This Is the Dumb Money (EP. 423)

Summary

Animal Spirits Podcast – Episode 423: "This Is the Dumb Money" Summary

Released on July 30, 2025, Episode 423 of the Animal Spirits Podcast delves deep into the intricacies of modern markets, investment strategies, and the evolving landscape of wealth distribution. Hosts Michael Batnick and Ben Carlson navigate through a myriad of topics, offering insightful analysis and engaging discussions. Below is a comprehensive summary capturing all key points, notable quotes, and the essence of their conversation.

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1. Market Strategies and Key Influencers

Timestamp: [01:15 – 05:07]

The episode kicks off with a discussion about an interview with Michael Sembalist, the chair of the Market and Investment Strategy Group at JP Morgan, conducted on "Live from the Compound." Ben Carlson highlights Sembalist's consistency and depth in market analysis:

Ben Carlson [02:51]: "He seems to always keep it fresh. And it's not just like here's evergreen wisdom, it's here's what's going on right now and why it's important."

Michael praises Sembalist’s 20-year retrospective work, emphasizing the blend of historical data with modern commentary:

Michael Batnik [03:16]: "He took the charts from the biggest moments of time, the GFC and all that sort of stuff, and put modern commentary on what he was saying back then. Absolutely epic."

This segment underscores the value of long-term market perspectives and the importance of staying updated with influential market thinkers.

2. AI and the Stock Market Bubble

Timestamp: [05:07 – 07:04]

Ben and Michael delve into the potential of Artificial Intelligence (AI) as the "stock market bet of the century." They analyze Nvidia's remarkable stock performance, touching upon the speculative nature of AI-driven investments:

Ben Carlson [05:07]: "This is the first time we bought this stock. And part of me is thinking, why would I not just sell this? It's up 70% in three months."

Michael reflects on the longevity of bull markets, suggesting:

Michael Batnik [05:47]: "Bull markets can go a lot longer than you think."

They ponder the possibility of an AI bubble and its impact on investor behavior, questioning the sustainability of such rapid growth.

3. Wealth Distribution: Stocks vs. Real Estate

Timestamp: [17:01 – 20:22]

Ben presents intriguing data on household net worth, highlighting a stark contrast between stock and real estate ownership:

Ben Carlson [17:30]: "The top 10% own 87% of the stock market. The bottom 90% own 13%. But in housing, the top 10% owns 44% and the bottom 90% owns 56%."

This disparity raises concerns about the middle class's ability to build wealth, especially as housing becomes increasingly unaffordable. They discuss the implications for individuals whose primary financial assets are tied up in real estate, limiting their investment opportunities in the stock market.

4. Housing Market Dynamics

Timestamp: [29:00 – 35:03]

The conversation shifts to corporate investments in real estate versus individual investors. An article from the Wall Street Journal is dissected, revealing:

Ben Carlson [35:03]: "Investors who buy homes to flip or rent out have made up about 30% of purchases, the highest on record."

They explore the impact of high mortgage rates on housing supply and demand, with Ben noting:

Ben Carlson [35:03]: "Some people get mad about this, but this is not the kind of thing where you can get mad and blame the big private equity places."

Michael adds his perspective on demand outstripping supply, asserting that home prices are unlikely to decrease significantly nationwide:

Michael Batnik [34:46]: "Demand is going to so far outstrip supply. I don't see home prices coming down, do you?"

5. Private Markets and Investment Risks

Timestamp: [40:17 – 45:25]

The hosts discuss Jason Zweig's critique of Wall Street's promotion of private market assets. They highlight the inherent risks, such as illiquidity and high fees, associated with investments like private equity and venture capital:

Ben Carlson [41:37]: "There are going to be investors who don't understand the liquidity profile of these and they're going to be very angry when they want or need their money and they can't get it out."

Michael emphasizes the marketing aspect, pointing out that firms push these products for higher fees:

Michael Batnik [42:46]: "They're doing it for a very simple reason, because the fees are much higher, because there is no liquidity. They can take these fees to the bank."

This segment serves as a cautionary tale for investors considering private market assets without fully understanding the associated risks.

6. Demographic Shifts and Wealth Transfer

Timestamp: [44:17 – 45:25]

Ben shares a study highlighting the growing asset ownership among baby boomers:

Ben Carlson [45:25]: "In 2001, people age 55 and above owned 50% of all US household assets. Today they own 70%."

They discuss the impending wealth transfer as baby boomers age, noting:

Ben Carlson [45:25]: "Father Time is undefeated. We've never had a cohort this big before live this long. Time solves this one."

Michael concurs, suggesting that future generations like millennials will eventually inherit and redistribute this wealth:

Michael Batnik [45:54]: "Time solves this one."

7. Crypto Investments by Corporations

Timestamp: [28:51 – 35:20]

An article from the Wall Street Journal is examined, revealing that numerous companies are channeling funds into Bitcoin and other cryptocurrencies:

Michael Batnik [29:00]: "This is the dumb money. This makes no sense."

They express skepticism about the sustainability and rationality of such investments, criticizing the lack of fundamental support for crypto markets:

Michael Batnik [30:14]: "This is complete nonsense. This is not going to end well."

Ben echoes these sentiments, emphasizing the inherent volatility of the crypto market despite claims of institutional stability:

Ben Carlson [30:18]: "I do not believe that for a second. This is still a crazy 24/7 market."

The hosts caution listeners about the speculative nature of corporate crypto investments, labeling it as misguided.

8. Consumer Behavior and Economic Indicators

Timestamp: [46:44 – 48:12]

Ben and Michael discuss observable consumer behaviors, such as the bustling activity in restaurants and resorts, questioning whether these are reliable economic indicators:

Ben Carlson [47:24]: "It is the first thing to go because these are the big ticket items."

They debate whether sustained high spending on leisure activities reflects underlying economic resilience or masks potential vulnerabilities in other sectors.

9. Personal Anecdotes and Lifestyle Discussions

Timestamp: [49:27 – End]

The hosts transition to lighter topics, sharing personal stories about health, family trips, and movie experiences. Michael mentions his weight loss efforts:

Michael Batnik [49:33]: "I'm down 14 pounds. My weight is now hovering around 169."

Ben shares his thoughts on sequels in cinema, expressing disappointment in films like "Happy Gilmore 2":

Ben Carlson [56:35]: "I couldn't finish it. It's one of those movies where your mind was already made up before you watched it."

They also touch upon the inevitable passing of baby boomers, reflecting on the transient nature of fame and legacy:

Ben Carlson [55:31]: "With the number of baby boomers, there's just going to be a lot of people that die in the years ahead."

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Conclusion

Episode 423 of the Animal Spirits Podcast offers a multifaceted exploration of current market trends, investment pitfalls, and socio-economic shifts. Michael Batnick and Ben Carlson provide listeners with a blend of professional insights and relatable personal anecdotes, ensuring a rich and engaging listening experience. Whether discussing the speculative frenzy in AI and crypto markets or the deeper implications of wealth distribution and demographic changes, the hosts deliver thoughtful analysis aimed at informing and educating their audience.

For those interested in furthering their understanding of these topics, the episode serves as a valuable resource, encapsulating the complexities of today's financial landscape while maintaining an accessible and conversational tone.

Transcript

[Michael Batnik]

Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute.

[Ben Carlson]

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[Michael Batnik]

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[Ben Carlson]

Institutional quality in this context is meant to convey a level of professional rigor and expertise combined with low costs. To learn more, visit vanguard.com all investing is subject to risk Investing in bonds are subject to interest rate, credit and inflation risk. Copyright 2025 the Vanguard Group Inc. All Rights Reserve Vanguard Marketing Corporation Distributor welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing and watching.

[Michael Batnik]

All opinions expressed by Michael and Ben are solely their own opinion and do.

[Ben Carlson]

Not reflect the opinion of Ritholtz Wealth Management.

