Tech Stocks Are Back | Animal Spirits 309

Oh, today's Animal Spirits is brought to you by our friends at y charts. One more reminder: register for y charts webinar discussing scenario tools with a big emphasis on how it works to streamline the financial planning process with our CEO, Nick majorly made 20 of data Fame. May 24th, 12: 30 PM Eastern. Be there, sign up on our website. Wait, this comes out on May 24th, Chef, same day. Just a reminder: if you're a morning listener and you want to learn about the scenario tools, we have a lot of early morning listeners, all right. So one more thing from y charts. I pulled it up: comp tables this year: S P: 500 number of stocks up in the s p out of 504 names. Well, it's 500 names. Don't do this. There's 504 names because different share classes- all right, there's 500 stocks. There's 500 companies- okay, technically, 504 share classes, it's 500 companies, all right. How many are up? Well, I was told five, so I'm gonna go with five. 270 are up because everyone says it's only- yeah, I still. There's just five companies. 234 are down. 150 stocks this year up: 10 or more, 99 down, 10 or worse. Not as bad as people make it out to be saying it's only these stocks, right, they have it just saying: if you want to check out the comp table, scenario analysis, all that stuff, check out the webinar. The day this is releasing ychartscom, tell them. Animal spirit sent you 20 off your initial subscription. [music] experts. With Michael and Ben, we're going to start with a little bit of housekeeping. Show more

Red holds wealth management is coming to Austin. We've finally have an office there. I've been there a million times. The millionaire- was it 99? No, we've been in the bunch. Lovely, are you going on the trip end? Okay, we, you and I have been traveling too much. Show more

Yeah, I, I I'm probably not going, but I might, I might. But if you want to talk to us about learning about what we actually do for a living, helping people manage their money, if you want to talk to us about potentially joining us as an advisor, if you are in the Austin area, you can email us info. Red hotswealthcom. All right. That's plug number one. We've got two plugs. Second plug: Ben, you wanna take this one? Which one? Well, this is you look good, this is more of an announcement than a plug. Yeah, it's an announcement, okay. First of all, we are doing this podcast together again. We do this once a month. It seems like we get together now and we are at the wealth management Edge slash inside ETF slash. Wealth sack slash is that it is there another slash, I think you nailed it. It's a big conference in Fort Lauderdale, Florida, Hollywood, Florida, Hollywood, and we thought there wasn't a better time to break it out than in Florida. We have the new Animal Spirits tropical brothers. Look at that. Animal spirits says it right on the sleeve. There we have the new whale design trees. I mean we have like the little wooden looking buttons here. It's fabulous. The tropical Bros people did better than I could have imagined in designing us a shirt. This is on sale now. You can get it at Tropical Brothers. If you go to tropicalbrotherscom- it's tropicalbroscom under collaborations. There's it says Natty light, like USA and animal spirits. Wait, USA like the USA. There's like a us, like a USA Rara Olympics kind of thing. Show more

So we go into collaborations just there. If not, we're gonna have- I'm gonna share it on social media, on the blogs, but it's Animal Spirits Hawaiian shirts. Here's the best part, besides looking really cool and being comfortable in the summer- 10 of all sales which would have gone to us. Show more

But not to brag, we're, we're for going all sales here. It's going to. No kid hungry, which we've helped out in the past. No kidhungryorg. So 10 of all sales will go to them. So feel good, look good, do good. Yup. According to their latest estimates, nine million children live food insecure, do not get enough food to live a healthy life. No kid hungry, which you've worked for for a few years. They've always been great to work with, very happy with that relationship. We're giving 10 of all proceeds to them to help children in need who need some more food. So again, tropicalbroscom, look for collaborations. Animal Spirits. This is the hottest shirt of the summer. I'm sorry you have to have one of these for summer break. Show more

It's, it's comfortable, it's breathable and it looks just fantastic colors. We're walking around a conference and we have people in business casual. We have the women are in dresses, the men are in suit coats and business casual and they look at us and we're in shorts and a Hawaiian shirt and everyone's just look at these guys. These guys have it all figured out right? I think so too. All right, Ben, where am I? We're in, we're in Florida and I've got a few bones to pick. Maybe. Observations, actually, no bones, that's. That's not true. Well, I have one bun. You won't believe what I saw before you got to the conference this morning. So there's an exhibit hall back there and, you know, behind the exhibitors there's like a banner right with their company. Yeah, whatever, I saw a dude steaming. Swear to God with a steamer. I would have told him: listen, dude, they don't work. And I went up to him. He goes seeing his clothes or the banner, no, the banner. I said something. He goes: does this do anything? And it said, Thank you. Funny, you should mention that we just you know, I've got, we have a podcast and I, I, he doesn't know who you are, which is totally cool, Fair. And I said: listen, I want to clarify. Steamers will not get out of bed wrinkle. So, yeah, if you, if you crumble, if you crumble a suit coat and you put into your, into your briefcase, you've got lines out the ass. No, a steamer's not gonna do. You need an iron. But for just a t-shirt, to just get a quick wrinkle out, Steamers are are sufficient, but if you're traveling somewhere, you're going to have wrinkles. I agree, Steamers are not ideal for travelers. I agree, yes, okay. So my other conference observation: most Finance conferences are dominated by men, it's. There's not a lot of diversity in this industry. I think it's getting better, but it's notoriously but not very diverse. I would say 15 of all attendees at any Finance conference are bald. Right, one out of seven and a half or so. It's pretty close. There's a lot of balls at Finance conferences. What's a bald? Do you mean like a meatballed or like like a dude who's balding? Both? Yeah, yeah, I think that's fair. Okay, all right, wait, wait, I got two more things, two more things. This happened to me two times in a row, so it's not a coincidence for me once. Shame on me. Twice can't get fold again. Last night I went to the Miami Heat game. Actually, let's talk about that now real quick. Alone, alone, see, I would like Duncan to do a poll to see what's weirder: going to movies alone or going to a professional sports game alone? Oh, definitely a sports game, for sure I mean. So it's just like, because going to a sports game is a social event. Now here's a few things people around you like: are we in groups and you're just by yourself? Here's a few things I will say. Show more

