Most Stocks Suck (EP.414)

Summary

Animal Spirits Podcast Summary: "Most Stocks Suck" (EP.414) Released on May 28, 2025

Hosted by Michael Batnick and Ben Carlson from The Compound, Episode 414 of the Animal Spirits Podcast delves into the intricate dynamics of the stock market, investor behavior, bond yields, real estate trends, and the evolving impact of artificial intelligence. Below is a comprehensive summary capturing the key discussions, insights, and conclusions from the episode.

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I. Introduction and Market Sentiment

Timestamp: [02:21] - [05:05]

Michael and Ben kick off the episode by reflecting on recent market sentiments. They discuss how the market tends to focus on one primary concern at a time, positing that bond yields have emerged as the latest major worry among investors.

Ben Carlson: "The market only has room for one worry at a time."

Michael Batnick: "The market said, I don't believe you."

II. Bond Yields: Normalization or Cause for Concern?

Timestamp: [05:05] - [11:22]

The hosts delve into the topic of rising bond yields, exploring whether this trend signifies genuine economic concern or merely a return to historical norms. They reference historical data, noting that bond yields have fluctuated within a 4-5% range over the past few years.

Ben Carlson: "Maybe this is just what normalization looks like."

Michael Batnick: "The yield curve is becoming uninverted. Look at this. This looks normal to me."

They discuss comparisons to Japan's bond market and consider the potential impact of U.S. fiscal policies on bond yields.

III. Investor Behavior: The Buy-and-Hold Dilemma

Timestamp: [11:22] - [22:28]

The conversation shifts to investor psychology, focusing on the challenges of maintaining a buy-and-hold strategy during market volatility. Michael shares anecdotes from the Wall Street Journal about investors doubting their strategies during downturns but ultimately seeing recoveries.

Ben Carlson: "It's a chicken and the egg kind of thing."

Michael Batnick: "The market gave you a get out of jail free card."

They emphasize the importance of long-term investment strategies despite short-term market fluctuations.

IV. The Perception and Behavior of the Wealthy

Timestamp: [22:28] - [38:28]

Michael and Ben discuss societal perceptions of wealth, highlighting how affluent individuals are increasingly scrutinized for their spending habits. They reference a Wall Street Journal article on the high costs of luxury lifestyles, such as weekend getaways in the Hamptons.

Ben Carlson: "A lack of starter homes is one of the reasons houses are becoming unaffordable."

Michael Batnick: "Why are you telling people how to live their life? You don't have enough problems of your own."

The hosts explore the tension between conspicuous consumption and societal expectations during times of economic strain.

V. Retail Sales and Consumer Spending Trends

Timestamp: [28:33] - [36:32]

The duo examines trends in retail sales and consumer spending, noting a persistent increase in spending since the pandemic. They discuss whether this is a result of increased risk appetite or other economic factors.

Ben Carlson: "The 2020s might be our roaring 2020s."

Michael Batnick: "Spending, investing, speculation, risk—all that."

VI. Artificial Intelligence: Impact on Venture Capital and Academia

Timestamp: [36:32] - [44:28]

Artificial Intelligence (AI) takes center stage as Michael and Ben discuss its growing influence in venture capital and academia. They highlight AI's role in driving one-fifth of venture deals and its integration into university assessments.

Ben Carlson: "AI now drives one in five venture deals."

Michael Batnick: "People like you who are incorporating this into their own writing."

They express both excitement and caution regarding AI's future implications.

VII. Stock Market Fundamentals: Individual Stocks vs. Index Funds

Timestamp: [36:32] - [43:32]

The hosts analyze data on stock drawdowns, emphasizing that most individual stocks fail to recover after significant declines. They advocate for a shift towards index funds to mitigate risks associated with individual stock volatility.

Ben Carlson: "Only 46% of the stocks that had these drawdowns managed to recover their prior peak."

Michael Batnick: "Most stocks are garbage."

VIII. Real Estate Market Trends and Challenges

Timestamp: [40:00] - [48:41]

Michael and Ben discuss the stagnation in the real estate market, focusing on the increasing median age of homes and the lack of new construction. They explain how these factors contribute to housing unaffordability and limited starter home availability.

Ben Carlson: "A lack of starter homes is one of the reasons houses are becoming unaffordable."

Michael Batnick: "Rates are ridiculous."

They also touch upon consumer preferences shifting towards larger homes with more amenities.

IX. Private Equity and Retail Investors: Risks and Opportunities

Timestamp: [43:32] - [47:02]

The conversation turns to private equity's growing influence and its potential risks for retail investors. They discuss concerns raised by industry figures about private equity firms potentially leaving retail investors as "bag holders."

Ben Carlson: "Retail is going to be the bag holder."

Michael Batnick: "87% of U.S. companies with over $100 million in revenue are private."

They explore the accessibility of private equity investments for the average investor and the importance of cautious participation.

X. Lifestyles, Spending Habits, and Social Perceptions

Timestamp: [48:11] - [60:48]

The hosts share personal anecdotes and observations regarding societal spending habits, such as the rising costs of entertainment and leisure activities. They discuss the societal resignation towards inflation and high prices, highlighting how consumer behavior adapts to economic pressures.

Ben Carlson: "There's a lot of spending, investing, speculation, risk—all that."

Michael Batnick: "If someone has a big line behind them, it's very rude."

XI. The IMAX Phenomenon and the Movie Industry

Timestamp: [56:07] - [61:46]

Michael and Ben delve into the resurgence of IMAX, particularly following the success of "Mission Impossible: Dead Reckoning." They discuss the exclusive deals and high box office revenues, attributing part of the success to premium viewing experiences.

Ben Carlson: "IMAX kicked off the summer in record fashion."

Michael Batnick: "The sound is wild. You better see it in IMAX."

They reflect on the broader implications for the movie industry and consumer preferences for high-quality cinematic experiences.

XII. Closing Remarks and Market Outlook

Timestamp: [66:41] - [Ending]

In their closing segment, Michael and Ben touch upon the rapid passage of summer and provide a brief update on the stock market's performance, noting a slight increase and expressing optimism for the ongoing bull market.

Ben Carlson: "The stock market wanted to move higher."

Michael Batnick: "We're back in the black."

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Key Takeaways:

1. Bond Yields as a Primary Concern: Rising bond yields are causing significant anxiety among investors, but some argue this may represent a return to historical norms rather than an immediate threat.

2. Investor Behavior and Strategy: The importance of maintaining a long-term investment strategy is emphasized, with caution against panic-selling during market downturns.

3. Real Estate Challenges: The increasing age of homes and the decline in new construction contribute to housing affordability issues and limited availability of starter homes.

4. Private Equity Risks: The growing presence of private equity in the market poses potential risks for retail investors, particularly concerning lack of transparency and accessibility.

5. AI's Expanding Role: Artificial Intelligence is increasingly influencing venture capital investments and academic assessments, raising both opportunities and challenges.

6. Societal Perceptions of Wealth: There's a growing scrutiny of wealthy individuals' spending habits, reflecting broader societal tensions regarding economic disparities.

7. IMAX and Premium Experiences: The success of IMAX and exclusive movie deals highlights consumer demand for premium entertainment experiences amidst changing market dynamics.

Notable Quotes:

• Ben Carlson: "If you hold stocks over a 20-year period, nominally you've never lost money." ([20:06])

• Michael Batnick: "The yield curve is becoming uninverted. Look at this. This looks normal to me." ([10:23])

• Ben Carlson: "Only 46% of the stocks that had these drawdowns managed to recover their prior peak." ([35:07])

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This episode provides a multifaceted exploration of current market trends, investor psychology, and broader economic and societal issues affecting the financial landscape. Michael Batnick and Ben Carlson offer insightful analysis and practical perspectives aimed at helping listeners navigate the complexities of investing and economic behavior.

Transcript

[Michael Batnick]

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[Michael Batnick]

Learn [e-mail] advisors. Investing involves risk performance not guaranteed. Today's show is also brought to you by kraneshares. Ben, we've spoken about the number one so active ETFs are having a moment. They are having a moment. And the number one active ETF is a covered call strategy. And this shocks me. There are only three international cover called ETFs and given that I just saw IFA is having the best start to a year in 25 years. If this keeps going, we will see more launches.

[Ben Carlson]

Prediction oh, interesting. So options on international indices or stocks are not as prevalent as the us I didn't realize that. Okay, so we've talked to Brendan Ahern from Crane Shares before about. How do you say it? You say.

[Michael Batnick]

I say Caleb.

[Ben Carlson]

You say Caleb. But it's clip.

[Michael Batnick]

You know they call it kweb. Why would you call it clip? I get you're clipping, right?

[Ben Carlson]

So they have their KWEB strategy which is the Chinese Internet companies. And then they also do clip which is the income on those. And again, these technology stocks tend to be more highly volatile. That means potentially more option income because of the volatility.

[Michael Batnick]

That's right, Ben.

[Ben Carlson]

You can also find the link to the webinar they recently did resilient covered call strategies during severe market volatility in the show notes, click that link. Welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

[Michael Batnick]

Welcome to Animal Spirits with Michael and Ben. Did Memorial Day creep up on this on us this year?

[Ben Carlson]

Are we back to middle aged time? Is Passing guy.

[Michael Batnick]

Yeah.

[Ben Carlson]

Before we get into this, I gotta ask you a question. What percentage of your wardrobe is Nyx these days? Because I feel like it's 95%. Is that close?

[Michael Batnick]

After what game? What. Was it bad? What was game one? After Tuesday, I've been. It's been in a bear market, but, yeah, probably 98%.

[Ben Carlson]

Okay, so you were in mourning a little bit. You weren't there for the Gut Punch game. Were you the only there for game two?

