigger than that. So I would Agree with you.

Ben Carlson (24:06)

All right, how about this? So Oracle, when they had their big day, that moved them to the 10th biggest company in the S&P 500. So you look at the. Just the top 10 list is Oracle. And above here from Bespoke, what sticks out to you out of this list of the top 10 names? Because there's something that stuck out to me right away and I go, oh my gosh.

Michael Batnik (24:20)

Yeah, obviously, go ahead.

Ben Carlson (24:22)

It's Warren Buffett. It's Warren Buffett and nine tech stocks. I think this is honestly one of his crowning achievements. The fact that he survived the dot com bubble and now is surviving whatever we're calling this AI thing. And I guess, I mean, it seems like it's only a matter of time until, I don't know, Netflix comes up and it's all 10. That feels like that's where we're going.

Michael Batnik (24:43)

Yeah.

Ben Carlson (24:44)

This thing ends when it's all the top 10 is all tech stocks and they come up with a new name for the top 10, and then it's all the biggest.

Michael Batnik (24:50)

And then it keeps going for another five years and we keep talking about it, when is it going to end?

Ben Carlson (24:53)

But don't you think that this is one of Buffett's most impressive things he's ever done, that he's kept up with these tech stocks and he's in there in the mix and he's a trillion dollar company. It's unbelievable. I think.

Michael Batnik (25:04)

Who's going to be the first trillionaire? Larry Ellison became the richest man in the world the other day for a second.

Ben Carlson (25:11)

Yeah. You know what, that's great for Michigan football because his wife is a Michigan alum and they were big donors to the NIL Fund for Michigan. So bullish Michigan football in the future because Larry Ellison's so rich. That's great for me. All those stories about how rich Larry Ellison is, send them all to me. I love it. That's great. Michigan's gonna be. Michigan's gonna have the best quarterback for the next 20 years. All right, this is a, this is a really interesting one to think about. The dichotomy of AI bubble talk versus what's actually going on. So first is Google versus ChatGPT. This is, this is the one that, like there was all these conversations of Google's dead, there's no way. And so I looked at Google. Since ChatGPT came on board in November of 2022, Google is outperforming the Q's and the S and P by a pretty wide margin. A lot of the Performances come recently, but they've. Google essentially tracked the NASDAQ 100 throughout this whole time. Remember, it had that one initial fall that lasted for what, a week maybe.

Michael Batnik (26:05)

And wait, what did, what did.

Ben Carlson (26:06)

Google had had a little bit of a downdraft because people said, oh, no.

Michael Batnik (26:09)

Google, no, that was, that was real.

Ben Carlson (26:12)

Right? This is the.

Michael Batnik (26:15)

So I, I bought that dip. I bought that dip because I didn't believe the story that ChatGPT was going to kill Google because I, I was using Gemini. It's like it's right in there. It's the first thing that comes up. And then I had CNBC on, which I, which I rarely do. And there was, there was like a report about some of the numbers being leaked about Chat GBT usage. I can't remember what it was. Google fell 7%. That said, ah, I don't need this headache. Who needs this? This cloud hanging over me? And the stock is up like 50 since I sold it. The move is unbelievable.

Ben Carlson (26:48)

Yeah. So here's a more surprising move to me. This is from Luke Kawa at Sherwood News. Gold is outperforming the NASDAQ 100 since the launch of Chat GPT. No one ever could have possibly explained this. And he gives some, some reasons here. He's saying that a lot of it is like people worried about fiscal and monetary policymakers and inflation and then those sanctions imposed on Russia in the wake of the Ukraine. So a lot of other countries decided to start hoarding gold. If this is a bubble, it's one of the weirdest ones ever. Because the whole point is gold is this relic and technology should make gold obsolete. And that has not happened. It's unbelievable. The fact that the NASDAQ 100 can boom, Bitcoin can boom, Ethereum can boom, and gold can boom all at the same time. That almost doesn't seem possible. Yet here we are.

Michael Batnik (27:41)

It is a weird market. And I think, getting back to the point that we opened the market, talk with Steve and there being a lot of disbelief. There are people who look at some of the dumb behavior going on in smaller stocks and Nvidia being at $4 trillion and say, how could you say that? There's not euphoria, but there's not euphoria. The S tax report just came out from Schwab and it's barely up over the last month. And the Russell 2000 is not at a new high.

Ben Carlson (28:09)

Still stick with S tax instead of stacks, huh?

Michael Batnik (28:10)

I'm still singing with S tax. There is not. None of my friends are asking me.

Ben Carlson (28:15)

About the stock market, I would say this, this doesn't feel anything like 2021 to me. No, right, 2021, that was, that, to me, that was a crazy little mini bubble because we did see 50 to 70% drops in a lot of stocks and some of them haven't come back.

Michael Batnik (28:28)

A lot of the hot stocks over the past couple of weeks now, some have rebounded a little bit, but a lot of the, the momo names got smoked.

Ben Carlson (28:34)

I do feel like the 2022 bear market is going to go on a history of like, oh, that was a run of the mill bear market, but there were some stocks that got absolutely annihilated and that one's going to be kind of lost to history a little bit.

Michael Batnik (28:45)

Totally agree. Totally agree. All right, I want to give a shout to Daily Chart Book, which just the best compilation of charts every day. A lot of the work, a lot of the things that we use here are from that site.

Ben Carlson (28:58)

So I look at it every day in my inbox and every day there's nine or ten charts I've never seen before.

Michael Batnik (29:03)

Yeah, there's gold. So, so here's one. Who is this from? This is from Macro Bond. They say that margins tend to decline and recept tend to decline before recessions. And that is definitely. So there's a great chart showing the path of margins before recession versus where we are today. And this just, it's not, it's not there. It's not happening.

Ben Carlson (29:28)

Margins are breaking out. Should we do technical analysis on the margins? Right, okay. So we had Wes Krill from DFA on talk your book this week talking about a bunch of different things, but he made it, he made a great point. We asked him because DFA has historically been a. That's how they got their start with small caps. And one of the things, and you talked about earlier, the IPL thing, one of the things that people have said is small caps aren't going to be good anymore going forward because I. Companies are staying private longer. Right. So Torsten Slok has this chart. The median age of IPOs is currently 14 years. And that's. That's gone up, right? And this idea like there's the old stat of Amazon went public at $400 million and that will never happen again today. And people are missing out. And so his point was, listen, that sounds great in theory, but in practice, IPOs are terrible investments as a whole. You take the group of IPOs and I thought, man, why didn't I ever think of this? So Jay Ritter is a professor at the University of Florida. And he's kept track of IPO data forever. And so I pulled up his. He updates this, I think in an annual basis. I pulled this up and looked at his IPO data and you look at this average three year buy and hold return. And he looks at IPOs and they market adjust it, meaning like compared to the market. And look at from 1980 to 2023, the average IPO over a three year window underperformed by 20% annually against the market. It's a massive number. IPOs are terrible investments as a whole. And he looked at this in this next one shows three year buy and hold return. He shows 60% of IPOs had a negative three year return from the first close. Almost 40% of them had a return of negative 50% from the first close. So you could say, you could say, listen, it's different in the last five years or something, or different in the last 10 maybe. But history shows actually you're not missing out that much by not getting in on all these private companies. What do you think about that?

