How Much Is $1 Trillion? | Animal Spirits 469

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0:34 Click the link in the show notes to learn more. Before investing, carefully consider a fund's investment objectives, risks, charges, and expenses along with other information contained in the perspectus available at wisdomree.com/investments. Read it carefully. Welcome to Animal Spirits with Michael and Ben. Michael, I want to talk about unsatisfying conclusions because I think since the great financial crisis, a lot of people have wanted a satisfying conclusion to the market, right? They want something to be definitive and we haven't had [music] that. 2020 2022 was a bare market. It wasn't a definitive bare market, right?

1:09 It w it was just it happened. We moved on. Co was a crash. It wasn't definitive. We moved on. Everything has happened since since the great financial crisis we moved on from. So, I think I think when the SpaceX IPO, people wanted to there to be a definitive uh this is it. They wanted to see like a 500% pop or whatever like a like a dot IPO or a crash. And I know that the stock took off and it's taking off a little more today, but we're not getting anything definitive. And so, I'm just I'm just throwing out the the potential for an unsatisfying conclusion to the whole AI thing, right? Some people want this to be a bubble like the dot thing that crashes, right? Other people want it to be this life-changing thing that's going to take economic growth to 14% per year or something. The unsatisfying conclusion is we get a wash out at some point, but it's not an end of the world crash and we and the world moves on because AI is a life-changing technology and that's probably a buying opportunity.

2:02 Thoughts >> from your lips to God's ears? That would be >> and no one's satisfied with that that conclusion. Unlike the end of Road to Predition, I don't know why I just thought of that movie as an unsatisfying conclusion. >> Boy, that was, you know, that part of that movie was filmed in on the coast in Lake Michigan. >> Okay. Um, yeah, that would be fantastic. No bubble, no crash. I think I think most um reasonable people would like to avoid both of those outcomes, >> but I I still think like this is going to there's going to be a wash out at some point. there's probably going to be a bare market from this, but I I don't necessarily think that that means it has to be this like lifealtering crash.

2:42 Maybe, but I'm just I'm throwing that potential out there for people who it would let's say we had a 25 to 30% bare market and the world didn't fall apart and it was a great buying opportunity and the market recovered in a year and a half or two and all the people who were screaming bubble would go, "Ah, man, really that was it?" Ben, I think two weeks ago, um, you said something to the effects of this has to end badly, and I said I was going to take the other side of that next week.

3:08 >> True. >> I never did that cuz that, you know, whatever, we forgot. >> Um, everything that we know about investing, the history of investing, and some of the immutable laws of stock market driven by fear and greed and human behavior. And that's the part of it that has never changed and will never change. Doesn't matter if you're talking about 1923, 1946, I mean, whatever. We we were human beings 100 years ago, we'll be human beings 500 years from now. And so everything in the back of our brain wants to go to the place that this has to end in a bubble. It just has to.

3:50 Um, but maybe it doesn't. Maybe it doesn't like that that that stock market stat that we discuss all the time from Peter Bernstein where he spoke about in in when he came into the the business I think in the 1950s um there was a whole generation of investors that was obviously still scarred from from from the stock market crash in 1929 and forever and ever stocks had a higher dividend yield than the coupon that you would receive on bonds because stocks were riskier and nobody thought about price appreciation or total return. It was what is a stock going to pay you?

4:32 What is a bond going to pay you? It was sort of an apples to apples comparison, >> right? Stock dividends were much higher because they had to compete with bonds in the past. >> Correct. Um, and then it changed where yields on stocks went below the interest rate on bonds and these old-timers were telling young Peter Bernstein, "Listen, kid, we've seen this movie before. Anytime they get close, stocks are too expensive, they crash." And it's been, you know, 75 years and we haven't looked back. And so things do and can change and nothing is forever and ever. And I know that's like a specific thing versus a human behavior thing, but I think you have to at least be open-minded to the idea that maybe this isn't the.com bubble again. Even though it's so easy to go there and you can't rule it out. I mean, certainly we'll talk about the SpaceX IPO. There are there are similarities more than more than one or two.

5:25 >> Here's here's my thinking on this. We think of a we think of this thing this in a range of outcomes because how could you possibly be certain? But my point is you don't need to call the top. >> Okay? So, the New York Times had this piece this week. Mega IPO frenzy could be a harbinger of stock market bubble. Okay, Meb Meb Fabers show this week. He had Jim Grant AI is one of the greatest bubbles of all time. Jim Chainos was on a video yesterday. This is bigger than the dot bubble. And to be fair, there's more context involved in these headlines. Of course, Jim Chainos was talking about the capex side of things.