[Michael Batnick]

I was there.

[Ben Carlson]

Okay. I didn't. I haven't talked to you about it. So you. For the Halberton Bounce. And so I.

[Michael Batnick]

Thank God I left. We were. It was 40 seconds left. We were up, I think eight. And OG got fouled. They reviewed it. So I figured, all right, I'm leaving. Like, I had a train to catch. I don't need to be part of the nonsense on 7th Avenue. And then they overturned that foul call even though it was a foul. And thank God. Thank God I watched it on the train.

[Ben Carlson]

Oh, so you weren't even in the building for that. Okay, I agree. That would be because the silence was deafening kind of thing.

[Michael Batnick]

After that, after regulation, I couldn't listen to any podcast. No recap. Didn't mean to hear it. Couldn't do it. Really tough. What were we saying?

[Ben Carlson]

You can't believe it's Memorial Day already.

[Michael Batnick]

Old man conversations at the Beach Club this weekend. Some. Me and some of the dads were talking about the Merrick train station parking lot and this and that. I'm like, oh, my dick. Guys were so old. This is. We're talking about. Yeah. Where to park. Okay. We're coming to Chicago next week, as mentioned a couple weeks ago.

[Ben Carlson]

Can you believe it's going to be June already?

[Michael Batnick]

I can't believe it. Unbelievable. Where does the time go? And I'm very excited. I looked at the forecast. The weather is immaculate. The vibes shall be great. It's our biggest RWM getaway. I think We've got almost 50 people coming. We're doing an event at the Salt shed. We are excited, to say the least. So we will see you there or we will see you at another time.

[Ben Carlson]

Yeah. We'll be doing the live compound. You and I will be recording Animal Spirits from somewhere in Chicago. Probably our new office. One of those days. I can't. This will be our first of two trips to Chicago in the month.

[Michael Batnick]

Yeah.

[Ben Carlson]

So you and I are seeing each other a lot lately.

[Michael Batnick]

Can't wait to see you.

[Ben Carlson]

Keeping things fresh. Yeah. So if you're in Chicago, come say hi. All right, so last week, the new worry and I feel like we, the market only has room for one worry at a time. This is a theory I've been thinking for a while.

[Michael Batnick]

Oh, I like that take.

[Ben Carlson]

You know, we, we just short attention spans. We've already kind of moved on from tariffs and it does feel like the market just slapped the wrist of the tariff policies. And even when Trump says I'm going to do 50% tarif on Europe and Apple can't make their iPhones in India anymore, you know what? No one really believes it anymore.

[Michael Batnick]

The market said, I don't believe you. It was, it was a rod bur. Because on Friday we gapped down, what, like, I don't know, a percent or so. And given the incredible rally that we've had in stocks, I don't think it would have surprised anybody if we said, oh, here we go again. The market's down 3% heading into the weekend. Who wants to be long on a three day weekend? Stocks close at the high of the days. Bond yields were relatively unchanged. And so sure enough, I guess the market got it right this time because on Sunday he said, just kidding, we're going to, we're going to punt that to June 9, July 9.

[Ben Carlson]

We've moved on from my children having to work in a sweatshop again and create our own T shirts or something. So the big worry last week now is bond yields, right? And it wasn't just the US But I pulled up just, I typed in bond market or something like that into Google and look at all the top stories, right? Is this the breaking point for the US bond market? Oh, GOP bill locks a new deficit as bond market quakes. And it's all these scary headlines of bond yields are rising. This is bad. And then people were tweeting about Japan. This is from bar chart. Their 40 year bond yield hit 3.6% all time high. Which is kind of nuts if you think about it. An all time high for long term bond yields. And so the question for people is, okay, rising bond yields must be bad because people are worried about the deficit, they're worried about government spending, they're worried about inflation. It's a worry about something. And maybe these things are true, but my whole point is just, let's just take a breath on the bond stuff. And every time yields rise, we get worried. And every time they fall, we get worried.

[Michael Batnick]

Yeah, that's a good point.

[Ben Carlson]

It's been in a 4 to 5% range for, I don't know, two years now. Ish.

[Michael Batnick]

Yeah. Can I say that I'm not, not worried. Like I don't want to completely sweep it under the rug, but I will also say that what you just said is valid. Let's take a breath.

[Ben Carlson]

So I think part of it is we were accustomed to such low yields in the 2010s that what if, what if this is just a normalization? I looked at the, the average returns by. Or the average yields by decade for the 30 year TR.

[Michael Batnick]

Don't come at me with average by decade. Who cares?

[Ben Carlson]

So it's, it was 11% in the 80s.

[Michael Batnick]

Okay. In the 90s it was 7% erroneous this economy.

[Ben Carlson]

But now look at this, look at the chart of the last couple years. It's, it's averaged 4% and it's been in a 4 to 5% range forever. And every time we go up, we go down.

[Michael Batnick]

What's the opposite of erroneous? Is it erroneous?

[Ben Carlson]

I don't know if there is.

[Michael Batnick]

That's. Because that's, that's valid. It has been in a range, but.

[Ben Carlson]

And I even pulled up the returns for like the 10 year treasuries this year. If is the 7 to 10 year treasury. Okay. People are freaking out about bonds. This, this is up 2% this year. Now most of that is yield because, you know, rates have kind of gone nowhere. But are we really having a bond freak out? Because bonds are up 2% over the last year. They're up like 5%.

[Michael Batnick]

I'm not freaking out. In fact, last week I bought zeros and tlt.

[Ben Carlson]

See, I feel like the, the timing of the duration never works though.

[Michael Batnick]

It worked last time I bought it.

[Ben Carlson]

Who has the ability to time duration like this?

[Michael Batnick]

Easy.

[Ben Carlson]

So it, so you're going to do the range thing. It gets to five, you're buying duration, it gets to four, you're lighting up.

[Michael Batnick]

Is that your plan? First of all, for the market? I'm obviously kidding. But this is not like a buy and hold for me. I'll sell if it rips.

[Ben Carlson]

Well, I hope not. Yeah, that'd be a crazy sort of buy and hold product. So Matthew Klein at the overshoot, which I feel like he's always kind of a calming voice, and he said, what if this is just what normalization looks like? And he looked at Japan and he said, listen, if you look at what Japan was like in the years prior to the pandemic period and post pandemic period, their inflation was a lot lower, their growth was a lot lower, their spending was a Lot lower. And now if you match up where the growth is, where the inflation is, where the spending is, these rates make more sense in this environment. And he also. I've seen a lot of people poking holes in the whole deficit thing. People saying, like, well, the new tax bill is going to add so much money to the deficit, it's crazy. So he said, the US Congress is moving forward with a budget plan that would not lower most American taxes relative to current rates. Yeah. So if you look at it, a lot of it is just keeping things the same. It's lowering for some people, not very many. We talked to Bill Sweet about this the other day. We said, bill, what's this going to do to our taxes? He said, nothing. There's no. It keeps them the same, but not. No material change. He also said it would meaningfully, meaningfully cut spending on health benefits for the poor for Medicaid, food aid for the poor for snap, and subsidies for green energy. The budget is also set to sharply increase imposed taxes imposed on premier research universities.

[Michael Batnick]

Remember Doge? That was cute.

[Ben Carlson]

Yeah. No, but he says, combined with tariffs, which are taxes imposed on Americans, the net effect should be contractionary relative to the current fiscal stance.

[Michael Batnick]

Interesting.

[Ben Carlson]

But you could say, well, what if the tariffs continue to come lower than that? So it's kind of a wash, essentially, is what he's. He's saying, not nearly as bad as. So I don't like. What if this is just normalization? Because look at the yield curve. I pulled this up from. I feel bad. I had Sean make me a yield curve this morning, and I said, oh, wait a minute. Why did I have Sean do that? We probably have one on exhibit A. So into exhibit A. So I got a yield curve, and it shows the yield curve from a year ago and the yield curve for today. So I remember. I'm old enough to remember. That's something people say on a podcast. I'm old enough to remember when the inverted yield curve was a problem. Remember how scary that was? Inverted yield curve always leads to recession, except for this time. Now the yield curve is becoming uninverted. Look at this. This is this not. This looks normal. Is this normalization to you?

[Michael Batnick]

Looks like it to me.

[Ben Carlson]

Now, the. The retort is just, wait, Ben. The bad stuff. And maybe. Maybe this is. This is like the American exceptionalism premium going away and people are worried about deficits and government spending. Because I really do believe. I think I tweeted this the other day. I know people get really angry, but my baseline assumption is government debt will continue to increase government spending will continue to increase. Maybe voters will get mad enough eventually that they'll put someone in office who will not.

[Michael Batnick]

There's no reason to think anything else.

[Ben Carlson]

Exactly. Like you can get mad at it. But that's the baseline assumption. That should be your baseline.

[Michael Batnick]

Mm.

[Ben Carlson]

And that. That's my baseline. So what if this is just a normalization and people are freaking out? And the thing is, the world we live in now is maybe just higher bond yields on the long end. Because I thought it was crazy. It was nuts when we had 9% inflation and higher longer term bond yields didn't budge at all.

[Michael Batnick]

Right.

[Ben Carlson]

Remember, they didn't, they didn't move up meaningfully. It was just short term rates. I think this is just normalization. Fair enough.

[Michael Batnick]

Fair enough.

[Ben Carlson]

All right, what's my favorite thing about Wall Street Journal articles?

[Michael Batnick]

The anecdotes.

[Ben Carlson]

The anecdotes. All right, this is the gut wrenching play in investing right now is buy and hold. So they interviewed some more people about their strategy for, you know, what they should.

[Michael Batnick]

We should call these, we should call these antiquotes.

