Animal Spirits Podcast (Ep. 457) — "The Best Stocks in History"
Date: March 25, 2026
Hosts: Michael Batnick & Ben Carlson
Main Theme: An exploration of market psychology in a turbulent environment, wealth concentration in stock market history, current macroeconomic trends, the behavior of investors, and the enduring value of indexing.
Episode Overview
Michael and Ben discuss how markets dominate policy, the psychology of investors amidst ongoing geopolitical and economic uncertainty, the distribution of stock market wealth as highlighted by updated Bessembinder research, and how these lessons inform investors. They touch on personal finance, AI's impact in the workplace and education, the evolving housing and auto markets, and close with recommendations and light cultural commentary.
Key Discussion Points & Insights
1. Markets and Geopolitics: The Era of Market-Driven Decisions
[03:30-07:00]
- Markets are dictating the timing of major world events and political announcements.
- Example: Military actions and diplomatic news now seem coordinated with market hours.
- Ben: “Markets basically rule everything now. Fair. That’s it, right.” [03:30]
- Michael: “They're the judge and the jury… The market is the regulator.” [04:24]
- Recent market volatility around Middle East tensions highlighted, including rapid swings in oil and equity prices.
Notable Quote
“It's weird that markets are looking past this stuff now… The psychology of the market is really interesting because it's not always like that.”
— Ben Carlson [05:29]
2. Market Psychology & The ‘Purgatory’ Metaphor
[05:59-07:36]
- Despite bad headlines (war, oil, inflation), markets are not correcting as investors might expect.
- Michael compares the current market to being in purgatory: “Maybe it is just in a perpetual… purgatory.” [06:31]
- Under the surface, many stocks are in bear markets, but large indexes remain relatively stable.
Notable Quote
“40% of the index is in a bear market. So even though it’s not showing up at the index level, under the surface, that doesn't count.”
— Michael Batnick [07:07]
3. Insider Trading & Market Manipulation Concerns
[07:36-08:42]
- Discussion of “movie plot” trades: outsized futures positions ahead of key political announcements.
- Universally negative view of insider trading; frustration that more isn’t done to stop it.
- Michael: “Nobody likes insider trading.” [08:17]
- Ben: “If it’s a 100% consensus, why doesn't someone get a slap on this?” [08:31]
4. Making Sense of Wild Markets & The Limits of Macroeconomic Forecasting
[08:46-09:41]
- Ben likens market behavior to unpredictable children: "The market these days... can be a completely different person from one day to the next based on an announcement." [09:29]
- Both agree: Fundamental models struggle in such a rapid-fire, news-driven environment.
5. ‘Bears Sound Smart, But...’ – Dan McMurtry’s Market Optimism
[09:41-11:17]
- Michael reads a tweet emphasizing society’s inherent bullish bias: billions striving to make things work expands the economy over time.
- “Do not be fooled by the psychological games of people seeking to dominate attention... do not forget that 95% of the world is trying to rig the game to work out. There is a vast conspiracy to grow the economy… it’s called society.” — Dan McMurtry, quoted by Michael [10:39]
- The hosts reinforce that betting against economic progress is usually a losing game.
6. Oil Prices, Inflation, & Resilience of the Consumer
[11:38-13:38]
- Oil's spike is less impactful on US households today (now 2% of budgets) versus the 70s/80s (6%).
- Ben: “Households have the ability to eat it, because it’s not like it’s a huge part of their budget.” [12:14]
- Corporations (e.g., Apple) largely insulated from energy shocks.
- The "midwit meme" of overestimating single-variable impacts (like gas prices) on the economy.
- “[Consumers] can probably handle $4-5 gas… The market is betting that it can.” [13:11]
7. Rate Cut/Rate Hike Whiplash & Macro Uncertainty
[14:00-16:04]
- Rapid shift from expecting rate cuts to rate hikes amidst inflation fears; highlights “rate expectations flip-flopping” in three weeks.
- Michael jokes about having to Google what year it is to keep up with market narratives.
- Consensus that hiking rates now to counteract exogenous supply shocks is misguided.
8. Investor Psychology: Waiting for the Correction
[17:03-18:35]
- S&P drawdown of 6.8% feels insufficient to many investors who “just want to rip the band-aid off.”
- Lieutenant Dan/Forrest Gump and “I Know What You Did Last Summer” analogies—the market not capitulating as expected.
9. Value of Indexing: Bessembinder’s Updated Research
[26:04-29:46]
- Only a tiny subset of firms create most market wealth: now, 46 companies account for half of $91T in net wealth (updating prior findings).
- Michael is tired of these findings; Ben believes they're vital for hammering home indexing's importance.
- “Buying and holding forever individual stocks is a terrible idea. Empirically, most stocks are not worth marrying. Guess what?” — Michael Batnick [27:23]
- Many of the best-performing stocks over 20 years are obscure, supporting the unpredictability and concentration theme.
Notable Quote
“The interesting thing to me ... I never would have thought it’d be this concentrated.”
— Ben Carlson [29:46]
10. Personal Finance: Housing, Auto Markets, & Behavior
Housing Market Stasis [33:45-36:31]
- Housing (pending home sales at historic lows) is “in an absolute ice age."
- Despite this, the stock market remains resilient—“Isn’t housing a third of the economy?” [33:45]
- Illustration: Even as home sales boomed, Home Depot’s stock is flat since 2021 due to “pull forward” effects.