[Michael Batnik]

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. Welcome to Animal Spirits with Michael and Ben. We got an email from somebody who was like, hey, why don't you guys do a little bit of promotion? I know the show is promotion of itself, but let people know what other things you guys have going on. And we've always been of the mind that, yeah, we're pretty, we're pretty loud. People can find us if they want to. But we did something this week that might have fallen under the radar because it was a Monday episode and Monday is not a usual drop for us. Josh and I had the enormous privilege of interviewing Michael Sembalist on Live from the Compound, which you can watch on YouTube. Michael chairs the Market and Investment Strategy Group at JP Morgan. He's been there for 35 years, but for 20 years he's been writing Eye on the Market. And he came on to discuss some of the most important things he's learned since he started writing this. And somebody emailed me and said like, who are the people that you read immediately? Or what sort of stuff do you read? And I said, hey, you know what, that's really interesting. That list has shrank over the years. He. I'm pretty sure that he is the only person whose post I never miss. I never miss an eye on the markets. And I don't know if there's anybody else that I could say that about.

[Ben Carlson]

There are some people that you end up graduating from no fault of their own. You just like, you know what they're gonna say or you've heard it before. And he seems to always keep it fresh. And it's not just like here's evergreen wisdom, it's here's what's going on right now and why it's important. And here's some like data that I've fleshed out very deeply in deep research and here's what it means. Yeah, it's very, very useful.

[Michael Batnik]

What he did with the 20 year retrospective is he didn't just republish it, which I thought he was going to do, which would have been fair enough. He took the charts from the biggest moments of time, the GFC and all that sort of stuff. And like he put modern commentary on what he was saying back then. Absolutely epic.

[Ben Carlson]

Yeah, great charts too. All right. He has been talking about, I think he said that the Sembla said AI is the stock market bet of the century. Something like that. What if there is just an AI bubble floor in that everyone is just kind of waiting for it and that, that really. I know people talk about retail and all this stuff saving the US from the trade war and we'll get to the trade war a little bit later. But what if everyone is just. Even when there's risks, people just are waiting for the market bubble to happen. So Nick and Jessica at Data Trek did this thing where they compared the NASDAQ to the dot com bubble now versus then. Josh talked to him about this last week and usually I'm not a fan of these charts, but this is like same scale and we've looked at this before where like we're tracking, we talked about this last week. We're close to tracking the 80s and 90s. It's not there, but it's there. Like if we had a blow off top for the AI bubble like we would almost get there pretty close, right? Over a two decade period. And I just wonder if that's what a lot of investors, if that's keeping could keep a floor under the market. So you and I think both, I think we did this independently when the market was crashing in April. I think when it was the down two back to back, like down 5% days. Both of those days, I'm like, okay, this is ridiculous. I'm buying Nvidia just because, like, if AI is a thing, I have to. And it was down 35, 40%, and now it's up. What is it up 70% from the bottom, from us or something?

[Michael Batnik]

Yep.

[Ben Carlson]

And we both bought it, and I think we both mentioned after the fact, this is the first time we bought this stock. And part of me is thinking, like, why would I not just sell this? It's up 70% in three months. But the other back of my brain, I'm going, no, no, wait, there's going to be an AI bubble. There has to. And if there's an AI bubble, this thing's going higher. How dangerous of a line of thought is that?

[Michael Batnik]

Well, it's a fair thought, and it's a thought that only happens in bull markets, obviously. I saw somebody tweet this morning that Nvidia is bigger than. Was it Amazon, Tesla and Apple or something crazy?

[Ben Carlson]

Probably not Apple, but yeah, so.

[Michael Batnik]

So you're saying that. All right, so a couple things in there. You said a lot. This chart that overlays today with the Nasdaq in the 90s, I think the takeaway is not that anybody expects it to follow this exactly, but bull markets can go a lot longer than you think. Is that the takeaway for you?

[Ben Carlson]

Yes.

[Michael Batnik]

Okay, so we've there's been, I mean, obviously a million people who said that we were late cycle, 9th inning in 2018. When or when did Fang start? Was it 2015 or 2017? The Fang started, like the name Fang. And then it was fan mag, and then it was Mag 7. So we've been doing. We've been saying this for you. We've been having this debate for years, like how much longer this. I mentioned the pie chart last year, last week. The other thing is the floor. So you're saying that there is so much money just waiting to rush in to buy the dip like happened in April. Is that what you're saying? That it's keeping a floor under the, under these names?

[Ben Carlson]

Yeah. Or just the behavioral mindset is that we're going to get this blow off top from an AI bubble. Why would I sell now if that's going to happen? I'll sell later when it, you know.

[Michael Batnik]

Yeah. I mean, that's the thinking, right? That's the psychology. And that's how you feel. That's how I feel. That's how every investor feels who's holding gains.

[Ben Carlson]

I just wonder how dangerous of a mindset that is.

[Michael Batnik]

So here's the thing. What's going to stop this? These names, These names aren't just going to fizzle out. Okay? You're hearing from every hyperscaler. Google raise our capex guidance from 75 billion to 85 billion. I believe that's per quarter. Is that per quarter? That sounds insane, but maybe it is. Wait, can that be? No, no, no, no. Because their revenue is like 90. Okay, no, whatever it is, it doesn't matter. The point is this is not going to stop until we hear from these companies that they're pulling back, that all of the investments are not working as planned. And it's hard to see that happening this quarter or next quarter. It will happen. I would assume that at some point they're going to disappoint, they're going to pull back and Nvidia is going to fall 27% in two sessions or whatever it is. And when is that going to happen? Yeah, listen, these are, I'm speaking up both sides of my mouth, but that's, that's sort of the thinking here. We had a, we had a emailer ask us, do you guys think that there will ever be another time with zero companies over a trillion dollar market cap? Not sure what would cause it, but I would take yes on Kal. She would love to hear your thoughts. Will there ever be a time where we don't have any trillion dollar companies? No, I don't think so either.

[Ben Carlson]

Not at this point. I, I mean it would have to be a NASDAQ.com level washout for that to happen. Right? For Nvidia is over $4 trillion. I mean, not saying it, it just did fall 65% a few years ago.

[Michael Batnik]

But Amazon would be needed to trade at like 1 1/2 times sales. I just, I don't see it.

[Ben Carlson]

Yeah, but your point about the spending, that's the thing that does it in, is all this spending happens and eventually the market goes, wait, where's the return? You, you guys are promising all this greatness from AI. Are we actually seeing an economic return from it? Not just talking and cool things on chat, GPT. Like, are you actually seeing revenues and profits from this now?

[Michael Batnik]

The other part of it is like, all right, but we know that stocks are a discounting mechanism. And how much good news are they discounting? Yeah, I said that's assemblies. But the channel's quote about in bull markets, people put promises, people put premiums on promises. How much of a premium is already in Nvidia? Like what would, what would they need to deliver for this to continue to grow? So I'm thinking about taking, taking profits or at least half, like 70% since the bottom of April. That's certainly exceeded my expectations.

[Ben Carlson]

And I don't want to be carry the five. What is that annualized?

[Michael Batnik]

I don't know. My personality, I'm, I'm fine with like selling a little bit early. Like that's just. But everybody's personality is different.

[Ben Carlson]

Everybody's different. I was looking through the J.P. morgan guide to the markets and they show this thing that shows from the bottom in 2022 and it shows that Europe and Japan are outperforming if you D.O. s and P500X Nvidia. Right. And I think we've shown this before. But this just got me thinking. When I was in the institutional crowd, the money managers, when they would underperform, they were great at creating new benchmarks to be like, listen, it's a junk stock rally. Take out all the junk stocks because we're high quality managers. I can't imagine how many managers are doing X Mag 7 or X Nvidia to show their investors that, listen, it's not as bad as you think. Yes, we're underperforming because we don't feel like buying at these no speed levels. I just wonder how many money managers have thrown in the towel and gone fine market weighted or whatever. Like how many that, that mindset has to have taken over Professional money managers who fought this for years.

[Michael Batnik]

Yeah, I don't envy those people. It's, it's brutal. All right. Spencer Jacob had a post last week about like trying to explain the market and basically like, you know, at a loss for words. Not really exactly sure how to explain.

[Ben Carlson]

What was the headline, why is the stock market up? I don't know, something like that.

[Michael Batnik]

Yeah. So Besant retweeted and said if Wall Street Journal reporters actually cover the markets, they know why they are up. President Trump's one big beautiful bill prevented the largest tax hike in history and introduced economic drivers like full expensing, no tax on tips and overtime. And tax cuts for seniors. Yeah, that's why the market's up. Tax cuts for seniors. Pair that with our deregulation agenda and the trillions in investments secured by potus and it's more than clear why the markets are responding the way they are. All right, whatever a politician doing what a politician does. It's so funny how short our memory is. Like there was panic in April and the V shaped recovery to new all time. Highs that it's been six days in a row. And now there's of course pockets of euphoria everywhere. Wild. I was last week having the conversation, memory hole. Everything now like, oh, maybe, maybe 4 trillion in Bitcoin in crypto isn't that much. And it's like, whoa, whoa. Huh.