[Ben Carlson]

Okay, that's not bad. So I, this anecdote here is one I think that happens for stock market investors all across the country almost all the time. When a chunk of Bill Jensen's retirement savings got wiped out in early April, he started to second guess himself. And I'm coming to the point where like these could be AI made up stories and I wouldn't doubt it. Right. I'm just going to start not trusting anything just to be safe, but let's, you know, go with it. His wife urged him to consider switching their savings from stocks into safer investments. But Jensen insisted they wait for the market to rebound. He's a retired 68 year old who tried to reassure both of them by sending emails to the gains when their portfolio had ended in green. So he's like showing her, listen, it's worked out fine in the past. Seven weeks later, the couple's investments recovered most of the losses rather than take risk down and actually recommitted to the stock market. But I feel like almost every couple has this where one of the people is saying, oh gosh, this is too scary. Get us out. And one of the people. Don't you think that happens all the time with people?

[Michael Batnick]

Sure.

[Ben Carlson]

Like that's, that's a conversation people are having a lot.

[Michael Batnick]

Yeah, we, we've said this a bunch over the past couple of weeks, but I'll say it again. The market gave you a get out of jail Free card. If you were like, really worried and about to do something. Probably. Probably do something right now.

[Ben Carlson]

Right. But now it's harder because what if it keeps going up? That's not.

[Michael Batnick]

This is a much better. This is a much better.

[Ben Carlson]

Yeah, you're right. If you wanted to lighten up. So I'm curious. Does Robin ever come to you and ask you about your investments or does she completely.

[Michael Batnick]

All the time. She won't stop asking me about it.

[Ben Carlson]

Are you serious?

[Michael Batnick]

No, she has.

[Ben Carlson]

Okay. She never.

[Michael Batnick]

No, I've tried. She just.

[Ben Carlson]

I think my wife asked when we first got married and I told you this, I gave her like a PowerPoint presentation of why we're going to invest all of our retirement savings in the stock market. And that was all I needed to do.

[Michael Batnick]

You're like, courtney, you're not listening. Eyes on me. Okay, so we got an email last week that I thought was really, really fair in response to the conversation we had last week about the investor class being more educated and better behaved. Was just listening to the latest podcast and the discussion of financial education and retail investor behavior improving. I agree directionally, but can't help but wonder if that's giving them credit for what have been relatively easy tests. With the dominance of the big tech names both as businesses and stocks, and Walmart's inexplicable multiple, The S&P 500 has had an incredible run and it just keeps working. The COVID crash and the recent tariff tantrum were extremely short in duration and basically rewarded investors immediately. 2022 was a longer downturn, but even the ChatGPT reveal pretty much returned everything to normal. Buy NASDAQ S&P and you'll make money almost immediately. These downturns are in Stark Contrast to one, the early 2000s, the GFC. To be clear, I fully support and recommend systematic buying of index funds no matter what's happening in the market. I'm not saying people should have to do all kinds of research and or pick stocks to build a global portfolio. Nor do I hope for a sharp downturning in the market just to be proven correct or deliver some kind of comeuppance. Just saying. I'm not sure the last five to 10 years of investors piling into the S&P 500 through mostly brief drawdowns is solid evidence of long term discipline. Yet I don't entirely disagree or agree. I think it's. I think it's a fair counterpoint.

[Ben Carlson]

Okay, I kind of disagree because we've had three bear markets this century alone or this decade Alone. And it's not just the bear markets, which have been relatively mild. True. If you invested in bitcoin, you've lived through like 4 or 5 80% drawdowns, right?

[Michael Batnick]

Yeah.

[Ben Carlson]

If you invested in some of the individual stocks, Amazon was down 60%, Nvidia was down 70%.

[Michael Batnick]

That's true.

[Ben Carlson]

Right. Some of these are not just losses, they are catastrophic losses. So even though the returns came back relatively quickly. I don't know. I mean, I tend to think the great financial crisis could be a once in a lifetime event.

[Michael Batnick]

So do I. Well, it could be.

[Ben Carlson]

Or it could be we're going to have another financial crisis at some point, but like that one, it's possible.

[Michael Batnick]

It's hard to prove anything. But what if we can say that investors are generally better educated, better behaved, less prone to panics than they used to be, and also it has been a relatively benign investor environment.

[Ben Carlson]

What if it's a chicken and the egg kind of thing, though? The fact that people are better behaved and there's more automatic contributions, that makes the downturns not last as long as. What if it's circular? Yeah, that's Josh's relentless bid theory.

[Michael Batnick]

Yeah. No, it impacts the markets for sure, but it can't save the mark from downturn. It did it in 2020, it did it in 2022.

[Ben Carlson]

But if you look at 2022, that was. I always break out between recessionary and non recessionary bear markets. And if you look at a non recessionary bear market, 2022 is textbook. The downturn, the length of time, the peak to trough, the return, all break even, all that stuff. That's a fair assessment. So we were asking, where is all the money coming from? The last couple of weeks, Jeffrey Patak from Morningstar, friend of the show, sent me some numbers because I said it's gotta be just bonds or money markets.

[Michael Batnick]

We're. And wages.

[Ben Carlson]

Yeah. And so wages is a big one. So because wages are up, you know, more than inflation by a little bit. This. But he showed. This is from April, the flows, you saw money, big time money coming out of taxable bonds, municipal bonds to the tune of almost $50 billion and over $21 billion of flows into US equities. So not all of that money went into stocks, but a lot of it came out of bonds into stocks.

[Michael Batnick]

That is interesting.

[Ben Carlson]

Right? So there is some of this. And I always say there's like, what, four reasons you buy bonds, Yield and income.

[Michael Batnick]

You always say that. I've never heard you say that.

[Ben Carlson]

Yeah, I've said It before yield and income stability, like volatility reduction, spending purposes, and all four. And then dry powder. Right. So people are using, I feel like dry powder.

[Michael Batnick]

Dry powders catch all dry powder rolls up at the 1 through 3.

[Ben Carlson]

But I mean dry powder for rebalancing. All right, so here's another thing. 26 million customers at Robinhood. So I had Steve Quirk on this show on Asset Compound last week, and he talked about this. So it's 20 million, 26 million customers at Robinhood now, 13 million of them. It's their first brokerage account. And a few people said, hey, what if it's Gen Z and millennials who cannot afford to buy a home, but they have that income still that they would be using to buy a home. And now they're putting it in the market. Like, you look at this. I pulled this from the quarter. I pulled it from quarter. It's the Robinhood deck. Net deposits in Q1, $18 billion. 37% annualized growth.

[Michael Batnick]

Yeah, that's something.

[Ben Carlson]

57 billion over the last 12 months. So look at, look at. Their deposits are growing by leaps and bounds still. And it's a lot of factors, but I guess that's part the of, part of it. Here, read this other email, because we had a lot of people who responded with this too, about the money market stuff.

[Michael Batnick]

Okay? So we have to do a bit of a mea culpa. And Ben, no offense, I'm going put this on you. Although I didn't flag it, so it's on me, too. Somebody said, I, I have a, I.

[Ben Carlson]

Have a retort here, but just go ahead there.

[Michael Batnick]

There's no retort. This is. These are facts.

[Ben Carlson]

No, go ahead.

[Michael Batnick]

I follow this stuff pretty closely. And the withdrawal in money markets in March and April the last two years was not to buy stocks. It is to pay tax payments. How do we prove this? Because we look for a spike in deposits into the treasury general account of the Fed. You can look this up yourself. It didn't go to stocks and went to Uncle Sam. And Warren Pies has done a lot of work on this. There is a very seasonal component of this. So the money that came out of money market funds that we mentioned last week did not go to buy stocks.

[Ben Carlson]

Went to pay taxes, which is funny, which is why the stock market falls in. Here's the reason why I didn't flag this. My planning brain goes, who are the idiots who don't set aside enough for taxes that have to sell stocks to pay their taxes?

[Michael Batnick]

Sell stocks. These are money market Funds.

[Ben Carlson]

Okay, nevermind. Okay. I totally got that wrong. You're right.

[Michael Batnick]

Yeah. That's okay.

[Ben Carlson]

All right. My brain broke.

[Michael Batnick]

No, sometimes we get things wrong. That's okay.

[Ben Carlson]

But it's kind of funny though that that causes also the stock market to fall.

[Michael Batnick]

It does.

[Ben Carlson]

In the last two Aprils.

[Michael Batnick]

Yeah. Warren and Fernando have done some great work on this. Like really, truly.

[Ben Carlson]

That's what my brain is saying. So people are obviously selling stocks to pay for taxes too. A little bit.

[Michael Batnick]

I don't know if they're selling stocks and, or just not buying enough or not buying as much.

[Ben Carlson]

Okay, but somehow this is. But that's what I'm saying. You don't think that there are people selling stocks to pay off their taxes because they misplan?

[Michael Batnick]

Absolutely. Does that move the market? I have no idea. All right. This has me excited, Ben. I'm excited. We've shared this chart before. Every advisor shares this chart. And the chart is that the odds of the S&P 500 being higher over time increases dramatically if you zoom out. So we grabbed this chart from exhibit.

[Ben Carlson]

A, my all time favorite long term stock market chart. I want to say I'm going to give credit to Jeremy Siegel for this one. Probably for the first time I ever saw it in stocks for the long run. But I could be wrong.