Cars & Social Media Pressure [38:41-41:27]
- Shock over $60-80k car purchases and $1,000/month payments for young people—“I can’t believe more people aren’t just buying used cars.” [41:15]
11. AI in the Workplace & Education
[41:29-49:48]
- WSJ study: AI tools intensify workloads, increase messaging/app time—people work more, not less, when using AI.
- Ben’s thesis: initial AI wave could “fake a productivity boom” by making people fear job loss, so they work harder.
- Michael: It’s "way too early for these types of studies…the equivalent of measuring the iPhone in 2007." [42:52]
- Email from a high-school teacher: Most students use ChatGPT to avoid learning, not to feed curiosity; fears AI is “absolutely making society less smart.”
- Ben: “It just seems like the collective sentiment among teachers is way lower than when we grew up.” [49:48]
12. Crypto, Tokenization, and Financial Innovation
[50:52-54:15]
- Discussion of buffered ETFs for Bitcoin—products to limit downside risk.
- Traditional exchanges like NYSE are entering the world of tokenized securities.
- Michael notes the barriers to entry (e.g., branding, trust) still matter in finance even as technology changes.
13. Homeownership, Regret, & Accidental Landlords
[56:23-59:36]
- Not all home purchases end happily; articles on “regretting my house” and accidental landlords who couldn’t sell.
- Both agree: owning versus renting is highly location-dependent; in some places, renting a house is almost impossible.
14. Customer Service, Business Ethics, and Word-of-Mouth
[61:00-63:14]
- Ben’s positive story: roofer fixes a small issue for free as a word-of-mouth strategy—business is booming.
- Michael: Responsiveness is a business asset, not a liability. “Feels so good when a service person responds immediately.” [62:55]
15. Private Credit & Deferred Taxes
[64:34-68:51]
- Cautious optimism about private credit: returns are slow-moving and bad years (e.g., 2008: -6.5%) are far less severe than equities.
- Wealth management is now much about tax deferral and efficiency (“box spreads, direct indexing, etc.”) as about performance.
16. Pop Culture & Film
[69:15-77:04]
- “Project Hail Mary” movie praised as a must-see family event; Ryan Gosling’s universal approval rating discussed.
- IMAX theaters and moviegoing as a cultural experience.
- TV: Recommendations for “DTF,” “Rooster,” and commentary on the cold plunge/sauna fad (“You can’t have a cold plunge without telling someone about it.” [73:23])
- Michael reflects on TV’s anti-cynical, light humor appeal in current shows.
Notable Quotes & Timestamps
- Dan McMurtry (via Michael):
“There is a vast conspiracy to grow the economy… it's called society.” [10:39]
- Ben Carlson:
“The interesting thing to me ... I never would have thought it’d be this concentrated.” [29:46]
- Michael Batnick:
“It’s not rocket science. I need somebody to watch me. I have no discipline. I’m a child.” [20:11; on personal training and the enduring need for guidance even with AI]
- On Student Use of AI:
“My main goal is to prevent as many young adults as I can from being ruined by technology.” [48:33; email read by Ben]
- On Responsive Customer Service:
“It feels so good when a service person responds immediately.” [62:55]
Topic Highlights With Timestamps
| Segment | Topic | Timestamps | |--------------------------------------|--------------------------------------------|---------------------| | Markets & Politics | Trading around announcements | [03:30-07:36] | | Market Psychology | Purgatory, correction psychology | [05:59-08:13] | | Insider Trading | Pre-announcement trades, frustration | [07:36-08:42] | | Macro Uncertainty | Oil/inflation, whipsaw on rate expectations| [11:38-16:04] | | Bessembinder Research | Concentration of wealth, index argument | [26:04-30:09] | | Housing/Cars | Flat home sales, rising car costs | [33:45-41:29] | | AI & Society | Intensified workloads, impacts on youth | [41:29-49:55] | | Crypto Innovation | Buffered ETFs, tokenization, new products | [50:52-54:15] | | Homeownership Regret | Renters, accidental landlords | [56:23-59:36] | | Service Stories | Roofer anecdote, importance of responsiveness| [61:00-63:14] | | Pop Culture | Movies, TV, cold plunge/sauna trend | [69:15-77:04] |
Memorable Moments & Analogies
- Market Behavior Analogies: Comparing market volatility to kids waking from naps, and movies like “Forrest Gump”/“I Know What You Did Last Summer.”
- Customer Service Insight: Quick, proactive service leads to referral business and customer loyalty: “People get excited to share positive stories in their life.” [63:25]
Tone & Language
The episode balances the hosts’ trademark combination of data-driven skepticism, lighthearted cultural references, and candid, sometimes irreverent banter about markets, investing, and life. There are regular asides, self-deprecating humor, and personal anecdotes interspersed with real insight.
Takeaways for Listeners
- Don’t fall prey to doomsday narratives; history overwhelmingly favors patient, diversified investors.
- Real wealth in the stock market is created by a tiny number of stocks—indexing increases your odds.
- The economy and stock market are more resilient than headlines suggest, but market “purgatory” can test conviction.
- Tech and macro environments change fast; humility is crucial in predictions.
- The future of finance will hinge on managing taxes and client experience as much as picking the next hot stock.
- Continuous adaptation and skepticism are essential, but optimism remains warranted for those who understand how “the game is rigged… to go up” (and why).
For further resources or full disclosures, visit Ritholtz Wealth’s podcast disclosures.