[Ben Carlson]

I saw that. That was a very toppy headline for you.

[Michael Batnik]

It was so toppy. But for people that didn't listen to that. My point was that crypto is not a market cap. Right. It's not like there's a, with a stock there could be theoretically be a single buyer and if everybody wants to sell Apple, well then somebody would take it private because the cash flow, there's nothing fundamental supporting the floor in bitcoin. So the market cap, it's made up. It's not real. It's, it's, it's a.

[Ben Carlson]

Think about all the market caps for the shitcoins out there. They're.

[Michael Batnik]

Yeah, these are not real.

[Ben Carlson]

Look at those numbers.

[Michael Batnik]

Because you can't take that out of the market. And with a stock you can, there's shares and there's a price and there, there is theoretically a willing buyer for the entire business with some of these coins. What's, what's the air quote? Market cap on Doge. You kidding me? That's not a market cap. It's not a market cap, right? So that was my point.

[Ben Carlson]

Last week we had the question about why can't we just have 15% returns forever? This is a great chart from Goldman. I think Sam Rowe had this on his substack and it just shows the S and P price versus trailing 12 month operating earnings going back to 1945. And this is a series that over the long term, it's fundamentals. We follow earnings which. This is like a great reminder. You can see it opened up at times and we're opening up a little bit from earnings but not, not nearly to like.com levels.

[Michael Batnik]

You saw that, that chart that Matt shared with us on Slack. Earnings expectations are hitting all time highs, as is the stock market. This is not magic. We say this at least every other episode.

[Ben Carlson]

Yeah, Sam also had a good piece on. It was called. What was this called now, by the way?

[Michael Batnik]

Just. Let's rewind five minutes. Why is the market up? Like, why is it doing what it's doing? Because earnings. That's it. That's. This is, it's not complicated. It sounds insane. Given I was asking Matt like can we like volatility or noise adjust the returns this year I saw Bell Chunas tweet to Sam, like, we're up 9% year to date. If you adjust that for all of the noise in the headlines, it might, we might as well be up 45%. So I had Matt, the range of.

[Ben Carlson]

The low to the high. That's right, 30% range.

[Michael Batnik]

So we tried to do that and there's nothing like historical about it, but it just, it feels remarkable.

[Ben Carlson]

I don't get what you're, I don't get what you're trying to do. Noise ad.

[Michael Batnik]

So, so I had Matt. What did he do? He like divided the, the annual return by the max vix or something like that, or the annual return divided by the number of 2% days. And like when you, when you do it that way, and I'm sure there's better ways to do it, but you know, I didn't want to spend.

[Ben Carlson]

This is another one of those for the chart that shows the, the final return plus the intra year drawdown. And it's like, wait a minute, this is way, way.

[Michael Batnik]

But, but it, but it's even, it's just, it's even more impressive because you have to add like the headlines on top of it. And it was so freaking dark. And the fact that we're up 9% feels like a goddamn miracle.

[Ben Carlson]

So this, I know we've beat this horse to death here, but Sam wrote a great piece and I think it's important to talk about this because he said that time people freaked out about the CAPE ratio 10 years ago. And he.

[Michael Batnik]

Yeah, if you were, if you were not there, if you were not there, if you're a younger listener, I can't emphasize enough how big of a deal this was.

[Ben Carlson]

People were pounding the table. Most of the quantitative, yes.

[Michael Batnik]

Like John Hussman was a very, very well respected economist and market prognosticator. He had a very good track record and so he was getting a lot of airtime. And Henry Blodgett at Business Insider was using these headlines a lot. I remember being on my honeymoon and reading about this and I was genuinely like, oh shit, like this is not going to be good for us. And it was, it was everything, right? It was headlines.

[Ben Carlson]

You'd show the historical averages and from current Cape levels. The returns were awful. Right. And so, but the funny thing is, is that there was people pounding the table on this. And then Sam pulled these quotes from Shiller and he said this in a 2012 interview. Things can go for 200 years and then change. I even worry about the 10 year PE. Even that relationship could break. Down. So he was showing some humility in his own work where other people were pounding the table saying, no, no, no, no. This is the 97th percentile of worst valuations ever. Returns are going to be lower. And think about. And I think it's just important to recognize these things that don't work. So the inverted yield curve. Remember that in 2022 it happened. Cam Harvey said, listen, the inverted yield curve since I started, this is eight for eight for predicting recessions. But even he, I think, said, like, I don't know if it's going to work again. But that's just the track record. Guess what? The inverted yield curve didn't work again. Right. So I just think it's important to, like, understand how much context matters in these things that, like. And even if something like technically works going forward, it's not going to work every time. There's nothing that works every time. That's the point. Right. Even if something is grounded in research and evidence and even economic rationale.

[Michael Batnik]

Well, with the stock market, there's no iron law. There just isn't. Well, I guess. Well, if. All right, off the top of the.

[Ben Carlson]

Dome, I would say I'm trying to think of one.

[Michael Batnik]

Well, I could think of one. Volatility, mean reverts.

[Ben Carlson]

Okay. Yeah, that's right.

[Michael Batnik]

Like Vix 50s, Vix 70s. They come down. They can go higher, but they come down. There is some sort of gravity gravitational pull there.

[Ben Carlson]

But there's every rule, right? Every rule. There's an exception to it. The US Stock market has always come back. Yeah. What about Japan? What about Russia's stock market? What about all these things?

[Michael Batnik]

Yeah.

[Ben Carlson]

All right. So I was doing a little updating on. I've got this thing that I update every once in a while from the Fed that has how much households, the percentage of household net worth by stocks and real estate.

[Michael Batnik]

Huh.

[Ben Carlson]

And so. Okay, I didn't say that.

[Michael Batnik]

Well, no, I know what you're saying.

[Ben Carlson]

So the top 10% own 87% of the stock market. Right. The bottom 90% own 13. But in housing it's different. The top 10% owns. It's more like 44% and the bottom 90 owns like 56. So it's for the middle class, the majority, their biggest financial asset and the majority of their wealth is tied up in their house. And I'm kind of worried, thinking, well, geez, if the housing market is so bad and so unaffordable for so many people, does this mean that the middle class is going to get screwed big time now because they don't own a lot of stocks and if they're blocked out of the housing market or boxed out, where do they build wealth? Because say we will about housing as an investment. It's a form of forced saving for people. People who would wouldn't have saved otherwise saved and built equity in their house and that's like their financial asset. But I looked at this and the last time I updated this data was Q4 2021. So the the latest numbers are Q1 2025 and if you look at this now, it's not a huge change but the top 1% has gone from 54% to less than 50% in stocks.

[Michael Batnik]

No, that is, that is huge change. When you think about if you dollar adjusted that is huge.

[Ben Carlson]

The bottom 50% and the bottom 50 to 90 have both gone up by almost 1%. So again, not these are on the But I think this whole idea that more people are invested in the stock market. What if the unaffordable nature of the housing market is going to make people wealthier? Like what, what if the stock market has to be the savior? So here's an email. Hello, the show longtime listener wanted to chime in on something from today's episode. This is last week. Ben asked if people are using their down payment cash to invest in the market and Michael brushed it off. For what it's worth, that is exactly what I'm doing. My wife got pregnant two years ago and been sitting on enough cash for a 20% down payment in South Florida. We've been house hunting Miami and Boca. Nothing makes sense to buy. We can rent an equivalent house or apartment for half the cost of owning, not to mention major repairs. So we decided to continue renting and put one third of the cash to work in April. Correction would gladly do so again and delay buying another 6 months. Imagine there are many 27 to 35 year old couples making 200 to 500k a year, high cost of living, cities doing the same thing. Duncan told us he's doing the same thing. He slapped me afterwards. So I'm not saying this is rampant, but what if there's enough young people where like and the young people obviously are the lower income cohorts, right?

[Michael Batnik]

Not these young people.

