Big Tech Concentration: The dominance of mega-caps continues to skew index performance and breadth signals, with outsized influence from names like NVDA and META.
AI Buildout: Strong case made for ongoing AI demand and profitability, with debate on whether we're in a bubble yet; margins and cash flows were cited to justify current multiples.
Data Centers: Meta is building a 4M sq ft Louisiana facility delivering ~2GW to train models, and McKinsey estimates nearly $7T in data center investment ahead; construction spending on data centers is nearing office levels.
Key Companies: AAPL segment revenue comparisons underscored its scale and buybacks, while META faced stock volatility but is aggressively expanding compute infrastructure; NVDA remains central to AI with potential market impact from any earnings miss.
Bitcoin & MicroStrategy: MSTR discussed extensively, including its S&P B- rating, shrinking premium to BTC, and balance-sheet strategy; broader Bitcoin outlook noted as middling YTD despite macro tailwinds.
Regulatory Entrepreneurship: UBER was highlighted as the template for legal-first disruption, informing approaches in complex, highly regulated industries like advanced nuclear.
Consumer Staples Shift: KHC cut outlook as consumers move away from processed foods, challenging the packaged foods category despite management’s sentiment commentary.
Risk Management: Emphasis on Portfolio Diversification and sequence-of-returns risk, with bonds/TIPS as ballast after a decade favoring equities.
Transcript
Today's animal spirits is brought to you by Y Charts. If you're an adviser, here's a stat that might make you pause. Four out of five heirs fired their parents' adviser after inheriting wealth. That's not just lost relationships, it's lost revenue. >> Over the next 20 years, $84 trillion is expected to change hands. The biggest risk to your business isn't the market. It's not connecting with the next generation before the money moves. Y Charts just released its great wealth transfer deck built to help you protect your book, stay relevant, and start those nextgen conversations now. >> It's packed with charts, visuals, and talking points that make inheritance and family planning easy to explain. Download it free using the link in the show notes and turn the great wealth transfer into your next growth opportunity. Welcome to Animal Spirits with Michael and Ben. [music] Uh, one of the conversations in the market over the past couple of weeks, but really reaching a crescendo last week, I think, has been the dominance [music] of technology stocks, particularly like in the last couple of sessions. You see like the RSP, SPY ratio, which is which just keeps hitting new all-time lows really nosediving off of a cliff. So I had chart can make this chart showing the past two days and this was I don't know if this was Tuesday, Wednesday, Wednesday, Thursday, whatever it was doesn't really matter so much. You had 227 stocks over a two-day period that were advancing set differently the remaining 730 or 20 whatever it is fell on the day. And in that type of environment over a 2-day period when you've got that many decliners versus advancers, meaning stocks going up versus stocks going down over a 2-day period, the average return of the S&P is negative 2% on those type of days. And yet the S&P was barely positive on that over that 2-day period, which is bizarre. Um, and it just goes to show that the concentration of the index is having all sorts of really gnarly impacts. Well, I guess having Nvidia be what's the percentage now? Is it up to 10% almost? >> Yeah, it's getting there. So, it it cuts both ways. So, Duality Research, who we've mentioned before, but their work is absolutely top-notch. Worth signing up for their Substack if you haven't if you're not familiar with them. So, they hit on this, too. I read this this morning on the on the way in. um they say this unprecedented concentration that we're seeing is going to keep producing these very weird mismatches between returns and internals. And as interesting as they may appear, cuz they created the same chart that I had Matt do, as interesting as they may appear, these short-term divergences don't really signal much anymore, they mostly just reflect today's index composition. They're coincident indicators, not bearish. So, if you were using the chart that I just have on screen, you'd be like, "Whoa, time out. Time out. Not healthy. Not healthy." But they but they also showed that if you look at the other side of the coin, like the days where you have a lot of stocks going up and yet the index isn't, that's just the nature of a market where the top 10 names are 40% of it. It's going to keep happening. >> Right. This isn't going to like go magically disappear all of a sudden. >> Right. Right. >> You know what else though? I have a problem with this. The word breath just it's hard to say. It doesn't look right. Um, >> well, you saw the I mean, did you see >> I think that was subliminally planted in the in the in the inbox. You saw that email. >> No. >> So, somebody emailed us and said, "Stop saying breadth thrust. It is really unnatural off the tongue." And I would agree. >> Problem is >> problem is that's that's the term. He suggested calling it a bread crust, I think, which is easier to say, but you can't it's Marty's wife's bread thrust. It's not a bread crust. So, I'm looking at the returns right now and we're recording this Monday because you and I are going to Vegas tomorrow and we'll be there for the annual FBA conference. So, if you're out there, say hi. Even though this will record by the time we're out there. Um, the Russell 2000's up 13% year to date or so 12%. Um, equal weight is only up 9% and then midcaps are only up 5% this year. So, so there is still this pretty wide divergence. I think this is this is why international diversification is shining this year. Like this is the time that it matters the most because emerging markets are up 34% and EHA's up 28% or whatever it is. >> Like that that's why like the currency piece is such a big deal with that type of diversification as far as I'm concerned. But you're right, even if like a million other stocks do well in the S&P, it's not going to matter, right? Because the it's these big stocks right or wrong and it's going to be like this for a while. Yeah. Um, they also have another chart showing, listen, you can't say you can't use that data that we open the show with to say that breadth sucks because if you look at the equal weight version of the S&P, the NASDAQ, and the Russell 2000. So, within those indexes, you equate all the names, they're all within 3% of an all-time high. So, yes, there are a lot of names that are in the AI crosshairs that are getting smoked. That is true. But a lot of stocks are doing just fine. >> So the the way the stock market acts and if my CNBC's thing here is that it's not a stock market, it's a market of stocks, right? [laughter] If you look at the market of stocks, it's just going to seem the it's going to seem weird for a while because of the way the market's structured now. >> Yeah. The concentration is having is having weird impacts on both both sides of the bread coin. >> So Nvidia eventually has its bad earnings report. It's going to happen at some point. It's It is funny how I mean there was a little bit of movement in some of the big tech companies for earnings last week, but I mean there still hasn't been this like wo kind of moment, right? Like one of them just >> just so see you're not a market of stocks guy. I am. >> Uh >> sorry, but Facebook down 10% that to me that's not a wo. I need like a down 20 or 30% to go oh my god. >> Hang on. Facebook's not going to fall 30% on a day. What are you talking about? >> It's done that many times in the past. Yes, it is. That's going to happen. One of these AI stocks, yo, >> Facebook is not going to fall 30% in a day unless there's a massive accounting fraud stock. >> One, no. One of these stocks is going to hit get hit 20 or 30% on some AI news. It's going to happen, but that's going to be the end of this thing. >> All right. Perhaps. But >> Nvidia, no. Let's let's move the goalpost back to where you originally moved them from. Meta had a pretty bad week. Google went vertical and Amazon was up 10% to an all-time high. It's been a while. >> There hasn't there hasn't been one that's gone. Oh my gosh, this is a like to me that's going to be the signal. One of >> I know you said something. You moved the goalpost. I tried to move it back. You tried to take it back. There were big moves last week. Let's leave it at that. >> I'm pretty sure Met has been down 20% in a day before. That's not out of the realm of possibility that >> maybe when it was maybe it was a $300 billion market cap. It's >> can't you think it can happen? I I think it can. >> I said it I Okay, don't say 20 or 30 because those are very different numbers. >> I think 20 to 30 in that range. I think that No [laughter] table. >> 30 is very different than 20. Can it fall 20? Yeah, sure. Perhaps it would have to be really gnarly. But to fall 30 in a day would have to be either an accounting scandal or Mark Zuckerberg. I don't even want to say like, you know, something bad happening to him. >> What if he pivoted the company to the metaverse and changed the name from Facebook to Meta? Would that do it? >> Okay. I I think it's I think it's possible. You you don't, but I because of the gains these companies have had. If there is if there's a really bad Oh my gosh, we spent $300 billion too much. Boom. Up in flames. >> Yeah. Over over maybe maybe over a week it could it could lose. >> But I'm saying if if let's say that happens to Nvidia and Nvidia is down 15% in a day. Like it's going to do weird things to the market. >> Yeah. Interesting. Daniel, you see how he's he keeps moving it lower and lower? Yeah. Can Nvidia fall 15% to the day? Sure. That was the point I was trying to make is one of these companies is probably Nvidia is going to have a bad earnings report at some point and it's going to cause weird things to happen to the overall market. >> All right, let's move past this. We all we we agree 15%. I'll give you that. >> Okay, 20 is going to happen. Just mark that. >> You said 30. >> I can't wait to revisit this in the future cuz I said 20 to 30. I'm putting book ends on it. All right. I wanted to see where this thing stacked up. So, one of the great things about Chart Kid Matt is that I give him an idea and I say, "Hey, this is the chart I want to look at." and he makes it look better than I had it in my mind, right? That's why he's he's so good for us. So, I said, I want to I want to compare this to past meltups. I want to look at the down the roaring 20s. I want to look at Japan in the 80s. I want to look at the NASDAQ in the '90s. Compare the last 10 years to this. Okay? He does this. I got to be honest, these were way closer than I ever imagined they would be. [laughter] And um so, the past 10 years, the NASDAQ 100 is up more than 500%. in the roaring 20s. And now I measured this from 1921 because there was like a depression in 1921. So from there and through the end of the through the peak in 1929, the Dow was up almost 500%. In the 1980s, Japan was up 510%. The only one it really is not close to his NASDAQ in the 1990s, which was up 800%. >> Does it get there? >> I guess that's the thing. A lot of people were when I posted the chart, I knew it would kind of go crazy and it did. And a lot of people said, "Hey, we got two or 300% left to go." Um >> Oh, yeah. That's how it works. >> I don't see how you could look at this chart and not say, "Okay, I'm a little I'm a little concerned." And now my Grand Rapids hedge here is listen, all of these other periods resulted in a huge crash, like a mind-numbing crash. I would be way more comfortable, and again, I'm putting this on the table, Grand Rapids Hedge, so don't even call me on it. I'd be way more comfortable saying the returns are going to be far lower in the future than they are going to crash. I'd have way more confidence in that because the NASDAQ is up 20% per year over the past 10 years from the bottom in 2009 of Mar March of 2009. Cherry-picking fair. It's up 22% per year. The NASDAQ 100. >> We can't continue to see gains this big. It'll swallow everything. These companies will swallow everything. It's impossible. >> Remember the book Scale? >> Yes. >> Where it spoke about the law of nature and why elephants can only get to a certain size before their bones would just crumble. >> Yeah. Yeah. I think we mentioned this like a couple months ago. Did we? >> But yeah. >> Well, that sort of dynamic does does exist. Like I don't and I think you would agree. Who wants this to go to 700%. The higher it goes within a shorter window. Now, if we could go up 700% over the next like six years where it's up, you know, 11% a year, not 22%. Yeah. All day long. But you should not be rooting for this to look like the previous ones because at some point you're setting yourself up for just major disappointment. the numbers become too big that all growth prospects in the future, you just discount them too much, too far, too fast. >> Yeah, we we I would love to see just a Let's take a breather here. We don't need to get see this thing get crazy. Um, you'll notice on this chart, there's a huge gap. He did it by years between the 1930s and the 1980s. There's there's no meltups here. There actually was one in that time. So, a lot of people said, "Why do you include the Nifty50? The returns weren't nearly as close." Um, I thought about maybe putting gold in here in the 70s, but that would kind of defeat the narrative of the chart. There was one that was in this same ballpark, and it didn't end in tears. In the 1950s, the whole decade of the 1950s, the S&P was up 491%. On par with the Roaring 20s, on par with Japan in the 80s, on par with the NASDAQ over the past 10 years. >> So, why didn't you put that in here? >> I thought about it after the fact. I'm not going to lie. >> Um, >> but but I put the corrections in here. I have a I have a whole table in one of my Excel charts that's historical corrections. You can see in 1959, the S&P fell 14%. In the 1961 and 62, it fell 28%. 1966, it fell 22%. So it didn't it this there was no bone earthshattering crash here that caused the 1950s bull market. It kind of ended with a whimper and and now that one to be fair wasn't like this innovation driven thing. That was a middle class thing World War II sigh of relief great depression's over kind of thing. Um but that was one if you want to point to an instance where you had a meltup and it didn't end in a meltdown. So, I I I would say that if if we are we are um it doesn't have to end badly this time, but if you get another 25% year in 26 and another 25% year in 27, then I see no way out. >> It will. Yeah. I I just >> So, >> I'm a broken record here, but there you diversification hasn't helped you at all in the past 10 12 years. I if you're not diversified now because of this, I think now is the time. >> Well, maybe maybe that's the conclusion. If you are all in on the on the NASDAQ or the S&P right now, um certainly if you're near retirement, I mean, what are you thinking >> exactly? And and there are pe, you know, there I'm sure there are people who are all in and keep pushing the foot down on the gas. Um but we have these conversations all the time who people who have made insane wealth off of these names going, I need to I know I need to diversify. Please help me. Yeah. It's not like people are saying, no, no, no, keep me on. And I I want to keep pressing that. That's not happening. All right. Take him who wrote the book on Nvidia. He works for Barons now. Where else has he been before? CNBC, great reporter. He wrote this thing about why AI is underhyped and it is in a bubble yet. And he did this whole really long thing, but then he did a TLDDR. So, it's worth reading if you want to click through. He did this on Twitter. Um, here's his bullet points. And I I actually think it's easier right now to make the case and more believable to make the case a is a AI is a bubble versus it isn't. Don't you think that it's more believable to say it is a bubble versus people who say no no no it's not a bubble? >> Depends if if you're just talking about like quick quick sound bites then yes easier to make the case that it's a bubble but I think it's very easy to make the case that it's not a bubble. So back to you. >> No I think if you did the deep deep dive analysis and charts like it's way easier to make the case that it's a bubble than not. >> Oh really? Okay. I I disagree but go ahead. >> Okay. All right. We're disagreeing today. Um here's his bullet points. Big tech valuations are reasonable and leverage is low. We're the beginning of a multiple AI super product cycles in years ahead. We are in the early innings of a technology computing shift to AI, the largest in decades. Think 94 versus 99. Every credible source reports overwhelming demand for AI computing capacity. Where is the over capacity glut? Nowhere. That's this is the teal. And again, he has way more that goes in each of these. >> So, I mean, that that that's a great that's a great mic drop. I think there's obviously a lot of different shades of black and white here. Maybe you could even call it gray. For example, over the weekend, >> my my mother who only who only consumes our podcasts through the Instagram uh reels or whatever that we do, you know, the short sound bit. >> Did she Did she watch my horror movies yet? >> I don't think No, she she's notorious for messing up sayings. And she said, "I just want to thank Michael for being in the same boat as me for messing up sayings all the time." Cuz we replayed your thing about messing up your broken arrow or broken, you know, >> first of all, uh the great actually the great the terrible Jared Allen once said, "The lights are brighter than I expected." when it came to Madison Square Garden, something happens to your brain, at least to my brain, when the light goes on. I don't know what it is. It scramles the signals, things get twisted, but it happens to me offline. So, the the the part about them still being behind capacity. Now, again, on the flip side, all right, well, Nvidia has a $5 trillion market cap. Like, so so so what? Who cares about capacity? We're talking about bubbles and valuations and expectations. to which I would say uh duality research throw the baton back to them. They say for us it all comes down to profitability. So if you're comparing today's 22.8 times multiple to the 10-year average you're also comparing it to a period when margins averaged about 12.3%. Right now they're closer to 14.5%. And that context matters. So he did this thing where you you margin adjust the PE because why wouldn't you margin? It's the biggest driver of valuations. Higher margins deserve a higher multiple. Counterpoint. All right. Well, how do you explain Open AI? $13 billion in revenue, a trillion dollar market cap. Now, could you tell me that Open AI could be a trillion dollar market cap in 20 years from now and that could be it and it could just be horrible returns for shareholders? Yeah, I buy that hook, line, and sinker. Absolutely. But to say that it's a bubble, again getting back to my definition of a bubble in which there's no inconceivable world in which this doesn't fall 70%, 60% and stay down that I don't think we're there. >> I think you're hung up too much on the definition here. The the falling >> not words matter. Words matter. >> I I think you're falling you're you're too hung up on the it has to fall and then never come back. Like I don't >> But that's what a bubble is. That is what a bubble is. It is an environment in which the future cash flows >> in no in no outcome in no plausible outcome can match the hype of today and that is not this that's not this >> so that that's the cliff as said like the definition of a bubble is there there's no future potential that can match what the fundamentals are saying right now you're right there is a world where that can happen >> so the of course there is so that's why I don't feel comfortable saying yes this is bubble Now, if we're up 25% in the next 2 years and it's mostly multiple expansion, then I will probably say something different. >> So, you're saying, listen, these stocks can crash and doesn't necessarily mean it's a bubble. >> No, that proves nothing. Amazon fell 50% along with Google in 2022. Was that a bubble? >> All right. I'm sick when it's a capex level. I I don't think I don't think the amount of spending that we're doing can match what the returns are going to be. That's that's kind of where I land. And I don't think that necessarily means that it's a systemwide crash and it's never coming back. But I I think that there the spending is the expectations are too high for the level of spending. >> Expectations on whose part? The investors or the companies? >> Everyone. The companies. The company companies especially. I think they're they're way too in and they don't really care. I don't think that they care if this is a bubble or not. They're just trying to win. That's it. All right. Speaking of diversification from before, Jason Zwag, should you just buy stocks until you die? This is a very good piece. Did you read this one? >> Yes. >> Okay. So, he talks about the luck of the draw when it comes to being in stocks. He said, "Consider two hypothetical investors, each with a million dollars invested in the S&P 500. They both withdraw 4% a year in equal monthly installments for the next 20 years. One retires on December 31st, 1999, the other on December 31st, 2002." Of course, between 2000 and 2002, there was a bare market. The market crashed. He said the first investor would have a little more than 890,000 left after 20 years. The second would have a little more than $4 million. Obviously, don't include fees, taxes, inflation, all that stuff. Um, and then a really good chart here just kind of this is the sequence of return risk that if you happen to retire at the wrong moment, if you happen to invest at the wrong moment, um, there can be two diametrically opposed outcomes through no fault of your own. you could follow the same exact script. The process is perfect. The investment process is sound and you could get much different results. And his whole point is um he says that's why I still own some bonds in my case TIPS. And I think you should too. The historical odds and current government policy are against them, but stocks are also far from a sure thing. Of course. Yeah. This is I mean to to us this is obvious, right? I think obviously not to everybody. Um, it doesn't, nobody's gonna be mad if you went from 7030 to 5050. Now, you know, depending on your situation, and the market does go up 25% over the next two years or three years, you're not going to be like, "Oh my god, I miss it. How could I be such an idiot?" But secrets of return risk is real. And just because stocks have higher long-term expected returns, by the way, the fact that we're even having this conversation makes me like cringe or makes me a bit like, why are we even talking about this? Obviously, you shouldn't be all in on the market. >> Yes, but but it's at this time in the market when some people need that reminder. I think like I've seen a lot of comments like, "Why would I ever own bonds? What's the point of cash?" I I think there are there is some of that. It's not it's not everyone, but there's some of that going on. I actually one of my readers I heard from a lot early in my blog days, he he sent me this whole thing. He he retired in 2000. I think he said March of 2000, which was actually the top. and he gave me this whole thing about how him and his wife survived it. He's like, "I retired early." It was in March 2000. Literally the worst that that's the worst entry point in stock market history. You could say the Great Depression, but um no one really invested in stocks back then, which that's that's my one um problem with the 1929 book from Andrew Rosen. Great book. He makes it sound like everyone is invested in stocks. 