I grew up hating the Heat organization- still do, because Pat Riley, but I respect the out of this team so much that I actually bet on. I did a parlay, I told you I took the nuggets and the Heat to make the finals plus 7.90. No big deal not to break. I didn't think that he were actually gonna beat the Celtics, but they were like plus 450 or whatever. It made no sense. Yeah, it's made no sense. So two, two things. We had a podcast with ramit Sadie, which was amazing, and ramit's whole deal is spend extravagantly on things that are important to you and cut back mercilessly on the things that aren't right. So also, podcasts come out Saturday with him, YouTube. On Monday, we talked about his new Netflix show and it was a fantastic conversation. All right, so I am a lifelong gigantic basketball fan. Probably the first thing that I ever remember, like my early memories are like the next. So you're setting me up to tell me you spend a lot of money in this District. I can, I can see, I can see where this is going. So, all right. So I spent a lot of money on this ticket and I'll reveal, and I felt, I felt no qualms about spending this money, because this is what this is what money is for. Like, literally, I will never forget going to game three, where the heat destroyed the Celtics can, I guess? Show more

Sure, so you want to know where it's at. You sent me a picture, okay, so that. So that was my second ticket, and here's where the bone that I have to pick is. So, but it was. It was in the lower ball. Why do you have two tickets? I'll explain in a second. What do you think? I spent playoff game, home game for money. Eastern Conference Finals: 9: 50.. Okay, not quite that much. So my first ticket was like 470- 600 with taxes, so it's like 600 bucks. So I'm getting ready to go to the game and it's like five o'clock and my ticket's still not delivered. So I call up StubHub- who you know I how I feel about StubHub with their 30 fees or whatever it is- and I said my ticket hasn't been delivered, what's going on? And they're like: oh, the seller didn't deliver the ticket. We were just about to email you or something. I'm like the game starts in three hours. What do you mean? You were just about to email me like I ordered my ticket, like this morning, I don't know, was it on me? Should I've called them sooner? But in any event. So now there's no decency, it's that I wanted for the same price. Show more

I had a better seat. No, I didn't. I, I had a slightly worse seat and it ended up costing me like 740 wow. So you have to plan more because they messed up the first one. So I called them and I explained the situation like listen, I don't think I'm being unreasonable, I just want you to credit me the difference between my worst seat and the better seat that I would have had, because you guys just never let me know that the ticket was. And they laughed in your face. No, the customer service guy was very nice. He said: let me check with my team. He said: what if I can give you? He's like there's no way they're going to give you the refund. Obviously I get it. What about if we just give you like a coupon, like a 140 voucher? Show more

And I said that would be great, thank you. What do you think they did? Sorry, sorry, we can't help this on our policy. I'm like you know what? Okay, okay, I will never use stuff up again. I, I, I don't understand why it's so bad, the whole everything, the whole ticketing process. Well, how come someone hasn't come in to figure it out and make it a better? So there's a, there's another service, I think it's called- let me see if I'm doing this right- Tech pick, yeah, so yeah, it's check to pick. I'm done with StubHub, it was, it's just just annoyed, annoyed me, all right, let's talk markets. Wait one last thing. Okay, you got a lot to talk about, sorry, last thing. So last night I went to dinner, obviously by myself- this is before or after the game, before- and they included a 20 gratuity. That's a great scene. And, Forgetting Sarah Marshall, where Jonah Hill is the host and Jason Siegel goes to, we have one guy by himself sitting for dinner and Sarah and Russell, Russell Branch, yeah, I love that movie. So they put a 20 pack of truly, and I guess I don't even know what I was thinking, but I tipped on top of it because I just wasn't really paying attention. But then you and I got a fantastic Miami Vice When in Rome at the bar, and it was again 20 gratuity, I'm thinking like why are they doing that? So I've seen they include 20, which, by the way, I don't have a problem with- like 20, tell you. But no, they do that. If it's like a party of ten. Yeah, true, I party of one. I do think, unfortunately, the like I've been since the pandemic started and you feel for people, but they're working and doing stuff and making keeping the world moving. Show more

My tipping has definitely increased a lot, like the pandemic made me realize, like, oh, like these people are that are in our food service preparing it and moving, like I've been tipping better, but I feel like the The Tipping thing is getting to a point where they're really making people mad now, like they pushed it a little too far, almost that there's there's a lot of people getting angry with, like the concept. Show more