[Ben Carlson]

Well, sorry, okay. Lower net worth cohorts that usually would have put all this money to work in the housing market are now putting it to work in stocks. And what if that actually makes some of these people wealthier than they would have been otherwise? Well, by the nature of getting boxed out, I'm looking for A silver lining here of this terrible housing market.

[Michael Batnik]

Yeah. Well, okay, a couple things. Well, these people are getting wealthier because if they've been doing this, the market's been roaring. Obviously their home wouldn't appreciate at the same extent. And it's liquid, so it's working. The extent to which people are doing this. Listen, we got, we got two emails like this and Duncan. Right. So it is obviously happening with certain people depending on how badly the person wants to buy a house. This is risky as hell, obviously. Right. Like the stock market can get cut in half.

[Ben Carlson]

But that's interesting that because for some people it's hard, it's too hard to save a down payment. They go, I'm throwing my hands up, I can't save. I'm just going to do other stuff.

[Michael Batnik]

Well, yes, if you have $30,000 saved and you're like, I am miles away from having a down payment on a house that I would like, then that, then I could totally understand the psychology of just putting it in the market.

[Ben Carlson]

This person has a down payment, they're not. But the thing is in Florida, like I would start dipping a toe in the water and putting some really low ball offers in.

[Michael Batnik]

Are you market timing Florida real estate? You son of a bitch.

[Ben Carlson]

I'm just saying buy when there's condos in the street, like if you, if that's where you want to be and prices are falling there and people are having a really hard time selling lowball some people and see if you can get a really good deal.

[Michael Batnik]

By the way, your video was blurry and now it's come into focus. And that is a great shirt.

[Ben Carlson]

Right? Thank you.

[Michael Batnik]

That is a great shirt.

[Ben Carlson]

You know, we went on a family trip. I got some anecdotes later in the travel section and my brother in law texted everyone before the trip, hey, Hawaiian shirt night. Second night for dinner. And then the first night I wore a Hawaiian shirt. And he said, wait, wait, what are you doing? Hawaiian shirt is the second night. And I said, dude, you don't think I have reserves? Come on, let's be honest here.

[Michael Batnik]

Anyway, the housing market is seriously screwing things up.

[Ben Carlson]

Yeah, I'm trying, sorry, I'm trying to just put a silver lining on it, but yes, I don't see many silver linings there. All right, so remember how. I don't remember what years. We talked about this. Probably coming out of 2020 after things really bottomed and took off in early 2021. The prospect for the roaring twenties. Right? That was, that was a thing. And I think we had it there for a little until inflation took off. We had a mini 12 month period or something where it was glorious and it felt like we had the roaring twenties and then 9% inflation came in that. But I think what we got is maybe even better because if we got the roaring twenties and just rampant inflation, that probably would have just kept. It would have pushed us into a recession if we got too many excesses. But I think we got the resilient twenties. I'm trademarking this. So we got this resilient stock market that always comes back, this resilient economy that throw anything at it. The pandemic 9% inflation rates going from 0 to 5% and then the resilient consumer that just keeps spending regardless of what's happening. So I think this like resilient economy that we got is maybe even better than the roaring economy we were talking about. Like, think about all the stuff that's been thrown at people.

[Michael Batnik]

I think that's a fair point. I made the case a couple of weeks ago that the tariff war, as far as the market was concerned, was actually a good thing. I think we needed a little bit of cold water because had we not had that, the market could have just gone vertical, which. Whoa. What's wrong with that? Well, a lot's wrong with that. Stock market's going straight up is. That's where the danger lurks.

[Ben Carlson]

Right. It is kind of interesting to think that. What did you say? We're up 9% year to date now.

[Michael Batnik]

Yeah.

[Ben Carlson]

So we finish most year. I've said this before. The average up year in the stock market is up like 21%. When stocks are up, the average is up 21%. When they're down, the average is down 13. If we somehow got another 20% up market this year, that's. That'd be three in a row. We're three fifths of the way to a late 90s boom when they there was five years of back to back to back to back to back years of 20% gains or more.

[Michael Batnik]

Sounds hard to believe.

[Ben Carlson]

It does.

[Michael Batnik]

Certainly possible.

[Ben Carlson]

Yeah. There's going to be a correction that starts right after this podcast is over because we're sounding very toppier. How about this?

[Michael Batnik]

Hang on. It's not us, it's the market. What should we be saying?

[Ben Carlson]

That's true.

[Michael Batnik]

Right? Like it. I don't know. I feel. I feel like we're being sort of sober.

[Ben Carlson]

Yes. All right. Sony Varghese from Carson Group says the trade war is over. Thank you for attention to this matter. He basically Says, listen, the deals are happening so fast now.

[Michael Batnik]

You put the. Thank you for touching this matter. Did he?

[Ben Carlson]

He did.

[Michael Batnik]

Okay.

[Ben Carlson]

He said the administration wants to close deals sooner rather than later and be done with all the trade chaos. And he says basically between Japan, China and the EU, along with Canada, Mexico, that pretty much covers 80 to 85% of US trade. In my opinion, that means we're done with the trade war and they're kind of just moving on. Do you remember people who said, like, we need to go through a recession because it's so important? And I feel like that has just been like, nevermind. I mean. No, no, I didn't say that. That was.

[Michael Batnik]

We just like, I don't want a recession. I know it hurts people, but we need one system needs one. Get lost with that.

[Ben Carlson]

Yeah. All right. I am of the opinion that AI is going to be a scapegoat.

[Michael Batnik]

If we don't take our medicine now, we'll have to take it later.

[Ben Carlson]

Listen, it's Main Street's turn. Okay, It's Main Street's turn.

[Michael Batnik]

Thank you for your service, wise one.

[Ben Carlson]

Meanwhile, the stock market's up 30% from the lows. So something we've been talking about, the.

[Michael Batnik]

College grad thing, by the way, even the administration, even Besant was saying, listen, things are very bad. We need to reset. We need to, you know, it's going to be painful. The transition's not going to be easy.

[Ben Carlson]

We need a recession for lower interest rates. Employ America says don't blame AI for the rise in recent graduate unemployment. And they go through this whole thing where they break it down a million charts and it's really good. Just saying this trend has been in place way before AI and they even look at like sectors that are impacted by AI and how they are not being impacted in the way that you would assume. So they break this down data wise. And I just think they don't see the evidence of AI meaningfully hurting recent college grads. And I think AI is going to be the scapegoat for a lot of things in the years ahead. It's going to be like excuses for companies to lay people off. It's going to be. There's going to be people that are having a bad situation economically and looking for someone to blame. And it's going to be AI. AI is going to be. Even if AI has all these impacts in certain ways, it's going to be the scapegoat for certain people.

[Michael Batnik]

I think that you're right. It will be the scapegoat. For a lot of issues, but I don't think that you could quantitatively handwave it away.

[Ben Carlson]

Yes.

[Michael Batnik]

Like it is making an impact, even if it's not the only thing that matters.

[Ben Carlson]

Yeah. But I think the bigger impact is coming, and it's not here yet. This is interesting. So, speaking of the college stuff, Adam Ozemek on Twitter says around 60 people in their 30s do not have a college degree, and the college wage premium remains near historic high. That number, to me is just the 60% of people in their 30s don't have a college degree. It's hard to wrap your head around the fact that thinking it's that high.

[Michael Batnik]

Wow.

[Ben Carlson]

Right? It's one of those inverted equations. We go, oh, my gosh, that's.

[Michael Batnik]

Well, get out of your Midwestern elite bubble, Ben, and you, you know, meet.

[Ben Carlson]

Some real Americans, I guess so. Charter had this chart this week that people were sharing on on social media. And I know that you're not a big demographic guy, so if you want to tune me out like you usually do, go ahead. But they show that the fertility rate across the world is just plunging. And there was a record low fertility rate in 2024 in the US and people are saying like this, this is terrible. In terms of productivity and economic growth, the big thing is population. Right. Those are the two things that matter for economic growth. And population falls off a cliff. That's a really bad thing for this time of the world.

[Michael Batnik]

I think that used to be true. We needed more people to do more things. It's no longer true. And how about if this chart was inverted and fertility rate was skyrocketing, Wouldn't there be mega concerns about the health of the globe? Like, oh, we're overpopulating the world. There's not.

[Ben Carlson]

That used to be the worry.