60% of households are invested in stocks now. 2% were back then. It wasn't >> Yeah, definitely. >> No one invested in stocks back then. Anyway, so this guy says, um, how did we do it? We kept four years in cash and we rebalanced and if stocks were down, we took from cash. If stocks were up, we took from stocks. And he's like, it was really, really difficult. And this guy, like he managed his money to a tea. Um, he actually I I get emails about it all the time. He created this thing called the four-year rule, and I wrote did a write up about it like I don't know 10 years ago, and I still get emails about it this day because people ask for his like longer version of it. Anyway, um but if you don't have some sort of plan like that, like a backup plan just in case because guess what? You don't get to do the Monte Carlo thing when you retire. You don't get to try it 10,000 ways and see which one's the best. You have one shot at this. >> Yeah, maybe I take this for granted that because our advisers are doing this all day with our clients, but my god, this is so obvious. Hello, risk management. You can't your life can't depend on the stock market for God's sakes. Especially after this run that we've been on, it's treated you very well. May continue to do so. Who cares? Plan for it not plan for this not to continue. >> Yes. And again, I I think most baby boomers investors recognize this that they're retiring. Like they know and they've lived through enough crashes to understand like this is not going to last forever. And I'm probably far richer than I ever would have been otherwise >> right now. But I I think I think this is the kind of thing that's worth a reminder. >> Yeah. No, you're right. There was a really good story in the Wall Street Journal about kids versus adults and basically saying um things are way better. So it's the economy that's great for parents lousy for their grown-up kids. And they go through all of these different stories about the parents who are doing well. They have home equity that's up a ton. Their stock portfolios are up a ton. They have kids who are graduating with PhDs and these different jobs. And it's hard for them to find a job. And they they looked at the survey result and they looked at people like themselves, the baby boomer parents versus their children and like can keep up with expenses, have enough money to buy a car, pay an unexpected medical expense, buy a home, find a good job. And obviously all the older people, the parents have way higher responses than the kids, right? It's way lower for the kids. Um, and >> do you think it's ever not like this? >> I that's I wanted to have two things here. One, it's a tough job market for some people, especially college graduates. Two, um, suck it up, right? I had a terrible job experience when I first came out of college. I think the difference between now and like any time in history before this, today, people want others to feel sorry for them. It's not just like recognize the fact that there's a tough whatever. Um, it's tough to buy a house, it's tough to find a job. I need everyone collectively to agree that they should feel sorry for me. I don't think we had that when we came out of a tough job market in 2008. There wasn't >> What was unemployment in the GFC? Did it hit almost 10%. >> There was 10%. That was the high. Yeah. The unemployment rate is 4% right now. So, yeah, there's there's pockets of like where things are starting to get bad. >> Imagine millennials complain and not imagine we did a millennial I mean I had nobody to complain cuz I was an idiot, but millennials that did the right thing in in college um complaining about not having a job when grown adults were getting laid off in their 40s. It's like shut up kid. I have kids. >> Yes, that's the thing. We didn't get any no one gave any sympathy to young people back then. That's all I'm saying. >> So, I think that of listen, of course, like I I am a sympathetic person. I don't like to see this. Um, it is weird though because on the one hand, like younger people tend to be more optimistic than than older people. >> I made this comment to you. >> Go ahead. >> I made this comment to you and Josh last week. I feel like it's always been younger people have this optimism and today I feel like it's getting it's getting broken. All the young people, they are they're way more pessimistic and cynical. And I think it's just because they grew up with the internet and social media. I don't I don't think they had a chance. So, young people have way less optimism than than they did in the past. They're way more cynical. >> Are young people This is a dumb question. Like, are young people on Twitter? >> I don't know. They're on TikTok and I don't know. I feel like it is more of a middle-aged Gen X late millennial thing for most people. But I I do think you you hate talking about demographics. But I do think the demographic stuff in the years ahead is going to be the the divide between the demographics is going to be worse than ever. So, um, Eric Finnegan from John Burns sent me every 6 to 12 months he sends me his demographic presentation that he does. And I pulled some charts here. And the thing is part of the the difference now between young and old people is part of it is things are just, you know, they're they are harder in some instances, but some of it is just life choices. So you look at uh annual birth by mother's age and it's under 30 versus 30 plus and for the first time ever more people are having a child plus 30 than below 30. It's never h right. So it was it was way different back in the 70s ' 80s and 90s. Um of course this one this is probably the one that gets people the most is that the first-time home buyer is 38 years old. It really hasn't budged off of like 30 31 since the last few years. But you have the largest population group this year is turning 33 to 37. If you break down the demographics into these these cohorts of like four or five years. Um I think that's part of the reason that it's causing this. There's so many more of these 30-y old people than ever before. This is like the rabbit going through the snake right now. It's young people. Um and this one gets people too. So this is Americans reaching other typical adult milestones later in life. So, this is percentage of 30-year-olds um living on their own, married, with a child, own a home, or have a bachelor's degree. And bachelor's degree is obviously the only one going up. And that's part of it, too, why people are putting off this stuff till later in life because they're getting more education. And how many young people these days want to even settle down? I think a lot of it this is life choices, too. >> You think this is like a structural thing, not just a real estate thing? >> I think this is I think part most of this is structural. Obviously, this is the worst time ever to be a first-time home buyer, but I think a lot of this is life choices, too. People are going to school longer. They're waiting to settle down longer. They don't a lot of people don't want kids till later in life. They want to enjoy it. Whereas in the past, it was like, yeah, let's just do it. Everyone else is doing it. Um, so anyway, I just think the demographic like divide though is and it's also we talked about the luck of the draw thing with Jason Zwag and and when you retire, a lot of the luck of the draw thing is going to be do I have rich baby boomer parents or not? Can they help me with a down payment? Will they give me some money or will I get an inheritance from them someday? >> I think that's going to be luck of the draw, too. Were you Did your parents save were they fiscally responsible or not? Does that some of the people that's that's their retirement plan. We've talked about this. Anyway, you you hate generational warfare. I think it's going to be worse than ever in the years ahead. Not going to get better. It's going to get way worse. >> Uh yeah, not my favorite topic. >> Okay. I shared with this with you on Slack this morning. Um >> no, you know why? Because it's just like it's just like a bummer. I don't like that stuff. >> It is a bummer. I I totally agree and I I just don't see it getting better anytime soon because I was you you and I probably in a similar boat here. I was so naive to the world around me when I was younger in high school and college. I knew nothing besides what was going on in like I had the blinders on. I didn't pay attention. I still remember when we had the Bush Gore election. Me and five or six friends went to a house of our friends that had a party house cuz we were I think we were a freshman in college. We watched the election. I don't even think people talked about who they wanted to win. No one really cared. We stayed up till 3:00 or 4 in the morning. They still didn't name a winner and we all went home. And guess what? We never talked about it again after that once. We didn't. It never once came up in conversation. >> Yeah. If you ask if you ask me, I mean, I was a little bit younger, but whose policies do you like better? I would say, uh, yeah, sure. But now if if you're a young person, you know everything down to a tea about these politicians and the and you're paying attention to this race in Iowa and this race in New York and like >> that stuff just didn't we wasn't on our maybe that says more about me and my friends than anything back then, but I think that was that was more people, right? We didn't have to care as much. And today young people feel like they have to know everything that's going on. All right. Um so there's this viral thing going around lately saying from Moody's the top 10% of earners account for 50% of consumption. We've talked about this a lot. this guy from University of California, this economist, Antoine Levy, he says, uh, this this isn't this stat isn't right. It can't be right. And he says the biggest reason is, um, rich people pay higher taxes, they have higher savings rate. So, he kind of backed into this and said, if you look at just the fact that people pay higher, rich people pay higher taxes. He's saying, I think some of the numbers are kind of, it's not like Moody's is fudging these numbers, but they're not exactly accurate. He said the number is probably more like 35 to 40% of disposal of of consumption. That's pretty high. >> I mean, does that change anything? >> I think the point is how you perceive the data. >> The trend is going higher. But the the funny thing is is that the 50% number, no one even batted an eye because it just seems like that's what it should be. You're right. May and maybe that the point is the trend is moving higher. And even if it's not 50%, the thing is the top 10% does account for like 50% of the income in this country. We were talking with Stephanie Roth last week on TAFF about why a lot of the spending wasn't impacted by higher interest rates and it is the top 10% the top whatever percent their ability to get alternative financing at lower interest rates and not have to slow down their spending is a structural change in the market. And I don't know what slows that other than something a credit event or something with the labor market, but even then a lot of these people are I mean certainly the retirees are are insulated from the labor market. Now if there's a big labor market impact the stock market will come down and it's circular logic but >> the the stuff that we're seeing the wealthy people have never had more options than they do today in terms of trying to manage their taxes or borrow money against financial assets. >> Yeah, >> there are so many other strategies. >> Yes. that wealthy people have that you're right. They were kind of like the mag seven companies that that didn't get impacted by higher rates. It was the same thing. >> Uh so here's the other side of the equation. Uh from Apollo, 25% of the US population has a subprime credit score. That's pretty gnarly. >> I wonder. So what's the number on that? I guess >> 680 I think. >> 25%. >> That's kind of nuts, right? >> No, that sounds right to me. Honestly, I mean, if you think about it, not everyone is in a mature financial position. Think about how many young I said the biggest cohort in the country right now is 33 to 37. How many people come out of college and their finances are awful? >> Is there a way to see your credit score score over time? I would love to chart mine. >> That's a good question. I don't know how that works. Like, so you think that at like when you first graduated from college and you're working as a waiter, like your fin your credit score was like negative essentially if that was >> I know it was. So, the first job opportunity, the first real one that I had, I've told this story before, but it was at Erade uh in Garden City, and the guy gave me an interview and was like, uh, yeah, you're going to take over a book of whatever it was, $100 million, and you're going to talk to these people, and you're going to try and upsell them, and you have a base salary of $60,000 with some opportunity to make more. And I was over the moon, excited. At that point, I had been unemployed. This is probably 2010 11. So I was unemployed for like two and a half years. Like literally unemployed. My eye was twitching. I had an eye spasm for two years. Um because I was so upset. And anyway, where am I going with this credit score? Right. So I didn't get the job because when they were doing their background check on me, they found a ding in my credit report. And in the interim, the guy that hired me left and the new guy who replaced him brought in somebody else. So yeah, my credit score sucked and impacted my job, my life in a serious way. >> It is it can it can tens of thousands of dollars over the course of your life, maybe hundreds of thousands if you had a good credit score, >> by the way. Well, for me in the opposite direction because my career trajectory would have been it can it can totally change your >> Yeah, >> but thank but thank god my credits suck because otherwise who knows where I'd be. Not here. Not talking to you, Ben. >> Okay. There are those forks in the road, right? >> Yeah, that was a major one. >> Yes, it is. This is something I would also tell young people. There are times in your life when you don't get a job or things seem really bad. I had many of those and I thought the world is over. This is it. The end of the world. And you look back at those and you go, gosh, that I I was so lucky that that thing didn't work out for me. >> Oh, yeah. Did you Did you ever apply to the Bermuda Monetary Authority? Things that bad for you? [laughter] >> I I lost a job once because I was trying to move to Chicago. My brother had a condo in Chicago and I used his address and they were sending all the correspondence to him and somehow he never got it. It was And um I finally emailed them. I said, "I haven't heard back from you." They said, "Hey, we offered you the job uh but you never responded." Um, yeah, that was a low point. That wasn't great. Uh, I think I went straight to the bar from there. Anyway, guess what? It worked out. I would have been miserable. It was like a real estate analyst job. It would have been awful. Wouldn't have worked out good. All right. Um, let's talk tariffs for a minute. We've had lots of conversations about why why aren't tariffs having a bigger impact? Um, from the ramp economics lab, R. Carzian has this great substack and he said, "Why are tariffs so confusing?" This is the big thing. Um so ramp is this company that helps people pay invoices and automates a lot of the financial decisions. So they have a ton of data to come from. So he said ramp data from manufacturing and retail sector invoices shows a slow and gradual increase in tariff costs. The share of bills and invoices showing a tariff charge has doubled from 1.4% in 2024 to nearly 3% as of 2025 September. Um so basically saying it's still a very tiny number. It's way so he he goes through this whole thing in this and it's worth reading the article, but he basically says if you just looked at the announcements, you'd think, "Oh my gosh, this is unbelievable." But if you look at the actual numbers and how many companies are actually paying tariffs or consumers, it's way smaller than the announcements. So companies are finding ways to skirt around these. They're not paying them. It's not having an impact because people aren't the tariffs aren't being paid as much as one would think. And we actually have a podcast. When is it coming out? Saturday, maybe. >> Saturday. >> Okay. All right. So, we have a podcast coming out with him talking about this and AI and it's it's really interesting stuff. So, should be out soon. >> All right. Um, on the AI front, we we talk as stock market people, we talk a lot about the market cap, the tweets, the charts, whatever. Um, and I don't think we spend enough time talking about like the underlying fundamentals about what's actually happening. So, our friend Michael Sitchmore has a great Substack and podcast called Alt Goes Mainstream. And in the most recent edition, he wrote about um what Meta is building in Louisiana, the Hyperion thing that they're doing this interesting financing with Blue Owl and Pimpan, everything else. Um it's 4 million square feet. It's a 4 million square f foot data center that's being built in Louisiana that will deliver over 2 gawatts of compute capacity to train future open source large language models. So for for context um 5 gawatt would be enough to power the entire city of Miami. So when you talk about the infrastructure the data center the capex bubble this is where it is. >> You know it is kind of funny. This is kind of a gotcha thing, but you could say like there's people who have been pounding the table and screaming for years like, "Why don't we build anything in the US anymore?" And they're probably the same people going, "Why are we