Listen, I spent my entire adolescent life in the service industry: busboy, waiter, valet Parker, Cabana Boy, caddy. One time was not for me, so I'm a Tipper. But, yeah, there's come, there's a, there's a time and a place and a way to do it. Yeah, why not? I can't see asking you for golf tips. No, offense, no, but you should have seen me, commanded boy. I was, that was, that was special. I was Elite. Oh, speaking of elite, lasting. And then I'll move past this. Show more

Robin goes, he's like you know. I heard you talking about how you're a great grocery food shopper and I was like how? Because she doesn't listen to the podcast, she goes. I saw it on Instagram she goes: let me just tell you something. Until you listen to something, you never get what I asked you to get. I'm like, okay if I shoot 96, if I forget blueberries one time, I I maintain I am an elite grocery Shopper, okay. So she called you on it, she called me on it, but the I am, I just am. That's fair. If you had to describe the financial Market macro news cycle in 2023, what are some adjectives that will come to mind? Adjectives not like, it's not good, just the general mood sentiment: sour, right on edge, boring. How about great for the stock market? Oh, how about great. Show more

How about NASDAQ 100? But that's facts. We're talking about Mood Food. The Vibes of not The Vibes- have not felt great this year. Again, it's a continuation of last year. Nasdaq 100, this year up 27 percent. S P 500 up 10 year-to-date. Does it feel that like that? I think the Russell 2000 is not up as much it's. The Vibes don't match the returns and obviously some people would say: well, last year the NASDAQ was down 30, whatever percent. That first he was down 20, whatever percent. Still, they're nowhere close to matching the fact that this has been a pretty great year. Five months in in the stock market. Show more

Right, yes, but what happens when this happens and that happens and the recession is coming? I mean the fed and I get team butt. I totally get team butt. I have no problem with Team butt, I'm not gonna touch that one. I have a problem. When can I get us up here? Diet Coke, here's the. Here's my one, my one, my one problem with this conference: there's no Coke Zeros, where I thought I had water. I'm thirsty. All right, go on, I'm not sure I might Diet Coke with you. Show more

Do you want some? No Cokes here you can have it. Now. Sure, Mike, terms with you. So I would say that the Vibes have still been way off compared to the market, and the market is saying: we don't care, we're climbing the wall of worry again, whatever it is. But I think a lot of people would be shocked at how well the stock market is doing this year. Yeah, right, okay, here's a bone to pick with you. We headed, we had it out in slack this morning and you know what the best performing stock in the s? P this year is? When I was looking at my little computer, Facebook, Nvidia, Nvidia- I thought Facebook, it's mostly tech stocks, though tech stocks are doing phenomenally. Show more

What is the Fed done with interest rates this year? Raise them a lot. They're higher. Yeah, tech stocks are up and rates are up. Yes, how does this possible? Because I was told the only tech stocks can go up if rates go down, the only. No, that's not what you were told. I'm moving the goal post. Last year I was told that's not what you were told. Rates went up, so Tech socks went down. So that doesn't have to be that. No, it doesn't. This is not. This is not. The inverse does not have to be true. See, this is where you're wrong text. I'm saying I don't believe this, but this is. Show more

I feel like a lot of people thought last year that, okay, we have an inverse correlation and that's what's gonna happen. Yeah, that's what happened. There was a historic, there was an interest rate shock and tech stocks which were reliant on hopes and high multiples got destroyed. This is not narrative, this is fact. Got destroyed by that, did they not? And I'm not saying that rates didn't have something to do with that, they obviously did. And then inflation made those cash flows less valuable- future cash flows- so they got destroyed. My point is: a lot of people did think, okay, tech stocks were only a rate story and that's it, and that was not the case. Show more

Obviously, if rates are higher and tech stocks are higher, this, your tech stocks are way higher, hold on. But we're talking about different things. So, so part of the run-up to tech stocks was obviously a low rate story. Not all of it, because their earnings- like, obviously, Apple, Google, they- exceeded lofty expectations. Just fundamentally, they did they. They stratified. It was not all a rate story. I think some people were saying that it was all low rates stock is not one. It's not. It's not one Tech stock. There's the sofas and carvanas of the world. Right like so. But anyway, my point, so my point- is those stocks got killed because interest rates went up as quickly as they did, primarily the- I'm not saying the other reason, primarily. And now, how could they be up when rates are still high? Well, it's simple. Number one: they got oversold. I know it's like a lame excuse, but Facebook was down 70 plus percent, but, more importantly, it's fundamentals. These companies and their management teams got the memo very, very quickly, or pretty damn quickly, in this first quarter of 2022.. Show more

Was that one? No, in the first quarter of 2021, things started to. That's when all of these companies crash. When DocuSign went down 80, what do you think- and after how much less- would Facebook have gone down if they didn't make the switch to metaverse, to meta? A lot less right, a lot less. Yeah, the point is this: that the CEO of uber, Dara, was, I think, the first major company to come out and tell it's different. Now Wall Street has certain expectations and they all cut their losses and move to efficiency. So I think that is the reason why we've had so much great success for these companies and, of course, with Nvidia specifically. That's all AI, but I think, the Google- maybe I'm arguing with a strong manager, but is what I'm saying Fair? Yes, it is, but I'm also just saying I think there were certain people who thought like, oh, this is easy, I haven't figured out. It's rates, that's it and that's not it. That was it, it wasn't it. It was well, rates plus speculation plus. Yeah, all right, Carl icon, did you read this ft story about him? Lost some money. I, I, I actually spent some time in this last week. Okay, Carl Icahn made a bet that the market would crash and it cost him nine billion dollars over six years. How much money did he manage? If he lost nine billion dollars, it's like all his, but how much? How much was he worth? So did you see the who did the Hindenburg did the report and I'm? It's pretty rough, yeah, but but I remember. I remember in 2015 when I was a young whippersnapper, Carl Icahn was on CNBC talk calling, calling hyg and j k a powder keg. I remember that. Remember he had the cartoon of ishares, Larry Fink driving a bus over a cliff, yeah, and so I wrote a blog post. Show more