[Michael Batnik]

What's so wrong with this chart that.

[Ben Carlson]

I think this chart just shows we're getting richer, and when you get richer and like you said, you don't need seven kids to work the farm for you. But I think the people who are worried about fertility rates falling off a cliff, AI is the answer. It's productivity that's. That picks up the slack for lack of population.

[Michael Batnik]

Yeah, this is. I'm not a fertilitist, but I don't know. This doesn't concern me. Should it?

[Ben Carlson]

Is that a thing? All right, crypto time.

[Michael Batnik]

All right, here's the lead from an article by Greg Zuckerman and Vicky Gawang at the Wall Street Journal. It's the hottest trade of the summer. Companies are raising tens of billions of dollars not to invest in their business or hire employees, but to purchase bitcoin and more obscure cryptocurrencies. A Japanese hotel operator, a French semiconductor manufacturer, a Florida toy maker, a nail salon chain, and electric bike maker. They're all plowing cash into tokens, helping to send all kinds of digital currencies to record levels. News that a company plans to buy cryptos enough to send the shares flying, sparring others to consider joining the frenzy. Since 6-1-98 companies have announced plans to raise over $43 billion to buy Bitcoin and other cryptocurrencies. All right, this is the dumb money. I found it. This makes no sense.

[Ben Carlson]

That right there sounded like something that you see in the book about this bubble. That's a bubble anecdote right there.

[Michael Batnik]

I mean, this is ridiculous. This is nonsense. Mutual fund giant capital Group, hedge fund D1 Capital Partners, and investment bank Cana Fitzgerald are among those backing recent efforts. I just don't understand, like, I understand the thinking, like, all right, we're gonna, we're gonna buy a dollar of this token and the premium is gonna be $2 or whatever. All right, but could you imagine, like, raising giant pools of money to do.

[Ben Carlson]

This, like, and borrowing to do so?

[Michael Batnik]

There's billions of dollars that are investing in, investing in these things. I mean, this is complete nonsense. This is not going to end well. And I hate, I hate, I hate the buckle up, buttercup bullshit. I hate, like, warning people about, about. But, like, this is, this is garbage.

[Ben Carlson]

So I remember Josh wrote a piece when the spac boom hit, and he said, listen, the thing that ends this is just more spacs. The supply overwhelms the demand. And that's the same thing would happen you, you would imagine right now the.

[Michael Batnik]

The thing with, with crypto that makes it unique is that the supply is fixed, right? And so more money coming in. It could just continue to. It could, it could work for a while. But like the premium, like the, the idea that there's going to be a dozen micro strategies, that part I just don't buy. There could maybe, there could be a few others.

[Ben Carlson]

We talked about the volatility piece of crypto last week. And with the understanding that, yes, volatility has come down, like I've seen. Keep seeing people say, like, listen, now that this is institutionalized, crypto's not going to have the crazy volatility. And I do not believe that for a second. This is still a crazy 247 market. And seeing air pockets in this, especially with all the borrowed money in here. I think that you're nuts if you think that the volatility, the crazy volatility is gone forever. Yeah, I don't think so. This is interesting. I don't know if this person is a crypto soothsayer, but they have bitcoin in their Twitter profile, so that means they must be legit. Okay. The Wolf of all streets, Scott Melker, he's got a million followers. So he's a, he's a bitcoin. So he says, yeah, bitcoin. Bitcoin is amazing, but it's obviously been co. Opted to some degree by the very people that it was created as a hedge against. Many to some degree. Yeah. Many of the most ardent early whales have seen their faith shaken and have been selling at these prices. Now, I don't, I don't know if I saw people in the comments saying, like, prove it. And he said, oh, I had conversations. So maybe he's making this up. But is it possible that some of these people are finally going to go, hey, I joined this for like the libertarian, you know, we're fighting against the man and this isn't it anymore? I don't. Now that we have all the ETFs and there's institutional capital, I'm out. Is that like, could that actually be the first thing that shakes some of these religious beliefs from, from these people? Because the religion aspect of it has been the whole thing so far. Right? That's been the bull case. Is that, is it possible if Wall street, like sends these people, like, yeah, fine, I'm out. If you're here, then I'm. This is not what I signed up for.

[Michael Batnik]

I sort of reject the notion of this conversation because it's so theoretical. Like, is it possible that some people are thinking this one thing? Like, I don't know, maybe? Sure, could be.

[Ben Carlson]

Well, yeah. Anything about the future is theoretical.

[Michael Batnik]

No, no, no, but it's just, it's just such a ridiculous conversation. Like this person tweeted something that people are thinking one thing. I don't know, maybe they are.

[Ben Carlson]

I told you, his, his profile says hashtag bitcoin. Do you think about that?

[Michael Batnik]

I don't know. There does seem to be a lot of supply at 120. There is some selling going on there for the last week.

[Ben Carlson]

But my, my thought is that the bitcoin people have been able to change their line of thinking through every cycle to something different. And I don't know why this would be any different than that. Like, hey, we got there first and.

[Michael Batnik]

They'Re Just, I mean, what's not. There's no arguing that where we are today is very different from what the early bitcoiners wanted bitcoin to become. I mean, that's a fact. Yes, but how do they feel about that? They. I don't know. Everybody is. Everybody feels differently about things, especially when it comes to like potentially hundreds of millions of their own dollars.

[Ben Carlson]

Can you imagine telling them, Telling them, like, listen, the biggest catalyst for the bull market in the mid-2020s is going to be an ETF. It's going to be financial advisors and institutions that come in to buy. How do you feel about that? They wouldn't felt great, but who cares? It's going number go up.

[Michael Batnik]

Yeah. All right, New record high. Let's move on. New record high for existing single family home prices in June. That's from Kevin Gordon. Okay, there is. All right, so I, I've been thinking a lot about this. Lower interest rates are obviously going to unlock supply. Right. People are trapped in their house and demand, but way more. But demand never left. That's the thing. Demand is going to.

[Ben Carlson]

It's just waiting in the shadows. Right.

[Michael Batnik]

Demand is going to so far outstrip supply. I believe that for every seller there will be 11 buyers. So I don't see, I don't see home prices coming down, do you?

[Ben Carlson]

Well, they are in certain areas already, but nationwide, I think, yes. I think that the places that it's falling there are specific reasons and it makes sense. And yeah. And even if, if home prices did fall nationwide a little bit, then the lower rates immediately reverses it.

[Michael Batnik]

So I'll give a housing update on my personal situation next week, but low. So the boys have to have to switch elementary schools, which I did when I was in third grade. And Logan, the who is going into first grade said that he doesn't want to. And Rodman goes, see, he doesn't want to. We shouldn't do it. I go, Logan, what's five plus one? He said five. I said, I don't care what he thinks. His vote does not count.

[Ben Carlson]

When I was in going from fourth to fifth grade, we moved from Grand Rapids to Traverse City, which is like a two and a half hour difference. My dad took a new job up north and I was devastated. And my parents like, why are we? Why are we? They said years later, like, why were you so devastated? Like, I don't know. Because the first week we started school, I immediately forgot about it and moved on and it didn't matter anymore. Right. It's just change for a Little scary.

[Michael Batnik]

Yeah.

[Ben Carlson]

Right. And then you. Yeah, but then you realize you move on and you're fine. Okay. This is from the Wall Street Journal. So far, in 2025, investors who buy homes to flip or rent out have made up about 30% of purchases. That's the highest on record, according to property analytics firm Totality, which tracks the sales of. For the past 14 years. So some people get mad about this, but this is not the kind of thing where you can get mad and blame the big private equity places. BlackRock, Blackstone, the usual suspects, because they're just stepping in where individual people don't want to go. And the funny thing is, is that small investors made up 25% of these, while large investors account for 5. So they break it down to people who invest in three to nine properties. Nine or 10 to 99, 100 to 999 and thousand or more. And the biggest one is always people with three to nine properties. And this is a weird thing. I think I've said before that crypto was the first place where retail was really the big investor. But I guess you could say retail is a big investor in rental units as well. Like, it's. It's people who just own a handful of rental properties. They're not like these big mammoth organizations. It's still the smaller ones that are doing it, and the growing one is just 10 to 99. So it's not like these big firms are doing it. And they say that the smaller people can take on more risk because they don't really have to report to pension funds or outside stakeholders. It's just themselves. And they have less competition now because individuals aren't buying.