[Michael Batnick]

Okay, so the quote is, if you hold stocks over a 20 year period, nominally you've never lost money. And it's powerful and it does inspire, maybe not confidence, but it shows you stocks for the long run. But there is a huge and obvious counterpoint to this that occurred to me while I was listening to the Berkshire Annual meeting and Warren said something about the likelihood of a decline in stocks. Same thing. The longer you go out, you're almost guaranteed to have one. And I said, you son of a bitch. He did it again. So I called Matt immediately and I told him we got to flip this chart. And so for chart of the week for exhibit A for advice dot com, if you're a financial advisor, check us out. We're sending out charts of the week and it's a new fresh chart every week with your logo on it. So what I had Matt did was show the odds of experiencing a bear market also increased by holding period. So it looks exactly the same. It's, it's basically linear. So over any one year rolling period since 1950, you had a one in three chance of experiencing a 20% decline. If you go out to 15 years, it's 100% of the time. So yes, the message that advisors Preach to their clients is stocks for the long run. Less is more. Keep your eye on the ball. The money's not for today. But this chart is equally if not more important because the facts are that those long term returns are tough as shit and they always come with setbacks.

[Ben Carlson]

Credit to you. This is a great chart. And I told you the one that I hone in on to highlight is 77% of the time over five years. So you'd sell your clients. Listen, 80% of the time over a five year period, there's an 80% chance you're going to get a. A bear market. That is enough to like, I think, help people understand the risk involved of either you have a steady hand and you hold or you need cash, fixed income, something else in your portfolio.

[Michael Batnick]

In a 20, by the way, look, look at four years.

[Ben Carlson]

Nice.

[Michael Batnick]

If a client says to you in 2024, after back to back 20% years, hey, why am I 60% stocks? What is this nonsense? Like, why are these bonds slowing me down? You show them this chart?

[Ben Carlson]

Yes.

[Michael Batnick]

Credit to Matt. Credit to me.

[Ben Carlson]

All right, so I feel like the. I feel like rich people have always had their own moment, but they're just. Rich people are having a moment unlike any other time before. They're more scrutinized than ever before. I think they're getting.

[Michael Batnick]

Is this the Spider man meme? Are you pointing to yourself, Ben? Are you having a moment?

[Ben Carlson]

No, this is like the rich, rich, rich people. So you saw this story in the Wall Street Journal about the jaw dropping cost of a Hamptons girls weekend?

[Michael Batnick]

I saw the tweets.

[Ben Carlson]

And the tweets, okay, I'm sure you saw the tweets. And it's talking about how it can easily cost $5,000 to go to Hamptons for a girl's weekend of drinks and Ubers and outfit changes and workout classes and you know someone, Haley Sacks, I think she's. She been on the compound in France before. She talked to Josh before. She says the Hamptons is like Disneyland now. And so she says you have to like go to all these places and Instagram and obviously these are Instagram influencers. They're not. It's not real people, but I do feel like. So they talked about how there's like $97 lobster salads and. I can't, I can't. I don't know if I. You Hampton. Have you ever gone to the Hamptons before? Is that your thing?

[Michael Batnick]

What do you think?

[Ben Carlson]

Probably not.

[Michael Batnick]

I've been.

[Ben Carlson]

I'm not regularly.

[Michael Batnick]

No. Yeah, come on.

[Ben Carlson]

But I do feel like there's something to the fact of. There's a lot of things that I think we've all just. I know people complained about inflation and we hate it, but I think a lot of it is just, like, resignation. Like, yeah, this is just what it costs now. Like, these things that are so expensive and ridiculous, and I can't believe I'm paying this much money. Yeah. It's like, ah, geez, that kind of stinks, but we just do it.

[Michael Batnick]

Yeah.

[Ben Carlson]

Like, I think there's just resignation of what.

[Michael Batnick]

What's the one thing in your life that you can't believe costs as much as does?

[Ben Carlson]

I'll.

[Michael Batnick]

I'll start then. You can think of one. So there's. There's a Greek salad that we get here in town, and it's iceberg lettuce. And, you know, whatever. It's Greek salad. But they have great dressing. So I will give. I will give them that. It's $19. And I. I can't believe it. I won't order it, but Robin does.

[Ben Carlson]

You know, the funny thing for me is that you go out somewhere to have dinner or go to a bar, get a drink, and you get a beer, and it's, I don't know, $8 or something. 8 or $10 for a beer. Right. But the weird thing that sticker shocks me is getting a six pack. And now it's like $19, my good Oberon summer beer. Right.

[Michael Batnick]

How much did that used to be? 12?

[Ben Carlson]

Yeah, yeah. Just something like that. Which is still probably a pretty good deal. But we had this conversation this week about. I'm sure you've had these conversations about houses that are in your neighborhood. Someone brings it up like, can you believe the house down the street sold for that much?

[Michael Batnick]

Yeah.

[Ben Carlson]

And they go, you know, in 2017, we bought for this. And you're doing the math in your head to think what yours is worth, obviously. But someone finally just said, like, that's how much houses cost now. Kind of like slap to the face, like, get used to it. This is where we are now. And I think that's the thing. That's my whole thing is just. I think it's just resignation of like, oh, yeah, this is just how much stuff costs now.

[Michael Batnick]

Yeah.

[Ben Carlson]

And people have moved on. There was another article in the Cut titled It's a Weird Time to be Rich Now.

[Michael Batnick]

And this is kind of what is the Cut? I don't know what that is.

[Ben Carlson]

That is the New York magazine, like, one of their. You know, it's like the Grantland for New York magazine. I guess. So they talk about all these rich people are going to therapists and complaining about how weird it is to be rich right now. And they don't want to be like too flashy and show offy because they don't want like people showing up at their house with pitchforks and torches. I guess. But I pulled this out. A real estate agent who sells luxury properties in the Tri State area is seeing the same thing. It's a weird time to be rich. Right now. All the wealthy people I know are keeping their cards closer to the chest. When people have that much money, stuff like inflation doesn't really affect them. What they do care about, though is being judged for their conspicuous consumption. When the whole world is crying poor and you're living. What did I say?

[Michael Batnick]

Conspicuous.

[Ben Carlson]

Okay, close enough. And you're living the life in this wealthy bubble. It's really frowned upon. They've all seen the White Lotus. No one wants to be like that.

[Michael Batnick]

Some people want to be like that. Come on, let's be honest.

[Ben Carlson]

Yes, but, but I feel like this. Rich people in the white. Like we've shown such a light in this and there's so many shows and you know, succession and White Lotus and your friends and neighbors and the influencer stuff. And I just think wealthy people in the past didn't ever think this deeply about their wealth.

[Michael Batnick]

No, no, no, no, no, no. Not true. There was a lot of like Bill gates in the 90s or whatever driving Toyotas. It's always been a thing for mega rich people to not be opulent. Did I use a word properly? Speaking of word, messing up is.

[Ben Carlson]

But I just feel like now is the. It's. It's harder than ever for an uber rich person to be happy. That's my take.

[Michael Batnick]

What?

[Ben Carlson]

You're too, too in your head if you're. When you're rich.

[Michael Batnick]

I don't know about that. You're making that up. It's never been harder for a rich person to be happy.

[Ben Carlson]

You don't think more rich people are miserable today than they were before? I think I would have way more miserable.

[Michael Batnick]

I have no idea.

[Ben Carlson]

Because on a relative basis you see other people's wealth. You don't think that.

[Michael Batnick]

I don't know. I don't know. Well, but here's, here's the part I.

[Ben Carlson]

Think there's a lot of miserable rich people out there.

[Michael Batnick]

If you live in a rich town, then you're not hunting anything.

[Ben Carlson]

True.

[Michael Batnick]

It's the opposite.

[Ben Carlson]

Yeah. You want to flaunt it. Yeah.

[Michael Batnick]

If you live in a relative upper middle class town, you're probably less likely to, you know, drive a Ferrari or whatever.

[Ben Carlson]

That's true. There. There are a handful of like Ferraris or. Because there's a handful of billionaires in West Michigan and you see the fur and you see it on the road and you go, whoa, whoa. But in New York, you probably wouldn't think twice.

[Michael Batnick]

But if you're a billionaire, why not drive a Ferrari? Like, who cares? It's not like you could hide your wealth anyway. Listen, to each their own. I don't. Whatever.

[Ben Carlson]

True. All right, so I pulled the retail sales graph just to kind of drive this point home about spending. And it's just, it's weird to me that you can see the charts here. I circled, like after the great financial crisis, there was a new trend for retail spending and it was down. Like, we took a huge thing down and then the trend took a long time to get back on. And since the pandemic, it's just been way higher and it's still trending higher. And this is why I just. It's the whole risk thing about. And obviously some of this is inflation. I just think there's a new mindset these days.

[Michael Batnick]

What is it?

[Ben Carlson]

Spending, investing, speculation, risk, all that. The 2020s is. Maybe that's our roaring 2020s. It's just a risk appetite change. I'm just trying to wrap my head around it still.

[Michael Batnick]

Yeah, I think you're right. All right, I want to point out. So CB Insights has their quarterly State of Venture report. AI now drives one in five venture deals. Pretty wild, right? We were talking to Rich Bernstein on TCAF last week. Do you know what? I don't know if you listen to the show, but if you didn't, do you know what OpenAI's most recent funding round was?

[Ben Carlson]

I saw it in a headline. But no, I don't know.

[Michael Batnick]

Okay, they raised 40 billion. And you can guess who led that round. They raised 40 billion on $300 billion valuation. 300.

[Ben Carlson]

I thought deep Seq was going to be the end of all these AI companies.

[Michael Batnick]

Here's another one. Eight early stage AI companies raised.

[Ben Carlson]

You know, wait, wait. I'm surprised that it's not higher than 1 in 5. I thought it'd be 50% of them by now.