Very respectfully. I wasn't like dunking on Carl Icon. By any stretch of the imagination, I would never do that. And I do remember a particular comment, but anyway, that's not the point. The point is that Carl- I kind credit to him- came out and said that he's been. He at least admitted it. He said, like I've always told people, there's nobody who can pick this Market on a short-term basis. Maybe I made the mistake of not adhering to my own advice, but he also said- and this is I mean, this is just, this is a layup if you're a fun manager performing. I obviously believe the market was in for great trouble, but the FED injected trillions of dollars into the market to fight covet, and the old saying is: don't fight the Fed, so he did blame the FED a little bit, which I feel like. Show more

You just kind of. Even if you're admitting a mistake, you have to blame the FED, because that's what you do. If you want to perform, yeah, right anyway, but it my point of the stock market being up this year is just that most of the time the stock market goes up. Sure, a lot of people- I feel like a lot of people in their brains- can't come to this conclusion, though, because everything always has to be bad, and if you bet against the stock market for six years in a row, guess what probability says you're probably going to be wrong, because the stock market goes up most of the time, even though sometimes it goes down. People are so. I saw I just fly this. I didn't read it all. Mike Green, Professor Plquote, tweeted: breaking White House says: if US defaults, the stock market is expected to decline by more than 45 percent. Show more

I I haven't had time. I may not have time. I did not see the report, I didn't read into this, but so Mike Green said the quote: let it burn. Quote: tweets and comments tell you everything you need to know. Everyone is Comfortably Numb to the consequences. Again, I didn't see all the quotients, but I did see this one response that I want to fly because it was pertinent to what you just said. Don't you believe the market over politicians? Though, like the, I would just listen, just listen, just wait for the, the coup de gras. So somebody replied: sending the s? P down 45 would be more than enough to atone for the sins of 15 years of insane QE. Show more

And zurp takes us back just below pre-pandemic levels. Inflation would probably. Inflation problem would evaporate overnight. Yes, it would be an ugly recession, but we've returned to a real economy. There's a lot of people, all a lot of people, that feel that QE is somehow not somehow. I understand their point of view. They think it's, you know, exacerbating wealth inequality, because rich people only and the world needs to burn. Yeah, but anyway, but they really do they? They think that it's like a moral problem of qan. I don't, I don't share this person's point of view, but I understand where they're coming from, even if I don't agree. I don't. I I think 2008 broke people's brains. In 2020, shatter them into million pieces. And I think some people just they assume the world would be better if we had like a a great depression level resetting. I'm sorry that is not better than it's not. No, that well, that that I definitely. I do not agree that that that is better. How about a win for the now show Japan crowd, or a loss? Show more

I don't even know if it's a win or loss, but bespoke tweeted: did you see this, Ben? Nope, the Nikkei 2225 broke out to a new multi-decade high this week, hitting its highest level since 1990.. Wow, that's impressive. How about that? Here's another one greatest bubble of all time. I, I think, as far as my money goes. I think so. Yeah, here's another one, Ben the Dax. That's the German Mega. That's the index in Germany. Stock market index in Germany- new all-time highs. That is one of the most confounding things. That is surprising. Euro stocks- what oh what's this? Euro sucks one. Hi, look, I have been a recording podcast right now. Look at my, look at my shirt, look at me. Bye. So yeah, there you go. Show more

And Walter Bloomer tweeted: Euro size volatility index is at its lowest level since February 2020.. Wow, just wait, I honestly have. No, I don't know anything about, like the German stock market. I can't tell you why it's doing what it's doing, but there you have it all right. So Tony Welsh had a great tweet. He said I know only a few stocks driving returns. Narrative sounds scary but according to Empirical research, there really isn't much to read into forward returns when trailing performance has been concentrated in the top of the market. So he looked at what happens. This is so great. If you've never seen this, I haven't either. So he shows. I was told that narrowing leadership is super bearish, which it intuitively makes sense. Right, and the the returns have been fine when it's concentrated performance. So walk me through this. So people- well, people- always say: if it's just the top stocks leading the way, just wait when those stopped working, Watch Out Below. And he broke it into lowest concentration versus Heinz concentration and showed the what is it? The six month returns following that. So prior six months things were high and I think the ensuing six months and what happened? And it's not bad, it's not the end of the world and at all all right. So this shows large cap stocks, six month forward returns by deciles of the share of market returns explained by the top five companies. So low it from lowest concentration to highest concentration. Look at the one from 1926 on. It was. So it's been a little worse lately, since 1990, but still pretty darn good. All right, you ready? Yeah? Yeah, there's not much to see here. Hyeah, hold on. I just will say, when there is Broad, more broad participation returns are better, yeah, but yeah, it's not the end of the world just because it's so concentrated. Show more