Michael Batnik (31:25)

Well, I, I said this to you, I said, why are we so sure that successful IPOs are pulling up the, the Russell 2000, right.

Ben Carlson (31:36)

History would say that that's not the case at all.

Michael Batnik (31:39)

So. But I do wonder if Amazon's rise from $400 million to say a billion, two billion, cancels out all of the other small IPOs that come public at 100 million and go to zero. I don't know about that. But then the other part is, all right, but these companies, they graduate out of the Russell 2000 very quickly.

Ben Carlson (31:59)

That's the thing, right?

Michael Batnik (32:01)

So let's say that Amazon leaves the Russell 2000, goes from 400 million to 2 billion. I'm making up the numbers. And then it's gone. And then all the other. And then it goes into the mid caps and it goes to the 500. And so, yeah, I don't know that I buy the argument that it's a lack of IPOs that are causing the Russell $2,000.

Ben Carlson (32:17)

So Facebook went public at $100 billion. I think roughly it's up almost 2,000% since it went public in 2012, 2013, whatever it was, it's up 25% annually since it went public. It went way bigger than Amazon. Right. And it's still done fantastically well. So I think that might be just a little bit of a misnomer. I got some new charts from Goldman Sachs. This is interesting. So they looked at the average allocation of 401k account balances. Now this is not euphoria, but this is just risk taking. So how's that? There's no euphoria. There's definitely a larger appetite for risk for sure. How's that? So participants in their 20s from 2013 to 2022 went from 76% in equities to 90%. All ages went from 66 to 71%. So people have definitely increased their allocation to equities in a pretty decent way.

Michael Batnik (33:10)

Well, you know what? Some. Somebody shared with me a video that was on YouTube. Fidelity was, I think it was from Fidelity. They were interviewing people. What year was it? 1990. I can't remember. It was 94, 97. But either way, people's attitude about the stock market was just seems so different than it is today.

Ben Carlson (33:33)

Yeah. Well, look at this next chart. So this shows the average allocation to stocks, bonds and cash. And for the 70s, 80s and first part of the 90s, until probably the dot com bubble, people had just as much money in bonds as they did in stocks. Which is kind of crazy because if you think this is the baby boomers back in the day and they were still relatively young. So the fact that there's more money in equities now makes a lot more sense than that did. Like there shouldn't have been a 50, 50 mix. And it was stocks, bonds and cash. And I know that rates were higher back then, but this was essentially like a 1/3, 1/3, 1/3 in stocks, bonds and cash for the aggregate allocation of investors. And that makes no sense. Equity should be way higher like it is today. Yeah, this, this was an interesting too. So they show the equities as a share of household assets in the us, Japan, uk, EU and China. I think we looked at something like this before for, but it's 50% or so for the U.S. 13% for Japan, 10% for UK and the EU and 9% for China. So the fact that we've accepted risk, it hasn't quite been accepted around the globe yet. And I think that's actually a bullish case for stocks in the future. These countries are going to catch up to us. I had a conversation with someone at Future Proof saying like, listen, the advisors in Canada are a couple years behind you guys. The advisers in Europe are like five years behind you. In terms of the US I think.

Michael Batnik (34:55)

Australia is the closest saying like it's.

Ben Carlson (34:57)

It'S coming, this stuff is coming.

Michael Batnik (35:00)

All right, so we get this question a lot like why doesn't the stock market care about the labor market and how Is it possible that corporate profits keep rising faster than gdp? I'd never seen this chart before, but somebody who. Is this from Wells Fargo?

Ben Carlson (35:20)

Yeah, Sam Rowe posted this one.

Michael Batnik (35:22)

Okay. S&P 500 EPS is almost evenly split between goods and services. All right, so basically 50, 50 split, stark difference versus GDP composition. So the biggest difference is that goods only make up 16% of GDP, but 47% of earnings per share in the S&P 500. And boy, do we buy a lot of shit. Speaking of one of the.

Ben Carlson (35:45)

This is the ultimate. This stock market is not the economy kind of chart.

Michael Batnik (35:48)

So 72% services and GDP and then 11% government spending. One of the big takeaways. So we. I got home Wednesday night at around midnight from Future Proof. Robin woke me up at six o' clock the next morning and said, get up, we're moving. One of the big takeaways is we buy a lot of shit, we hold a lot of shit, we hoard a lot of shit. At least my wife does. But everything ends up in the garbage.

Ben Carlson (36:12)

Eventually, including us, especially when you have kids. Like, we did it.

Michael Batnik (36:17)

We.

Ben Carlson (36:17)

We've been purging for the last six weeks because we redid some of our house and it's like, God, we have a lot of stuff. But this is, this is why moving is so good for economic activity. Why the housing. We need the housing market as like a hedge because when people start moving, they throw stuff away and they buy new stuff.

Michael Batnik (36:34)

Well, that's.

Ben Carlson (36:35)

You spend a lot of money moving.

Michael Batnik (36:36)

Bingo. You also don't realize how much like, why do I have, why do I have four packs of 9ve? The little batteries that don't go in anything. Why do I have so many of those? But you're 100% right. We threw out, we threw out almost all of our kitchen stuff. All of our kitchen stuff is either. I don't even know how it shows up, honestly. Some of this plastic stuff that we have, I don't even know where it came from. But the, the, the, the real stuff that we have, like the ceramic stuff is from our wedding in 2013. So I said, whatever, we could go. We could replace all of this on Amazon for 200. Like, all of it.

Ben Carlson (37:08)

Yeah, that, that's why the housing activity is going to be a really. I think it's going to be like a shock absorber for the slowing economy if rates fall. I think housing activity is going to be that shock absorber.

Michael Batnik (37:18)

All right, so, so these next two charts are very important. The, the. It's like, make it make sense. A lot of talk about the disconnect, right? How people feel, how the economy's doing. And obviously not to re, you know, not to relitigate that point, but it's all about two things. It's high income people and it's retirees. And that's the entire story. Mystery solved.

Ben Carlson (37:48)

And both of those groups are not as impacted as other groups by what's going on in the economy.

Michael Batnik (37:53)

Correct?

Ben Carlson (37:54)

Especially in some ways, they're immune to it, which sounds crazy to say, but they are.

Michael Batnik (37:59)

So this chart is in Bloomberg, and it shows high income Americans are behind roughly half of all US Consumer spending, up from about a third in the early 1990s.

Ben Carlson (38:07)

The crazy thing to me is that this century alone, it's basically been around 40 to 45%. So it's been high for this whole century, pretty much. We just now have the data to back it up. And it's going higher, obviously.

Michael Batnik (38:22)

All right, and one other chart that pairs nicely with this from Variant Perception via daily chart book. All right, this is amazing. Retirees continue to make up more and more of US Consumption, less sensitive to job market feedback loops, although still sensitive to wealth effects from home values, et cetera. So this chart goes back to the turn of the century and it shows 65 years and older as a percentage of total consumption. And this chart has gone from 15% in 2020 to up to around 25% today. And it's projected to just keep going up into the right. And retirees are obviously not completely immune to the economy, and certainly they're not immune to the stock market. But like the labor market, assuming that it's not. Assuming that the labor market isn't crashing because the economy is crashing, they just keep spending. So that's why you can see jobs, job openings go down, job hiring go down, and spending continue to march along. We got retail sales today, and it's more the same.