5:54 But if you talk about Jim Grant and Ray Dallio and Jim Chanos, their job is to call the top on these things. That is their livelihood essentially. >> This is what they do. M >> you, the royal you, the royal we, don't have to call these like this. You don't have to be a pundit. You don't have to be a hedge fund manager. You don't have to call the top. I I looked at this. I wrote a piece in 2017 about how how financial market, the financial media has been calling stuff for a while now.

6:24 Look at all these headlines I put in here from August 5th, 19 2017. When will the tech bubble burst? May 2016, is the tech bubble bursting? September 2015 is Silicon Valley in another tech bubble. People have tried to call this for so so long that if anyone who does quote unquote call it is going to be lucky because they timed it right and they've been calling it for 12 years. That's it. You don't have to call it.

6:52 >> Um Ben, the remember the show Silicon Valley? >> It was early. >> Do you know when that debuted? >> Was it 2014? Maybe. That's exactly right. >> Oh, nailed it. >> 2014. If ever, if ever there were a they ring the bell at the top, it was a freaking show about Silicon Valley after Silicon Valley had a pretty damn good run. There was an article in the journal over the weekend by Spencer J. Jacob, who who uh I think does great work. He said uh the headline was a sign of the market top. Tell us your shoes shine boy story. So, they're they're soliciting um reader emails. I was outside of Starbucks on the morning of the IPO of SpaceX and the guy next to me was at a table with his wife and kid and he said, "Ah, I got 75 shares." He got 75 shares of SpaceX. He uh he wanted 250 shares.

7:51 And my point is, there are no more shoe shine boy stories. It's over. Everybody knows everything. Everybody likes to talk about that Joseph Kennedy story back in 1929 where >> there's too many anecdotes now. >> What's that? >> There's too many anecdotes now. >> Um, everybody knows everything and you might hear from a friend or a family member and think, "Oh, wow." By the time they're asking about it, and yeah, that's probably fair, but you don't know what anecdote they came across or who spoke to them. Like, there's just so many different ways to get information. Everybody knows anything. There are no more shoe shine boy indicators now.

8:34 >> No one knew anything back then when Joseph Kennedy was investing in the 20s. No one knew anything and no one invested in the stock market. >> Nobody knew anything. So if you want to point to the space So if you're saying like, "Guys, are you drunk?" All right. If you want to point to the SpaceX IPO as your mental signal to reduce your AI concentration in your own portfolio, fine. Fine. I'm not going to say that this is not a potential point in time that we can look back on as the top. Maybe we will, maybe we won't. But what's going on in SpaceX is um explainable lunacy.

9:18 So the IPO was on Friday. It ended up doing $85 billion in volume according to Eric Bachunis. Easily a record for an IPO and in the top 10 all time for any stock on any day. Um as of this morning, the company is basically within spitting distance of having the same market cap as Amazon. Now, as we discussed last week, and I'm not saying this makes sense at all. I'm just trying to explain the mechanics of how this even happens.

9:46 There are just not a lot of shares out there. And so, nobody who's buying today for the most part is thinking about is is SpaceX worth more than Amazon. Who gives a [ __ ] They're trying to make 20% in 24 hours. And guess what? They did, >> right? >> So, there's there's all sorts of disconnects and narratives. And I get it. And yeah, the SpaceX thing is is crazy. >> Yeah. it with that much money moving, it's kind of easy to push around the price right now, >> right?

10:09 >> Easyish for a company this big, obviously. >> Yeah. So, like there was a stat that yesterday SpaceX added the most market cap ever of any company of any day ever outside of Nvidia, which definitely makes you um take I don't know, take stock of what's going on. Uh but it's not it's not it's sort of apples to oranges a little bit. Elon did say yesterday on Twitter or on X that SpaceX could get to a trillion dollars in revenue by 2030. Feel like there's some I don't know. I'm not a lawyer, but isn't that like a material statement? Whatever. Um >> Are you kidding me? There's no security laws anymore. That was the past. It Doc Browns where we're going. We don't need roads.

10:54 There's no SEC anymore. All right, let's look at the other side of this. Taking profits. I got a call last week from uh someone at marketplace saying, "Hey, we've got a bunch of normal investors and we saw this this headline on Bloomberg from Bank of America. It said BFA warns it's time to take profits as red flags multiply." And this isn't from some like perm. This is Sevita is very good. She's great at what she does.

11:18 She's very well respected. Um, she's talking about how there's some bare market signposts and there's a lot of red flags. And this guy from Marketplace said, "Okay, what does it mean to take profits for a normal investor? What does that actually mean? Right? So they sell their stocks, then do they sell them all? Do they sell a little bit? Then what do they do with it? Do they sit in cash? Do they put it in other investments? Like like what does it mean to take profits? And I thought that was a perfectly legitimate question.