[Michael Batnick]

Well, for context, in 2022 it was 1 in 10. Okay, but you're right, I think it's, I mean, it's, it's up to the right. Eight early stage AI companies raised $100 million mega rounds that's a new record. Nvidia, obviously they were a big backer of Core weave. They've done 49 equity deals and they also show Google's done 49, Microsoft has done 24. This is since 2020 and Amazon's done 20. So I guess these are the new megaphones. Kind of wild.

[Ben Carlson]

I'm really fascinated by where the AI stuff goes because I.

[Michael Batnick]

Did you see the videos this weekend?

[Ben Carlson]

I just think that there's so many different paths we could take from it, good and bad, that I don't even think you could possibly predict what is all going to come out of this at this point.

[Michael Batnick]

Did you. We're going to talk about this later. Did you see Mission Impossible yet?

[Ben Carlson]

I'm guessing no, I didn't, but I will see it in the theater.

[Michael Batnick]

Okay.

[Ben Carlson]

I'm a tc. I'm a TC supporter.

[Michael Batnick]

Sure. All right. So on Quarters, did you see it? I did. We'll talk about in a sec. On Quarters app, I said make me a chart of uber free cash flow.

[Ben Carlson]

So they have.

[Michael Batnick]

They have Claude and Chat GPT in there. So I said make me a chart of uber free cash flow by quarter for the last five years. And they said there is no avail. They meaning the. The LLM said there is no available data. Uber's free cash flow by quarter for the last five years. The requested information is not present in the latest financial disclosures. So in my head I gave a shoulder truck. I'm like, what the heck? What do you mean? So I typed to them, can't you calculate it based on the financial statements? Boom. Trot on. See that? Isn't that wild?

[Ben Carlson]

It's a cold prompting, huh?

[Michael Batnick]

All. All I said was like come on man, figure it out. And it did.

[Ben Carlson]

Oh, that's pretty good. So there was a Bloomberg article traveling around this morning and it said, welcome to the academia and the age of artificial intelligence. I keep harping on this one. As several recent reports have shown, outsourcing one's homework to AI has become routine. Perversely, students who still put in the hard work often look worse by comparison with their peers who don't. So you put in a lot of hard work on your own paper and someone else does an AI paper, theirs is going to look way better than yours. They say professors find it nearly impossible to distinguish computer generated copy from the real thing. And even weirder, have started using AI themselves to evaluate where students work. So students are turning in AI papers, professors are having them graded by AI. And the whole the crux of the article Was does college still have a purpose in the age of ChatGPT? But I keep coming back to the fact that this is why being a creative person is going to be such a thing that sets you apart. I was thinking about the early days of reading Josh's Reform Broker blog and him writing in his own voice and sharing his own inside jokes and experiences. And I think that's the blogger stuff that people really latched onto in the 2000 and tens. I think why that whole scene of finance Twitter took off because people were. It was like a breath of fresh air to hear people write in their own voice as opposed to some stuffy Wall street research piece. And I feel like that kind of stuff the ability to write in your own voice is going to be more important than ever in the years ahead.

[Michael Batnick]

I don't think the ChatGpts of the world are going to change anything in terms of we're not going to be all of a sudden reading stuff that is clearly generated by a computer. I think it's going to be like you. People like you who are just incorporating this into their own writing.

[Ben Carlson]

Yes.

[Michael Batnick]

Right. Because this stuff is. It's obvious and it's sterile.

[Ben Carlson]

I think so too. Which is kind of funny. It says that professors find it nearly impossible to distinguish. Like you couldn't tell that the freshman kid in your English class is all of a sudden creating way better paper. So don't you.

[Michael Batnick]

But wait. But wait. I'm sure you could say to the whoever whatever program you're using and make it sound like it was written by a 19 year old.

[Ben Carlson]

That's true. I mean but couldn't you take the first day of class everyone like put.

[Michael Batnick]

In a few some grammar that doesn't.

[Ben Carlson]

Really flow too well the first day of class. I want everyone to write a one page paper about this subject and that's my baseline for your writing skills. And I'm going to be matching your papers you turn into this baseline if you're a professor. I feel like there's got to be easy ways to around this.

[Michael Batnick]

I'm sure there are.

[Ben Carlson]

Maybe they're just too lazy to figure it out. I don't know. Speaking of AI So Michael Mobisen had a new piece out from Morgan Stanley Drawdowns and recoveries. It's 24 pages or something now. Anytime I in the past would get a very long shame on you. No, this is not a shame of me. This is just timesaver. Anytime in the past I get a really long research note. I would scroll through the charts. I'd Read the first paragraph. Then I'd do control F conclusion. And then I read the conclusion.

[Michael Batnick]

I feel like Mobasyn deserves some respect. You don't chat.

[Ben Carlson]

Okay.

[Michael Batnick]

You don't chat. GPT Mobison. Come on.

[Ben Carlson]

Okay, so I chatgpt Mobisen, but then I went back and I read the key points anyway. You read this, too? Because you put some stuff in here. Why don't you go first?

[Michael Batnick]

I actually have not read it yet. I read the first. What page am I on? I'm on. I'm on page two. I haven't had time to read it yet. I was a busy weekend. I'm going to read it, though. I'm going to read it.

[Ben Carlson]

Okay. So he looked at the drawdowns of individual stocks, not just the stock market.

[Michael Batnick]

Why don't we read this and we'll. We'll circle back to it.

[Ben Carlson]

I did read it. That's what I'm talking about. I'm going to share with you some of my findings.

[Michael Batnick]

Your findings. This is clearly a chatgpt findings, sir. I see the. I see the. I see it.

[Ben Carlson]

I know it is. And then I went back and I read it. The. The points that made sense. So I didn't read it all. But he's looking at the draw. They looked at 6,500 companies from 1985 to 2024. The median drawdown of this is individual stocks was 85%.

[Michael Batnick]

I buy it.

[Ben Carlson]

Which lasts about two and a half years. And then he looked at the time like the peak recovery was 90% to get back, so. Meaning a lot of them didn't come back. And so they said only 46% of the stocks that had these drawdowns managed to recover their prior peak.

[Michael Batnick]

Yep.

[Ben Carlson]

So most of the stocks that fall.

[Michael Batnick]

But it was most stocks are not worth buying and holding at all.

[Ben Carlson]

So he looked at the median and the average. And the average peak Recovery is like 340%. But that's because it's skewed by a handful of stocks. So they even put a chart in here, which I did. Pull the chart, and you can see the recovery. There's a handful of stocks that if you bought when they were down that much.

[Michael Batnick]

Is that Carbona?

[Ben Carlson]

I'm sure it is. You did amazing. But most of the stocks did really poorly, which is again, just so you see these. This is the Nvidia thing. Like, Nvidia fell 70%. Netflix fell 70%, you idiot. Why wouldn't you buy that?

[Michael Batnick]

This paper from Bessembender and also Howard Marks ruined me as a stock Picker. Because I. I read the. I read Howard Marks stuff about second level thinking I never bought Apple. Cause I was like, this is first level nonsense. Who's buying Apple? This is like 2014. But. But all jokes aside, knowing this, Knowing this data like you and I do, and I still pick stocks, but as a, you know, as a. As a game. Not because I think I'm, you know, gonna retire off of it, it's a bad idea. The data set. This is not me saying it. Most stocks are garbage. Most stocks don't be. Treasury bills.

[Ben Carlson]

You know what I've been doing for the past couple months? I've been slowly but surely trimming all the individual stocks in my brokerage account and just pouring it in index funds.

[Michael Batnick]

Nothing wrong with that.

[Ben Carlson]

I look at them less. I'm not constantly checking my Robinhood account. It's just less. As Wes Gray would say, it's less brain damage.

[Michael Batnick]

Very valid counterpoint content for the podcast.

[Ben Carlson]

True.

[Michael Batnick]

Don't worry, I'll carry the load for now.

[Ben Carlson]

You know what? I was going to say, you were talking about IMAX before we got on here and look at the chart of imax. Maybe this is a New Yorker thing, but you and Josh love to share good news about the stocks that you own. Is that fair? Josh? Josh loves Uber.

[Michael Batnick]

Josh is a big crowd. Uber. However, if you Control F. How many times have I mentioned IMAX in our group chat?

[Ben Carlson]

That's true. So I. I haven't even heard.

[Michael Batnick]

Hold on. How many times I did it this weekend when there was an article in the, in the New York Times about them.

[Ben Carlson]

I've. I'd say a dozen mentions of imax.

[Michael Batnick]

No way. Control F right now. Go to Slack. I'm calling you out. This is Recency Buy. So I did it today. I mean, no, I did. I did over the weekend. You're right.

[Ben Carlson]

No, this is. This is in person chats as well.

[Michael Batnick]

Come on in. I don't talk to you about IMAX in person. Get out of here.

[Ben Carlson]

Yeah, I've heard it on the podcast.

[Michael Batnick]

Listen. All right, no, look, right now you'll find at least a mention because I did it this weekend. I'd say you said. You said 12. I'm gonna say. I'm gonna say five or less.

[Ben Carlson]

13 messages IMAX has mentioned here.

[Michael Batnick]

All right, I stand corrected.

[Ben Carlson]

Okay, so a couple of them are for Josh, but.

[Michael Batnick]

Okay, but how many from me? And how many of them cluster? How many is like in the same conversation?

[Ben Carlson]

All right, so I see five from you. All right, we're both right.

[Michael Batnick]

Listen, listen, fine. I'm not embarrassed. I'm proud of imax. I feel like it's not too often that the fundamentals and technicals line up. They are dominating and the stock is breaking up. Sorry, not sorry.

[Ben Carlson]

And you're. This is, See, you did learn. This is first level thinking from you. You go to imax. This is your Peter lynch stock. You go to IMAX theaters lot. You buy imax.

[Michael Batnick]

Dude, the sound is wild. You better see it in imax.