[Michael Batnik]

Yeah.

[Ben Carlson]

Which. So, like the fact that this is happening, like they're part of the reason activity is still even. It would be even worse if it weren't for these investors. Even though you got out of that game.

[Michael Batnik]

I retired.

[Ben Carlson]

Technically. You were a real estate investor. All right. Lance Lambert said we've hit three years of mortgage rates at 6.5 to 7.5%. Brief breaks, but that's pretty much been where we've been stuck since 2022. And I've said this before, I never would have believed the housing market would have held up this well with rates high this high for this long. Wouldn't you assume there has to be a 10% correction if rates are going to be that high? There has to be. I think.

[Michael Batnik]

Well, the thinking was backwards.

[Ben Carlson]

It was.

[Michael Batnik]

It was backwards. It was like. Well, no. And maybe it should have been obvious, but I Guess that's what hindsight is, that rates as high we're going to trap people in their houses and there was just supply was just going to be completely wiped off.

[Ben Carlson]

The what would have happened if rates would have stayed under 5% for the, for the last three years? What would have happened? Would it have died off eventually, do you think? Like the fervor of crazy waiting lines.

[Michael Batnik]

For how many millennials are there waiting to buy a house? Was it like true number 40 million?

[Ben Carlson]

Probably. Well, maybe not that high. I think the whole, I think the homeownership rate for millennials is, yeah, probably. I guess it's 55% or so.

[Michael Batnik]

I don't know. Who knows, who's to say what could have happened? Maybe house could have gone to zero. Who knows? All right, Anything's possible.

[Ben Carlson]

All right, this is a cool study someone sent us from constructionphysics.com they wanted to figure out how many vacation homes there are in the United States overall. And I don't know what kind of property records they looked at, but they say as of 2023, there's 142 million housing units, roughly one home for every 2.4 people in the country. 14.8 of them are vacant, 4.8 of those are vacation or seasonal. So 3.5% of the total. So it's a very, very small amount. Then they look at the place with the most vacation homes and it's Florida, 800,000, followed by California, New York and then Michigan in the top five, which doesn't surprise me because of all the water. Does that number seem high to low to you? That it's like three and a half percent of people of houses in this country are vacation homes? A tiny amount obviously sounds exactly right. Think so?

[Michael Batnik]

I don't know. What do you think? Yeah, it sounds about right.

[Ben Carlson]

All right, let's talk private markets.

[Michael Batnik]

All right. Jason Zweig wrote Wall street is promoting a colossal lie. Money matters are in a desperate race to stuff illiquid so called private market assets into funds anyone can buy, including your 401k. They say we all can earn high return and low risk with non traded alternatives like private equity, venture capital and private real estate. Jason is fighting the good fight, trying to warn investors of potential risks and blind spots. And Lord knows there are many of them with private markets. He's not going to win this one.

[Ben Carlson]

Listen, I think the points he makes are valid. On the one hand, the fact that you can that only 5% of shares can be redeemed every quarter or whatever is a quarter or year. Quarter every quarter. That makes sense because these are meant to be long term vehicles. You can't have, you can't have illiquid vehicles be short term in nature. But there are going to be investors who don't understand the liquidity profile of these and they're going to be very angry when they want or need their money and they can't get it out that there's going to be problems with some of these funds. And for sure there's going to be shenanigans with the marks on these things that like the, the marks are not what you think they are, not what they say they are. So there's going to be issues.

[Michael Batnik]

The lack of liquidity, to me that's like the least of it. If you, if you buy this and you don't understand that there is not the liquidity of the stock market that is on you because there is going to be so much disclosures and disclaimers and things out there. If you buy private illiquid stuff and you get mad that you can't get your money out, that's, that's on you there. Like, I think most, most people will understand that. But I do believe that Jason is 100% right about the way that these firms are marketing these investments, are telling the public why they need to get into them. They're doing it for a very simple reason, because the fees are much higher, because there is no liquidity. They can take these fees to the bank. Right? You can get in, you can't leave. So this is very good business for Wall Street.

[Ben Carlson]

I also, this is Wall street fighting back against passive investing.

[Michael Batnik]

That's true.

[Ben Carlson]

Listen, we had this nirvana of low cost investing, $0 trades, basically buying index funds for free. And Wall street said, no, no, no, no, no, we can't allow this to keep going. There's no way. We need, we need our fees. Come on.

[Michael Batnik]

I also think that while there will be a lot of disappointed investors, there will be a lot of returns that are not farmed. There will be risk that people don't know about. All of that is true. Ultimately, I think private managers, this is like a, be careful what you wish for because you know the phrase sunlight is the best disinfectant. A lot of the, that they were allowed to get away with is going to be brought to light by reporters like Jason and others because there will be horror stories, investors will get burned. But I think overall what is inevitably coming, and it is coming, I think will end up at the end of the tunnel, being good for the end Investor because there will be more transparency, there will be more education understanding because.

[Ben Carlson]

There have to be. Right. Fees will come down, advisors will push back against.

[Michael Batnik]

So there's a whole.

[Ben Carlson]

What all that leads to is just lower returns than they're being promised, which probably is a good thing. But I just, I have these experiences working with hedge funds back in the day. And we had one hedge fund who closed because their biggest investor left. Like they had a, they had a huge foundation or endowment and the endowment pulled their money and they said, all right, we have to shut this fund down because we can't do this anymore. So we're like, okay, give us our money back. And then they said, well actually we have some private investments on the books and it took like three years to get the money.

[Michael Batnik]

Yeah.

[Ben Carlson]

And I see those kind of things happening where it's like oh no doubt.

[Michael Batnik]

So But I also, I don't want to paint the entire industry with a broad brush that it's all. Because it's not. There are things that you can get in illiquid structures that are different, that are diversifiers, that are not core.

[Ben Carlson]

They're not, they're not as made up. There wouldn't be that much money in them if this was all like some.

[Michael Batnik]

Made up street rich like infrastructure for example. You just, you can't, I'm not saying that you need that, but you, if you want that you can get it and, and in an ETF wrapper. And when this stuff comes into etf rappers that's a whole.

[Ben Carlson]

And I think that there are some investors who understand the liquidity and want to have marks that come once a month and once a quarter and don't see the changing volatility even it's volatility laundering. They're going to want that 100%.

[Michael Batnik]

Yeah. Who wonder want that? And also people you know, with, if you like talk about position size and you think people are like going all in on this stuff.

[Ben Carlson]

Yes, that's the thing. It's gotta be right sized. And I think that's why places like Blackrock are talking about like 50, 30, 20 portfolios. Yeah, right. All right. This from Torsten Slok makes people mad, but it doesn't really matter. In 2001, people age 55 and above owned 50% of all US household assets. Today they own 70%.

[Michael Batnik]

When you say it doesn't really matter, what do you mean?

[Ben Carlson]

Because it's just baby boomers getting older. And guess what? That money is going to be dispersed eventually. Father Time is undefeated. This seems like oh my gosh but guess what? We've never had a cohort this big before live this long. So this was bound to happen. It's compounding. And then the baby boomers die off and the money gets dispersed. And guess what? Someday it'll be millennials in this position. Time solves this one.

[Michael Batnik]

Yep.

[Ben Carlson]

Okay, so every summer we take a family trip. My parents, for like a Christmas present, bring my whole family, my sister and her husband, my brother and his kids, their whole family. So this is our first year without him, which is kind of tough. But we had funds, went in northern Michigan to a resort and we went to breweries, and the breweries were all packed. We went to a place on the lake and it's packed and there's boats everywhere. Do you think travel anecdotes are helpful for understanding the economy or is that the going to be the last thing to go? Because I wonder if, like, that's, that's not going to be a leading indicator. Like people all of a sudden just stop spending on travel. Like, it's one of those things where everywhere we went was just packed with people. And I just wonder if that is not going to be the, the helpful at all. And that comes, that comes later.

[Michael Batnik]

No, I know what you're saying, but it's the first thing to go because these are the big ticket items, right?

[Ben Carlson]

Because people who can spend on travel will keep doing it and it'll seem.