All right, how about some? How about some optimism here? That was a hey Mike moment there. What do you mean from Old School when he's working on the car? Which part? Oh, yeah, Mike. Yeah, all right, Steve Cohen, the reference to somebody. Just Ben and I are in a glass booth. For those of you, I think we're in a podcast and I just wish, I just gave, gave away, and if you listen to the podcast, this is the week that you should check out YouTube at the compound so you can see the shirts. Yes, you have to see them. They're going to be linked to on our blogs and welcome sense and relevant. Investor. Do you still have a Blog? Show more

Barely okay, you don't blog much anymore. I, I no, you know what. You know what? I'm too busy, too much podcasting. I have two. I, yeah, I don't have time. Yeah, we were really busy today. Drinks by the pool. It was tough. All right, Steve Cohen, I'm making a prognostication. We're going up talking about AI. I'm actually pretty bullish. He thinks there's a big way of opportunities coming from Ai and he says, like good luck standing in the way of this freight train. Now, if AI does what everyone now says it's going to do, is that the next bull market or the next bubble, or both? Show more

It has to be a bubble, right. Yeah, we're not there yet. If it does 50 of what people think it's going to do, then that it's almost guaranteed to be a bubble right. Well, and then, by definition, it will be able market right, which will lead to a bubble. Yeah, we're on tcaf. We've got somebody this week who's knows way more about this stuff than we do. I'm excited to talk about it, but yeah, it's early. Speaking of people who don't belong anymore, remember when Jesse Livermore used to blog at philosophical economics? Yes, I mean, we're talking. I'm actually happy- who doesn't blog anymore? Because as as incredible as this blogs were, it was like: all right, block off three hours. I think the call it 2012 to 2015-ish range, as far as I'm concerned, was like: you know, the golden age. Show more

That was a golden age of financial blogging, I think, and he, he was a big part of it. Yeah, he, he had some. He had some real face blowers, like there was some stuff that I read from him where I was like I couldn't believe the quality of the work that he was putting out and I learned- maybe I learned to. I don't want to say more of him than anyone else, but I learned a lot from that guy. So he still occasionally tweets some numbers and stuff. He, he broke all of this great chart here breaking down all sorts of different valuation ratios and you can look at it if you want in the Tweet. But his he said his investing model for 2020's decade: International over domestic value, overgrowth, small over large. He looked at all these different P ratios and capes and small and all this stuff and it's it's. It's interesting because that would be pretty much the exact opposite of last decade and this is fundamentally based alone. So it's it's impossible to gauge where people put their money, but it kind of makes sense. It does make sense and I wouldn't be surprised if it doesn't pan out. Yeah, it's almost like: is this too easy? Well, did you see grantham's, not grantham's, Monty's? Mia culpa, I give him a lot of credit. I put it in here. Okay, because so GMO, as everyone knows, has been bearish, for I'm not sure I liked his explanation, though it honestly he's. So we talked about this a couple weeks ago. We said why was a place like GMO so wrong about margins having to come back down to the historical averages? Yeah, we just talk about that anyway, honestly. So his answer: the tldr. But he gave a full me, a Copa and then basically said it was the fiscal deficit. Show more

He said it was government spending. Yeah, and I honestly I'm not smart enough to say whether or not that's- but the government spending didn't happen until 2020.. That's my problem. Explanation: no, no, he said even prior, even prior. He said it was it. I, I don't know if the numbers are right, but I don't know if a six percent of GDP or six percent long-term average, I, I didn't. Show more

His explanation, I thought, missed the technology. Yeah, I don't think it's that complicated. I think these. You've never seen companies this big, with moats and margins this large, where they could just create new categories out of thin air. So I think that's a fundamental difference. I'm sure that there's. I don't want to throw what he said in the garbage, but that I think that's the simplest exercise. Speaking of Motes and margins, okay, see what I did there. They had a big profile on of JP Morgan on Wall Street Journal this week talking about how much bigger they're becoming. The bank is open branches in 25 new States, plus DC since 2018.. 4 800 locations in every state in the lower 48s achievement: it alone is unlocked. Show more

I'm back at JPMorgan, do you? Yes, added another 93 this month when I bought First Republic: 13 of the nation's deposit, 21 of all credit card spending- bigger share than in each than any other bank investment bankers. Show more

This is, surprisingly, bringing more Revenue than all our Wall Street Rivals, including Goldman and Morgan Stanley. Look at their deposits since 2020.. Yeah, I mean part of that is people holding more cash, but JP Morgan is essentially, I mean he's like the treasury secretary as it is right now and they- it feels like they're like part of the government now- is they're bulletproof, correct? Does that mean like something has to go wrong with them? I don't. They seem like they're another arm of the government. Essentially, I mean they're one of the most important companies in the world. Show more

Right, obviously, I mean biggest black United States. But what happens if, when Jamie Diamond retires, or does he work till? He's like Bob Iger, until he's like 80 or something. How old is Siri? 60s. He was younger than when he was running. He was younger than like during 2008.. Yeah, he strikes me as like a worker, but I don't know. I don't know I is that is this good? The whole them being this important and big, I don't know, 67 years old, he's not Young. The whole thing about how Regional banks are the ones that are serving their local community strikes me as something that people say that is true, right. Show more