[Ben Carlson]

My daughter went to IMAX for a field trip last week and they went to, they just, they didn't see a real movie. They saw some like national geographic something on IMAX. They saw two 45 minute whatever and she was blown away. She'd never, we've never taken over to IMAX before. She loved it.

[Michael Batnick]

Do her a favor and buy her the stock in a, in a UPMA account or whatever.

[Ben Carlson]

Okay. All right. Let's talk about the real estate market. Carl Quintanilla on Blue sky existing home slowest pace, slowest sales pace for any April since 2009. It is crazy that like the number of existing home sales are basically down to the, the housing crash lows more or less where we're right there.

[Michael Batnick]

Well, yeah. Rates are ridiculous.

[Ben Carlson]

I still can't believe I say this all the time, that rates are still 7% for mortgages that has gone on this long.

[Michael Batnick]

We opened up the conversation talking about, do you know, should we be worried about long end of the curve.

[Ben Carlson]

Yeah, but this is another thing where it hasn't totally derailed the market. Besides, like it hasn't caused a huge. Something besides making it more annoying for first time homebuyers.

[Michael Batnick]

Annoying. It totally derailed the housing market. It's, it's, it's an ice age.

[Ben Carlson]

I'm saying from a price perspective. I think most people would have assumed from a price perspective that would have been where the derail came from.

[Michael Batnick]

Yeah, it's worse. You haven't even got, you haven't even gotten the prices coming down.

[Ben Carlson]

That's what I mean. If prices came down, at least it would have spurred activity. So it didn't do anything from that perspective. All right, from Sherwood, this is a good one. They say America's homes and the people who buy them are getting older. We've been talking about this a lot lately, like the median age for the first time homebuyer. But they, they show. So they say the existing home buyer repeat went from like 35 in 1980 to 61. Now we talked about this last week, the first time homebuyers 38. But this is an interesting one. The typical home are that people are buying keep getting older. So the median age of homes sold in the US in 2012, it was 27 years. Right now it's 36 years. Because they say only 9% of all existing homes in the US were built in the 2010s, which is the lowest decade going back to the 1940s. So we just, we basically stopped building homes in 2010 because of the housing bust.

[Michael Batnick]

Wow.

[Ben Carlson]

Which is really. It's sad that like a boom and bust caused this to happen. And home builders just pulled back. They also show the median age of homes purchased in 2024. And you could, you could click on your town. So I clicked on Grand Rapids. The median age in grand rapids, Michigan is 42 years. And then they show the average, the median share or the median price of a home that is less than five years old or that is 30 plus years. And it's like a, I don't know, almost a $200,000 difference. So they're showing the price of the homes, the older homes versus the newer homes. This is, I guess, just why, I don't know. You buy Home Depot and Lowe's. If they're not building enough homes, there's going to have to be massive renovations. Right. The, the younger people coming in are going to want their HGTV house spaces to entertain, big garages. Right. Outdoor spaces, all that stuff. All right, from the Wall Street Journal. A lack of starter homes. This is a good one, too. This is one of the reason houses are becoming unaffordable. In 1950, 92% of all homes built were 1500 square feet or less. Remember the Pope's house we looked at a few weeks ago? That tiny thing which apparently the town took into like, receivership. And they said, no one's going to buy the Pope's house. It's going to be like a shrine or something. I don't know what they're going to do with it. Now that number is 22%. So we're just not building smaller houses anymore. And this is. You can blame a lot of people. Part of it is the consumer. They don't want small houses anymore. Yeah, you can blame home builders, but I think people want bigger houses. Yeah, one of the reasons there's no starter homes anymore and they're not affordable. Obviously builders, I think, get higher margins and higher price points on bigger houses, but consumers want more amenities. Like if you look at what they were building in the 1950s, it was no Frills? No, nothing. It was a thousand square foot, a couple of rooms. No. Walk in closets? No. 3 car garages, smaller houses.

[Michael Batnick]

Yeah. All right, moving on. Ben, you've been, you've been on this case talking about private equity coming in, coming for retail, coming for 401ks. So the FT wrote an article this weekend talking about that dynamic. The billionaire co founder of buyout firm Thoma Bravo has said wealthy individuals should be concerned about companies that private equity firms cannot sell ending up at funds aimed at retail investors. Now in the article, they didn't mention anything that it's actually happening. It was just sort of, you know, beware.

[Ben Carlson]

So he's worried that retail is going to be the bag holder.

[Michael Batnick]

Yeah. Now maybe.

[Ben Carlson]

Wait, where do you think that phrase came from? It's a great phrase, bag holder. There has to be a story behind that. Maybe someone can email in if they know it.

[Michael Batnick]

I'm thinking like a sack, like a satchel of coins that were like maybe empty. An empty bag. I don't know. Anyway, they're not in this business yet of going direct to retail. They're still all institutions. So maybe this is them talking their book a little bit. Isn't that illegal or is it not illegal if you disclose it? Like if private equity giant A is buying one of their companies in the retail channel from their institutional backed funds, is that, is that legal? I mean, obviously it's shitty, but if they can't find a buy and they're like, all right, these schmucks will hold the bag for us.

[Ben Carlson]

I mean, listen, they have really great lawyers. They have 200 page prospectuses. They. If they. Yeah, unfortunately. And I don't know, maybe it won't be as bad as I'm thinking. Oh, wait, this is chatgpt. Actually it was a phrase from the 18th century in the literal sense. Someone stuck holding a worthless item. Like being left holding a bag of stolen goods while everyone else runs away. Okay, so again, the problem is if this happens, we're not going to know about it for a very long time. Like how the ramifications. It takes the, it takes so long for these funds to play out that we're not going to know that these results are bad for like five, seven, ten years, possibly because the marks are kind of old until you get an actual, you know, event a company gets sold or goes public.

[Michael Batnick]

We've spoken about this before. Just a remarkable chart, this from Morgan Stanley. Today, 87% of U.S. companies with over $100 million in revenue are private. Just wild and Then they share. The private market share of global AUM is up from. It was hovering around 7% from 2013 to 2017. Then it broke out and now it's over 10%. I think it's probably going to go higher.

[Ben Carlson]

So this is the sales pitch though, right? If there's that many companies that are private with that much making that much money, that's like, hey, you're not getting access to these companies. You need access.

[Michael Batnick]

Yeah, I think it's legit. I also think that. I think that most people are skeptical or downright cynical of private investments. And I think that is understandable, but I think a little bit misplaced. There are areas of the market that you just cannot access inside of an etf, for example. And I'm not saying that these are good or bad or otherwise, but natural resources, infrastructure, litigation, finance, GP stakes, secondaries, all of those sort of things. Again, no commentary on good bid or otherwise. There is potential diversification, there's potential upside. So I think it's. It's prudent for most people to look at these things a little bit sideways, but to, to just. It's all bullshit. It's not all bullshit.

[Ben Carlson]

Right, of course. Yeah. There's a ton of money in here and, and many institutional investors have done well here. It's. It's probably the problem is the range of outcomes is way wider.

[Michael Batnick]

Yeah. And also how. How do you evaluate it by the time it's getting to you, like, all that sort of stuff?

[Ben Carlson]

Obviously, that's why it's. My only solution is it has to be in a target date fund. Right. 20% of this target date fund is going to be privates, or 10% or 5 or whatever it is. I think that's the, that's the most prudent way to do it if it's going to be done.

[Michael Batnick]

Yeah, I agree.

[Ben Carlson]

All right, so we got a bunch of feedback from people living in San Diego, and everyone kind of agreed with our assessment. Housing costs are too high, but it's worth it. But we were there, we were at the golf course, and the golf course looked fantastic. And someone asked us, hey, do you guys golf? And we both said, nah, we don't. I think the first time we ever golfed was seventh grade or something. So I, I started way late. My dad loves golf. He golf?

[Michael Batnick]

Really?

[Ben Carlson]

Oh, yeah. My dad golfs four times a week probably.

[Michael Batnick]

So why did you never get into it?

[Ben Carlson]

I. I was always doing something else. I had other sports going on. I wasn't a dork. I don't Know, it just. One of those things. I'm kidding. I just. It never. And I think because I didn't have the patience to put in the work, and the time I got, it was infuriating me because I was bad at it.

[Michael Batnick]

Same. Yeah.

[Ben Carlson]

And so I never put it in the work, but so I thought about this, and I know it takes up a lot of time, and we just choose to do other things. Right? Cause golf could take up a lot of time. It's expensive, but I know people do love it. So I wrote this blog post, and I wrote some things that I'll just never spend money on, and golf was one of them. And I wrote all these other things. Some of them I was just being tongue in cheek and funny and whatever. This is kind of a throwaway blog post, I thought. And it kind of went crazy on LinkedIn because people commenting on it. Oh, I totally agree with you on three of those. But this one, you're an idiot. You're wrong. And it's just a really good reminder that people love to judge others, but hate to be judged on what they spend on.

[Michael Batnick]

Yeah, that's a great point. Yep. You're right.

[Ben Carlson]

Right. It's. But. But it's a fun game to play. Like, why. Why would they spend on that? But it's all. My point is, Ryan Holiday had this thing where it's either works, family or scene. Pick two. Work, family, family, scene, scene is like going out.

[Michael Batnick]

Okay.

[Ben Carlson]

So, like, if you. You can try to do all three.

[Michael Batnick]

But if I do, I do all three.

[Ben Carlson]

One of them is going to suffer, though. It's. If you. If you put too much into one, another one is going to suffer.

[Michael Batnick]

I. I feel like I balance it pretty well. Not to brag.

[Ben Carlson]

All right, sure. You're. You just have it all figured out.

[Michael Batnick]

If you need advice, you come to me. I got you covered.