building so many data centers?" Um, now you'd probably say like, "Why can't we just build more houses and stuff?" But this is one of those things that, you're right, we're we're actually building stuff here and these this isn't just this is this is actual actual stuff that's going to matter in the future. So they they say McKenzie projects that these data centers are projected to require almost $7 trillion to keep pace with the demand for compute power. So if that is even remotely within the realm of what happens where you're seeing 67 trillion being spent over a given time frame and ostensibly the spend is because there's revenue tied to it such that the investment makes sense. If you get those sort of numbers, then looking at it today, it's not outlandish. I mean, it's it's hard to it's hard to think about numbers of that size, like of that scale. So, for example, all right, let me put this in the dock. I had chart Kid um make this. So, we looked at Apple reported last week. We looked at all of their different segments and Apple I think did Apple cross 4 trillion? >> Yes. the Okay, >> which is funny because Apple didn't get into the AI stuff at all and they're still at all time highs and still $4 trillion. >> All right, the iPhone over the last 12 months has done more in revenue than Bank of America. The iPhone has done more revenue in the last 12 months than Meta. All of Meta. >> All right, that one surprises me. And I do kind of get it though because my wife and I have both lost phones in the last year and it's not cheap to replace. I will say that >> services which is the uh bell of the ball. This is the highest margin business. This is pushing their margins to an all-time high. Services business did more revenue than Target 109 billion. If you look at the wearables, okay, the freaking wearables, dude, it did almost as much money 36 billion as Starbucks which did 37 billion. Starbucks has 80 40,000 stores globally. I mean Starbucks. It's Starbucks. Salesforce did 39 billion. Okay. Um turn into the Mac, the computer. The Mac did more revenue 34 billion than Schwab. And lastly, the freaking iPad. The iPad. I know I'm saying it's not for three times the iPad, which in my mind I I don't know what I would have guessed iPad is. I would have guessed5 billion10 billion dollars. The iPad did more revenue in the last 12 months than AMD. >> That's a good chart right there. >> And they're buying back hundred billion dollars of stock a year. >> So I guess that I was going to get to this in a minute, but um there was a chart uh what was it? >> My point is we we're not even we're not even pretending to zoom in often times when we're having these conversations. And when you do when you look at some of the numbers, it's like all right, give me a guess. So there there's this number this subset called understanding AI um and they they show that the cash operating cash flow versus capital expenditures and it's so this is for Google, Amazon, Meta, Microsoft and Oracle and the operating cash flow is still there's a huge wide gap between there there's more than enough cash flow to cover all these capital expenditures that and to your point with Apple that's because they make so much darn money these companies and they're not even listed on this obviously because they're not getting into it. >> Um okay that's good stuff. I'll give you that. >> All right. I want to uh I want to play this video. Let me share my screen. Okay. Somebody tweeted this from Neil Degrass Tyson. Did you see this, Ben? >> No. >> Okay. Here we go. I've been doing calculations as well as looking back at old NASA footage and raw data from satellites hovering above Earth and I just can't escape the conclusion that the Earth might actually be flat. That's not me. It was never me. Those aren't my words. That's what's called a deep fake. How wild is that? >> So, wait, the earth really is flat? >> Yes, that's what I'm trying to So, boomers are going to get scammed into the stone age and not just boomers. I got a call a couple of weeks ago. I was with Chris, actually. Somebody from Germany was trying to log into my Google account. I got a I got a push notification on my phone. I hit no, obviously. 10 seconds later, I got a call from Google, right? It says Google on my phone. Now, Google doesn't call you. Okay. So, but I but I was like, "Wait a minute." Uh, what? So, I was I was getting scammed. Thank god I hung up the phone. But that doesn't even scratch the surface. Like, that Neil Degrass Tyson video and what's coming is going to make the crypto scams look like uh >> so look like my brain is breaking it. What does it look like? A walk in the park. Sure. >> Isn't this Can't there be a whole industry that crops up because of this though? like we're we're going to be the ones that tell you what's real and what's fake. >> Well, I guess that's >> by Flack or whatever. >> Uh by Crowd Strike, for example, like these cyber security companies are the obvious secular winners for the next >> for the next decade. But it's it's it's wild what's coming. >> Okay. Um I got a data center one for you. This is also understanding AI. Uh it shows data centers are catching up to offices. So it shows annual construction spending for data centers and and other offices and data centers is almost closing the gap to be bigger. Here's what I want to see from the Wall Street Journal. There has to be a story of which construction companies are getting rich off of this. There has to be some someone who is other ancillary benefits to people who are working on these data centers and and making money, right? There has to be other outside impacts besides just the tech companies. >> Well, yeah, >> this is helping someone. >> Who's getting these contracts? >> That's Yeah, that's a good question. And I I mentioned this to you and Josh last week. We talked to a farmland manager who said because farmlands are tend to be by resources that have a lot of water. Um farmland investments are now getting bit up and farmers are making money because they're trying to buy these data centers or build the data centers on farmland because it's so close to water because they need the water. There's going to be so many knock-on effects like that. Now again, people are probably mad like what wait the build out of the data centers is taking away construction workers from building other offices and building houses and blah blah blah. But I I still think like the fact that we're building this stuff in the states, that's that's a net positive for us. >> Yep. Lots of jobs. >> All right. I want to talk about AI and jobs. So this is from Wall Street Journal. Tens of thousands of white collar jobs are disappearing as AI starts to bite. >> By the way, Derek Thompson tweeted Derek Thompson made this chart like two weeks ago and everybody's stealing it. >> Which one? >> This one. >> Okay. Okay. So this is the S&P 500 versus total job openings and it shows when chat GPT launched, job openings crashed. I'm sorry. This is a massive chart crime. Massive. This this if you're trying to say that Chad GPT coming out is causing job openings to fall that quickly. This is the N this is the Nicholas Cage thing. The number of people who drowned in falling in a pool versus films Nicholas Cage appeared in. You could This is total correlation causation and this is a massive chart crime. You cannot tell me. [laughter] Okay. AI is going to have an impact on white collar jobs. ass. It did it immediately when Chad GBT launched. Come on. Give me a break. This is this is a chart crime to the nth degree. Correct. Straight to jail. >> Um well, two things in this chart. Number one, the blue line artificially got inflated during COVID, right? Jolts like >> that's the thing. It was it was this is part of the 2021 job market slowing down. >> Yeah. And then also uh you know what else happened when ChachiBT launched or uh I guess before when this when the blue line actually peaks h was there a tightening cycle I can't remember >> exactly everyone the company is overhired they raise rates all this stuff is AI going to have an impact on jobs yes is it already so uh John Leraryi put this thing out and there there's these things like Amazon >> what did they they let go 35,000 people and you say oh my gosh but he looked at just in the fourth quarter alone 7.5 million private sector jobs were destroyed in the fourth quarter alone of 2024. Okay. Job gains 7.7 million. Like there's so much churn in the US job market because there's so many people and so many workers that like these numbers you have to put them into context sometimes >> for sure. >> I mean the unemployment rate is still 4.3%. Although I guess if we don't report it anymore maybe it doesn't count. Um I know AI is going to have an impact. I don't see how you can say that it's having this big of an impact yet. That's my whole point. I think people need to calm down a little bit. >> It's a truck run. >> All right. Where are we at? >> Um, all right. Let's let me if you would if you would allow me to take five minutes on on strategy. Um, all right. So, the the company formerly known as Micro Strategy reported earnings this week. Chart Kid made this looking at the ratio of Strategy to Bitcoin. And this peaked um this peaked a year ago actually in November 2024 and it has been straight down for the last really since July. It's been acting really funky in a bad way. Uh the next chart shows the the value of their Bitcoin holdings compared to the market cap and people are heming and hawing a year ago. Why are they getting such a premium? Well, guess what? That premium collapsed. Matt also showed the market cap value divided by the Bitcoin holdings value and it peaked at like 3.5 times. It's now 1.2 times. Now, there's a lot of different reasons for this. Um, I think the primary one would be that if you wanted exposure to crypto and brokerage account, particularly leverage exposure before all the ETFs, before all the other treasury companies, um, this was the only game in town. So, the the earnings call itself, it's an it was an hour and 50 minutes. There's 92 slides. Now, to me, I know a lot of people don't care about this, but to me, >> you listen you listen to this whole call. >> No, no, no. I I listened to a lot of it, but I not all of it. It was Friday at 4:00. I said, "I think I'm think I'm done." Um uh 92 slides, hour 50 minutes. I've never seen such a thing. And one of the things that they talk about was um them getting a credit rating. All right. So, this is Fong Lee. He is the president and CEO. I'm going to play this at 1.5 times speed. So, if you're already jacked up to two, this might sound like a mouse, so you might want to slow it down. All right. Here he is talking about the S&P rating. >> S&P assigned as a B minus issue or credit rating to strategy. And we think this is a big milestone, not just for strategy and for uh Bitcoin treasury companies, but a big milestone for Bitcoin in itself. There's been a lot of discussion around whether we think this is a good rating or or not a good rating. I think it's a solid starting rating and I think even more importantly to have a rating. It gives us access to more pools of capital. Okay. >> So what does a B minus rating mean? Uh by definition it means that there's a stable outlook and it reflects the expectation that we'll continue to manage our capital structure prudently and we >> and also means below investment grade. Go on, please. >> That we maintain market access. Uh we were rated under a uh a structure that's a framework that's called non-bank financial institutions. >> NBFI, keep going, fun. >> That's a framework the S&P uses to rate us. And importantly, at this point in time, Bitcoin is uh we don't get any credit for the Bitcoin on our balance sheet when it comes to our rating. It's deducted from our equity and this drives negative riskadjusted capital. Uh so what needs to change? >> Okay. Uh not sure that they should get credit, but they think so. But all right, remains to be seen. There's a chart that shows that they've consistently delivered a BTC yield, which is they're trying to buy Bitcoin faster than they can dilute their shareholders. And they're using the Bitcoin divided by the equity to come up with a yield. All right, they've got a 26% Bitcoin yield. It all sounds kind of I see >> James and I roll calling it a yield, but okay. >> Um they do have a ton of Bitcoin on the balance sheet. Uh they've got 640 What is that? 640 is that,000 640,000 Bitcoin. I mean, it's not a small number. So, I'm listening to the call and Michael Sailor has an IQ of 375. There's no doubt that his intelligence is off the charts, but he's also I don't know the person, but listen to the call, it sounds it sounds it sounds like a lot. The second innovation is where we're replacing traditional risk with digital risk. Traditional risk, it's opaque. It's heterogeneous. It's discreet. You own 8,700 houses or you own, you know, you're exposed to a portfolio of 47 junk bond issuers. uh and maybe they're fine but then there's a tariff or there's a trade war or there's a competitive change or maybe there's a strike or maybe an airplane crashes you know or there's a COVID lockdown whenever you have these kind of uh conventional real world issues you have a discrete explosion of risk a forest fire an earthquake um or a change in a political regime or a change in tax rates >> I don't know how that wouldn't impact heterogeneous or not and I'm not quite exactly sure what that means but I'm not sure why Bitcoin wouldn't be impacted by any of those risks that he uh highlights. But who am I? Back to Michael >> or changing customs duties. So traditional risk is opaque. It's heterogeneous. It's discreet. On the other hand, uh digital risk is transparent. It's homogeneous. It's continuous. You can go to our website and we update the risk model every 15 seconds. And so it is completely continuous. We update the price of Bitcoin. We update the volatility of Bitcoin on a on a continuous basis. We update the BTC ratings. You you can plug in your statistical models into them. And of course all the risk is based upon the your outlook of BTC AR, BTC V, BTC price and BTC rating. So digital risk is uh is something where you don't have to wait for a year for a credit rating agency to publish a new report to tell you whether your favorite airline or your favorite, you know, restaurant chain is riskier or less risky. Uh with digital risk, you can literally plug into the website and you can recalibrate and calculate your risk every 15 seconds on Saturday morning. And that's a big uh upgrade. >> Now there's seven innovations that was merely about one of seven. Uh, I know a lot of people that are listening like, "Michael, please enough. I don't care." Well, I care. I think this is one of the most fascinating stories in the financial markets. Michael Sailor has uh generated a lot of buzz, raised a lot of capital to power this perpetual money machine, had a lot of success uh up until I guess the peak at the end of 2024. It's been certainly a rough 2025. Can he get his mojo back? Are buyers buying what he's selling? Is raising capital a business model? >> So my takeaway here is let's say their their premium is compressed. Does that make it harder for them to borrow to buy more Bitcoin? That's my >> Well, so this so this is the point. This is the point. Um the FT did a did a a good piece on the credit rating a the credit ratings of of strategy and what it means and they said what makes this episode remarkable. This is the FT is the company's craving for validation from the very trady establishment it claims to reject. Strategy presents itself as a bull work against the debasement of fiat currency. Yet it seeks legitimacy from two of the oldest and arguably most discredited pillars of the ancient regime. Sellside equity research analysts and credit rating agencies. And that's not even mentioning the palpable desire to gain membership in the S&P 500. the company's pursuit of conventional approval betrays more than a little self-doubt about its own purportedly disruptive project. So, one of the interesting things on the call is what they're doing, and I mentioned this last time with their four different preferreds where they're they're trying to strip out the volatility risk and like somehow shift all of it into the dividends of the preferred or the interest payments, whatever. Um, and he talks so fast and it's just like it's hard, honestly, he's because he's he's so much more he's so much smarter than I am. I'm I'm picturing you in your mudroom as Charlie Day from It's Always Sunny with lines and the pictures. I honestly Daniel, make that one happen for me. Make Michael as the >> that guy. >> I can't keep up. Um, so then the FT goes on. Last thing, then I'll stop here. Actually, that's not true. One more thing. The FT says the company argues that its $71 billion treasury of Bitcoin offers a massive buffer of collateral to service its obligations, but this exposes what S&P calls a currency mismatch between Strategy's dollar denominated liabilities and its Bitcoin denominated assets. Fixed income investors take on the risk of this mismatch without sharing in the in the Bitcoin upside receiving only a dividend while being exposed to potentially ruinous losses. And as S&P notes, if strategy were forced to sell Bitcoin to meet its obligations, it would likely occur during a downturn precisely when the collateral is losing value. So, and this is genuinely the last thing. So, on the call, of course, one of the analysts asked, talk about the performance. Um, Bitcoin is is having a a fine run and you guys are not. What actions can be taken to overcome the the headwinds for growth? So, here's what Michael said. >> I think Fong uh highlighted some of them in the discussion of uh S&P credit ratings issues, right? the fact that Bitcoin is not viewed as capital by the traditional credit ratings industry. So I think the view of Bitcoin is as as and the collateral value of Bitcoin and the traditional views under Basel rules under under the rules that govern our banking system, our insurance companies and our credit rating agencies. I think that that's a structural thing, you know, like uh when when uh Fazby uh didn't allow you to recognize gains, but they made you recognize losses. You didn't and you had infinite tangible accounting, that was pretty crippling. Uh I think that um we fix that and I think that fixing uh capital risk rules you know will be a big one. I think the second is um banking acceptance uh custody and credit rel banks issuing credit on Bitcoin. So um we're hearing rumors uh and and we've heard you know that a number of major banks in the US in the first half of 2026 will start to buy Bitcoin, sell Bitcoin, custody Bitcoin and issue credit and and margin lines against the native Bitcoin asset. That will be great for them. That will be great for Bitcoin. That will be great for us. that will accelerate adoption. And uh and so I I would say that neither of these are things that I would ask for government help for. Like we don't need a law to fix it. Uh what we do need to do is lobby the banks, lobby the insurance companies. >> All right. Really not an answer. It just it goes on and on and on. Uh and forgive me if this is of absolute no interest to you. I can't take my eyes off of it. I'm >> not going to lie. I tuned out a little bit ago. >> I know. It's it's okay. It's okay. [clears throat] You're not >> Let me ask you a question though. Are you say So Bitcoin is 108,000 now. It's up 15% year to date in a very risk environment when the dollar is getting crushed. Right? If I'm a macro person, here's the Winnie the Pooh meme. I just put it in the dock for you. This is the new macro thing. Stocks are an inflation hedge. First Winnie the Pooh. Second Winnie the Pooh. Stocks are a debasement hedge. That's how you macro right there. >> That is good. >> Um are you a little surprised Bitcoin is only up 15% year to date? Because I kind of thought it once it hits 100 like oh boy, who knows? Um I'm I'm kind of surprised that now it's to be fair it's up 60% over the past year. >> Well sentiment in cryptoland is like in the toilet. >> So I mean I and I do you think gold is a big part of that? The fact that gold is going nuts I feel like there has to be some envy from the crypto people this year going oh man gold is doing what we thought we were going to do this year. Listen, I don't think any I don't think any crypto person would say that they're like now there's like there's very there's hyper rational, logical, sensible people who are like, "Guys, calm down. Zoom out. 110,000." Like, chill. It's not going to go up 70% a year. It's a major asset class at this point. Like, everybody needs to pump their expectations. >> Yeah. Like I said, it's up 60% of last year. Just this year, 2025, if you're looking at it in a vacuum, Bitcoin is kind of just nittling. >> No, it is middling. Absolutely. So given given the backdrop, given gold, given uh max 