Ben Carlson (39:30)

Just think about boomers, how they're the wealthiest generation ever, tons of equity in their home, their houses are mostly paid off. Stock portfolios that are way bigger than they ever could have hoped in the 2010s. You're right. What's going to slow them down from continuing to travel and spend their money? It would have to be a recession. But the chicken and the egg problem here is like, they need to slow their spending for there to be a recession. You'd think, all right, I want to zag a little on the labor market here. This is not me actually believing that the labor market is still strong, but I just Want to Ryan Rossillo this and say, like, I'm actually more impressed with the job market than people think. Okay, can I do that?

Michael Batnik (40:08)

Are we sure the job market's actually slowing?

Ben Carlson (40:09)

I mean, all right, so now that there's obvious retorts here, but look at this. I just want to play this out.

Michael Batnik (40:15)

Okay.

Ben Carlson (40:16)

Labor force participation rate, prime age, which is 25 to 54. So this takes away the boomers that are retiring, is as high as it's been in the last 20 years. Almost 84%. Way higher than it was in the 2010s. It was falling then. Now it's been rising. People keep saying the U.S. unemployment rate for ages 16 to 24 is like this crisis right now because it's over 10%. But if you look historically, the average is almost 12%. It's below average still now. Every time this has ticked up in the past, it's kind of led to recession, but it's.

Michael Batnik (40:46)

This is not this time.

Ben Carlson (40:48)

10 unemployment rate for 16 to 22.

Michael Batnik (40:50)

Is not every time this goes up, at least there's a recession.

Ben Carlson (40:53)

But it's just. It's just funny to me that people think 16 to 24 having a high unemployment rate is a terrible thing. Like, of course it is. That it's much harder to get a job. And you, you're in and out of the labor. I don't know. It doesn't seem to be. And finally, wage growth is still above 4%. It was never that high in the 2000 and tens, not once. It's falling, but it's still pretty high. Look at this from Torson Slok. Layoffs and discharge rate still way, way lower than anything we saw in the 2010s.

Michael Batnik (41:26)

Yes.

Ben Carlson (41:27)

So I think. How about this? You can't make the claim that the labor market is strong. Obviously it's weakening. But I'd say some combination of AI, immigration, the crap down there, and baby boomers retiring is going to make it really hard to understand what exactly is going on in the underlying labor market. I think all those forces coming together at once is going to make it really weird for a while.

Michael Batnik (41:46)

Yeah, I would agree with you. And this from ZipRecruiter CEO blew my face a little bit. I got this from the transcript, which also shout out to them, just do phenomenal work every week. All right. What we have just witnessed was an unprecedented downturn in the labor market that lasted for 32 months straight. For 32 months in a row. There was less hiring each month than the previous month. To put that in context, for you guys. If you go back to the 2008 financial crisis, that downturn in hiring, less than 22 months. So this is rare. However, finally, for the last two quarters, we have started to see stabilization. All right, so this was a face blower. But also context is required. I think there's a lot of overhiring coming out of the pandemic.

Ben Carlson (42:30)

Yeah. Doesn't this just mean in 2021 there was a ton, a ton of hiring?

Michael Batnik (42:34)

Yeah, yeah, but, but nevertheless it's still a surprising. Like that's a Pretty wild stat. 32 straight months. Remember when people were worried about GDP now crashing?

Ben Carlson (42:45)

Yeah. Back above 3%. Right. The stock market or the, or the GDP estimates are not worried about the labor market.

Michael Batnik (42:54)

Not yet.

Ben Carlson (42:54)

Yet. Okay, good one from. I want to talk about wages real quick here. Good one from. This was from Fortune. It's kind of going around social media a little bit. Americans think you should land your dream job by 29, buy your first home at 30 and earn six figures by 35. But they're in for a reality check. So they kind of fact check some of this. So they said. This is interesting. Research shows that the average person changes job 12 times in their lifetime between 18 and 56. The average age of a first time home buyer is now 38 years old, which is, is kind of depressing. And I don't know what the breakdown of this, but they say only 18% of individuals earn more than $100,000. So just saying that like these and this was probably a survey or something. They. The survey found that people need $500,000 or more to feel comfortable. But only one need. Yeah, well, need if they wanted to feel comfortable. But only 8% of all positions according to ADP make $5500,000 or more.

Michael Batnik (43:55)

I mean this is American exceptionalism. We're so ambitious and delusional that we all think we can be rich.

Ben Carlson (44:02)

But this is the thing. We are still by far the richest country. Jamer Horbital says they're looking, he's looking at new census data. Median family income is at an all time inflation adjusted high of 105,800 in 2024. He has another one that shows one third of American families Now have over $150,000 of income the first time in history. And this is adjusted for inflation. And this is, this chart always gets me because the middle class is shrinking, but it's because the upper class is rising. And it's people moving because the lower class has gone down too. People are moving up in the world.

Michael Batnik (44:40)

Huh?

Ben Carlson (44:42)

This is another one. So on top of this, Tom Harwood says 34% of American families make more than $150,000. By comparison, just 2 to 3% of British households earn more than that.

Michael Batnik (44:53)

Yeah, but you know what? Not a. Yeah, but in addition to. And also, we also consume a hell of a lot more. So relatively speaking, the average American definitely probably doesn't feel richer because they're spending so much of it.

Ben Carlson (45:10)

Probably. But people are spending a lot more overseas as well, and they're not making as much money as we are. So do you. Do you think that this job opening thing matters? Because I remember when there was so many job openings and I think Josh was the one who said, like someone on TCAF said, most of these job openings are probably fake anyway because people are trying to hoard employees right now.

Michael Batnik (45:30)

So there's been a lot of charts going around that show that there are more unemployed people than there are job openings. Then it starts in 2020. Right. So, like, this has never happened before. Wrong. I had. Chart can make this. If you zoom out. This is almost always the case. This is a post pandemic phenomenon where there was more job openings done. To your point, Ben, who even knows if they were real?

Ben Carlson (45:54)

Yeah. That was the abnormal situation. Right.

Michael Batnik (45:56)

Yeah, but.

Ben Carlson (45:58)

So I did. Sorry to cut you off. I didn't realize that this. It's been so much of a spread for so long before. I didn't see it go back this far before.

Michael Batnik (46:05)

Yeah.

Ben Carlson (46:06)

The rest of the century was always more unemployed people than job openings.

Michael Batnik (46:10)

Which kind of makes sense. Right?

Ben Carlson (46:12)

Yeah. Right. It shouldn't. Yeah. There shouldn't just be a job waiting for. Probably not going to be a job waiting for everyone.

Michael Batnik (46:17)

Right.

Ben Carlson (46:18)

All the time.

Michael Batnik (46:19)

So labor, obviously. Obviously, obviously. Obviously had the upper hand from post pandemic to, I don't know, a year ago, two years ago. Remember job switchers? That chart. Best way to get a raise was to switch jobs. Not anymore. Sherman Williams suspends 401k matching amid weak sales. Not great. Especially considering that the numbers that they've done net income wise.