[Michael Batnik]

Yeah, but, but that, but, yes, of course. So the question is not will it be the first to go? Because it will be for people that are impacted by the economy or their, or their industry. You're not going to cancel your Netflix, so you will pull back on the big things. But I think the bigger point is the upper middle class is so enormous that the travel boom is just different than what we're used to.

[Ben Carlson]

It is.

[Michael Batnik]

I was, it is. I was at. There's a, there's one restaurant on the water in my town and the food is whatever. It's nothing to speak of, but it's, but it's a spot on the water and it's, it's a great vibe and it was packed. I got there. At what time did I get there? Eight o'. Clock. And it was like a 30, 40 minute wait. I'm like, this is unbelievable. I guess the economy's okay.

[Ben Carlson]

Eating and drinking on the water gives you at least a 25% premium and the vibes.

[Michael Batnik]

So it's hard to, it's hard to like untangle. What, what sort of reflection is this restaurant on? The economy or just people just eating out more. And I don't know that's.

[Ben Carlson]

I just don't know if it's going to be helpful for like using that data to understand maybe this is just a big sea change for a lot of people.

[Michael Batnik]

The counterpoint, and this is a lot of this was like foreigners. But we saw a pretty big softening in at TSA numbers earlier in the year in the first quarter. Like they did have a pretty dramatic dip.

[Ben Carlson]

Then it came right back.

[Michael Batnik]

Yeah, it came right back.

[Ben Carlson]

So I, as far as like health stuff goes, I'm a person who hates hacks. I don't like. I think you have to put the work in. You have to exercise and eat right. That's the health hack. I know cold plunges are big in recent years. So we stayed at this resort and they had hot tubs and they also had saunas and cold plunges in between every one of these little townhouse places. And so my kids wanted to do the cold plunge. Like, oh, this will be fun. We'll go in the cold plunge, then we'll go in the sauna. And I did the cold plunge. And I kind of needed it because my kids woke me up and my brother in law still likes to go out and have fun when we all get together. So I went out to the bars. It was walkable. I was safe, home early. But still there was some tequila consumed and let's say I wasn't at 100% the next day. So I jumped in the cold plunge thinking, okay, this is a hangover cure. And it kind of was. It felt good. But I think that's a form of torture. I don't. You can show me all the studies that shows me, like how it's better for your joints and circulation and I think it's just a form of torture. I don't think it's. It's so painful to do, just not fun at all.

[Michael Batnik]

Yeah, I don't think I can handle that. I'm very weak.

[Ben Carlson]

Sauna. I can get behind cold plunge. No way. All right, one more thing.

[Michael Batnik]

Wait, can I just say one thing on the health stuff? So I don't know if you notice. In fact, I'm guessing you didn't. I'm down 14 pounds. My weight is now hovering around 1 69.

[Ben Carlson]

Okay.

[Michael Batnik]

And if that's a secret, it sounds like I'm light. I just have no muscle. I'm not. But no, there's no. Well, I'm just not eating carbs. And I, I've pretty much cut Out. Not. Yeah, I don't eat. Like, I've been. I've just been eating clean, that's all.

[Ben Carlson]

You're mean. Fasting.

[Michael Batnik]

No, I'm not doing that. I'm just not really eating pizza or pasta. Nothing. Nothing earth shattering how that works. But here's. Here's the. Here's the rub. I don't look good. Like I asked Rob, I was like, do I look skinny? She's like, your belly's still kind of big. Like it's not. I feel like. I feel like I look exactly the same.

[Ben Carlson]

£14 is a lot, right?

[Michael Batnik]

But somehow I don't look better.

[Ben Carlson]

I can see it in your face.

[Michael Batnik]

Oh, thanks.

[Ben Carlson]

Yeah, so one of the things. So we're on. We're on a lake and we. There's this huge lake in northern Michigan that's really. It's crystal clear, it's beautiful. Called Torch Lake. And we were driving around to go to lunch place. My dad goes, man, when I moved up here in the 90s, I could have brought. I could have bought four plots of land here for like whatever 100 grand each. And can you imagine how much they'd be worth right now? Millions. He's like, gosh, kicking myself. Will people still be saying stuff like that 30 years from now? Like, I could have bought a plot of land here or a house here 30 years ago and, oh, my gosh. And. But the thing is, you mentioned people just are more attuned to travel and eating out and stuff. Now, I grew up in northern Michigan. It wasn't. People didn't lean into how beautiful it was back then. It's like sometime in the early 2000s and maybe even after the great financial crisis, people finally realized like, oh, these places are beautiful. Maybe we should lean into that and make good stuff for people to do and highlight them. And I don't know if just social media explosion helped that stuff, but are those. Is there no more low hanging fruit? I guess is what I'm asking.

[Michael Batnik]

Yeah, I would say that there is no low hanging fruit the way there used to be.

[Ben Carlson]

I don't think there is either.

[Michael Batnik]

I think there's too much money and.

[Ben Carlson]

There'S too much information.

[Michael Batnik]

So a million bucks compounded at 2% for 30 years, which is like a reasonable growth rate for real estate, right? Yeah, 1.8 million. So it's not like in 30 years, people like, oh, my God, you used to be able to get this for a million. You know what I mean? Because that's like the rate of inflation.

[Ben Carlson]

Yeah.

[Michael Batnik]

So, no, I don't think. I don't think we're gonna be looking back and saying that. So I went to see Fantastic Four. It is the biggest opening ever for one of the Fantastic Four movies, which is not saying a lot because the previous ones were.

[Ben Carlson]

There's been so many.

[Michael Batnik]

But here's the thing. The rare instance where two July movies opened over a hundred million dollars. 2022 was the only other year in recent history.

[Ben Carlson]

Wait, what's the other one? Superman?

[Michael Batnik]

I guess so. Superman. Where's Jurassic? Yeah, Superman, I guess. Movie was certainly watchable. There was some, I thought, some cool CGI stuff. I wonder if Fantastic Four doesn't work because it's just weird. It's like you're in an alternate universe on Earth that is simultaneously in the 60s, but also in like the 2300s. There's like flying cars and futuristic stuff.

[Ben Carlson]

But it's like the Jetsons.

[Michael Batnik]

But, yeah, it's like the Jetsons. And Pedro Pascal, as Reed Richards was. Reed Richards is a dork. Pedro Pascal is not a dork. And the character's fault. Al. Whatever. It was fine. It was watchable.

[Ben Carlson]

Okay, Not. Not a very.

[Michael Batnik]

But yeah, it was fine. All right. Anyway. Anyway, somebody emailed us about the movies. We're at the local movie complex yesterday seeing. I know what you did last summer. 7.43 rating by me. I don't buy that this movie got horrible reviews. But. But, all right, generous review. Anyway, I witnessed an employee carrying a rather large bag of popcorn to the exit in a doordash bag. Was that someone doordashing popcorn? I asked. Oh, yeah. Happens all the time. Oh, my God, could you imagine? So popcorn at the movies is, I don't know, $9, $12, depending on the size, whatever. Maybe. Maybe a little bit more.

[Ben Carlson]

You're probably paying 25 bucks for popcorn.

[Michael Batnik]

$25 popcorn.

[Ben Carlson]

Wow. We are so lazy.

[Michael Batnik]

I mean, that is unbelievable. Because guess what? Popcorn in your microwave, while not quite as good, gets you 80% of the way there. Yeah, it's unbelievable. I can't imagine door dashing popcorn. All right, Ben, continue with the theme of, like, everything is. They're just really leaning into old, old titles. Meet the parents. 4 is titled Fauquin Law. I'm in. De Niro, Stiller, Owen Wilson.

[Ben Carlson]

Man, I. I'll watch it, but I. I won't be happy about it. I have. I have thoughts for Happy Gilmore, too. In a minute.

[Michael Batnik]

Okay. Yeah, I'm. I'm in. All right. Want to give a plug for. We're doing our first webinar for exhibit A. So if you're a financial advisor you've been hearing us talk about, you're like, all right, I kind of want to check it out. We're doing one with Taylor Schulte and the second week of August, I believe.

[Ben Carlson]

So he's an advisor to show how he's using it, Right?

[Michael Batnik]

Yeah. And we've got over 100 advisors signed up. So thank you for giving us.