7 names and a lot of the speculative names like the Olos of the world and the quantum stuff abs you wouldn't you would think that Bitcoin should be doing much better for sure. So anyway, Mic Strategy is definitely not doing what it used to do in terms of performance. He's doing a lot of uh wordplaining, but the the market isn't buying what he's selling for now, right? And I am >> the premium is too high. >> Yeah. And I I I'm very curious to see whether or not strategy get can get their mojo back. Uh, we'll see. >> Okay. Um, that was Yemen. Yman's work there. How do you say that word? Yman. >> Sorry. I Yeah, I know. For a lot of people, they're like they're fast voting or just >> It's the It was an interesting story. All right. You've been on it, too. So, the K-shaped stuff, this is from N. Let's get to housing. They look at the they do this on an annual basis. Change in sale by price range year-over-year. Um, this is a number of sales, not like how much it went up. Um, the biggest cohort that's getting more sales is the million-dollar houses, 20% of the total now, whereas under 250K is 8% of the total. More houses are selling for a million dollars or more than any any price right now, which is kind of insane when you think about it, but that's kind of our new reality. >> Yeah, I bet it also it's insane when you think about it, but then it makes a ton of sense when you think about it. >> The people who are able to buy houses, like you said, don't have to worry about much about is traditional financing. They have portfolios that they can use. Um they are buying the higher price houses. Yeah. They're not they're not worried about mortgage rates. They have home equity they can use. Uh I don't know. I I just I don't think a lot of people look at this and go, "Oh, this is great. Awesome." >> Ben, you know, you know, >> you know the line in um in Naked Gun, the late Leslie Nielsen says something like he's driving with uh with Ed, the big guy, and he goes, "Everywhere I look, I'm reminded of her." You know what I'm talking about? >> Yeah. >> So, there's a phenomenon. >> I watched the new one. I'm going to talk about it. My recommendations. >> Okay. There's a phenomenon. It has a name. I can't remember what it's called where like you buy a car or you get a dog and then you like you see them like you've never seen them before. Right. >> Right. Yep. >> So, that's happening with me now for the for the Dan Wang book that we keep talking about like the lawyers versus engineers. Now, it it's so obvious in this article because it literally this is what the article was about. But this guy Michael Riley does he covers uh he covers DC. That's his beat for Bloomberg. And he wrote a really good profile on Ollo and the history of nuclear and funding and the mismatch between venture and and and the industry and all that. It was really well done. So they spoke about this guy who uh is an early investor in Ollo and his whole strategy was basically to replicate the Uber playbook. Um, so >> well, like go into a place, just do it. Ask for don't ask for permission, ask >> just regulatory change, >> forgiveness. Yeah. >> Like just just make it happen. So the article said, um, Uber deployed lawsuits and regulatory assaults so regularly that the serial entrepreneur Michael Bertov said in 2023 that hailing an Uber account amounts to hiring a law firm that just happens to have an independent contractor driver nearby. Its army of lobbyists and aggressive political maneuvering cowed politicians from New York City to New Delhi. The company's playbook inspired a new term regulatory entrepreneurship. In trying to apply that model across industries, Chur who was the original investor, the original venture guy and uh I forget his first name and to a he built a company that has little in common with a traditional VC operation. Here's a kudigra. Rather than hiring mainly MBAs, Trust Ventures is stacked with lawyers. Chur and his team devote much of their time to dissecting regulations looking for loopholes. Um, so I have no opinion on like, you know, is this dirty? Is this good? Is this necessary? Is this what you need to enact change? Whatever. Like that's a whole other nuance debate. But this is the world that we live in in the United States where everything I feel like the the um the default answer to everything can we do this is no because of legislation. >> So now you know why so many business leaders and entrepreneurs and venture capital people uh were Trump supporters because it was the promises were deregulation. We're going to cut the red tape and let you do whatever you want. Right. Yeah. Now say what you say what you want if you you know obviously a lot of people are not supporters but like there is a lot of overregulation and is there the risk the not so uh little risk that we cut too much fat to the bone and we we over deregulate? Sure. Of course there is. >> We definitely will. I I would imagine there's stuff that's going to happen because of this. But um you're too Yeah, we obviously went too far in the other direction. Uh >> all right. This this this headline stuck out to me immediately. Um, Craft Hind CEO warns of worst consumer sentiment in decades. That's from Bloomberg. So, they reported um the CEO said, "We now have one of the worst consumer sentiment." Okay, I just read that part. The company expects fullear organic net sales to be down three to three and a half%. Um, he cited slower growth in emerging markets and pressure on the US retail. They they cut their outlook. All right. So, obviously my thinking is, hey, wait a minute. Uh maybe there's just other things happening that in the industry more so than just like yeah the consumer doesn't buy ketchup anymore because they can't afford ketchup. So Bloomberg says other big >> ketchup >> right other big package food companies have Yeah. How bad do things have to be without being insensitive for you to say no I can't get ketchup. >> Right. We we buy Listen, we buy a lot of ketchup in the Carlson household cuz my son he he'll fill up half his plate with ketchup when he has a burger and fries. Um, I got him a t-shirt last time I traveled somewhere that says I put ketchup on my ketchup in the Hines logo, you know. Um, so it's not it's not our problem. Sorry, Craft. We're doing our part. >> Same. Kobe dips uh apple slices in ketchup, which is >> everything, right? Kids kids use ketchup for Yeah, it's gross. >> All right. Analysts have said that these companies make the kinds of processed foods Americans are moving away from. Now, obviously, Hines makes a lot more than just ketchup. So, um, the So, here how's this for a nonsense quote from Manderlay CEO? The government shutdown going forward will not help with the confidence of the consumer. Bro, >> people, your your company's not struggling because the consumer is worried about the government shutdown. Ben, did you watch the show Riculousness or are you even like familiar with it? >> Yeah. Rob Deer. >> Okay. >> He he he stole the show from TSH, Daniel Tosh. Do you remember TSH.0? >> Yeah. >> Okay. So, we used to watch that one and Rob Deerk stole that the idea of ridiculousness from TSH.0. >> Got it. Okay. I never I never saw TSH 2.0 with Tash Po. I'm sorry, but I was familiar with it being a thing. Didn't know that. Anyway, so apparently there's like a >> new has come to light. There's a lawsuit and this was unearthed and um >> it was literally the only thing they play on MTV for like 24 hours a day. >> So this dude is making $ 32.5 million a year. They do 336 episodes a year. Isn't that wild? >> Did you ever watch Robin Big back in the day? >> No, I know when it was a thing. He was his bodyguard or something. >> Yeah, I liked that show. RP passed away. Um, all right. Anyway, I just thought it was wild that that he makes that much money content and and business. And obviously MTV is a paramount uh paramount studio thing. Anyway, that was a face blur for me. All right. A lot of people shared this this meme with us with with two dads running into each other at Costco. Dad. Uh-oh. Here comes trouble. Other dad. I guess they let anyone in here. Both dads. And it's Tom Cruz with just cackling. So good. Yeah, that's that's uh that one got me. >> Here's another good one. Uh, somebody said, "Hey, what was that AI podcast that Ben mentioned last week?" >> A million people asked me, just so you know, people in the future, we do show notes on our websites, a wealth of sense.com or relevantinvestor.com that has links to everything we talk about. So, if you need because people asked me and I shared, but if you need to know, we have show notes on our websites. >> All right. Well, get this. No longer will you need to go to the show notes or email Ben directly because this person asked Google which said it gave him the answer. He said animal spirits AI podcast and it gave him the answer. >> Wow, that's pretty good. Okay, >> that's pretty cool >> right there. All right, there was this robot thing on Twitter that went nuts called Neo, the home robot and there was a video and they showed it and it says it can do your laundry, it can clean for you. Um, see the person that folds your laundry that their robots are going to take their job. Um, now and it says you can you I think you can buy this thing for 20 grand or pay like $500 a month for it. And this had like 67 million views on Twitter. And I just have to say and it sounds like there's some caveats. Like I guess there's going to be like someone watching the robot through a screen for certain tasks and like controlling it for you. So it sounds a little sketchy and I I'm sure it's not ready for prime time, but I'm not usually an early adopter of technology and I don't know how this thing's going to do. Who knows? Um, >> that's true. you you just discovered Apple Pay, >> but I will be one of the last people to I'm going to wait like 5 years to buy a robot. I'm not going to be the one who buys the robot and have the robot come put it and and like choke me or something like I've seen enough movies. I'm not going to be a first adopter of a robot. Here's the thing. I don't want a robot to look like a human. Why can't it just look like Why can't it be a box with tentacles that come out? I don't want it to look like a person. That that's way too creepy. If you walk in your house in a dark room and the robot's just sitting there, how creepy is that going to be? I I don't want to have I'm not going to be the first adopter of the robot. And listen, if you buy a robot and the robot kills you, no one can feel sorry for you. If you buy the first version of the robot and it turns on you like iroot style, you can't. It's It's like going skydiving and you die like, "Sorry, no one feels sorry for you." Fair. >> Daniel's getting uncomfortable. He's moving in a suit. >> I'm sorry, but if you buy the first version of a robot and it turns on you and and it kills you, I'll go to your funeral, but I'm not going to like I'm not going to shed a tear. Sorry. Um, Roberts are coming. >> They definitely are, but I'm I'm not. I'm going to wait, >> right? >> Well, of course you are. So am I. I mean, listen, I think I think by definition, most people are going to wait for a $20,000 robot purchase. >> True. All right, but yeah, they're coming. Um, all right. So, I I got into the I I gave up on baseball like 15 years ago. I just don't didn't care anymore. It's too long, too slow, too boring. I other stuff going on. Um, I got really into the playoffs this year. I watched the Tigers play. They barely lost the mirrors. And I kept watching and I watched and I got really invested in the Blue Jays and Dodgers. I watched most of the series. I really wanted the Blue Jays to win because I hate the Evil M players that spend too much money. Um, and John Smoltz was the the announcer. So, I stayed up and watched the whole uh game seven the other night, like 1:00 in the morning or something. Uh, awesome game. I felt so bad for Blue Jays fans, our our fellow Canadians that always listen to us. But John Smoltz is the announcer for Fox and he's really really good. And it got me thinking. I forgot the very first boss I had in this business, John Smoltz has some Detroit ties because he started out his life with the Tiger. I don't know if he's from Detroit, but but he started out with the Tigers and the Tigers traded into the Braves where he got all good. Um, my boss had had a professional athlete as a as a c as a client. He had some family office clients, but mostly we worked with institutions and uh had a really bad experience and someone said, "Hey, John Smoltz was recommended as a client to you and he'd like to talk to you because your other clients had such a good experience." And my boss said, "No, not talking to him." And I said, "Whoa, whoa, whoa, whoa, whoa. No, we got to take this meeting. This is John Smoltz." And he said, "I have a hard and fast rule. I never work with I will never work with a professional athlete again. The demands are too much. The it's it's they were divas. I don't know this guy from anyone else, but I'm not going to even take this call with him." And I was flabbergasted. But looking back on it now, I love that he had that hard and fast rule like these are the clients I'm going to work with. These are the ones I won't. >> Anyway, >> that's my Johnson story. >> Wow. >> All right. recommendations. Can I go first? Cuz I I got a handful here. >> First of all, I have a horror movie that got me the heebie-jebies. It it you know the I I I you say I'm a robot cuz I don't have those feelings. I got it. >> Okay. Which one? >> This is because my son he he now likes our chat GPT to say, "Hey, we liked this movie. Type it in. Other movies like Tremors, other movies like Beetlejuice." So we be using that a lot. So yesterday we watched Arahobia and that movie >> makes my skin crawl. Absolutely. like because it feels real. It's not one of these weird that >> I hate spiders. >> H I do too. And so that movie I mean if you if you lived in the house I don't know if you've seen it in a while but you would literally burn that house to the ground before you stayed in it. Correct. The whole house was swarmed with spiders. >> Yeah. Disgusting. I did re I did rewatch like an hour of it a couple years ago. >> I mean John Goodman as the exterminator and Jeff it's a >> he was he was that his breakout role? Probably not but it >> it could have been. >> That's my earliest memory of him. Great. Uh he was in Raising Arizona was probably this his breakout one. Um okay so I did watch Naked Gun. It's on Paramount right now and I loved the originals. We've talked about this and obviously Leslie Nielsen Wait, what's his no Liam N? >> Let me ask you this. Was it better or worse than you thought it was going to be? >> I belly laughed probably five times. Like hardy laughs. And so he's obviously it it wasn't quite the same as the originals, but there was enough good jokes in there that I really laughed hard and that was >> and that's all you could ask for. Yeah, it was like an hour and 20 minutes. >> It was great. >> Okay. Um, so The House of Dynamite was literally one of the worst movie endings of all time. >> Holy >> Right. For a movie that tried to be good, it was one of the worst movie endings ever. >> That was the That was the horse meme. The the whatever the crap in the back. I'm I'm usually like I I can forgive a bad ending because I know sometimes the planes are hard to land, but that ending completely invalidated the entire thing. And not just the ending, Idris Ela's entire existence in that movie. I'm not saying it was his fault. As soon as he came into the movie, it went to It was so And no spoilers. Do not watch this movie. Okay, you're welcome. >> Don't waste your time. It was a waste of time. >> Oh my god. Did you Did you rewind as soon as it ended? Ended. Did I skip a part? >> That's what I I thought. Wait, I might Did I miss something here? >> What were they doing? Who thought that was good? >> All right, speaking of the horse meme, I watched Weapons on HBO Max. Now, I know this this movie had a little buzz. I think you kind of you liked it. weapons. I know you you saw this in the theater, right? Okay. >> This movie was the horse meme. Okay. And I I know this movie got some buzz. I thought the first hour of the movie was like riveting. It was oh my gosh, what's going on with these kids and Julia Garner who was in Ozark, I think she is fantastic. Um, but then they went and her story line was great and Josh Brolan was pretty and they did all these different the same story from different points of view. I thought it was really good. In the last hour of the movie, I thought just it was a car careening off of a cliff that it was the lady from Uncle Buck, Chenise from Uncle Buck or not Chenise, I can't remember that. Uncle Buck's girlfriend and she's also in Field of Dreams. Um, just the payoff I thought was so so bad. And the fact that it was like 2 hours and 15 minutes. This should have been an hour and 30 minute movie. I thought this was the total horse me. So here's here's my my analogy for movies this year. I feel like 2025 >> Wait, hold on. Hold on. Hold on. Hold on. Before let before before we get off weapons, you having a strong take on weapons would be like me telling you that Uncle Buck doesn't work. You're not allowed to have an opinion on horror movies because you're not a horror movie guy. And the last the part that you didn't like about weapons when it got silly. That was like obviously intentional. It was comedy and I did see it in the theater and the entire theater was cackling because that was the intended purpose. It wasn't supposed to be like, "Huh, that's a weird ending." So you you don't get to you don't get to weigh in. Sorry. No offense. >> It was an unintentional horror comedy. That's what I'm supposed to >> No, no, no, no, no. Intentional. It was intentionally hilarious. You were supposed to laugh at the end. >> The whole last it just I'm sorry. It was It was awful. Terrible. Didn't work at all. It was really >> All right. Well, guess what? Transplants and automobiles stupid. You have these two 40 You have these two middle-aged guys are crying with each. Come on. >> My point is it's not it's not a you. It's not. No, no, no. I love trans >> said about my weapons review here. >> No, no, no. My No. My point is this is not for you to weigh in. Here's my lawn. >> Here's my theory about movies in 2025 because we've done this a lot. Um Sinners I thought was a good movie, not a great movie. Um the P the PTA one you said everyone's saying this is a classic but it's it's it's just a good movie. I thought weapons is kind of the same thing. So, here it is. So, Michael Mobson had this piece about Ted Williams and why he hit 400. And the reason is is because the the level of competition was wider back then. There weren't nearly as many good people. So, now like the there's a higher average overall, but it's the, you know, people are just better. And I think that was the Ted Williams thing. So, in the 2000s, I'm I'm going to land this plane. Kanye West, everyone called him a genius in the 2010s being a rapper. I think if he was in the 1990s, he would have just been another rapper. He would have been good. He would add some hit songs. He people never would have called him a genius. And it's because there was no other good rappers at the time. And so my point here is >> there are so few good movies anymore. Anytime that there is a good movie, a decent movie, people have to say it's the greatest thing ever. >> Yeah. Okay. I totally agree with that take. But also, if you relative, >> if you ask me, should I watch Weapons? I would say no. It's not for you because it's genuinely not for you. Like I'm not surprised you didn't like the ending because it's not for you. >> But I the first hour of the movie I thought was really good. It was really interesting. >> Yeah. And I and I I did I I enjoyed the Shadow Weapons. I had a great time, but like I agree with Movie. >> Is it a No. Stop. Is it a classic? Uh, no. It was a good It was a good horror movie. It was fun. I had a good time. >> All right. Any Did you watch Weapons? >> Did you love it? >> Yeah. See, Daniel loved it. He gets it. >> Um, any other recommendations? Uh, no. Just d I just drecomd House of Dynamite. Um, I'm pretty dry right now. Oh, you know what's annoying? I want I really want to watch the Scorsesei doc. It's like six episodes on Apple TV. Come on. That's a That's a two-hour movie at most. I don't have time for six episodes of Marty. >> That is a lot. See, that's the They should have um Audible for documentaries. >> Yeah, I would two times the out of that. I really want to watch it. >> Yeah. So, you should just be able Like, do you need to see a documentary? I guess you want to see some movie scenes, but Okay. Okay. Um let's do some plugs. Let's plug Talking Wealth. >> Yes. So, so we have a a a podcast channel called um called Talking Wealth, and we talk about stuff in our day job, stuff going on around the industry, who's making noise, what should advisers be looking for. So, you can find that on our YouTube channel talking. >> It's a YouTube talking wealth. We also have a podcast version now. Um it's you, me, and Josh talking to people about what's going on in the industry and new exciting products and services and strategies and yes, take a look. All right. Uh, >> what else? All right, that's enough. We We went long. Sorry, Daniel. It >> was going to take a minute. >> Is our FBA conference going to be a podcast or not? >> Yeah. >> Okay. I don't know. >> Animal Spirits at the Compound News. Thank you everybody for the listens, for the emails. Love hearing from our audience. Have a great week. We'll see you next time. [music]