I do genuinely believe that, as you ever drive by a Regional Bank in your town and get like I'm gonna Bank it there- no, I don't. But you know what's funny? I was talking to Josh. Josh just mentioned that there's a bank near us. I was like hyou. Know what I'm very? Here's one of my weaknesses: I'm very non-observant of my surroundings, fair, so I don't notice things as I'm passing them and I somehow noticed like a Citizens Bank on the corner, like my street, or something. Why would you use that over JP Morgan? I don't know. They give you better rates or a better deal on business loans. I can't see it. If you're an individual. If you're a company, maybe I mean, I've I have. If you're credit worthy, a bank will loan to you. Show more

I mean, I have, I've had accounts over the years at Credit Unions for loans- car loans and house loans- but then and they make you open up a checking account, but all I do is is move money into there to pay the mortgage or to pay the car payment and that's all I use it for. Yeah, I don't use it for anything else because I just don't know that 3 000 Banks instead of seven thousand or whatever it is, is that bad? And I don't know, I don't know the ramifications, I I just don't know enough to really have a strong opinion. I don't think it's that big of a deal, but if you really do my hunch- but I don't know if you're one of these people who is worried about ftic, whatever, and for whatever reason you're worried about that- JPMorgan is the answer. Right, yeah, this, this chart is pretty wild from y charts, yes, okay. So this I put this is US federal government interest payments. Now, and it's good, gone, parabolic, right? Yeah, you've, you've got to normalize this for something, otherwise people are going to lose. You normalize it GDP, and it's not nearly as bad. Show more

But my whole point is this is: wow, what? Or is that a trillion? Is it about that? A trillion, yes, but I mean it's gone from 500 billion to a trillion, like that. This is my whole thing of why I don't think rates can stay higher for longer. Because the US can't Finance its debt. And even if, if you compare it to something else like GDP, and it's not as bad as it was historically- politicians are going to latch onto this and go see, look at how much more we're spending on interest. We cannot keep rates at five percent. I think this becomes a political issue at some point. Yeah, yeah, that's an interesting point. Are they going to cut rates, not to juice the economy, but to, like, make sure that we can roll our debt? It just seems like, eventually, that's a political problem. That's all I'm thinking. Why? Because the deficit will just keep widening and widening. Yeah, because you'll say, why are we keeping rates at five percent? Just to pay all this money to? I think it's a political issue eventually. Just a thought from Cali Cox: the S P 500 has been 10 or more below its record high for just over a year, the eighth longest streak in history. That's kind of wild. That is pretty good. Cali says, yes, this bear sucked. But if you're a long-term investor, this has been a once in a decade chance to buy consistently low prices. And to our listeners, I hope you've been taking advantage. You're here, Cali C, an optimistic person. Finally, I hope you've been taking advantage. Show more

Yes, all right. This was a good tweet from James Thorne, talking about the FED wanting to get back there two percent. They they say we don't follow the inflation, we follow core pce, which, whatever take this out, add this, I don't know. After the 1980s we had two recessions in the early 80s, another one in 1990. Poor pce did not reach two percent until 1996.. So inflation at 15 or whatever in 1981 or 80. we did not reach core pce of two percent until 96. A decade and a half later he said vocal claim victory over inflation was significantly above two percent. I'm just wondering at a certain point won't the FED kind of claim victory if price is just sort of stabilized? Show more

So athletic motor and was on Morningstar, the Longview podcast last week and he was talking about: listen, it's not inflation itself that's bad, it's the volatility in prices. So if you knew inflation was going to be five percent on a stable basis, you can plan for that. That would be fine, but it's going from two to seven to three, and then you average five. That's worse, because people don't like all the ups and downs. So I think, like, if we get to a stable three or four percent, at that point is the Fed gonna say, Okay, prices are stable, even though they're not as low as we wanted to be on inflation rate. Show more

Then can they claim victory. If we don't get back to two percent, just can't stop thinking about StubHub. Okay, you know what I'll say. I'll set up. There was a comment section, like you know. Are you happy, are you not leave? It was like 140 characters, I'm like typing, and then it was like wait, it was like once they take your, your piece of paper or whatever, you send it on and throw it away, your, your comments. Thanks for that. Right in the trash, right in recycle bin. All right, there's a, there's a refi boom. Liberty Street economics looked at wow, so they looked at mortgage originations and how it spiked and came down. The surprising thing to me, though, this is refinancing and purchases, three financing Boom for billions of dollars, and this isn't adjusted for inflation. It says balances are nominal dollars. It basically was the same thing as it was in the early 2000s. I don't think people took enough money out in refinancing. Guess what? Maybe maybe we don't talk enough about how stimulative the refi boom was. It was huge. People locked in their biggest monthly payment for a long, long time at a low rate. But also, how about the cash out refi's? Show more

So one third of outstanding mortgage balances were refinanced. During the seven quarters of the refinance boom, an additional 17 of mortgages outstanding were refreshed, but through purchases. So no, but I'm saying how much money was pulled out? Oh, I don't think. I don't think not as much as you would assume for rates being that low. But out of out of the 700 billion or whatever it was, was it a quarter of a trillion right there? Home equity extraction: look at the next chart. It wasn't as high as it was in the early 2000s. It never even got that high, which is that's pretty surprising to me, since housing values are obviously up since then as a percent. Okay, 430 billion dollars extracted. How much? 430 billion, there you go. It's a lot of money. Show more