Ben Carlson (46:42)

Didn't you buy this stock at one point?

Michael Batnik (46:44)

Yeah, I sold. I sold it yesterday. Funny you should ask. Okay, I sold it yesterday. This just feels. I don't, I don't want to be associated with a company that does this.

Ben Carlson (46:51)

Well, to me this is just a housing story. Right. This is. Oh, you're, You're. You're selling in solidarity with the people who are having their 401k.

Michael Batnik (47:00)

I mean, I don't. I Don't need to own the stock. You know what I mean? Like I just, I rolled it into Home Depot. It's just, I'm trying to get housing.

Ben Carlson (47:04)

Yeah, this is the housing related thing to me because it makes sense that there wouldn't be many people painting houses. Like if you move a house, first thing you do and you come in, I'll paint all the walls.

Michael Batnik (47:12)

No, my point is like, how shitty is this? And it's just a, it's just a. It's just a. Another example of where we are in the labor market.

Ben Carlson (47:19)

Yeah, yeah, you're right. That there's got to be a million other things they could cut before a 401k match. I agree. That's, that's a really crappy thing to do.

Michael Batnik (47:26)

Okay, so this is a point that I will, that I've, I've been making and I will continue to hammer, maybe even more vociferously if I use that word right. Listen to the companies. Not the headlines, not the tweets, not the newspapers. Listen to what the companies are saying. Companies tell you the truth. They have no reason to lie. If they lie, the market punishes them. Okay? The market keeps them honest and quarterly reports keep them honest. So in thinking about the consumer, I'm going to read a couple of quotes from the transcript. And it's not to say that everything is hunky dory because obviously there's pockets of weakness. Obviously. But my God, is it not as bad as it seems? Capital One. So as I've been saying for a long time that I still very much feel that the consumer is an anchor of strength. I think in our current economy there are a number of indicators that continue to be very strong. Consumer debt burden is very comparable to pre pandemic levels. And historically at a relatively modest place. Macy's. The consumer has been resilient. We are pleased with second quarter results and momentum has continued. Third quarter to date. Walmart, Sam Club. Sam's Club. I would tell you that in general, members are pretty rational. The consumer behavior is pretty consistent. And so far the impact from tariffs has been fairly muted. PNC consumer remains really strong. We saw record spending, I think this quarter across both our debit and credit cards. MasterCard. Consumer spending continues to be healthy. This is very consistent with what I shared at our second quarter earnings call. The consumer continues to spend a healthy clip. And finally, Visa, the requisite. How is spending going? Question. The word that comes to mind is strong.

Ben Carlson (49:05)

You're an odds. You're an odds guy. If I had to place Odds on there will be a recession by the end of this decade. Right. So four more years or whatever. What would your odds be on? Yes, there will be a recession in the next four years?

Michael Batnik (49:21)

I would say better than 50. 50, let's say 60%.

Ben Carlson (49:25)

That sounds about right.

Michael Batnik (49:26)

I don't want to pound the table, but it's been a while and could we get. Could we, by the end of the decade, could we be getting some of the AI fairy dust wearing?

Ben Carlson (49:38)

That would have to be the thing. I'm just starting to come around to the idea.

Michael Batnik (49:41)

No, wouldn't. No, wouldn't. Because recessions happen out of nowhere all the time. Who knows what's going to happen?

Ben Carlson (49:46)

Well, yeah, true. Well, all the time. There haven't been that many recessions. There's been three recessions this century alone, and one of them was caused by a pandemic. I'm just saying it wouldn't shock me if there really wasn't a recession by the end of this decade.

Michael Batnik (50:01)

Oh, it definitely wouldn't shock me either.

Ben Carlson (50:03)

I mean, the AI stuff is obviously that. That would be the easiest one. Like, okay, of course that led to a recession, but it wouldn't shock me if we didn't get one.

Michael Batnik (50:12)

Ben, last week I asked the audience, or maybe I was talking to you and asked the audience for help. Hey, how do I get. How do I turn like an all caps paragraph into lowercase? And we got a few emails. And then it hit me. There's no excuse for asking questions anymore. Like, hey, you know, when your friend asks you a question, it's just like you want to send them. Like, just Google it now more than ever. And I had to remind myself that because why did I ask you in the audience? I could just. I put into ChatGPT, I said, I accidentally have been writing on all caps for a whole page. How do I fix this? Boom, two seconds. So we are still. For as much as we talk about AI, It's. It's the. It's the zeroth inning. The game hasn't even started yet because I use it and I'm still not using it.

Ben Carlson (50:59)

Yes, probably. I'm sure the way that we're using it right now is. Is not close to it. We should be using it. There's people that are using it for way more, way better things than we are. I did have a. I'm putting this in the doc right now. I had a half hour battle with ChatGPT yesterday. I was trying to get it to make me into a little infographic. I wrote a post about the 10 things I've learned in wealth management last 10 years. And look at the. I put it in here. No, look at it closer. I didn't look at this close enough.

Michael Batnik (51:29)

Oh, there's two sexes. Oh, yeah.

Ben Carlson (51:32)

It couldn't get the numbers right. It. I kept saying, no, the numbers are wrong. It's got to be 1 through 10. And I swear I battled chat GPT for half hour and it couldn't. It literally could not do it.

Michael Batnik (51:40)

This is part of my point. Why?

Ben Carlson (51:43)

It's only going to get better, obviously. But I couldn't believe how.

Michael Batnik (51:46)

But you could have used Gemini or something else.

Ben Carlson (51:49)

Okay, I guess maybe I should have.

Michael Batnik (51:51)

The fact that you didn't even think about that just goes to show my point.

Ben Carlson (51:55)

It's funny how it can do these complicated things, but the simple things it can't do. I feel like there's, like a lesson there.

Michael Batnik (52:01)

It does look good, numbers notwithstanding.

Ben Carlson (52:03)

Yeah, it looks good if it could learn how to count. And finally, in the end, I said, why can't you get this? And it said, I'm sorry, my bad. Basically, that's all it said.

Michael Batnik (52:11)

Like, sorry, I'm shoehorning this in here. But from Ed Yardeni, speaking of profit margins, he said, there is no sign that rising tariff costs and labor shortages are squeezing profit margins. We have to conclude that productivity growth must be strong.

Ben Carlson (52:28)

The thing is, though, what stops this train if we're getting AI as a productivity tool? What stops margins from continuing to rise? This is not a mean reverting series anymore.

Michael Batnik (52:40)

No.

Ben Carlson (52:41)

Because for years I was taught this is the most mean reverting series in all finance. It has to be. Because if profit margins are high, competition rushes in.

Michael Batnik (52:50)

Yeah. These companies are too big. Nobody can compete.

Ben Carlson (52:53)

That's the. That's the problem.

Michael Batnik (52:54)

You know. You know, Porter's. Porter's Five Forces? I think that needs to be relooked at.

Ben Carlson (53:00)

It might be. I bet they still teach that at all the MBA classes, right? They gotta.

Michael Batnik (53:05)

Yeah. It's timeless. But. But maybe not so much.