Never Go All In On Stocks | Animal Spirits 437
Summary
Transcript
Today's animal spirits is brought to you by Y Charts. If you're an adviser, here's a stat that might make you pause. Four out of five heirs fired their parents' adviser after inheriting wealth. That's not just lost relationships, it's lost revenue. >> Over the next 20 years, $84 trillion is expected to change hands. The biggest risk to your business isn't the market. It's not connecting with the next generation before the money moves. Y Charts just released its great wealth transfer deck built to help you protect your book, stay relevant, and start those nextgen conversations now. >> It's packed with charts, visuals, and talking points that make inheritance and family planning easy to explain. Download it free using the link in the show notes and turn the great wealth transfer into your next growth opportunity. Welcome to Animal Spirits with Michael and Ben. [music] Uh, one of the conversations in the market over the past couple of weeks, but really reaching a crescendo last week, I think, has been the dominance [music] of technology stocks, particularly like in the last couple of sessions. You see like the RSP, SPY ratio, which is which just keeps hitting new all-time lows really nosediving off of a cliff. So I had chart can make this chart showing the past two days and this was I don't know if this was Tuesday, Wednesday, Wednesday, Thursday, whatever it was doesn't really matter so much. You had 227 stocks over a two-day period that were advancing set differently the remaining 730 or 20 whatever it is fell on the day. And in that type of environment over a 2-day period when you've got that many decliners versus advancers, meaning stocks going up versus stocks going down over a 2-day period, the average return of the S&P is negative 2% on those type of days. And yet the S&P was barely positive on that over that 2-day period, which is bizarre. Um, and it just goes to show that the concentration of the index is having all sorts of really gnarly impacts. Well, I guess having Nvidia be what's the percentage now? Is it up to 10% almost? >> Yeah, it's getting there. So, it it cuts both ways. So, Duality Research, who we've mentioned before, but their work is absolutely top-notch. Worth signing up for their Substack if you haven't if you're not familiar with them. So, they hit on this, too. I read this this morning on the on the way in. um they say this unprecedented concentration that we're seeing is going to keep producing these very weird mismatches between returns and internals. And as interesting as they may appear, cuz they created the same chart that I had Matt do, as interesting as they may appear, these short-term divergences don't really signal much anymore, they mostly just reflect today's index composition. They're coincident indicators, not bearish. So, if you were using the chart that I just have on screen, you'd be like, "Whoa, time out. Time out. Not healthy. Not healthy." But they but they also showed that if you look at the other side of the coin, like the days where you have a lot of stocks going up and yet the index isn't, that's just the nature of a market where the top 10 names are 40% of it. It's going to keep happening. >> Right. This isn't going to like go magically disappear all of a sudden. >> Right. Right. >> You know what else though? I have a problem with this. The word breath just it's hard to say. It doesn't look right. Um, >> well, you saw the I mean, did you see >> I think that was subliminally planted in the in the in the inbox. You saw that email. >> No. >> So, somebody emailed us and said, "Stop saying breadth thrust. It is really unnatural off the tongue." And I would agree. >> Problem is >> problem is that's that's the term. He suggested calling it a bread crust, I think, which is easier to say, but you can't it's Marty's wife's bread thrust. It's not a bread crust. So, I'm looking at the returns right now and we're recording this Monday because you and I are going to Vegas tomorrow and we'll be there for the annual FBA conference. So, if you're out there, say hi. Even though this will record by the time we're out there. Um, the Russell 2000's up 13% year to date or so 12%. Um, equal weight is only up 9% and then midcaps are only up 5% this year. So, so there is still this pretty wide divergence. I think this is this is why international diversification is shining this year. Like this is the time that it matters the most because emerging markets are up 34% and EHA's up 28% or whatever it is. >> Like that that's why like the currency piece is such a big deal with that type of diversification as far as I'm concerned. But you're right, even if like a million other stocks do well in the S&P, it's not going to matter, right? Because the it's these big stocks right or wrong and it's going to be like this for a while. Yeah. Um, they also have another chart showing, listen, you can't say you can't use that data that we open the show with to say that breadth sucks because if you look at the equal weight version of the S&P, the NASDAQ, and the Russell 2000. So, within those indexes, you equate all the names, they're all within 3% of an all-time high. So, yes, there are a lot of names that are in the AI crosshairs that are getting smoked. That is true. But a lot of stocks are doing just fine. >> So the the way the stock market acts and if my CNBC's thing here is that it's not a stock market, it's a market of stocks, right? [laughter] If you look at the market of stocks, it's just going to seem the it's going to seem weird for a while because of the way the market's structured now. >> Yeah. The concentration is having is having weird impacts on both both sides of the bread coin. >> So Nvidia eventually has its bad earnings report. It's going to happen at some point. It's It is funny how I mean there was a little bit of movement in some of the big tech companies for earnings last week, but I mean there still hasn't been this like wo kind of moment, right? Like one of them just >> just so see you're not a market of stocks guy. I am. >> Uh >> sorry, but Facebook down 10% that to me that's not a wo. I need like a down 20 or 30% to go oh my god. >> Hang on. Facebook's not going to fall 30% on a day. What are you talking about? >> It's done that many times in the past. Yes, it is. That's going to happen. One of these AI stocks, yo, >> Facebook is not going to fall 30% in a day unless there's a massive accounting fraud stock. >> One, no. One of these stocks is going to hit get hit 20 or 30% on some AI news. It's going to happen, but that's going to be the end of this thing. >> All right. Perhaps. But >> Nvidia, no. Let's let's move the goalpost back to where you originally moved them from. Meta had a pretty bad week. Google went vertical and Amazon was up 10% to an all-time high. It's been a while. >> There hasn't there hasn't been one that's gone. Oh my gosh, this is a like to me that's going to be the signal. One of >> I know you said something. You moved the goalpost. I tried to move it back. You tried to take it back. There were big moves last week. Let's leave it at that. >> I'm pretty sure Met has been down 20% in a day before. That's not out of the realm of possibility that >> maybe when it was maybe it was a $300 billion market cap. It's >> can't you think it can happen? I I think it can. >> I said it I Okay, don't say 20 or 30 because those are very different numbers. >> I think 20 to 30 in that range. I think that No [laughter] table. >> 30 is very different than 20. Can it fall 20? Yeah, sure. Perhaps it would have to be really gnarly. But to fall 30 in a day would have to be either an accounting scandal or Mark Zuckerberg. I don't even want to say like, you know, something bad happening to him. >> What if he pivoted the company to the metaverse and changed the name from Facebook to Meta? Would that do it? >> Okay. I I think it's I think it's possible. You you don't, but I because of the gains these companies have had. If there is if there's a really bad Oh my gosh, we spent $300 billion too much. Boom. Up in flames. >> Yeah. Over over maybe maybe over a week it could it could lose. >> But I'm saying if if let's say that happens to Nvidia and Nvidia is down 15% in a day. Like it's going to do weird things to the market. >> Yeah. Interesting. Daniel, you see how he's he keeps moving it lower and lower? Yeah. Can Nvidia fall 15% to the day? Sure. That was the point I was trying to make is one of these companies is probably Nvidia is going to have a bad earnings report at some point and it's going to cause weird things to happen to the overall market. >> All right, let's move past this. We all we we agree 15%. I'll give you that. >> Okay, 20 is going to happen. Just mark that. >> You said 30. >> I can't wait to revisit this in the future cuz I said 20 to 30. I'm putting book ends on it. All right. I wanted to see where this thing stacked up. So, one of the great things about Chart Kid Matt is that I give him an idea and I say, "Hey, this is the chart I want to look at." and he makes it look better than I had it in my mind, right? That's why he's he's so good for us. So, I said, I want to I want to compare this to past meltups. I want to look at the down the roaring 20s. I want to look at Japan in the 80s. I want to look at the NASDAQ in the '90s. Compare the last 10 years to this. Okay? He does this. I got to be honest, these were way closer than I ever imagined they would be. [laughter] And um so, the past 10 years, the NASDAQ 100 is up more than 500%. in the roaring 20s. And now I measured this from 1921 because there was like a depression in 1921. So from there and through the end of the through the peak in 1929, the Dow was up almost 500%. In the 1980s, Japan was up 510%. The only one it really is not close to his NASDAQ in the 1990s, which was up 800%. >> Does it get there? >> I guess that's the thing. A lot of people were when I posted the chart, I knew it would kind of go crazy and it did. And a lot of people said, "Hey, we got two or 300% left to go." Um >> Oh, yeah. That's how it works. >> I don't see how you could look at this chart and not say, "Okay, I'm a little I'm a little concerned." And now my Grand Rapids hedge here is listen, all of these other periods resulted in a huge crash, like a mind-numbing crash. I would be way more comfortable, and again, I'm putting this on the table, Grand Rapids Hedge, so don't even call me on it. I'd be way more comfortable saying the returns are going to be far lower in the future than they are going to crash. I'd have way more confidence in that because the NASDAQ is up 20% per year over the past 10 years from the bottom in 2009 of Mar March of 2009. Cherry-picking fair. It's up 22% per year. The NASDAQ 100. >> We can't continue to see gains this big. It'll swallow everything. These companies will swallow everything. It's impossible. >> Remember the book Scale? >> Yes. >> Where it spoke about the law of nature and why elephants can only get to a certain size before their bones would just crumble. >> Yeah. Yeah. I think we mentioned this like a couple months ago. Did we? >> But yeah. >> Well, that sort of dynamic does does exist. Like I don't and I think you would agree. Who wants this to go to 700%. The higher it goes within a shorter window. Now, if we could go up 700% over the next like six years where it's up, you know, 11% a year, not 22%. Yeah. All day long. But you should not be rooting for this to look like the previous ones because at some point you're setting yourself up for just major disappointment. the numbers become too big that all growth prospects in the future, you just discount them too much, too far, too fast. >> Yeah, we we I would love to see just a Let's take a breather here. We don't need to get see this thing get crazy. Um, you'll notice on this chart, there's a huge gap. He did it by years between the 1930s and the 1980s. There's there's no meltups here. There actually was one in that time. So, a lot of people said, "Why do you include the Nifty50? The returns weren't nearly as close." Um, I thought about maybe putting gold in here in the 70s, but that would kind of defeat the narrative of the chart. There was one that was in this same ballpark, and it didn't end in tears. In the 1950s, the whole decade of the 1950s, the S&P was up 491%. On par with the Roaring 20s, on par with Japan in the 80s, on par with the NASDAQ over the past 10 years. >> So, why didn't you put that in here? >> I thought about it after the fact. I'm not going to lie. >> Um, >> but but I put the corrections in here. I have a I have a whole table in one of my Excel charts that's historical corrections. You can see in 1959, the S&P fell 14%. In the 1961 and 62, it fell 28%. 1966, it fell 22%. So it didn't it this there was no bone earthshattering crash here that caused the 1950s bull market. It kind of ended with a whimper and and now that one to be fair wasn't like this innovation driven thing. That was a middle class thing World War II sigh of relief great depression's over kind of thing. Um but that was one if you want to point to an instance where you had a meltup and it didn't end in a meltdown. So, I I I would say that if if we are we are um it doesn't have to end badly this time, but if you get another 25% year in 26 and another 25% year in 27, then I see no way out. >> It will. Yeah. I I just >> So, >> I'm a broken record here, but there you diversification hasn't helped you at all in the past 10 12 years. I if you're not diversified now because of this, I think now is the time. >> Well, maybe maybe that's the conclusion. If you are all in on the on the NASDAQ or the S&P right now, um certainly if you're near retirement, I mean, what are you thinking >> exactly? And and there are pe, you know, there I'm sure there are people who are all in and keep pushing the foot down on the gas. Um but we have these conversations all the time who people who have made insane wealth off of these names going, I need to I know I need to diversify. Please help me. Yeah. It's not like people are saying, no, no, no, keep me on. And I I want to keep pressing that. That's not happening. All right. Take him who wrote the book on Nvidia. He works for Barons now. Where else has he been before? CNBC, great reporter. He wrote this thing about why AI is underhyped and it is in a bubble yet. And he did this whole really long thing, but then he did a TLDDR. So, it's worth reading if you want to click through. He did this on Twitter. Um, here's his bullet points. And I I actually think it's easier right now to make the case and more believable to make the case a is a AI is a bubble versus it isn't. Don't you think that it's more believable to say it is a bubble versus people who say no no no it's not a bubble? >> Depends if if you're just talking about like quick quick sound bites then yes easier to make the case that it's a bubble but I think it's very easy to make the case that it's not a bubble. So back to you. >> No I think if you did the deep deep dive analysis and charts like it's way easier to make the case that it's a bubble than not. >> Oh really? Okay. I I disagree but go ahead. >> Okay. All right. We're disagreeing today. Um here's his bullet points. Big tech valuations are reasonable and leverage is low. We're the beginning of a multiple AI super product cycles in years ahead. We are in the early innings of a technology computing shift to AI, the largest in decades. Think 94 versus 99. Every credible source reports overwhelming demand for AI computing capacity. Where is the over capacity glut? Nowhere. That's this is the teal. And again, he has way more that goes in each of these. >> So, I mean, that that that's a great that's a great mic drop. I think there's obviously a lot of different shades of black and white here. Maybe you could even call it gray. For example, over the weekend, >> my my mother who only who only consumes our podcasts through the Instagram uh reels or whatever that we do, you know, the short sound bit. >> Did she Did she watch my horror movies yet? >> I don't think No, she she's notorious for messing up sayings. And she said, "I just want to thank Michael for being in the same boat as me for messing up sayings all the time." Cuz we replayed your thing about messing up your broken arrow or broken, you know, >> first of all, uh the great actually the great the terrible Jared Allen once said, "The lights are brighter than I expected." when it came to Madison Square Garden, something happens to your brain, at least to my brain, when the light goes on. I don't know what it is. It scramles the signals, things get twisted, but it happens to me offline. So, the the the part about them still being behind capacity. Now, again, on the flip side, all right, well, Nvidia has a $5 trillion market cap. Like, so so so what? Who cares about capacity? We're talking about bubbles and valuations and expectations. to which I would say uh duality research throw the baton back to them. They say for us it all comes down to profitability. So if you're comparing today's 22.8 times multiple to the 10-year average you're also comparing it to a period when margins averaged about 12.3%. Right now they're closer to 14.5%. And that context matters. So he did this thing where you you margin adjust the PE because why wouldn't you margin? It's the biggest driver of valuations. Higher margins deserve a higher multiple. Counterpoint. All right. Well, how do you explain Open AI? $13 billion in revenue, a trillion dollar market cap. Now, could you tell me that Open AI could be a trillion dollar market cap in 20 years from now and that could be it and it could just be horrible returns for shareholders? Yeah, I buy that hook, line, and sinker. Absolutely. But to say that it's a bubble, again getting back to my definition of a bubble in which there's no inconceivable world in which this doesn't fall 70%, 60% and stay down that I don't think we're there. >> I think you're hung up too much on the definition here. The the falling >> not words matter. Words matter. >> I I think you're falling you're you're too hung up on the it has to fall and then never come back. Like I don't >> But that's what a bubble is. That is what a bubble is. It is an environment in which the future cash flows >> in no in no outcome in no plausible outcome can match the hype of today and that is not this that's not this >> so that that's the cliff as said like the definition of a bubble is there there's no future potential that can match what the fundamentals are saying right now you're right there is a world where that can happen >> so the of course there is so that's why I don't feel comfortable saying yes this is bubble Now, if we're up 25% in the next 2 years and it's mostly multiple expansion, then I will probably say something different. >> So, you're saying, listen, these stocks can crash and doesn't necessarily mean it's a bubble. >> No, that proves nothing. Amazon fell 50% along with Google in 2022. Was that a bubble? >> All right. I'm sick when it's a capex level. I I don't think I don't think the amount of spending that we're doing can match what the returns are going to be. That's that's kind of where I land. And I don't think that necessarily means that it's a systemwide crash and it's never coming back. But I I think that there the spending is the expectations are too high for the level of spending. >> Expectations on whose part? The investors or the companies? >> Everyone. The companies. The company companies especially. I think they're they're way too in and they don't really care. I don't think that they care if this is a bubble or not. They're just trying to win. That's it. All right. Speaking of diversification from before, Jason Zwag, should you just buy stocks until you die? This is a very good piece. Did you read this one? >> Yes. >> Okay. So, he talks about the luck of the draw when it comes to being in stocks. He said, "Consider two hypothetical investors, each with a million dollars invested in the S&P 500. They both withdraw 4% a year in equal monthly installments for the next 20 years. One retires on December 31st, 1999, the other on December 31st, 2002." Of course, between 2000 and 2002, there was a bare market. The market crashed. He said the first investor would have a little more than 890,000 left after 20 years. The second would have a little more than $4 million. Obviously, don't include fees, taxes, inflation, all that stuff. Um, and then a really good chart here just kind of this is the sequence of return risk that if you happen to retire at the wrong moment, if you happen to invest at the wrong moment, um, there can be two diametrically opposed outcomes through no fault of your own. you could follow the same exact script. The process is perfect. The investment process is sound and you could get much different results. And his whole point is um he says that's why I still own some bonds in my case TIPS. And I think you should too. The historical odds and current government policy are against them, but stocks are also far from a sure thing. Of course. Yeah. This is I mean to to us this is obvious, right? I think obviously not to everybody. Um, it doesn't, nobody's gonna be mad if you went from 7030 to 5050. Now, you know, depending on your situation, and the market does go up 25% over the next two years or three years, you're not going to be like, "Oh my god, I miss it. How could I be such an idiot?" But secrets of return risk is real. And just because stocks have higher long-term expected returns, by the way, the fact that we're even having this conversation makes me like cringe or makes me a bit like, why are we even talking about this? Obviously, you shouldn't be all in on the market. >> Yes, but but it's at this time in the market when some people need that reminder. I think like I've seen a lot of comments like, "Why would I ever own bonds? What's the point of cash?" I I think there are there is some of that. It's not it's not everyone, but there's some of that going on. I actually one of my readers I heard from a lot early in my blog days, he he sent me this whole thing. He he retired in 2000. I think he said March of 2000, which was actually the top. and he gave me this whole thing about how him and his wife survived it. He's like, "I retired early." It was in March 2000. Literally the worst that that's the worst entry point in stock market history. You could say the Great Depression, but um no one really invested in stocks back then, which that's that's my one um problem with the 1929 book from Andrew Rosen. Great book. He makes it sound like everyone is invested in stocks. 