It's kind of crazy, because when we refinanced it at least, it took forever. Remember how Berry they were. Yeah, the banks, yeah, and now it's what's the? What's the thing that rolls through like in the movies, a tumbleweed. Yeah, that's the word I was looking for. Midwest, out west. Yeah, I was thinking it wasn't like a what? Where was I looking for? I mean, that's the exact right word. I was gonna say something way off. You still thinking with StubHub, that's a problem. Show more

All right, is, there are eye buyers. So so andreesseness's Theory, like there's no such thing as a bad idea, there's only ideas that are too early or something like that. I buyers too early are just a horrible idea. So what I'm what I'm getting at is there's a chart from Mike delpreet: open door- and I apologize if I'm not saying his name correctly- Open Door, monthly purchases and it peaked in July 2021 and just you know, it went from around 6 000 units a month, if I'm reading this right, to 500.. I think. Will this ever work? I think the housing market is as close to being undisruptible as an industry can be. I agree how? I don't know how- it hasn't been disrupted yet. Show more

If it's not, if it hasn't happened yet, I don't think it's ever going to. There's too many parties. I think that, and it's too much. You can't. I don't think you can make the housing market more efficient with technology? I don't think it's possible. The thing that I, the thing, the story that I remember the most about why the eye buyers weren't working is: somebody emailed us that there's a house with a really bad dog in the backyard that won't stop barking and nobody would touch his house. Right, it was on the market for a year and it's the dog. It's an annoying dog and I buyers came in and immediately paid like 30 over, ask yeah, and then and then they were stuck with it. This is interesting from Lance Lambert. Talk about so we talk about like the economy, and how it's not homogeneous. There are local areas of growth and stagnation and recession and whatever he said. Talk about A Tale of Two housing markets. Most of Connecticut sits at an all-time high, while California remains well below the 2022 Peak. Show more

Don't show this to Duncan. He's just uprooted and living in Connecticut looking at houses, so I think he's not listening. Don't watch Duncan. That is interesting, did we or is? Is the recession done? Mentions of recession and recession and earnings calls be falling no longer in Vogue. Can I do a tweet in podcast form? 2021: a recession is imminent. 2022. we're already in a recession. It's obvious. 2023- actually recession is more like a 2024 story. Well, actually, actually, I was watching CNBC this morning. Neil Kashkari was on and he was saying how he's like remember last year when we had two consecutive cores of negative GDP and everyone thought we were in a session recession? Show more

I kind of forgot about that. Do you remember that? Yes, we, we pounded the table saying no, we're not in a recession. I'm pretty sure we were on the right side of history with that. Yes, we pounded the table, it was not a recession. I also saw a chart of it would be the first recession in history when no one lost their job and the unemployment rate went down. Boom, here it is. Thank you, Sean, for putting this in number of s p 500 companies citing inflation coming way down. So I call it. Catania tweeted: dear execs, second quarter saw the lowest level of production cost inflation since q1. Show more

And then he said: probably not a coincidence. So the number of companies mentioning inflation on earnings costs has fallen to the lowest level since Q2- 20- 21.. So no recession and we beat inflation. Is the landing soft. Is the landing soft? I missed this when Powell had his speech two or three weeks ago. He said something I'm looking for here. Show more

Well, here it is. It is still possible that the case of avoiding a recession is, in my view, more likely than not having a recession. Damn right, he said that, I think. I think if we do have a recession now, it's going to be all because of the FED. Show more

If they don't learn to like take their foot off the gas pedal to the brake- whichever analogy I'm looking for here- I think they're going to be the sole cause of it. If it happens, we, we only have this booth for another 10 minutes. We're gonna- we're gonna keep this quick. Don't need to spend a lot of time here. But this: who could have seen this coming? Disney is shutting the Star Wars star Cruiser hotel, which cost twenty four hundred dollars a night after 18 months. I thought it was like 5 000 a night, wasn't it? Well, they said a cabin- 72 guests- costs 4 800.. Well, listen, three guests was 5200, whatever. Whatever it said. The price for a couple sharing a room works out to 2400 per person for one night. Two days, stay all right. Here's this said this: premiBoutique experience gave us the opportunity to try new things on a smaller scale of 100 rooms. This is as we prepare for its final voyage. Whatever, whatever that's, it didn't last. You don't go to Disney to sit in your room and experience the room. You go to Disney to experience the parks. Yes, all right, just save them a lot of money. If they would have just listened to me. Disney's counterpart- sort of Netflix- said that five million monthly active users for it's cheaper at support option. I'm sorry. They said they have five million monthly active users. 25 set of new subscribers were signing up for the TRN areas where it's available. You know what this means. That's interesting. They make more money on the ad tier. So what's that gonna mean? Our subscription no ad one is prices are gonna go up. They're gonna. All these places are gonna jack up the prices of the the no ad version because they make more money on ads, you know? The other thing is I am getting very, very nervous about my Cable Bundle. Show more

Well, you should Disney what it doesn't say. Espn is laying the groundwork to sell its Channel directly to cable cord cutters at a subscription service in coming years. Here's the thing: ESPN helps subsidize other cable providers. They're gonna jack up the price on my Cable Bundle. Now I'm screwed. How much is it I pay? This is with internet and cable. I think I pay 170 a month, but this, that doesn't sound like that bad. With internet. It gets me stars, HBO, show time- yeah, that's not a lot, it's a great deal. Yeah, and 400 channels- okay, what would you realistically? I mean, I guess what this? You, you'll pay 250.. I'll keep, yeah, but the thing is there, if you, okay, I'm gonna. I know a lot of people change the YouTube TV in Hulu TV. They jacked the prices up on those too. Plus, you have to pay for internet. So either way, you're screwed. I think the prices- that's what we know- the prices are going up for Content. That's the takeaway. Show more