Ben Carlson (53:07)

All right, let's talk about crypto. This guy posted this thing about bored apes and how he bought one for 400 grand or 425 and sold it for $37,000. Now, I don't know. I can't. Sometimes with crypto, I can't tell if this stuff is real or if it's satire, because social media, everything is fake, I guess. Now, whatever the case is, I mean, remember how big this stuff was when it first came out? Jimmy Fallon had Paris Hilton on His show to talk about. They both owned a bored ape. I think they got sued for it because they were, like, pumping it because they owned it. I pulled up a chart of the price over time, and it did. It peaked at. In the 2022 at like $400,000 per one of these. And it was going to be this big community that was going to be formed, and it was going to be this brand, and they were going to do TV shows and movies, and that's the kind of thing that doesn't exist today, that sort of suspension of reality.

Michael Batnik (53:59)

Doorbell. One second. Be right back.

Ben Carlson (54:04)

Nice new doorbell you got there.

Michael Batnik (54:09)

Okay, so that was National Grid, which is a local utility company. And so we moved in on Thursday. And I called the plumber because I'm like, hot water's not working. And he looks at it and whatever he comes to, he goes, hey, is your gas on? I'm like, yeah, why wouldn't it be? He was call National Grid. So I called them, and my gas wasn't on. So I'm like, wait, I have an account number. My wife said that she called you guys and they said, yeah, she did. But you didn't set up a service appointment. I said, hang on. Why would you let your customer set up a new account and not make an appointment? So she said, sir, we sent you an email that we were going to be contacting you. I don't even know what she said. I'm like, but wait. So I'm like, robin, give me your phone. The email says that nothing else needs to be done. You will be contacted in 48 hours. We were never contacted. How is this. I have kids. I need warm water. So for the last six days, we've been. It's a good thing we didn't close on our house that we sold because we've been going back and forth having them shower and do laundry at the old house. So Kobe goes to me, daddy, are we like the Vanderbilts? So I said, what do you mean? He goes, because we have two houses. And I said, yeah, no, not. Not exactly.

Ben Carlson (55:58)

Wait, were you making him listen to the Vanderbilt book with you?

Michael Batnik (56:01)

No. I should have. But when we went to the Breakers, I was telling him about the Vanderbilts and how they. So Robin was asking me what happened. I said, they lost all their money because they bought too many houses and wasted their money.

Ben Carlson (56:13)

And good segue because someone said, michael, we need more updates on your selling and buying your house. How is it dealing with agents? Did you pay a buyer's fee?

Michael Batnik (56:21)

Yeah, I have. I have A lot said there. I'll do that next week. So anyway, yeah, the board apes it looks like it effectively went to zero or close to it. Not quite. I guess 37,000, whatever the floor price is. You know what's interesting though, I don't follow this stuff closely. Obviously I thought it was. It was wild at the time. But cryptopunks are still, are still hanging in there.

Ben Carlson (56:44)

Okay. That's the thing, I think.

Michael Batnik (56:47)

And JC owns a dick butt. He says those are doing well. But yeah, that, but that type of behavior, just the unbridled speculation. No, listen, people, we were home, right? Like that sort of thing is not in the market anymore. But price. Yeah. So the housing market, I do wonder what. It's what we're going to see over the next couple of months as rates come down. Because rates are at the lowest level that they've been at in a while.

Ben Carlson (57:16)

I think once we get into the fives, you'll start to see some movement. Mike Simonson posted this days on market per state and this is interesting. So it's way high in the south East. Florida is high. Alabama, Mississippi, Louisiana. The quickest sales are happening in the Midwest. Michigan, Wisconsin, Indiana, Illinois, Ohio, still flying off the shelves here. I think a lot of this is just ketchup, to be honest. These other states already had it in the Midwest is playing catch up a little bit. But we haven't really had a slowdown in real estate here. Like we had a house go up for sale in our neighborhood. It sold the day it got listed. Immediate. Immediate sale. Yeah, they got listed. Gone crazy. Yep. There's just not as much. There's no supply yet.

Michael Batnik (58:06)

The Wall Street Journal did an article about people staying married because yes, I read this. It says they're divorced rates. If only mortgage rates were low in the, in the 90s, maybe my life would have been ruined.

Ben Carlson (58:20)

So they finalized their divorce in April. She lives in a trailer in the yard and they keep their loan, which is refinanced at 2%. That's quite a financial sacrifice there, right?

Michael Batnik (58:35)

Yeah.

Ben Carlson (58:36)

At that point. Why don't you just stay married?

Michael Batnik (58:38)

You're more in love with your mortgage than your spouse.

Ben Carlson (58:40)

Seriously. But they were saying that they gave a few other anecdotes. It's not that a lot of people are doing it, apparently.

Michael Batnik (58:48)

Well, listen, I understand all jokes aside, like a lot of people, a lot, a lot of people need. Can't afford to financially be separated.

Ben Carlson (58:58)

Right. You need two places to live. It's two.

Michael Batnik (59:00)

Right.

Ben Carlson (59:00)

You're paying for your own place.

Michael Batnik (59:02)

There was a lot of shenanigans in 2021. Not just board apes, but how, why, Remember, you remember how much we spoke about the unicorns, these privately held companies that were, had a billion dollar valuation. This is a great chart.

Ben Carlson (59:14)

I think all the funding rounds were insane.

Michael Batnik (59:16)

I took this from Sedge Moore.

Ben Carlson (59:19)

In.

Michael Batnik (59:19)

2025, almost 4 out of 5, 2021 unicorns are still unprofitable. According to Silicon Valley Bank's Holy smokes, only a quarter have at least $300 million in annual revenue. So 79% are unprofitable, 75% have less than $300 million in revenue, and 28% are not even growing year over year.

Ben Carlson (59:39)

See, these companies are not, not going public because of stringent reporting restrictions and stuff. They're just, they got thrown way too much private money. And so they're, you don't call these zombie companies or anything, but they, they have such a long Runway because they got so much money.

Michael Batnik (59:58)

Valuations were completely insane. So this, this was a bubble.

Ben Carlson (60:01)

Yes. Right.

Michael Batnik (60:02)

Like a lot of these Companies are down 70. All right. Speaking of private markets, so Torsten Slok, who obviously does a lot of great work, Listen, not mad. He works for Apollo. Okay, so they're talking their book. We talk in our book. I get it. But this irked me a little bit. He, he, he wrote no alpha left in public markets. And I'm thinking, no alpha. What? The S and p is up 15%. Who cares about alpha? Who needs to outperform when, when the index is up 15% a year? He said there are fewer public companies to invest in and firms that decide to do an ip. I mean, we, we've heard this before. Combined with the domination of, of passive investing, failure of active managers, and high concentration in public markets and high concentration in a few stocks. The reality is that there's no alpha left in public markets. Implying that the alpha is in private markets. Maybe that's true, but it just struck me as a little bit. Come on.

Ben Carlson (60:49)

Yeah. I would say that the alpha in profit in private markets has shrunk considerably as well. It was there in the 80s and 90s and not much there anymore.

Michael Batnik (60:57)

Right.

Ben Carlson (60:58)

The other thing is like the, the active mutual funds and ETFs aren't outperforming. You know, they're still underperforming. But individuals, I think are outperforming more than they ever have been. Stocks.