[Ben Carlson]

Charts of the week are great. Yeah. Check it out. Exhibit A for advice dot com, right? Exhibit. Yeah. All right, so last week, Ozzy Osbourne and Hulk Hogan both died. Right. And, like, when people, you know, die, it feel like whether you know them or not or they're just celebrities, here's something that's kind of morbid. But there are so many baby boomers. We just have to get used to this happening all the time. There's, like, for the next 20 years, all the time, there's gonna be people that you know or heard of in the TV show or the movie or the sporting or whatever that die. And I told this to my wife, listen, this is really morbid, but our parents are in their 70s. My dad is approaching his 80s. In the next 10 years, one of them is probably gonna get really sick or die.

[Michael Batnik]

Yeah.

[Ben Carlson]

And it's a very morbid thought, but, like, with the number of baby boomers, there's just going to be a lot of people that die in the years ahead.

[Michael Batnik]

Ryan Sandberg died yesterday.

[Ben Carlson]

Right. It's a morbid thing, but that. That kind of thing is just going to happen all the time now.

[Michael Batnik]

And Michael Madsen died.

[Ben Carlson]

Think about how long the Oscars thing is going to be in the years ahead. Right.

[Michael Batnik]

So I just pulled up Michael Madsen's this guy ruled. Do you remember that? He was in Free Willy. I saw that at my birthday party in third grade.

[Ben Carlson]

You make every time you think you saw a movie in grade school, you make it up.

[Michael Batnik]

Yeah, there's a 50, 50 chance that happened, but I'm pretty sure it did.

[Ben Carlson]

No, my son and I just watched Free Willy a couple weeks ago.

[Michael Batnik]

I'm sure that is a ridiculous movie.

[Ben Carlson]

Oh, very, very much.

[Michael Batnik]

I know for a fact we saw Secret of the Ooze on my sixth birthday, I think. But Michael Madsen, what a career. Reservoir Darks, Kill Bill.

[Ben Carlson]

I'm gonna have AI go through all of our past shows and see how many times you said you saw a movie on your birthday that you didn't.

[Michael Batnik]

Yeah, I'm sure I'm making up some of these.

[Ben Carlson]

All right, can we do recommendations Go ahead. All right. So I watched Happy Gilmore 2. Did you watch it?

[Michael Batnik]

I saw the first 15 minutes and then I said, I think that was enough.

[Ben Carlson]

I think you made. You made. My wife said the same thing. I think it's one of those movies where your mind was already made up before you watched it. My whole thing with comedies is, would I ever watch this again? And obviously that. That's a pretty low bar, but no, I wouldn't. It kind of joins the list of sequels. To me, that never happened. In my mind, they just never happened. Hangover 2 never happened. Right. Anchorman 2. Nope. Zoolander 2 never happened.

[Michael Batnik]

Hold on, hold on. Anchorman 2. I know we've had this conversation before. There are scenes that are laugh out loud funny. I know the movie as a whole doesn't hold a candle to the first one, but there are scenes.

[Ben Carlson]

I've tried it like, four times, and I could never finish it. That's how it just. So here's the thing. So I wrote this thing about Adam Sandler in 2014, about his how, like, he's just not. You can't be funny for that long because when you get that rich and famous, like, you just can't. And you move into a different. And the thing is, I think for him, like, it was a win. Even though the movie was terrible, like, objectively a horrible movie, not good at all.

[Michael Batnik]

It was the biggest movie of the year on Netflix.

[Ben Carlson]

I'm sure. I'm sure there is a million cameos. Like, Ben Stiller played his same part. And I thought even that maybe this will be funny. And it wasn't like, I didn't even crack a smile once. But he got to make a movie with all of his friends. He got to make it with all these professional golfers. He always puts his wife and his daughter in his movies. Now for him, he gets to go on vacation and work with all these people. And so for him, it's still a win, even though objectively he's making dog shit movies now.

[Michael Batnik]

And you know what? It's Adam Sand. Everyone loves him. Like, I feel like if you're.

[Ben Carlson]

Yeah. He's.

[Michael Batnik]

If you're mad about Happy Gilmore.

[Ben Carlson]

No, that's the thing. I wasn't mad. Like, I understand why they did it. And to him, it was fun. It's just it. Like you. It never works to remake a classic comedy. The only ones that have worked are Austin Powers. Okay. The second one was good. Third one was okay. The National Lampoon movies. Naked gun, naked gun 33 and a third. Hot shots, hot shots, part du. I think American pie two stands up still. I think that one was funny, but it's very few and far between. It almost never works, because guess what? I don't want to know what happened with Happy Gilmore. I don't want to know what happened with the Hangover guys after, like, after it's done, it's done. All right. We watched Warfare last night. Did you see that one in theaters?

[Michael Batnik]

Did I make that up, too?

[Ben Carlson]

Probably. I listened to an interview with the guy who wrote and directed it, and.

[Michael Batnik]

It was Alex Garland.

[Ben Carlson]

Yeah, it happened to him. Right. And he tried to make it as real life as possible, going off of interviews with the people who are actually there. It's about a combat mission in Iraq, and it was very well done, and it felt very real.

[Michael Batnik]

It felt like a documentary. Like, it felt like you were watching Call of Duty.

[Ben Carlson]

It was a very hard, tough watch, though. Very tough watch. Very well done. Very tough. All right, I finished Stick and Day of the Jackal. I would say Stick is like a 6.6, like, entertaining. Few cheesy moments, but if you like Owen Wilson, you like it. David Jackal got better as it went on. I like that one. That's a thumbs up from me.

[Michael Batnik]

Okay. All right. I think. I think I'm sticking with this audio thing, Ben.

[Ben Carlson]

Okay.

[Michael Batnik]

I mentioned this last week.

[Ben Carlson]

Did you get an audible?

[Michael Batnik]

I did. I miss reading. I love learning. And the way that you learn new things is in books, right? That's. That's the deal. Um, but I just don't have the mental energy. I can't commit to reading books. It's just.

[Ben Carlson]

Isn't it easier to zone out to an audiobook, though, than it is when you're actually reading?

[Michael Batnik]

Sometimes, depending on the book. So there. There are times where I zone out. I rewind 30 seconds or a minute. So I listen to Leave the Gun, Take the Cannoli, which is about the making of the Godfather. Now, for my audiobooks, like, I. I am always on the go. I'm always either driving or walking or, like, I always have AirPods, and I'm always listening to something chopping vegetables. I know it's random, but whatever it is, like, I'm always right. I have my AirPods in a lot, so I finished that book, and it.

[Ben Carlson]

Is all of a TV show is based on the offer.

[Michael Batnik]

I don't know. I don't think so, but. No, no, I definitely don't think so. It starts with Mario Puzo, who wrote the Godfather, by the way. He wrote that in Merrick. My Hometown. Did you know that?

[Ben Carlson]

I didn't know that. He was about him is crazy. Like, he. He just made this all up in his mind. He didn't have any experience or he.

[Michael Batnik]

Never met a gangster.

[Ben Carlson]

Yeah.

[Michael Batnik]

So it was all about his journey, his ups and downs until he made this. It was a lot about the studio Paramount, which is owned by Gulf and Western, and the story behind, like, the magnets there.

[Ben Carlson]

Yeah, I like. The offer was good. It was way too long, but it was good.

[Michael Batnik]

Coppola, the production, the casting, like, all of the. It was awesome. And so anyway, now naturally. So I crushed that I'm listening to the Godfather, and I just finished Chapter one, and. Whoa.

[Ben Carlson]

It's the best book I've ever read. Or my favorite. It's my favorite book I've ever read. It was 750 pages or something. And. Absolutely. Because it takes parts of Godfather 1 and 2, the movies.

[Michael Batnik]

Okay.

[Ben Carlson]

Yeah. So there's.

[Michael Batnik]

Anyway, chapter one, I was blown away by. So I know the idea of audiobooks might sound ridiculous. It sounds like cheating. I don't care. I'm an audiobook guy now. Leave me alone.

[Ben Carlson]

I'm a big guy who likes to read books about, like, I'm reading High Fidelity right now because I rewatched the movie recently, and it seems stupid and, like, why would you do that? But I think sometimes you get more out of the movie if you read the source material first. So reading the Godfather made the movies better for me.

[Michael Batnik]

Yeah. All right, that. That'll do it. So thank you for listening. Thank you, Duncan and John and the rest of the production team. Animalspirits@the compoundnews.com we'll see you next. Okay.