I think Netflix ruined everything for everyone. They really did, because everyone saw how great their stock was. This is how the stock market affects businesses in the economy. Everyone was like, oh, we need to get into streaming. Look at the multiple. Nasdaq dragged Disney down with them. Look at the multiple. And then what everybody thought was like Green Pastures turned out to be like a hell pit right. So everyone followed it all crashed and burned. Now the bundle's going away. I don't know, but it's not going anywhere. But the prices are going up. Yeah, the prices are going up. All right, my car idea- so just to be clear, here was my idea people were sending us which, by the way, I learned something new: there's a company called turo t-u-r-o which is Airbnb. Show more

It's it's Airbnb for cars and it is sweet. So I'm, I think, I'm, I think I'm going to California next month with Chris and we are definitely going to use it. In my mind, you know about this Toro. Yeah, some people send it to us. My rebuttal D was: you're a bald man who wears Hawaiian shirts and you're trying to drive a convertible. Welcome to your midlife crisis. Yeah, it's here, no, boy. But again, just to be clear, here's what I want. I want a subscription service for cars, not for, like, fancy cars where you like can have access to. Show more

I'm talking about the cars that you drive around your neighborhood or whatever. So there should be tears. If you want four cars, it's a thousand dollars a month. If you want six cars, it's 1300 a month. If you want the upper end, it's 1700 a month. Whatever, you want to be a single lease fee, but you wanna have six cars a year or something exactly. So I I send this to cart dealership guy and he goes: Fair, did this, went bankrupt. So there was a company that did this again and it went bankrupt. So I would say maybe they just didn't execute, because I think it's a solid idea. This sounds like a 2020 idea to me. It would have gotten a very high multiple and it would be down 98 right now from the highs of it ipo'd. All right, recommendations. I am super, super, duper psyched for the Arnold Schwarzenegger- is it a? It's a doc on Netflix. He might be- he might be- the most interesting man of all time, most accomplished. Show more

I mean, he's got an interesting story. Yeah, did you see the trailer? Yeah, looks good, looks amazing. There's another trailer that I saw, that blue. Is he the most accomplished? No, has anyone ever done more impressions of a person ever than Arnold? Oh, no, right, okay, there's a trailer. It's called The Creator and it's about AI. It's basically looks like Terminator two, so you're pretty late in recommendations if you're recommending two trailers. Show more

Wait, did you? And the guy that the the director did? It looks good. It's Denzel's son in it, right, it looks good. Is that? What is it called? It's called The Creator. Oh, the, yeah, I'm so so. So here for it. What did I watch on the airplane? All right, you wanna, I? I don't think I'm watching anything, because I'm gonna tell it's all, it's basketball. I tried two things on the plane: the fablemans- brutal, oh, I'm so mad, so I, I, so I. When that came out I was so excited to see it and then it just got. Steven Spielberg is giving me so much joy in my life. Yeah, in it. Did you watch it at all? I'm not going to a cinema. Right, it's a film and in appearance, or Paul Dano and Michelle, amazing, amazing, yeah, great actors and their characters are horrible. They're annoying. It's a like. I turned it off after a half hour. I couldn't, couldn't do it. Here's a recommendation for you: Silo on Apple TV. My wife and I knocked out three or four episodes this weekend. A bunch of people you know- Tim Robbins is in it, a bunch of people you've seen in other movies and that you, you like, five people in the show. You'd go. This person's gonna. So here's the premise and they give you the premise five minutes into the, into the show. There's a huge Silo that goes down like 140 floors into the Earth. You can only see outside from the top floor. Say no more, I'm literally in the. People have been living. It's a civilization like a thousand people. They've been living there for 140 years but someone erased their history. They don't know why they're there. All they know is if they leave The Silo, they die of poison. It might be a one season show, but it's yes. And finally on Netflix. I felt kind of weird watching this last night before I flew this morning. But Flight with Denzel- great movie- I forgot about. That movie is awesome, got a great. It's a great- John Goodman, Don Cheadle, along with Denzel, it's a great mover. Here's the thing about Denver. You know, I only saw the movie Once. I don't feel like I need to revisit it because it's worth a re-watch. Okay, I only saw it once too. Denzel is the kind of guy who plays himself in every movie, but you buy the version of himself that he plays in every movie, even if it's a little different. I think Denzel is my favorite actor of all time. I I would have to- I would have to like seriously sit down and do a proper comparison, but I'm pretty sure he's my favorite actor. So good, that's all I got. All right, tropical Bros. In conclusion: yes, tropicalbroscom, look for collaborations. Animal spirits- that guy's got a sweet mustache. That's your next midlife crisis. Look at that guy. Yeah, can't see him. All right, remember: 10 of all proceeds go to no kid hungry. Help kids who are malnourished under eating here. What else we got? Austin, Austin, redhotswoldcom. If you want to learn more future proof, check out our show with ramit about Netflix. This is a lot of promos. Got a lot going on. These are the shirts of the summer you have. You have to get one, yeah. Animal Spirits product gmailcom. Thank you for listening. We will see you next time, okay. Show more

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