Michael Batnik (61:09)

I, I've been following Straz's work and, and the whole group at Allstar charts, and they're one of a Million examples of incredible quality research for individual investors.

Ben Carlson (61:22)

And it didn't exist in the past.

Michael Batnik (61:24)

That just you didn't have access to stuff like that. Now obviously it's on you to. To execute and blah, blah, blah, blah, blah. But, like, there's a lot of truth in the fact that Joes are smoking pros. Remember Joe's versus Pros? That was that on MTV show. What was that on? Great show.

Ben Carlson (61:42)

It was an E.S.P.N.

Michael Batnik (61:43)

No. Was it?

Ben Carlson (61:45)

No. Okay, maybe. All right, I've got a new theory for you.

Michael Batnik (61:48)

Go ahead.

Ben Carlson (61:49)

I can't back this up with numbers. I'm just basing it on anecdotes and vibes. I think we've never had wealth inequality this great among young people. And this is one of the reasons that a lot of them are so unhappy. So I gotta. I get the emails all the time from people who are in their 20s and early 30s and talking about how rich they are because of stock options. This, I put a one in here. This is from Asset Compound. This guy and his wife are 27 and they have 21 houses they own worth $4.5 million. And so I stuff about stock options and getting rich on crypto. And I think that it's never. You did not hear stories like this in the 2010s, like, about people in their 20s getting wealthy. There literally wasn't one story like this about someone in their twenties getting obscenely wealthy. And now they're.

Michael Batnik (62:29)

Hold on all the time. I had 37, my MassMutual pension.

Ben Carlson (62:34)

Okay, plus you're shorting the S P, so that had help.

Michael Batnik (62:36)

But you're right then. This was not a thing.

Ben Carlson (62:38)

So I think wealth inequality and the ability to see people get rich on stock options and crypto. And I bought this stock and it went to the moon. I bought Nvidia or Tesla or whatever, and I got in at the right time. I think wealth inequality among young people is probably as great as it's ever been.

Michael Batnik (62:52)

Yes. And when you. When you combine this cocktail with what's going on with social media, it has some really nasty, nasty ramifications. So Jake, our friend economic tweeted this from Sam Harris. Since deleting my Twitter account nearly three years ago, I've generally ignored social media. However, in the past 48 hours, I've spent enough time studying the response to Kirk's death to be further convinced that platforms like X and TikTok are destroying our culture. No metaphor does the problem justice. I've compared social media to a dangerous psychological experiment, a hallucination machine, a Funhouse mirror, a digital sewer. But nothing captures the ludicrous insults, moral injuries and delusions that millions of us avidly produce and consume my mind. If the medium is the message, the message is mass psychosis, and it will send us careening from one political emergency to the next. The fact that some of the most deranging and divisive content is being created or amplified by foreign adversaries, and that we've literally built and monetized our capacity to do this beggar's belief. We are poisoning ourselves and inviting others to poison us. What was I just going to say?

Ben Carlson (63:56)

So my hope is that for my kids, because this worries me about my kids coming up in age, that they're going to recognize this and they're going to go, we don't need this crap. We don't need to pollute our brains and we're going to do something else. That's my hope. That it's gotten so crazy and there's so many insane people on it, and God knows if they're even real people at some point. Like, the every reply on Twitter for me now is a bot. They're all very positive, but they're all bots, and they're not real people. And I wonder if it's just going to be bots talking to each other in the future and the young people are going to go, why do we need to be part of this?

Michael Batnik (64:35)

Yeah, thank you. I hope that's good. I completely lost my train of thought. But, yeah, social media has been an absolute disaster for the world. Like, just hard stop. Are there good aspects of it, obviously, like, we, we. You know, to say that we owe a lot to social media is an understatement, but, my God, it is. It is so, so, so, so, so.

Ben Carlson (64:57)

Bad how many lives it's ruined. People have literally lost their jobs because of stuff they said on social media. This happened last week to people.

Michael Batnik (65:05)

All right, I was going to say something, but I guess it was not that. That profound. But this is. This is a great example on. On a. On a much, much different scale. But I was reading this article from the Financial Times, and just in terms of, like, attention and the way that communication works these days. So they have. They wrote an article, US Public pension Funds Parent allocations to Private Credit. And on the front of it is Cincinnati's $2.4 billion retirement fund is growing cautious about private credit investments. All right, so they go through this whole article about private credit and how dangerous it is and loose covenants, and they literally end it with this. Stephen Meyer, CIO of the $295 billion New York City Retirement System, said the fund was looking to increase its private credit allocation. And it goes on. We have completely committed to private credit. He said this article is backward. It should have said US public pension funds are completely committed to private credit and then ended with, however, not all are convinced. Okay, it leads with a $2.4 billion fund from Cincinnati and it ends with a $295 billion fund in New York City, which is completely the opposite of what it should say. And this is exactly what is so up with media and social media and attention and rewards and monetization. And it is so crippling to our society. And of course, we all feel very powerless and hopeless and down and sad and it is just really, really, really terrible and scary. And I don't know. I don't know how any of this gets policed or regulated. There's no incentive to regulate it. Elon Musk is obviously the most powerful man in the world. It's just horrendous, horrendous, horrendous, horrendous. Ripping our society apart.

Ben Carlson (67:00)

Well, then you realize when you go in the real world and you go, oh yeah, people aren't really like this in real life. They're just like this online. It's like two. It's like a bipolar reality.

Michael Batnik (67:09)

It's like how people behave in their car, but it's not on.

Ben Carlson (67:13)

Worse. Yeah, let's do something a little lighter. Matt Bellany says, Rotten Tomatoes. Rotten Tomato scores are rigged. He looks at the average score from 2014 to 2024 and they're all way higher. And he's saying that, like, studios can complain. They can get people to give reviews that they shouldn't. He said, two years ago, New New York reported on the PR firms that recruited little known critics and paid them to write or change reviews that boosted Rotten Tomato scores. One film was elevated from 46% to 62 after manipulation. It's all very gross. He went through all these different examples of how they can. How basically Rotten Tomatoes scores are totally useless. They bring in people who aren't really critics. They get people to vote in and change scores. This is why I'm, I'm an IMDb guy. When I look for a score of a TV show or a movie, I don't go to Rotten Tomatoes. I go to IMDb.

Michael Batnik (68:05)

You know, I hear you, I get you. All that being said, I'm. I'm Rotten Tomatoes. Although, you know what? I found myself looking at it way Less than I used to. Here's where I look at it. If I'm. If I'm on an airplane and just. And the only reason why I look is if there's a movie that I've never heard of, I just want to make sure it's not a 12, you know what I mean? Like, so if I see a 53, would that stop me from watching it? Absolutely not. But if I see like a 12 or a 20, yeah, I'm probably gonna pass.

Ben Carlson (68:32)

It also depends on what type of movie it is. If it's like a drama or a thriller, it's gotta be higher score versus a comedy. You can accept a lower score for a comedy.

Michael Batnik (68:38)

True. Ultra.

Ben Carlson (68:40)

All right, back to the Vanderbilt stuff. This is a comment we got fun fact on the Vanderbilt family. The two most famous living descendants are Anderson Cooper and Timothy Olant.