60% of households are invested in stocks now. 2% were back then. It wasn't >> Yeah, definitely. >> No one invested in stocks back then. Anyway, so this guy says, um, how did we do it? We kept four years in cash and we rebalanced and if stocks were down, we took from cash. If stocks were up, we took from stocks. And he's like, it was really, really difficult. And this guy, like he managed his money to a tea. Um, he actually I I get emails about it all the time. He created this thing called the four-year rule, and I wrote did a write up about it like I don't know 10 years ago, and I still get emails about it this day because people ask for his like longer version of it. Anyway, um but if you don't have some sort of plan like that, like a backup plan just in case because guess what? You don't get to do the Monte Carlo thing when you retire. You don't get to try it 10,000 ways and see which one's the best. You have one shot at this. >> Yeah, maybe I take this for granted that because our advisers are doing this all day with our clients, but my god, this is so obvious. Hello, risk management. You can't your life can't depend on the stock market for God's sakes. Especially after this run that we've been on, it's treated you very well. May continue to do so. Who cares? Plan for it not plan for this not to continue. >> Yes. And again, I I think most baby boomers investors recognize this that they're retiring. Like they know and they've lived through enough crashes to understand like this is not going to last forever. And I'm probably far richer than I ever would have been otherwise >> right now. But I I think I think this is the kind of thing that's worth a reminder. >> Yeah. No, you're right. There was a really good story in the Wall Street Journal about kids versus adults and basically saying um things are way better. So it's the economy that's great for parents lousy for their grown-up kids. And they go through all of these different stories about the parents who are doing well. They have home equity that's up a ton. Their stock portfolios are up a ton. They have kids who are graduating with PhDs and these different jobs. And it's hard for them to find a job. And they they looked at the survey result and they looked at people like themselves, the baby boomer parents versus their children and like can keep up with expenses, have enough money to buy a car, pay an unexpected medical expense, buy a home, find a good job. And obviously all the older people, the parents have way higher responses than the kids, right? It's way lower for the kids. Um, and >> do you think it's ever not like this? >> I that's I wanted to have two things here. One, it's a tough job market for some people, especially college graduates. Two, um, suck it up, right? I had a terrible job experience when I first came out of college. I think the difference between now and like any time in history before this, today, people want others to feel sorry for them. It's not just like recognize the fact that there's a tough whatever. Um, it's tough to buy a house, it's tough to find a job. I need everyone collectively to agree that they should feel sorry for me. I don't think we had that when we came out of a tough job market in 2008. There wasn't >> What was unemployment in the GFC? Did it hit almost 10%. >> There was 10%. That was the high. Yeah. The unemployment rate is 4% right now. So, yeah, there's there's pockets of like where things are starting to get bad. >> Imagine millennials complain and not imagine we did a millennial I mean I had nobody to complain cuz I was an idiot, but millennials that did the right thing in in college um complaining about not having a job when grown adults were getting laid off in their 40s. It's like shut up kid. I have kids. >> Yes, that's the thing. We didn't get any no one gave any sympathy to young people back then. That's all I'm saying. >> So, I think that of listen, of course, like I I am a sympathetic person. I don't like to see this. Um, it is weird though because on the one hand, like younger people tend to be more optimistic than than older people. >> I made this comment to you. >> Go ahead. >> I made this comment to you and Josh last week. I feel like it's always been younger people have this optimism and today I feel like it's getting it's getting broken. All the young people, they are they're way more pessimistic and cynical. And I think it's just because they grew up with the internet and social media. I don't I don't think they had a chance. So, young people have way less optimism than than they did in the past. They're way more cynical. >> Are young people This is a dumb question. Like, are young people on Twitter? >> I don't know. They're on TikTok and I don't know. I feel like it is more of a middle-aged Gen X late millennial thing for most people. But I I do think you you hate talking about demographics. But I do think the demographic stuff in the years ahead is going to be the the divide between the demographics is going to be worse than ever. So, um, Eric Finnegan from John Burns sent me every 6 to 12 months he sends me his demographic presentation that he does. And I pulled some charts here. And the thing is part of the the difference now between young and old people is part of it is things are just, you know, they're they are harder in some instances, but some of it is just life choices. So you look at uh annual birth by mother's age and it's under 30 versus 30 plus and for the first time ever more people are having a child plus 30 than below 30. It's never h right. So it was it was way different back in the 70s ' 80s and 90s. Um of course this one this is probably the one that gets people the most is that the first-time home buyer is 38 years old. It really hasn't budged off of like 30 31 since the last few years. But you have the largest population group this year is turning 33 to 37. If you break down the demographics into these these cohorts of like four or five years. Um I think that's part of the reason that it's causing this. There's so many more of these 30-y old people than ever before. This is like the rabbit going through the snake right now. It's young people. Um and this one gets people too. So this is Americans reaching other typical adult milestones later in life. So, this is percentage of 30-year-olds um living on their own, married, with a child, own a home, or have a bachelor's degree. And bachelor's degree is obviously the only one going up. And that's part of it, too, why people are putting off this stuff till later in life because they're getting more education. And how many young people these days want to even settle down? I think a lot of it this is life choices, too. >> You think this is like a structural thing, not just a real estate thing? >> I think this is I think part most of this is structural. Obviously, this is the worst time ever to be a first-time home buyer, but I think a lot of this is life choices, too. People are going to school longer. They're waiting to settle down longer. They don't a lot of people don't want kids till later in life. They want to enjoy it. Whereas in the past, it was like, yeah, let's just do it. Everyone else is doing it. Um, so anyway, I just think the demographic like divide though is and it's also we talked about the luck of the draw thing with Jason Zwag and and when you retire, a lot of the luck of the draw thing is going to be do I have rich baby boomer parents or not? Can they help me with a down payment? Will they give me some money or will I get an inheritance from them someday? >> I think that's going to be luck of the draw, too. Were you Did your parents save were they fiscally responsible or not? Does that some of the people that's that's their retirement plan. We've talked about this. Anyway, you you hate generational warfare. I think it's going to be worse than ever in the years ahead. Not going to get better. It's going to get way worse. >> Uh yeah, not my favorite topic. >> Okay. I shared with this with you on Slack this morning. Um >> no, you know why? Because it's just like it's just like a bummer. I don't like that stuff. >> It is a bummer. I I totally agree and I I just don't see it getting better anytime soon because I was you you and I probably in a similar boat here. I was so naive to the world around me when I was younger in high school and college. I knew nothing besides what was going on in like I had the blinders on. I didn't pay attention. I still remember when we had the Bush Gore election. Me and five or six friends went to a house of our friends that had a party house cuz we were I think we were a freshman in college. We watched the election. I don't even think people talked about who they wanted to win. No one really cared. We stayed up till 3:00 or 4 in the morning. They still didn't name a winner and we all went home. And guess what? We never talked about it again after that once. We didn't. It never once came up in conversation. >> Yeah. If you ask if you ask me, I mean, I was a little bit younger, but whose policies do you like better? I would say, uh, yeah, sure. But now if if you're a young person, you know everything down to a tea about these politicians and the and you're paying attention to this race in Iowa and this race in New York and like >> that stuff just didn't we wasn't on our maybe that says more about me and my friends than anything back then, but I think that was that was more people, right? We didn't have to care as much. And today young people feel like they have to know everything that's going on. All right. Um so there's this viral thing going around lately saying from Moody's the top 10% of earners account for 50% of consumption. We've talked about this a lot. this guy from University of California, this economist, Antoine Levy, he says, uh, this this isn't this stat isn't right. It can't be right. And he says the biggest reason is, um, rich people pay higher taxes, they have higher savings rate. So, he kind of backed into this and said, if you look at just the fact that people pay higher, rich people pay higher taxes. He's saying, I think some of the numbers are kind of, it's not like Moody's is fudging these numbers, but they're not exactly accurate. He said the number is probably more like 35 to 40% of disposal of of consumption. That's pretty high. >> I mean, does that change anything? >> I think the point is how you perceive the data. >> The trend is going higher. But the the funny thing is is that the 50% number, no one even batted an eye because it just seems like that's what it should be. You're right. May and maybe that the point is the trend is moving higher. And even if it's not 50%, the thing is the top 10% does account for like 50% of the income in this country. We were talking with Stephanie Roth last week on TAFF about why a lot of the spending wasn't impacted by higher interest rates and it is the top 10% the top whatever percent their ability to get alternative financing at lower interest rates and not have to slow down their spending is a structural change in the market. And I don't know what slows that other than something a credit event or something with the labor market, but even then a lot of these people are I mean certainly the retirees are are insulated from the labor market. Now if there's a big labor market impact the stock market will come down and it's circular logic but >> the the stuff that we're seeing the wealthy people have never had more options than they do today in terms of trying to manage their taxes or borrow money against financial assets. >> Yeah, >> there are so many other strategies. >> Yes. that wealthy people have that you're right. They were kind of like the mag seven companies that that didn't get impacted by higher rates. It was the same thing. >> Uh so here's the other side of the equation. Uh from Apollo, 25% of the US population has a subprime credit score. That's pretty gnarly. >> I wonder. So what's the number on that? I guess >> 680 I think. >> 25%. >> That's kind of nuts, right? >> No, that sounds right to me. Honestly, I mean, if you think about it, not everyone is in a mature financial position. Think about how many young I said the biggest cohort in the country right now is 33 to 37. How many people come out of college and their finances are awful? >> Is there a way to see your credit score score over time? I would love to chart mine. >> That's a good question. I don't know how that works. Like, so you think that at like when you first graduated from college and you're working as a waiter, like your fin your credit score was like negative essentially if that was >> I know it was. So, the first job opportunity, the first real one that I had, I've told this story before, but it was at Erade uh in Garden City, and the guy gave me an interview and was like, uh, yeah, you're going to take over a book of whatever it was, $100 million, and you're going to talk to these people, and you're going to try and upsell them, and you have a base salary of $60,000 with some opportunity to make more. And I was over the moon, excited. At that point, I had been unemployed. This is probably 2010 11. So I was unemployed for like two and a half years. Like literally unemployed. My eye was twitching. I had an eye spasm for two years. Um because I was so upset. And anyway, where am I going with this credit score? Right. So I didn't get the job because when they were doing their background check on me, they found a ding in my credit report. And in the interim, the guy that hired me left and the new guy who replaced him brought in somebody else. So yeah, my credit score sucked and impacted my job, my life in a serious way. >> It is it can it can tens of thousands of dollars over the course of your life, maybe hundreds of thousands if you had a good credit score, >> by the way. Well, for me in the opposite direction because my career trajectory would have been it can it can totally change your >> Yeah, >> but thank but thank god my credits suck because otherwise who knows where I'd be. Not here. Not talking to you, Ben. >> Okay. There are those forks in the road, right? >> Yeah, that was a major one. >> Yes, it is. This is something I would also tell young people. There are times in your life when you don't get a job or things seem really bad. I had many of those and I thought the world is over. This is it. The end of the world. And you look back at those and you go, gosh, that I I was so lucky that that thing didn't work out for me. >> Oh, yeah. Did you Did you ever apply to the Bermuda Monetary Authority? Things that bad for you? [laughter] >> I I lost a job once because I was trying to move to Chicago. My brother had a condo in Chicago and I used his address and they were sending all the correspondence to him and somehow he never got it. It was And um I finally emailed them. I said, "I haven't heard back from you." They said, "Hey, we offered you the job uh but you never responded." Um, yeah, that was a low point. That wasn't great. Uh, I think I went straight to the bar from there. Anyway, guess what? It worked out. I would have been miserable. It was like a real estate analyst job. It would have been awful. Wouldn't have worked out good. All right. Um, let's talk tariffs for a minute. We've had lots of conversations about why why aren't tariffs having a bigger impact? Um, from the ramp economics lab, R. Carzian has this great substack and he said, "Why are tariffs so confusing?" This is the big thing. Um so ramp is this company that helps people pay invoices and automates a lot of the financial decisions. So they have a ton of data to come from. So he said ramp data from manufacturing and retail sector invoices shows a slow and gradual increase in tariff costs. The share of bills and invoices showing a tariff charge has doubled from 1.4% in 2024 to nearly 3% as of 2025 September. Um so basically saying it's still a very tiny number. It's way so he he goes through this whole thing in this and it's worth reading the article, but he basically says if you just looked at the announcements, you'd think, "Oh my gosh, this is unbelievable." But if you look at the actual numbers and how many companies are actually paying tariffs or consumers, it's way smaller than the announcements. So companies are finding ways to skirt around these. They're not paying them. It's not having an impact because people aren't the tariffs aren't being paid as much as one would think. And we actually have a podcast. When is it coming out? Saturday, maybe. >> Saturday. >> Okay. All right. So, we have a podcast coming out with him talking about this and AI and it's it's really interesting stuff. So, should be out soon. >> All right. Um, on the AI front, we we talk as stock market people, we talk a lot about the market cap, the tweets, the charts, whatever. Um, and I don't think we spend enough time talking about like the underlying fundamentals about what's actually happening. So, our friend Michael Sitchmore has a great Substack and podcast called Alt Goes Mainstream. And in the most recent edition, he wrote about um what Meta is building in Louisiana, the Hyperion thing that they're doing this interesting financing with Blue Owl and Pimpan, everything else. Um it's 4 million square feet. It's a 4 million square f foot data center that's being built in Louisiana that will deliver over 2 gawatts of compute capacity to train future open source large language models. So for for context um 5 gawatt would be enough to power the entire city of Miami. So when you talk about the infrastructure the data center the capex bubble this is where it is. >> You know it is kind of funny. This is kind of a gotcha thing, but you could say like there's people who have been pounding the table and screaming for years like, "Why don't we build anything in the US anymore?" And they're probably the same people going, "Why are we building so many data centers?" Um, now you'd probably say like, "Why can't we just build more houses and stuff?" But this is one of those things that, you're right, we're we're actually building stuff here and these this isn't just this is this is actual actual stuff that's going to matter in the future. So they they say McKenzie projects that these data centers are projected to require almost $7 trillion to keep pace with the demand for compute power. So if that is even remotely within the realm of what happens where you're seeing 67 trillion being spent over a given time frame and ostensibly the spend is because there's revenue tied to it such that the investment makes sense. If you get those sort of numbers, then looking