[Ben Carlson]

I wonder how he did.

[Michael Batnick]

Life guru.

[Ben Carlson]

All right. The point is, though, you know what? Actually, if you go out too much, you're not at home with your family, you're missing games and stuff. Right. That's the point.

[Michael Batnick]

I really. I'm not going to caveat this with saying, oh, I teach. I really hate the life judge. The. The life philosophers. Can't stand it. Cannot stand it. I'm sorry. I know it helps some people. My God, it drives me nuts. Irrationally nuts. I watched the Liver King doc over the weekend. I don't know why. I think it was just, you know, it was on a. Falling asleep.

[Ben Carlson]

That. A Netflix thing.

[Michael Batnick]

Yeah. And needless to say, by the way, that was three years ago, 20, 22, that, that it came out that he was doing steroids. I feel like that was like yesterday. Whatever. Point is he's a, he's a life guru guy who was obviously not exactly practicing what he preached. The nine an central tenants and you could look like me and then he was just doing steroids but he was like, yeah, I was full of shit. But it's just, to me it's just so transparently obvious, like why are you telling people how to live their life? You don't have enough problems of your own. You have it all figured out that you're gonna like give strangers advice, like mental advice. It's just so tiresome. I hate it.

[Ben Carlson]

I do agree. But obviously there's always going to be a market for it because there's.

[Michael Batnick]

How big is the self help market? Is it a hundred billion dollar market?

[Ben Carlson]

And there's new self help books all the time to reframe your mind and obviously people need it.

[Michael Batnick]

Yeah, well, I have mixed feelings because on the one hand there are people that genuinely benefit, you know, so I don't want to like discount that entirely. But the people that, that give it on the Internet.

[Ben Carlson]

Oh, I agree. And you do wonder how many people actually it just goes in one ear and out the other and then they're on to the next self help because.

[Michael Batnick]

And also it's like, bro, you're 26 years old. What are you talking about?

[Ben Carlson]

Yeah, how much life experience do you actually have? Like, there's this book I read a long time ago called Mindless Eating and it was a psychology of food. And the point his, the one stat that stuck out to me all the time was 95% of people who go on a diet and lose weight end up gaining the weight back. And I think that's probably how it is with most self help people. And I'm guessing the market for self help, obviously you can graduate out of it, is just. I'm sure there's some people who are just constantly consuming this stuff and never actually applying it to their life. Right. You could take the building blocks from a lot of big self help stuff and apply some of it. But it's like, well, what if there's a better way to do it in another way? Yeah. Once you see through it though, it's. I don't know. So last week we talked about, there was a New York Times story about people taking Social Security early and because they were freaked out and we got a ton of emails from people saying, and it Was all the same exact tone. I'm taking like hand up. I'm taking it early because I've done the break even calculations and you know, it wouldn't break even till I'm 77 or 80 or something. And I just don't care. I want, I want the money now. Like, I don't care what the data says.

[Michael Batnick]

I thought we were pretty fair on that last week. I thought that we. Or maybe I'm wrong, maybe I'm misremembering, but like, I totally get that. I'm not gonna besmirch anybody for, for doing that.

[Ben Carlson]

But I think though, if you don't have enough saved, the best way to ensure that you beat the longevity risk is you work a little longer and then that allows you to push Social Security back. So you work until instead of retiring at 65, you work till 67 or 70.

[Michael Batnick]

Then judge not, lest ye be judged.

[Ben Carlson]

But obviously no one wants to work longer. But this is interesting. So this is from IMF's World Economic Outlook based on samples in 41 countries suggested that the average 70 year old in 2022 had the same cognitive ability as a 53 year old in 2000.

[Michael Batnick]

That sounds made up.

[Ben Carlson]

It does, doesn't it? So they're also saying this means. So people who are employed at 70 see a 30% uplift in earnings. But think about how many people are still working into old age now. I mean, the fact that it's a 22 year period or whatever seems almost. If you would have said in 1950. I don't know though. But this is my point of some people who aren't. There's a lot of people out there who are not prepared for retirement. Their solution is going to be working longer because you're living longer and your brain is staying sharper longer.

[Michael Batnick]

Duncan is saying that according to various market research reports, the market for US self improvement is 16 and a half billion dollars. It's a lot of coin.

[Ben Carlson]

Yeah. All right, I'm going to do it. I'm going to. I'm going to start just podcasting shirtless and going for runs all the time. And let's do it. All right. A bunch of people confirmed for us. You can book Grand Hyatt Baja Mar using Hyatt points. Michael, it's still there for you.

[Michael Batnick]

They also said, hang on, hang on, hang on. There are blackout dates.

[Ben Carlson]

Yes, there are blackout days. So they said there was a certain amount of rooms.

[Michael Batnick]

Christmas, for example. You can't use points unless. I was told I was. I called them And I.

[Ben Carlson]

That makes sense.

[Michael Batnick]

I complained.

[Ben Carlson]

And they also said that if you use the Hyatt points, it's a really good credit card because there's no taxes or resort fees with points, which is pretty good because those resort fees are ridiculous.

[Michael Batnick]

It's so. It's so expensive.

[Ben Carlson]

All right. What, you're trying to talk me out of it Because I.

[Michael Batnick]

No, it's phenomenal.

[Ben Carlson]

No, that's just twist my arm.

[Michael Batnick]

No, no, it's a great time. All right. Lucas Shaw tweeted, Netflix's share of TV viewing is flat from a year ago. YouTube group. I have more than three. YouTube group by 3%. Excuse me. More than every other streamer combined. My kids are on YouTube a lot these days, and I don't love it. There's just like. They're just watching garbage.

[Ben Carlson]

Yes. I've been thinking about this a lot. My kids do the same. And I just think about this.

[Michael Batnick]

I've been saying, no YouTube a lot.

[Ben Carlson]

I have, too. We're putting, like, limits on it now. But I look at some of the stuff that I grew up watching, cartoons and stuff, and I just. Is it really that much worse than the stuff we grew up on? I don't know.

[Michael Batnick]

I think so. I was watching Spider Man. That taught you how to be a man. And I don't know, Spider man was.

[Ben Carlson]

A life coach or aunt. What's the uncle?

[Michael Batnick]

With great powers comes great responsibility. That was Uncle Ben.

[Ben Carlson]

That sounds like something a life coach would say.

[Michael Batnick]

Yeah. All right, so this is the article that I shared over the weekend on Friday, Ben, that I think you called me out for. But the article was in the New York Times, a reputable publication in the eyes of some people. Why is IMAX suddenly everywhere? And this is the lead. Tom Cruise had a major request. He wanted IMAX to show his latest Mission Impossible movie and. And only his movie on its giant screen for three weeks. It is the kind of exclusive run that that few films get. So Mr. Cruise went straight to the top. He reached out to imax's chief executive, Rich Gelfand, who had some requests of his own. He wanted all the Mission Impossible premieres, along with press screenings and influencer screenings, to be held at an IMAX theater. And he wanted Mr. Cruz to endorse the company screens during his global press tour for the film, which opens this weekend.

[Ben Carlson]

Did he also want to teach him how to eat popcorn?

[Michael Batnick]

Holy shit.

[Ben Carlson]

The viral video of Tom Cruise eating popcorn.

[Michael Batnick]

So he ate popcorn, like how some people eat peanuts. And I think even that's weird. Eating peanuts but whatever. Not here to judge how people eat their food. I guess I am, actually. That's a lie. I am judging. When you have your handful of nuts or popcorn or whatever it is and you just, I guess there's a hole over here, you just throw it in. It's just weird. Who does that? I've never seen anyone do that with popcorn. It was very bizarre.

[Ben Carlson]

Okay, so IMAX relented and gave him all his demands. Or they each gave each other their demands.

[Michael Batnick]

I forget what it said, but last night I went to the theater, saw a 710 showing. I got there ready to get some popcorn. And I oscillate between a Sprite and a Diet Coke, depending on my mood. That's the only place that I drink soda, actually, for the most part, is at a theater. And the line was ridiculous. I almost took a picture for the show. I didn't, but it was, there was, I think four reg registers that were open. And I, I, I, I bailed. I said, I want to miss a movie. And then I tried to come out of the movie at like. So the show was at 7:10. I went in there. I got there at 7:05. I went in there like 7:25. I'm like online for 20 minutes. I tried to come out again. The line was still so long. So they captured 30. I got an email from IMAX over the week.

[Ben Carlson]

Even on a Monday night, huh?

[Michael Batnick]

Well, it was, you know, it was a week. All right, so the numbers were. IMAX kicked off the summer in record fashion. 30, $31 million in box office for Mission Impossible, including a stunning 20% of the domestic. 20% and it's probably 1% of theaters. It's wild.

[Ben Carlson]

That is crazy. So, so yeah, people are going to get out and go to the theaters. They want a premium experience. That's your selling point, right?

[Michael Batnick]

That's exactly right. It was a. This is from the Journal. It was a blockbuster Memorial Day weekend for Hollywood, led by a little blue alien. Disney's remake of Lilo and Stitch topped the box office with an estimated $183 million. Mission Impossible did 77 and a half million dollars. All told, domestic ticket sales totaled $326.7 million for the record for the holiday weekend. The prior record, not accounting for inflation, was $314 million in 2013. So this is great news for the movie industry because the first quarter was garbage.

[Ben Carlson]

My kids are excited about Lilo and Stitch. I'm sure you're taking your kids to that one.

[Michael Batnick]

I'm going to take Them. Yeah.

[Ben Carlson]

So this is crazy. We talked about the drawdowns with individual stocks earlier. After the dot com bubble, Imax probably.

[Michael Batnick]

Fell, what, 95%, 98%. Yeah.