Michael Batnik (68:49)

So I think everybody knew the Anderson bit. I. I had no idea that Ol was a bit.

Ben Carlson (68:53)

I didn't either. I love him too. He's great.

Michael Batnik (68:55)

Yeah. No idea.

Ben Carlson (68:56)

He was in that stick show with the one Wilson. Good, good, good one.

Michael Batnik (69:02)

Ben observed horror movies don't picar struggling to turn over anymore because cars just start. The guys have previously discussed the enormous increase in the durability and quality of cars goes hand in hand with higher medium price. They're just better machines now. You can't get a new 20k Kmart style anymore. Yeah, true.

Ben Carlson (69:18)

That is true. All the sensors and stuff and the cameras like, it makes sense. Cars are more expensive.

Michael Batnik (69:22)

But this was the point he said he was talking about, like, how. How people are financing cars longer, which is like, dangerous. But maybe he's like, when cars are. Were trash after six or seven years, why would you finance them for very long? Course he wouldn't. So he said when cars are completely solid with ordinary maintenance for 8, 10, 12 years, smooth, smooth the cash flow by extending the loan. Giant exception. Whatever Michael's driving. That man has a nose for a lemon risk sniffer. True. I am a huge risk sniffer. All right, you have.

Ben Carlson (69:47)

You. You have picked some really bad cars.

Michael Batnik (69:50)

Yeah, I have. All right, let's book on the show with. There he is. Email of the week, shall we? Longtime listener and fan of the show.

Ben Carlson (69:58)

As one of you, I thought you already did it. There he is. Or you did a that guy.

Michael Batnik (70:01)

No, I did a this guy. Email of the week.

Ben Carlson (70:03)

Oh, okay.

Michael Batnik (70:04)

This is a. There he is.

Ben Carlson (70:05)

You really trying. You're really trying to make this a thing.

Michael Batnik (70:07)

Longtime listener, fan of the show. I was wonder if you could rank Your top three to five things you yell when watching football in the fall, especially when the Giants. You know how depressing the Giants are. I didn't even watch week two. I mean, granted, I. I was moving and stuff, but I can't. I don't think I've ever not watched week two. I don't care. All right, so this is. This is his Midwest. Midwest fan version. You got to get rid of it. What are you guys doing? Geez. This is very Midwest. Wow, that was nice. Did you see that? But you're watching the game alone. Well, who do we play next week? Mid second quarter? So true. These refs. I can't do it this year. Oh, they'll get that right with the replay. They got to overturn that one. Not bad. Pretty good list.

Ben Carlson (70:47)

You know, mine is. I just. My daughter always comments on this and thinks it's so funny. I say whatever the announcer's about to say. I do that like 10 times a game because I'm explaining the game to her, and I'll say. And then the announcer says it after me, and I'm like, yeah, that's right. So there's this idea that the monoculture doesn't exist anymore. And I think this is a total bunk theory. So people say, because we're not all quoting the same movies and watching the same movies or TV show or music as we did, like, in the 90s, that monoculture is dead, right? There's not everyone. There's not 40 million people watching the same show anymore besides the Super Bowl, Right? And I think it totally exists, and I think it's more prevalent than ever, because my daughter is 11 going on 12, and she feels like she's already like a teenager. And the youths now, they all know the same memes. They know the same sayings of memes. Like they're. Instead of quoting movies, they quote stuff from YouTube. It's like they. All the kids say this stupid 6, 7 thing, which I still don't get.

Michael Batnik (71:42)

Oh, my kids do the six, seven. What is it?

Ben Carlson (71:44)

Yeah, I don't know, but it's a. It's a meme. My kids. It's a meme. And my daughter, all the kids were the exact same, same clothes. Like, if you go to a football game and see all the kids there, they're all wearing the same exact thing. And today it's sandals with socks. Like, they all look exactly the same.

Michael Batnik (72:00)

Sandals with socks. I really am a trend setter.

Ben Carlson (72:03)

I told. That's what I told him. I said, you guys don't realize that when dads used to wear sandals with socks, that was considered that they were, like, the nerdiest person there. But now it's actual trend. But so the kids, now that they have texting and they see everything on YouTube, they are. The monoculture is probably stronger than ever.

Michael Batnik (72:20)

Did your kids watch the Demon Slayers or the Demon Slayers? The K Pop Demon Hunters?

Ben Carlson (72:25)

I gotta be honest, I watched a little bit with them. I'm surprised it was as big as it was. I thought it was just okay. I watched a little bit with them. I'm surprised they liked it. They didn't love it. I mean, they liked the songs and stuff, but it's such a massive phenomenon.

Michael Batnik (72:38)

This is the greatest thing ever. My friend texted me this. His kids share a room. They live in the city, and these kids are whatever. The age doesn't really matter that much. Although eight and whatever years old. Listen to this. So the boy shares room with his sister, and apparently she likes this movie.

Ben Carlson (73:01)

This is the most shittiest crap on earth. Can't believe I. I'm forced to listen.

Michael Batnik (73:07)

To this stuff every night.

Ben Carlson (73:12)

Wow.

Michael Batnik (73:13)

The most shittiest crap on earth. That kid has taste.

Ben Carlson (73:16)

All right. That's a New Yorker right there, obviously.

Michael Batnik (73:22)

Do you know about the Savannah Bananas?

Ben Carlson (73:23)

Yeah, of course. I've seen the videos and highlights and stuff.

Michael Batnik (73:27)

So we went on Saturday. They sold out Yankee Stadium.

Ben Carlson (73:30)

Oh, how did you like it?

Michael Batnik (73:32)

We've been before. It's great. 49,000 people there.

Ben Carlson (73:35)

So they're. They're just the Harlem Globetrotters of baseball, right?

Michael Batnik (73:38)

Yeah. It's great fun. So one of the added benefits is it tells you how much time is left in the game. Although I guess if the sixth inning, you know where the night thing is. But whatever. It tells you that there's like 30 minutes left. So I said to Robin, all right, we gotta go. And she goes, wait, but they're having so much fun. I said. She goes, I said, I have to teach him about leaving early. There's 49,000 people here. We're in the Bronx. It's going to be a disaster.

Ben Carlson (74:01)

Getting kids. That's a. That. There's no way that you can do that.

Michael Batnik (74:04)

So I said, all right, Kobe, here's a story. And I explained to him, we could stay until the end, but it could take an hour to get out of here. Or we could just leave now. And he goes, let's go.

Ben Carlson (74:13)

Yep.

Michael Batnik (74:15)

So they're on board.

Ben Carlson (74:16)

You're teaching something, right?

Michael Batnik (74:18)

All right, Ben, recommendations, What do you got?

Ben Carlson (74:20)

Okay, so Duncan rec after we saw Oasis and everyone. We talked about Future Proof was probably sick of us talking about it because we were giving glowing reviews to everyone. But Duncan said, you have to see the. The documentary on him. And I hadn't seen it. It came out in 2016. It's called Oasis Supersonic. And I read.

Michael Batnik (74:33)

Where do you watch it?