at it today, it's not outlandish. I mean, it's it's hard to it's hard to think about numbers of that size, like of that scale. So, for example, all right, let me put this in the dock. I had chart Kid um make this. So, we looked at Apple reported last week. We looked at all of their different segments and Apple I think did Apple cross 4 trillion? >> Yes. the Okay, >> which is funny because Apple didn't get into the AI stuff at all and they're still at all time highs and still $4 trillion. >> All right, the iPhone over the last 12 months has done more in revenue than Bank of America. The iPhone has done more revenue in the last 12 months than Meta. All of Meta. >> All right, that one surprises me. And I do kind of get it though because my wife and I have both lost phones in the last year and it's not cheap to replace. I will say that >> services which is the uh bell of the ball. This is the highest margin business. This is pushing their margins to an all-time high. Services business did more revenue than Target 109 billion. If you look at the wearables, okay, the freaking wearables, dude, it did almost as much money 36 billion as Starbucks which did 37 billion. Starbucks has 80 40,000 stores globally. I mean Starbucks. It's Starbucks. Salesforce did 39 billion. Okay. Um turn into the Mac, the computer. The Mac did more revenue 34 billion than Schwab. And lastly, the freaking iPad. The iPad. I know I'm saying it's not for three times the iPad, which in my mind I I don't know what I would have guessed iPad is. I would have guessed5 billion10 billion dollars. The iPad did more revenue in the last 12 months than AMD. >> That's a good chart right there. >> And they're buying back hundred billion dollars of stock a year. >> So I guess that I was going to get to this in a minute, but um there was a chart uh what was it? >> My point is we we're not even we're not even pretending to zoom in often times when we're having these conversations. And when you do when you look at some of the numbers, it's like all right, give me a guess. So there there's this number this subset called understanding AI um and they they show that the cash operating cash flow versus capital expenditures and it's so this is for Google, Amazon, Meta, Microsoft and Oracle and the operating cash flow is still there's a huge wide gap between there there's more than enough cash flow to cover all these capital expenditures that and to your point with Apple that's because they make so much darn money these companies and they're not even listed on this obviously because they're not getting into it. >> Um okay that's good stuff. I'll give you that. >> All right. I want to uh I want to play this video. Let me share my screen. Okay. Somebody tweeted this from Neil Degrass Tyson. Did you see this, Ben? >> No. >> Okay. Here we go. I've been doing calculations as well as looking back at old NASA footage and raw data from satellites hovering above Earth and I just can't escape the conclusion that the Earth might actually be flat. That's not me. It was never me. Those aren't my words. That's what's called a deep fake. How wild is that? >> So, wait, the earth really is flat? >> Yes, that's what I'm trying to So, boomers are going to get scammed into the stone age and not just boomers. I got a call a couple of weeks ago. I was with Chris, actually. Somebody from Germany was trying to log into my Google account. I got a I got a push notification on my phone. I hit no, obviously. 10 seconds later, I got a call from Google, right? It says Google on my phone. Now, Google doesn't call you. Okay. So, but I but I was like, "Wait a minute." Uh, what? So, I was I was getting scammed. Thank god I hung up the phone. But that doesn't even scratch the surface. Like, that Neil Degrass Tyson video and what's coming is going to make the crypto scams look like uh >> so look like my brain is breaking it. What does it look like? A walk in the park. Sure. >> Isn't this Can't there be a whole industry that crops up because of this though? like we're we're going to be the ones that tell you what's real and what's fake. >> Well, I guess that's >> by Flack or whatever. >> Uh by Crowd Strike, for example, like these cyber security companies are the obvious secular winners for the next >> for the next decade. But it's it's it's wild what's coming. >> Okay. Um I got a data center one for you. This is also understanding AI. Uh it shows data centers are catching up to offices. So it shows annual construction spending for data centers and and other offices and data centers is almost closing the gap to be bigger. Here's what I want to see from the Wall Street Journal. There has to be a story of which construction companies are getting rich off of this. There has to be some someone who is other ancillary benefits to people who are working on these data centers and and making money, right? There has to be other outside impacts besides just the tech companies. >> Well, yeah, >> this is helping someone. >> Who's getting these contracts? >> That's Yeah, that's a good question. And I I mentioned this to you and Josh last week. We talked to a farmland manager who said because farmlands are tend to be by resources that have a lot of water. Um farmland investments are now getting bit up and farmers are making money because they're trying to buy these data centers or build the data centers on farmland because it's so close to water because they need the water. There's going to be so many knock-on effects like that. Now again, people are probably mad like what wait the build out of the data centers is taking away construction workers from building other offices and building houses and blah blah blah. But I I still think like the fact that we're building this stuff in the states, that's that's a net positive for us. >> Yep. Lots of jobs. >> All right. I want to talk about AI and jobs. So this is from Wall Street Journal. Tens of thousands of white collar jobs are disappearing as AI starts to bite. >> By the way, Derek Thompson tweeted Derek Thompson made this chart like two weeks ago and everybody's stealing it. >> Which one? >> This one. >> Okay. Okay. So this is the S&P 500 versus total job openings and it shows when chat GPT launched, job openings crashed. I'm sorry. This is a massive chart crime. Massive. This this if you're trying to say that Chad GPT coming out is causing job openings to fall that quickly. This is the N this is the Nicholas Cage thing. The number of people who drowned in falling in a pool versus films Nicholas Cage appeared in. You could This is total correlation causation and this is a massive chart crime. You cannot tell me. [laughter] Okay. AI is going to have an impact on white collar jobs. ass. It did it immediately when Chad GBT launched. Come on. Give me a break. This is this is a chart crime to the nth degree. Correct. Straight to jail. >> Um well, two things in this chart. Number one, the blue line artificially got inflated during COVID, right? Jolts like >> that's the thing. It was it was this is part of the 2021 job market slowing down. >> Yeah. And then also uh you know what else happened when ChachiBT launched or uh I guess before when this when the blue line actually peaks h was there a tightening cycle I can't remember >> exactly everyone the company is overhired they raise rates all this stuff is AI going to have an impact on jobs yes is it already so uh John Leraryi put this thing out and there there's these things like Amazon >> what did they they let go 35,000 people and you say oh my gosh but he looked at just in the fourth quarter alone 7.5 million private sector jobs were destroyed in the fourth quarter alone of 2024. Okay. Job gains 7.7 million. Like there's so much churn in the US job market because there's so many people and so many workers that like these numbers you have to put them into context sometimes >> for sure. >> I mean the unemployment rate is still 4.3%. Although I guess if we don't report it anymore maybe it doesn't count. Um I know AI is going to have an impact. I don't see how you can say that it's having this big of an impact yet. That's my whole point. I think people need to calm down a little bit. >> It's a truck run. >> All right. Where are we at? >> Um, all right. Let's let me if you would if you would allow me to take five minutes on on strategy. Um, all right. So, the the company formerly known as Micro Strategy reported earnings this week. Chart Kid made this looking at the ratio of Strategy to Bitcoin. And this peaked um this peaked a year ago actually in November 2024 and it has been straight down for the last really since July. It's been acting really funky in a bad way. Uh the next chart shows the the value of their Bitcoin holdings compared to the market cap and people are heming and hawing a year ago. Why are they getting such a premium? Well, guess what? That premium collapsed. Matt also showed the market cap value divided by the Bitcoin holdings value and it peaked at like 3.5 times. It's now 1.2 times. Now, there's a lot of different reasons for this. Um, I think the primary one would be that if you wanted exposure to crypto and brokerage account, particularly leverage exposure before all the ETFs, before all the other treasury companies, um, this was the only game in town. So, the the earnings call itself, it's an it was an hour and 50 minutes. There's 92 slides. Now, to me, I know a lot of people don't care about this, but to me, >> you listen you listen to this whole call. >> No, no, no. I I listened to a lot of it, but I not all of it. It was Friday at 4:00. I said, "I think I'm think I'm done." Um uh 92 slides, hour 50 minutes. I've never seen such a thing. And one of the things that they talk about was um them getting a credit rating. All right. So, this is Fong Lee. He is the president and CEO. I'm going to play this at 1.5 times speed. So, if you're already jacked up to two, this might sound like a mouse, so you might want to slow it down. All right. Here he is talking about the S&P rating. >> S&P assigned as a B minus issue or credit rating to strategy. And we think this is a big milestone, not just for strategy and for uh Bitcoin treasury companies, but a big milestone for Bitcoin in itself. There's been a lot of discussion around whether we think this is a good rating or or not a good rating. I think it's a solid starting rating and I think even more importantly to have a rating. It gives us access to more pools of capital. Okay. >> So what does a B minus rating mean? Uh by definition it means that there's a stable outlook and it reflects the expectation that we'll continue to manage our capital structure prudently and we >> and also means below investment grade. Go on, please. >> That we maintain market access. Uh we were rated under a uh a structure that's a framework that's called non-bank financial institutions. >> NBFI, keep going, fun. >> That's a framework the S&P uses to rate us. And importantly, at this point in time, Bitcoin is uh we don't get any credit for the Bitcoin on our balance sheet when it comes to our rating. It's deducted from our equity and this drives negative riskadjusted capital. Uh so what needs to change? >> Okay. Uh not sure that they should get credit, but they think so. But all right, remains to be seen. There's a chart that shows that they've consistently delivered a BTC yield, which is they're trying to buy Bitcoin faster than they can dilute their shareholders. And they're using the Bitcoin divided by the equity to come up with a yield. All right, they've got a 26% Bitcoin yield. It all sounds kind of I see >> James and I roll calling it a yield, but okay. >> Um they do have a ton of Bitcoin on the balance sheet. Uh they've got 640 What is that? 640 is that,000 640,000 Bitcoin. I mean, it's not a small number. So, I'm listening to the call and Michael Sailor has an IQ of 375. There's no doubt that his intelligence is off the charts, but he's also I don't know the person, but listen to the call, it sounds it sounds it sounds like a lot. The second innovation is where we're replacing traditional risk with digital risk. Traditional risk, it's opaque. It's heterogeneous. It's discreet. You own 8,700 houses or you own, you know, you're exposed to a portfolio of 47 junk bond issuers. uh and maybe they're fine but then there's a tariff or there's a trade war or there's a competitive change or maybe there's a strike or maybe an airplane crashes you know or there's a COVID lockdown whenever you have these kind of uh conventional real world issues you have a discrete explosion of risk a forest fire an earthquake um or a change in a political regime or a change in tax rates >> I don't know how that wouldn't impact heterogeneous or not and I'm not quite exactly sure what that means but I'm not sure why Bitcoin wouldn't be impacted by any of those risks that he uh highlights. But who am I? Back to Michael >> or changing customs duties. So traditional risk is opaque. It's heterogeneous. It's discreet. On the other hand, uh digital risk is transparent. It's homogeneous. It's continuous. You can go to our website and we update the risk model every 15 seconds. And so it is completely continuous. We update the price of Bitcoin. We update the volatility of Bitcoin on a on a continuous basis. We update the BTC ratings. You you can plug in your statistical models into them. And of course all the risk is based upon the your outlook of BTC AR, BTC V, BTC price and BTC rating. So digital risk is uh is something where you don't have to wait for a year for a credit rating agency to publish a new report to tell you whether your favorite airline or your favorite, you know, restaurant chain is riskier or less risky. Uh with digital risk, you can literally plug into the website and you can recalibrate and calculate your risk every 15 seconds on Saturday morning. And that's a big uh upgrade. >> Now there's seven innovations that was merely about one of seven. Uh, I know a lot of people that are listening like, "Michael, please enough. I don't care." Well, I care. I think this is one of the most fascinating stories in the financial markets. Michael Sailor has uh generated a lot of buzz, raised a lot of capital to power this perpetual money machine, had a lot of success uh up until I guess the peak at the end of 2024. It's been certainly a rough 2025. Can he get his mojo back? Are buyers buying what he's selling? Is raising capital a business model? >> So my takeaway here is let's say their their premium is compressed. Does that make it harder for them to borrow to buy more Bitcoin? That's my >> Well, so this so this is the point. This is the point. Um the FT did a did a a good piece on the credit rating a the credit ratings of of strategy and what it means and they said what makes this episode remarkable. This is the FT is the company's craving for validation from the very trady establishment it claims to reject. Strategy presents itself as a bull work against the debasement of fiat currency. Yet it seeks legitimacy from two of the oldest and arguably most discredited pillars of the ancient regime. Sellside equity research analysts and credit rating agencies. And that's not even mentioning the palpable desire to gain membership in the S&P 500. the company's pursuit of conventional approval betrays more than a little self-doubt about its own purportedly disruptive project. So, one of the interesting things on the call is what they're doing, and I mentioned this last time with their four different preferreds where they're they're trying to strip out the volatility risk and like somehow shift all of it into the dividends of the preferred or the interest payments, whatever. Um, and he talks so fast and it's just like it's hard, honestly, he's because he's he's so much more he's so much smarter than I am. I'm I'm picturing you in your mudroom as Charlie Day from It's Always Sunny with lines and the pictures. I honestly Daniel, make that one happen for me. Make Michael as the >> that guy. >> I can't keep up. Um, so then the FT goes on. Last thing, then I'll stop here. Actually, that's not true. One more thing. The FT says the company argues that its $71 billion treasury of Bitcoin offers a massive buffer of collateral to service its obligations, but this exposes what S&P calls a currency mismatch between Strategy's dollar denominated liabilities and its Bitcoin denominated assets. Fixed income investors take on the risk of this mismatch without sharing in the in the Bitcoin upside receiving only a dividend while being exposed to potentially ruinous losses. And as S&P notes, if strategy were forced to sell Bitcoin to meet its obligations, it would likely occur during a downturn precisely when the collateral is losing value. So, and this is genuinely the last thing. So, on the call, of course, one of the analysts asked, talk about the performance. Um, Bitcoin is is having a a fine run and you guys are not. What actions can be taken to overcome the the headwinds for growth? So, here's what Michael said. >> I think Fong uh highlighted some of them in the discussion of uh S&P credit ratings issues, right? the fact that Bitcoin is not viewed as capital by the traditional credit ratings industry. So I think the view of Bitcoin is as as and the collateral value of Bitcoin and the traditional views under Basel rules under under the rules that govern our banking system, our insurance companies and our credit rating agencies. I think that that's a structural thing, you know, like uh when when uh Fazby uh didn't allow you to recognize gains, but they made you recognize losses. You didn't and you had infinite tangible accounting, that was pretty crippling. Uh I think that um we fix that and I think that fixing uh capital risk rules you know will be a big one. I think the second is um banking acceptance uh custody and credit rel banks issuing credit on Bitcoin. So um we're hearing rumors uh and and we've heard you know that a number of major banks in the US in the first half of 2026 will start to buy Bitcoin, sell Bitcoin, custody Bitcoin and issue credit and and margin lines against the native Bitcoin asset. That will be great for them. That will be great for Bitcoin. That will be great for us. that will accelerate adoption. And uh and so I I would say that neither of these are things that I would ask for government help for. Like we don't need a law to fix it. Uh what we do need to do is lobby the banks, lobby the insurance companies. >> All right. Really not an answer. It just it goes on and on and on. Uh and forgive me if this is of absolute no interest to you. I can't take my eyes off of it. I'm >> not going to lie. I tuned out a little bit ago. >> I know. It's it's okay. It's okay. [clears throat] You're not >> Let me ask you a question though. Are you say So Bitcoin is 108,000 now. It's up 15% year to date in a very risk environment when the dollar is getting crushed. Right? If I'm a macro person, here's the Winnie the Pooh meme. I just put it in the dock for you. This is the new macro thing. Stocks are an inflation hedge. First Winnie the Pooh. Second Winnie the Pooh. Stocks are a debasement hedge. That's how you macro right there. >> That is good. >> Um are you a little surprised Bitcoin is only up 15% year to date? Because I kind of thought it once it hits 100 like oh boy, who knows? Um I'm I'm kind of surprised that now it's to be fair it's up 60% over the past year. >> Well sentiment in cryptoland is like in the toilet. >> So I mean I and I do you think gold is a big part of that? The fact that gold is going nuts I feel like there has to be some envy from the crypto people this year going oh man gold is doing what we thought we were going to do this year. Listen, I don't think any I don't think any crypto person would say that they're like now there's like there's very there's hyper rational, logical, sensible people who are like, "Guys, calm down. Zoom out. 110,000." Like, chill. It's not going to go up 70% a year. It's a major asset class at this point. Like, everybody needs to pump their expectations. >> Yeah. Like I said, it's up 60% of last year. Just this year, 2025, if you're looking at it in a vacuum, Bitcoin is kind of just nittling. >> No, it is middling. Absolutely. So given given the backdrop, given gold, given uh max 7 names and a lot of the speculative names like the Olos of the world and the quantum stuff abs you wouldn't you would think that Bitcoin should be doing much better for sure. So anyway, Mic Strategy is definitely not doing what it used to do in terms of performance. He's doing a lot of uh wordplaining, but the the market isn't buying what he's selling for now, right? And I am >> the premium is too high. >> Yeah. And I I I'm very curious to see whether or not strategy get can get their mojo back. Uh, we'll see. >> Okay. Um, that was Yemen. Yman's work there. How do you say that word? Yman. >> Sorry. I Yeah, I know. For a lot of people, they're like they're fast voting or just >> It's the It was an interesting story. All