[Ben Carlson]

And came all the way. It's one of those stocks that did come back. Now it's still in the 35% drawdown from the high in 2015. You got room to run here?

[Michael Batnick]

I think so.

[Ben Carlson]

All right, I've got a question for you. I want to know if I'm a curmudgeon or if I have a point here.

[Michael Batnick]

You're not a curmudgeon, dude. Instead of honking at the car next to you, you climbed out your window. You're the opposite of a curmudgeon.

[Ben Carlson]

Okay, I didn't say anything, but this is, in my opinion. So breweries have figured it out, right? If you want to get, like, millennials and their kids there, you have to have the beer and the food, but you also have to have, like, games or an outdoor spot for the kids so the kids can play while the parents sit there and have a beer. Right? So I frequented two breweries this weekend, and waiting in line to get a beer at both places, the same thing happened. So it stood out to me. The people in line in front of me, and there's a big line of people behind them waiting to get a beer. Right. They ask for a taste of a beer before. Like one of those in the little cups.

[Michael Batnick]

No, sorry.

[Ben Carlson]

And they taste it and they sip it and they go and think and think. Yeah, that's pretty. You should not be allowed to taste a beer before you order it. I'm sorry. You can't order food at a restaurant and try it and then send it back.

[Michael Batnick]

You're 100% right.

[Ben Carlson]

Right. Like, you shouldn't be able to do that. If you buy a beer and you don't like it, you're out seven bucks.

[Michael Batnick]

Well, guess what?

[Ben Carlson]

Drink a different one.

[Michael Batnick]

Throw it out, get back, get a new one.

[Ben Carlson]

Think. Yes. This should not be a thing. I would tell. If this was my bar. I'd say, no. Buy the beer, don't buy the beer.

[Michael Batnick]

One of my strong points. I'm very courteous to others around me. I'm a very considerate driver. I'm considerate walker. I'm considerate. Line, attendee, line cure I care about. Right. Yeah. It's actually, if someone's behind you, it's very rude. It's very rude.

[Ben Carlson]

Thank you.

[Michael Batnick]

I was at the beach this weekend talking to my cabana boy, and I was asking him, because he Told me that he went to the beach club next door growing up, and I worked there.

[Ben Carlson]

It just sounds weird to say that you have your own cabana boy. That doesn't sound.

[Michael Batnick]

By the way, growing up, I knew one person that went to a beach club in my town, and I'm sure there were others, but I knew one. I visited once or twice growing up.

[Ben Carlson]

So now everyone has one. And a beach club is just. You have your own cabana, and there's a pool there and a restaurant and stuff.

[Michael Batnick]

It's great.

[Ben Carlson]

Okay.

[Michael Batnick]

So I spent. I spent maybe five years as a cabana boy, I think, from, like, 16 to, like, 20, something like that. So I was talking to him, and I'm like, oh, you. You were in the sand court. And I'm saying to Robin, I said, because Robin I met at the beach club. I said, who was the cabana boy in the sand court in 2002? And he goes, I was born in 2006.

[Ben Carlson]

Yeah. High school job. So do they work on tips? Essentially, yeah. Is he gonna get a tax break?

[Michael Batnick]

Ooh, that is a good question. Hey, you ever been hit by a car? No, I got hit by a car last week.

[Ben Carlson]

Okay. Like a bump or a hit?

[Michael Batnick]

I would say it was a. Probably in between. Well, no, I didn't. I didn't get hit like, New York.

[Ben Carlson]

I'm surprised more people don't get hit by cars in New York City.

[Michael Batnick]

Yeah. So I was crossing the street.

[Ben Carlson]

AirPods in.

[Michael Batnick]

No, I was walking with a friend, and she backed up into me because I guess she was too far into the crosswalk. So she backed up into me, like, why are you. Where are you going? You're on 7th Avenue. And it hurt. She hit me in the arm.

[Ben Carlson]

Did you hit the car? Like, hey, boom.

[Michael Batnick]

No, but it hurt. I was.

[Ben Carlson]

Did she know? Did they know they hit you?

[Michael Batnick]

Yeah, she was, like, very apologetic, but she was only going, you know, four miles an hour, tops. But it actually hurt. So. Can imagine getting hit by a car going more than four miles an hour.

[Ben Carlson]

Was it an SUV or a car?

[Michael Batnick]

I don't remember.

[Ben Carlson]

Okay, that's kind of funny, actually.

[Michael Batnick]

So, all right, Mission Impossible. Dead Reckoning.

[Ben Carlson]

You saw the one before this, right?

[Michael Batnick]

Wasn't it one before it called Ghost?

[Ben Carlson]

I thought that was dead.

[Michael Batnick]

Is this Dead Reckoning? What was this called? God, I'm old.

[Ben Carlson]

Oh, the final record.

[Michael Batnick]

Oh, the final Recording.

[Ben Carlson]

The other one was a dead record.

[Michael Batnick]

All right, so the movie didn't get.

[Ben Carlson]

Great, great reviews, but I still liked it.

[Michael Batnick]

I enjoyed the. Out of the last one this one, however, I. All right, I had a great time. But now I've said this before, actually, I feel like I've said it the last three weeks. I have trouble following plots, especially in action films, which is like sort of their besides point. But this was so convoluted. Like the story made no sense. Not that it matters to the. To the movie going experience, but it was so disjointed. I'm excited to hear your take on it, but some of the. Some of the things that TC did were just unbelievable.

[Ben Carlson]

He's a maniac.

[Michael Batnick]

Unbelievable. Like the peaks of the action scenes were as good as it gets, but it was, it was. I mean there was a lot of fat on the movie. It was two hours and 49 minutes.

[Ben Carlson]

Yeah, that's long because the last one was two and a half hours or so.

[Michael Batnick]

Yeah, but. So, yeah, not the best Mission Impossible. But I don't want to complain. I had fun. And that's when I go to movies. I'm looking for fun. Oh, that's a theater movie. That's an IMAX movie. Not try to talk my book there. But it really is an IMAX movie. Did you finish the studio?

[Ben Carlson]

No. I finally watched your Ted Sarandos episode last night. I thought it was funny how everyone just kept thanking Ted Sarandos. That was a good inside joke. So I. That I'm. I might have two left, I guess.

[Michael Batnick]

Okay.

[Ben Carlson]

All right, well, I. I'm finishing up some other old shows that are. I'm sunk costing. So just go ahead and I'll tell you.

[Michael Batnick]

Okay. So Seth Rogen and Evan Goldberg were on the town, a two parter, talking about the making of and the goals. And I think that the show went a different direction than I thought it would. I thought it'd be like a storyline. Like through it through the season. There wasn't. Each episode is its own thing, man. I enjoyed the shit out of it. No apologies. I had a great time. I thought the finale was hilarious. I really, really enjoyed it. Big fan of the show.

[Ben Carlson]

Yeah. Again, it's hit or miss for me. I think the good episodes are really good. The bad ones are like, eh.

[Michael Batnick]

Yeah, but is it an hour?

[Ben Carlson]

It's like a half hour, 40 minutes maybe.

[Michael Batnick]

Yeah. So it's quick. You don't like.

[Ben Carlson]

And the fact that there's so many guest stars in each episode is.

[Michael Batnick]

Anyway, so in the finale, Bryan Cranston, you're gonna die. He steals the show.

[Ben Carlson]

Okay. He's good. We're finishing two shows now that it's kind of I equate it to a good novel. Like there's a lot of good novels that start out really good and the setup is amazing and it's just hard to find an ending. Right. Because. And so we're finishing you, which is a serial killer show on Netflix with Penn Badgley. And I think it's the fifth or sixth season and it just went too long and we finished it and the ending was okay, but I feel like there's no good way to end a serial killer show. It's like the Dexter went too long and didn't have a good ending. There's just no good way to do this. And then we're finishing the Handmaid's Tale, which is. I think we're up to the finale now. And it's one of these things where the start was just way better and we're hanging on because I think my wife liked both these shows more than me. And it's kind of. We're finishing because we started them.

[Michael Batnick]

Are they still making new seasons or is it over?

[Ben Carlson]

This is the last one. Handmaid's Tale is. This is it. So there's one more episode and it's kind of like, yeah, these shows were really good at beginning and I don't know if I needed to see how they concluded. I had to because I wanted. I know I needed to know what happened, but it's. The quality went down after a while. That's all I got.

[Michael Batnick]

Market's up almost 2%. Kind of wild. Not kind of wild, wild. It's a bull market.

[Ben Carlson]

The stock market wanted to move higher. I do wonder if we never had the tariff thing in the first place. If Trump just said deregulation tax bill, would we have had another 20% up year this year? Yeah, God knows, maybe we still. But that seems to be. Maybe that's the baseline. Not saying the market is even.

[Michael Batnick]

Stocks will go up 20% every year unless something bad happens, says Ben Carlson.

[Ben Carlson]

No, in a, in a rip roaring bull market with a lot of animal spirits. I don't know, maybe the baseline for this year was a 15 or 20 up year and the tariff had pulled us back from that. The tariff stuff. It really is kind of incredible how much of an about face there's been. It seems like of course it shouldn't have been a surprise, but it still is kind of surprising for the rhetoric we heard in April, I think. All right, what else we got?

[Michael Batnick]

What do you mean? In general? In life?

[Ben Carlson]

Yeah.

[Michael Batnick]

Summer. Can you believe how fast summer went? That's a, That's a preview for 12 weeks from now.

[Ben Carlson]

So on a year to date basis, the S and p is now up 1%. We're back in the black.

[Michael Batnick]

All right, Animal spirits of the compoundnews.com thank everybody for listening, for emailing. We'll see you next time. Sa.