Ben Carlson (74:35)

I had to run it on Amazon 3.99 or whatever. It wasn't on any streaming services. And it was fantastic. It's just. They decided, like, we are going to be the epitome of a rock and roll band and we're gonna drink and we're gonna do drugs and we're mess stuff up. There was just some excellent stories. Like the first ever overseas show they did, they took a casino ferry to Amsterdam, and I guess they just got really drunk and they were messing up the casino and throwing chips everywhere. And Liam's like, yeah, we're rock and roll stars. That's what we do. So they never made it to the concert. They had some great quotes, so they talked about how democracy never works in a band. They both thought they were prime. The prime minister. And that's, like, one of the reasons they broke up. But this is a good one. So Noel was the songwriter and Liam was the lead man, right? Which made you could see at the show that was. Liam was the lead. So they talked about how, like, why their relationship got sour over the years. And Noel said Liam was always. This is like a total personal finance thing. I think Liam was always cooler than me. He had a better walk and clothes look better on him. And he was taller and he had a better haircut and he was funnier.

Michael Batnik (75:35)

Did you see him wearing the Sobrero in Mexico City?

Ben Carlson (75:38)

So Liam clearly would have liked to have my talent as a songwriter. And there's not a day that goes by where I don't wish I could rock a Parker like that, man. And he did. At the show, he looked excellent in his parka. But he's. He's saying, listen, I was jealous of everything Liam had, and he was jealous of my songwriting. It's like, you can never have it all. I thought that was a really good. Anyway, the doc is really well done. They talked about how Noel left the tour because he met a girl. And he said, I need a break from the tour. I can't stand all these shenanigans Liam's doing. They were doing, you know, lots of drugs and just being crazy. He said, I met this girl in San Francisco after a concert and I went to go stay a Weekend with her. I don't remember her name. I don't remember what she looked like. But after staying with her and talking with her about the band, I wrote a song. It was called Talk Tonight, which they played at the show. And just like, stories like that. There's excellent stories. Really good. All right, one more. Did you watch Tasket on hbo?

Michael Batnik (76:29)

Yeah.

Ben Carlson (76:30)

Okay, So I watched first two episodes, and I'm totally in. It's the guy who wrote Mayor of East Town, and it's like two or three different shows in one. And there's drug heists, and there's a biker gang, and there's FBI agents. And the guy who plays Laura Laney's brother in Ozark is so good as the lovable. You know, he's gonna mess up, but he's still. You still really like him?

Michael Batnik (76:52)

Oh, yeah. It's the same type of role. You're right.

Ben Carlson (76:54)

It's just. He's so good at that. And so I. I'm really in on this show. I really like it.

Michael Batnik (76:58)

Yeah.

Ben Carlson (76:59)

You in?

Michael Batnik (77:00)

Oh, I'm in. I'm all in. Did you watch the. Speaking of crazy drugs, did you watch the Sheen doc?

Ben Carlson (77:06)

Not yet.

Michael Batnik (77:07)

I don't know how crazy that was in real time. Yeah, like, the whole winning thing when he did that interview, and it was just like watching the most famous person in the world lose.

Ben Carlson (77:15)

I don't know if I can watch that kind of train wreck. I don't know if I'm gonna watch that one.

Michael Batnik (77:18)

Okay. All right. So Apple in China. Phenomenal book. This stat seemed fake.

Ben Carlson (77:27)

Is this one you listen to?

Michael Batnik (77:28)

Yeah, I had to. I had to look this up. Apple has gained. Remember when Steve Jobs died and there was obviously a lot of question about the future of Apple? Who the hell.

Ben Carlson (77:37)

I bought the stock the day after Steve Jobs died, and I can't believe I sold it, like, five years later.

Michael Batnik (77:43)

Why'd you buy it?

Ben Carlson (77:44)

I felt like this is way overdone. Like, it's still a great. I think I was just like a betting on the iPhone, and I held it like five years, but I sold it in, like, 2016.

Michael Batnik (77:53)

Huh. So there's. There's so much good stuff in that book. Listening to the story of how Apple did what they did. There's so much revisionist history when looking at a line on the chart. Right. Like, you look back 15 years of Apple. It's like I put to the right. No, wasn't. There was so much. There was so much in there. So many things had to go. Right. It's a miracle. That they do what they did. But here's the stat that I thought was fake. Apple has gained $600 million a day in market cap for 365 days in the year since 2011.

Ben Carlson (78:28)

Geez.

Michael Batnik (78:30)

$600 million a day.

Ben Carlson (78:32)

Wow.

Michael Batnik (78:32)

One of the things that's remarkable about Apple I. A chart can make this chart. I also listened to the 90s by Chuck Klosterman. You read that book, right?

Ben Carlson (78:39)

Very good.

Michael Batnik (78:40)

So they spoke a lot about. About how much, like, the first VHS cost. I think Top. Top gun was like $90, inflation adjusted. How technology is the most deflationary force. By the way, somebody sent me an email about how not a hot tape of like, Michael is right about when you're in a new. A new place, walking around listening to whatever. So I was walking around Burbank, went to the Warner Brothers water tower studio listening to the 90s. What a vibe. Love California. Anyway, the iPhone is the biggest technological force that goes against the grain. Their prices keep going up. Look at this chart.

Ben Carlson (79:19)

They were way underpriced at the beginning to get people hooked.

Michael Batnik (79:22)

But the price of the iPhone will never go down. So all these stories about, like, about, you know, how Galloway was, like, calling Apple a status symbol and it like, blew us away. It was like, oh, my God, what an insight. But it really was. There was people in China that were selling there. There was one guy that sold his kidney for an iPhone. There's one guy.

Ben Carlson (79:41)

Were they also getting subsidized by the phone companies at first too, though?

Michael Batnik (79:46)

Yeah. Well, was that at first? I don't remember one person. A guy in China took out a 30 loan. I'm sorry, I'm sorry. I'm sorry. Spent 30 of his annual income on an iPhone. He was a madman. He said, because when I have an iPhone, I'm not a mailman anymore. So they, they, they couldn't calculate the demand. They were so. By every economic metric that you would look at, they were so wildly off. Anyway, phenomenal book. All right, we've gone. We've gone way, way, way too long.

Ben Carlson (80:11)

So catch up on.

Michael Batnik (80:12)

And Daniel and John and everybody else who's involved in editing this.

Ben Carlson (80:15)

All right, one more thing. Because we. It kind of ties it all nice and neat. So at the end of the Oasis doc, they talk about how they had this huge concert somewhere in the English countryside. It was 250,000 people there. And they talked about how it felt like it was the last time before the Internet age really hit. And how, like, it was just. It really was a different time. And I think Klosterburn talks about that in his book, too.

Michael Batnik (80:38)

Yes.

Ben Carlson (80:38)

And it really there's no going back now. But it listening to him talk about how great it was and how people could just be in the moment and not on their phones and not on social media posting about it. And people always say that, like people are you're nostalgic for the past. And it wasn't really that great. But no, the 90s really were that great. And people who say that, like, don't. Like, the 90s were. They just were better. They really were in a lot of ways. Yeah. Signed middle aged guy, get off my lawn.

Michael Batnik (81:07)

All right. Animal spirits@the compoundnews.com thank you for listening. We will see you next week.

Ben Carlson (81:17)

Don't.