right. You've been on it, too. So, the K-shaped stuff, this is from N. Let's get to housing. They look at the they do this on an annual basis. Change in sale by price range year-over-year. Um, this is a number of sales, not like how much it went up. Um, the biggest cohort that's getting more sales is the million-dollar houses, 20% of the total now, whereas under 250K is 8% of the total. More houses are selling for a million dollars or more than any any price right now, which is kind of insane when you think about it, but that's kind of our new reality. >> Yeah, I bet it also it's insane when you think about it, but then it makes a ton of sense when you think about it. >> The people who are able to buy houses, like you said, don't have to worry about much about is traditional financing. They have portfolios that they can use. Um they are buying the higher price houses. Yeah. They're not they're not worried about mortgage rates. They have home equity they can use. Uh I don't know. I I just I don't think a lot of people look at this and go, "Oh, this is great. Awesome." >> Ben, you know, you know, >> you know the line in um in Naked Gun, the late Leslie Nielsen says something like he's driving with uh with Ed, the big guy, and he goes, "Everywhere I look, I'm reminded of her." You know what I'm talking about? >> Yeah. >> So, there's a phenomenon. >> I watched the new one. I'm going to talk about it. My recommendations. >> Okay. There's a phenomenon. It has a name. I can't remember what it's called where like you buy a car or you get a dog and then you like you see them like you've never seen them before. Right. >> Right. Yep. >> So, that's happening with me now for the for the Dan Wang book that we keep talking about like the lawyers versus engineers. Now, it it's so obvious in this article because it literally this is what the article was about. But this guy Michael Riley does he covers uh he covers DC. That's his beat for Bloomberg. And he wrote a really good profile on Ollo and the history of nuclear and funding and the mismatch between venture and and and the industry and all that. It was really well done. So they spoke about this guy who uh is an early investor in Ollo and his whole strategy was basically to replicate the Uber playbook. Um, so >> well, like go into a place, just do it. Ask for don't ask for permission, ask >> just regulatory change, >> forgiveness. Yeah. >> Like just just make it happen. So the article said, um, Uber deployed lawsuits and regulatory assaults so regularly that the serial entrepreneur Michael Bertov said in 2023 that hailing an Uber account amounts to hiring a law firm that just happens to have an independent contractor driver nearby. Its army of lobbyists and aggressive political maneuvering cowed politicians from New York City to New Delhi. The company's playbook inspired a new term regulatory entrepreneurship. In trying to apply that model across industries, Chur who was the original investor, the original venture guy and uh I forget his first name and to a he built a company that has little in common with a traditional VC operation. Here's a kudigra. Rather than hiring mainly MBAs, Trust Ventures is stacked with lawyers. Chur and his team devote much of their time to dissecting regulations looking for loopholes. Um, so I have no opinion on like, you know, is this dirty? Is this good? Is this necessary? Is this what you need to enact change? Whatever. Like that's a whole other nuance debate. But this is the world that we live in in the United States where everything I feel like the the um the default answer to everything can we do this is no because of legislation. >> So now you know why so many business leaders and entrepreneurs and venture capital people uh were Trump supporters because it was the promises were deregulation. We're going to cut the red tape and let you do whatever you want. Right. Yeah. Now say what you say what you want if you you know obviously a lot of people are not supporters but like there is a lot of overregulation and is there the risk the not so uh little risk that we cut too much fat to the bone and we we over deregulate? Sure. Of course there is. >> We definitely will. I I would imagine there's stuff that's going to happen because of this. But um you're too Yeah, we obviously went too far in the other direction. Uh >> all right. This this this headline stuck out to me immediately. Um, Craft Hind CEO warns of worst consumer sentiment in decades. That's from Bloomberg. So, they reported um the CEO said, "We now have one of the worst consumer sentiment." Okay, I just read that part. The company expects fullear organic net sales to be down three to three and a half%. Um, he cited slower growth in emerging markets and pressure on the US retail. They they cut their outlook. All right. So, obviously my thinking is, hey, wait a minute. Uh maybe there's just other things happening that in the industry more so than just like yeah the consumer doesn't buy ketchup anymore because they can't afford ketchup. So Bloomberg says other big >> ketchup >> right other big package food companies have Yeah. How bad do things have to be without being insensitive for you to say no I can't get ketchup. >> Right. We we buy Listen, we buy a lot of ketchup in the Carlson household cuz my son he he'll fill up half his plate with ketchup when he has a burger and fries. Um, I got him a t-shirt last time I traveled somewhere that says I put ketchup on my ketchup in the Hines logo, you know. Um, so it's not it's not our problem. Sorry, Craft. We're doing our part. >> Same. Kobe dips uh apple slices in ketchup, which is >> everything, right? Kids kids use ketchup for Yeah, it's gross. >> All right. Analysts have said that these companies make the kinds of processed foods Americans are moving away from. Now, obviously, Hines makes a lot more than just ketchup. So, um, the So, here how's this for a nonsense quote from Manderlay CEO? The government shutdown going forward will not help with the confidence of the consumer. Bro, >> people, your your company's not struggling because the consumer is worried about the government shutdown. Ben, did you watch the show Riculousness or are you even like familiar with it? >> Yeah. Rob Deer. >> Okay. >> He he he stole the show from TSH, Daniel Tosh. Do you remember TSH.0? >> Yeah. >> Okay. So, we used to watch that one and Rob Deerk stole that the idea of ridiculousness from TSH.0. >> Got it. Okay. I never I never saw TSH 2.0 with Tash Po. I'm sorry, but I was familiar with it being a thing. Didn't know that. Anyway, so apparently there's like a >> new has come to light. There's a lawsuit and this was unearthed and um >> it was literally the only thing they play on MTV for like 24 hours a day. >> So this dude is making $ 32.5 million a year. They do 336 episodes a year. Isn't that wild? >> Did you ever watch Robin Big back in the day? >> No, I know when it was a thing. He was his bodyguard or something. >> Yeah, I liked that show. RP passed away. Um, all right. Anyway, I just thought it was wild that that he makes that much money content and and business. And obviously MTV is a paramount uh paramount studio thing. Anyway, that was a face blur for me. All right. A lot of people shared this this meme with us with with two dads running into each other at Costco. Dad. Uh-oh. Here comes trouble. Other dad. I guess they let anyone in here. Both dads. And it's Tom Cruz with just cackling. So good. Yeah, that's that's uh that one got me. >> Here's another good one. Uh, somebody said, "Hey, what was that AI podcast that Ben mentioned last week?" >> A million people asked me, just so you know, people in the future, we do show notes on our websites, a wealth of sense.com or relevantinvestor.com that has links to everything we talk about. So, if you need because people asked me and I shared, but if you need to know, we have show notes on our websites. >> All right. Well, get this. No longer will you need to go to the show notes or email Ben directly because this person asked Google which said it gave him the answer. He said animal spirits AI podcast and it gave him the answer. >> Wow, that's pretty good. Okay, >> that's pretty cool >> right there. All right, there was this robot thing on Twitter that went nuts called Neo, the home robot and there was a video and they showed it and it says it can do your laundry, it can clean for you. Um, see the person that folds your laundry that their robots are going to take their job. Um, now and it says you can you I think you can buy this thing for 20 grand or pay like $500 a month for it. And this had like 67 million views on Twitter. And I just have to say and it sounds like there's some caveats. Like I guess there's going to be like someone watching the robot through a screen for certain tasks and like controlling it for you. So it sounds a little sketchy and I I'm sure it's not ready for prime time, but I'm not usually an early adopter of technology and I don't know how this thing's going to do. Who knows? Um, >> that's true. you you just discovered Apple Pay, >> but I will be one of the last people to I'm going to wait like 5 years to buy a robot. I'm not going to be the one who buys the robot and have the robot come put it and and like choke me or something like I've seen enough movies. I'm not going to be a first adopter of a robot. Here's the thing. I don't want a robot to look like a human. Why can't it just look like Why can't it be a box with tentacles that come out? I don't want it to look like a person. That that's way too creepy. If you walk in your house in a dark room and the robot's just sitting there, how creepy is that going to be? I I don't want to have I'm not going to be the first adopter of the robot. And listen, if you buy a robot and the robot kills you, no one can feel sorry for you. If you buy the first version of the robot and it turns on you like iroot style, you can't. It's It's like going skydiving and you die like, "Sorry, no one feels sorry for you." Fair. >> Daniel's getting uncomfortable. He's moving in a suit. >> I'm sorry, but if you buy the first version of a robot and it turns on you and and it kills you, I'll go to your funeral, but I'm not going to like I'm not going to shed a tear. Sorry. Um, Roberts are coming. >> They definitely are, but I'm I'm not. I'm going to wait, >> right? >> Well, of course you are. So am I. I mean, listen, I think I think by definition, most people are going to wait for a $20,000 robot purchase. >> True. All right, but yeah, they're coming. Um, all right. So, I I got into the I I gave up on baseball like 15 years ago. I just don't didn't care anymore. It's too long, too slow, too boring. I other stuff going on. Um, I got really into the playoffs this year. I watched the Tigers play. They barely lost the mirrors. And I kept watching and I watched and I got really invested in the Blue Jays and Dodgers. I watched most of the series. I really wanted the Blue Jays to win because I hate the Evil M players that spend too much money. Um, and John Smoltz was the the announcer. So, I stayed up and watched the whole uh game seven the other night, like 1:00 in the morning or something. Uh, awesome game. I felt so bad for Blue Jays fans, our our fellow Canadians that always listen to us. But John Smoltz is the announcer for Fox and he's really really good. And it got me thinking. I forgot the very first boss I had in this business, John Smoltz has some Detroit ties because he started out his life with the Tiger. I don't know if he's from Detroit, but but he started out with the Tigers and the Tigers traded into the Braves where he got all good. Um, my boss had had a professional athlete as a as a c as a client. He had some family office clients, but mostly we worked with institutions and uh had a really bad experience and someone said, "Hey, John Smoltz was recommended as a client to you and he'd like to talk to you because your other clients had such a good experience." And my boss said, "No, not talking to him." And I said, "Whoa, whoa, whoa, whoa, whoa. No, we got to take this meeting. This is John Smoltz." And he said, "I have a hard and fast rule. I never work with I will never work with a professional athlete again. The demands are too much. The it's it's they were divas. I don't know this guy from anyone else, but I'm not going to even take this call with him." And I was flabbergasted. But looking back on it now, I love that he had that hard and fast rule like these are the clients I'm going to work with. These are the ones I won't. >> Anyway, >> that's my Johnson story. >> Wow. >> All right. recommendations. Can I go first? Cuz I I got a handful here. >> First of all, I have a horror movie that got me the heebie-jebies. It it you know the I I I you say I'm a robot cuz I don't have those feelings. I got it. >> Okay. Which one? >> This is because my son he he now likes our chat GPT to say, "Hey, we liked this movie. Type it in. Other movies like Tremors, other movies like Beetlejuice." So we be using that a lot. So yesterday we watched Arahobia and that movie >> makes my skin crawl. Absolutely. like because it feels real. It's not one of these weird that >> I hate spiders. >> H I do too. And so that movie I mean if you if you lived in the house I don't know if you've seen it in a while but you would literally burn that house to the ground before you stayed in it. Correct. The whole house was swarmed with spiders. >> Yeah. Disgusting. I did re I did rewatch like an hour of it a couple years ago. >> I mean John Goodman as the exterminator and Jeff it's a >> he was he was that his breakout role? Probably not but it >> it could have been. >> That's my earliest memory of him. Great. Uh he was in Raising Arizona was probably this his breakout one. Um okay so I did watch Naked Gun. It's on Paramount right now and I loved the originals. We've talked about this and obviously Leslie Nielsen Wait, what's his no Liam N? >> Let me ask you this. Was it better or worse than you thought it was going to be? >> I belly laughed probably five times. Like hardy laughs. And so he's obviously it it wasn't quite the same as the originals, but there was enough good jokes in there that I really laughed hard and that was >> and that's all you could ask for. Yeah, it was like an hour and 20 minutes. >> It was great. >> Okay. Um, so The House of Dynamite was literally one of the worst movie endings of all time. >> Holy >> Right. For a movie that tried to be good, it was one of the worst movie endings ever. >> That was the That was the horse meme. The the whatever the crap in the back. I'm I'm usually like I I can forgive a bad ending because I know sometimes the planes are hard to land, but that ending completely invalidated the entire thing. And not just the ending, Idris Ela's entire existence in that movie. I'm not saying it was his fault. As soon as he came into the movie, it went to It was so And no spoilers. Do not watch this movie. Okay, you're welcome. >> Don't waste your time. It was a waste of time. >> Oh my god. Did you Did you rewind as soon as it ended? Ended. Did I skip a part? >> That's what I I thought. Wait, I might Did I miss something here? >> What were they doing? Who thought that was good? >> All right, speaking of the horse meme, I watched Weapons on HBO Max. Now, I know this this movie had a little buzz. I think you kind of you liked it. weapons. I know you you saw this in the theater, right? Okay. >> This movie was the horse meme. Okay. And I I know this movie got some buzz. I thought the first hour of the movie was like riveting. It was oh my gosh, what's going on with these kids and Julia Garner who was in Ozark, I think she is fantastic. Um, but then they went and her story line was great and Josh Brolan was pretty and they did all these different the same story from different points of view. I thought it was really good. In the last hour of the movie, I thought just it was a car careening off of a cliff that it was the lady from Uncle Buck, Chenise from Uncle Buck or not Chenise, I can't remember that. Uncle Buck's girlfriend and she's also in Field of Dreams. Um, just the payoff I thought was so so bad. And the fact that it was like 2 hours and 15 minutes. This should have been an hour and 30 minute movie. I thought this was the total horse me. So here's here's my my analogy for movies this year. I feel like 2025 >> Wait, hold on. Hold on. Hold on. Hold on. Before let before before we get off weapons, you having a strong take on weapons would be like me telling you that Uncle Buck doesn't work. You're not allowed to have an opinion on horror movies because you're not a horror movie guy. And the last the part that you didn't like about weapons when it got silly. That was like obviously intentional. It was comedy and I did see it in the theater and the entire theater was cackling because that was the intended purpose. It wasn't supposed to be like, "Huh, that's a weird ending." So you you don't get to you don't get to weigh in. Sorry. No offense. >> It was an unintentional horror comedy. That's what I'm supposed to >> No, no, no, no, no. Intentional. It was intentionally hilarious. You were supposed to laugh at the end. >> The whole last it just I'm sorry. It was It was awful. Terrible. Didn't work at all. It was really >> All right. Well, guess what? Transplants and automobiles stupid. You have these two 40 You have these two middle-aged guys are crying with each. Come on. >> My point is it's not it's not a you. It's not. No, no, no. I love trans >> said about my weapons review here. >> No, no, no. My No. My point is this is not for you to weigh in. Here's my lawn. >> Here's my theory about movies in 2025 because we've done this a lot. Um Sinners I thought was a good movie, not a great movie. Um the P the PTA one you said everyone's saying this is a classic but it's it's it's just a good movie. I thought weapons is kind of the same thing. So, here it is. So, Michael Mobson had this piece about Ted Williams and why he hit 400. And the reason is is because the the level of competition was wider back then. There weren't nearly as many good people. So, now like the there's a higher average overall, but it's the, you know, people are just better. And I think that was the Ted Williams thing. So, in the 2000s, I'm I'm going to land this plane. Kanye West, everyone called him a genius in the 2010s being a rapper. I think if he was in the 1990s, he would have just been another rapper. He would have been good. He would add some hit songs. He people never would have called him a genius. And it's because there was no other good rappers at the time. And so my point here is >> there are so few good movies anymore. Anytime that there is a good movie, a decent movie, people have to say it's the greatest thing ever. >> Yeah. Okay. I totally agree with that take. But also, if you relative, >> if you ask me, should I watch Weapons? I would say no. It's not for you because it's genuinely not for you. Like I'm not surprised you didn't like the ending because it's not for you. >> But I the first hour of the movie I thought was really good. It was really interesting. >> Yeah. And I and I I did I I enjoyed the Shadow Weapons. I had a great time, but like I agree with Movie. >> Is it a No. Stop. Is it a classic? Uh, no. It was a good It was a good horror movie. It was fun. I had a good time. >> All right. Any Did you watch Weapons? >> Did you love it? >> Yeah. See, Daniel loved it. He gets it. >> Um, any other recommendations? Uh, no. Just d I just drecomd House of Dynamite. Um, I'm pretty dry right now. Oh, you know what's annoying? I want I really want to watch the Scorsesei doc. It's like six episodes on Apple TV. Come on. That's a That's a two-hour movie at most. I don't have time for six episodes of Marty. >> That is a lot. See, that's the They should have um Audible for documentaries. >> Yeah, I would two times the out of that. I really want to watch it. >> Yeah. So, you should just be able Like, do you need to see a documentary? I guess you want to see some movie scenes, but Okay. Okay. Um let's do some plugs. Let's plug Talking Wealth. >> Yes. So, so we have a a a podcast channel called um called Talking Wealth, and we talk about stuff in our day job, stuff going on around the industry, who's making noise, what should advisers be looking for. So, you can find that on our YouTube channel talking. >> It's a YouTube talking wealth. We also have a podcast version now. Um it's you, me, and Josh talking to people about what's going on in the industry and new exciting products and services and strategies and yes, take a look. All right. Uh, >> what else? All right, that's enough. We We went long. Sorry, Daniel. It >> was going to take a minute. >> Is our FBA conference going to be a podcast or not? >> Yeah. >> Okay. I don't know. >> Animal Spirits at the Compound News. Thank you everybody for the listens, for the emails. Love hearing from our audience. Have a great week. We'll see you next time. [music]