11:42 >> It is. My read of this is very simple. If you are one of those fortunate investors that had the foresight, whatever, credit where credit is due. Does I don't care. Doesn't matter. If you made money in a lot of these memory names or the semi-names or the AI adjacent names and you're up 800%. Does it make sense to maybe uh take your money off the table? Yeah, it doesn't make sense to sell 25 whatever it is.

12:05 Yeah, it probably does. You know what sort of bothers me? And I'm not I'm not um I'm not accusing Sevita and her team of doing this because I agree. I'm I'm a huge fan of their work, but for the for the general person on the internet, the the average pundit who is telling people to take profits um or like you know, sort of scolding them or whatever, hey, did you make money? If you've been if you've been bearish the whole way up, who cares what you say? You have no right to tell anybody what to do about their portfolio.

12:34 >> Yes. >> But do I think take profits if you've been in these names is probably prudent advice? Not probably. Yeah, I do. Of course I do. >> Right. That so what she's saying and the big one that people took was she said the spread between the top performers and the bottom performers in tech rivals the.com bubble. So the it's the there's dispersion now. That's the Wall Street jargon term for this. There's dispersion between the top and bottom performers.

12:54 And she's saying, "Listen, this happened in the tech bubble. This is this is actually bad. So it's funny because for years we worried about concentration. Now we're worried about the opposite of concentration. I personally now this is n equals 1 for the sample size. Right? That that's one of my problems with this analysis. My thing I personally think this is a great thing that we're seeing some dispersion in stock prices and it's not just the mag anymore. We talked about last week the mag 7 is underperforming and the fact these memory names and these other companies are coming up. I think that's a good thing. Isn't that what you want to see in a bull market?

13:24 the market is picking winners and losers. Yeah, that's good. >> I I think that's I think >> the degree to this dispersion. Um yeah, I'm not I'm not dismissing this only in the sense that right now it really is um AI and everything else. Now, I'm not saying that AI is the only thing that's winning because it's not. But if you look at the top performing names here to date, it is for the most part all AI adjacent.

13:51 Yes, it it is just it's funny how the goalpost moved from um this AI is going to be a problem because they're going to put all this money in and nothing's going to work and now it's like AI is the only thing that's working, right? >> And so I feel like the goalposts have moved it. It's funny too because this year value is beating growth. So the Vanguard value index >> Wait, hold on. Just just before we I'm sorry before we move this move away from this. I think a very easy way to if you were going to dismiss this chart and provide more context that might make you feel less nervous.

14:24 What this is showing is AI versus software. That's all this is showing. >> Yeah, >> because AI is at the top. This is showing the top quintile on the bottom. It's AI and it's software. So it's it's Micron versus Salesforce. That's all this chart is showing. Well, >> no. That's all that's all this chart is showing. It's the top quintile versus the bottom quintile and the top is all the AI names. >> Yeah. AI is creating losers and winners.

14:52 So, that's that's what I think. >> But but again, sorry, the losers are software, >> right? >> It's software versus AI. That's the entirety of this chart, >> right? That that's why I it doesn't worry me that much. And it's funny. I think it's good to see a broadening out. And it's not just the hyperscalers that are winning. Even if this is all one big AI trade. So, it's funny because value is whipping growth this I can't remember who showed me this, but Vanguard Value, which is VTV, is beating Vanguard Growth VUG by I think seven or eight% this year. Now, people go, "Wait a minute, that's because of the memory stocks because they're so cheap." But I guess I'm just sick of people trying to do the yeah, buts. But caveats this it so what? These stocks are still cheap on their earnings value. So, it makes them value stocks.

15:33 What do you What do you want? First, it was value stocks stink because they have no fundamentals. Now, it's no, no, no. These talks have fundamentals, but it's all because of AI. People keep changing the narrative. >> Yes. >> What do you want? >> I think I think um the reality is that Micron is the biggest weight in this index. I think it's like 5%. The second biggest is like two. >> So yes, it's fair that >> Micron 4%. It's 4%.

16:02 >> Okay. >> But to your point to your point, guess what? The S&P 493 are outperforming the Max 7 by a lot, right? >> So, it's not just Yeah, the story is changing. It's not just the hyperscalers. It's more >> This is a global thing. Obviously, Meb at the idea farm had these uh slides from Schroers, which is really good. They had this whole global investment deck. It was like a hundred slides. I thought it was really good. Um, so it says 2026 equity gains are all about earnings. EM equities are up 26% year-to date. This is through the end of May.

16:36 And it's showing the earnings, the income, and the valuations like what in the and that remember remember last year when international law performs like well that's because the dollar and this year look at look at the earning for emerging markets. It's kind of crazy. It's just dwarfing everything else obviously and they have all these charts that show the earnings for emerging markets are just blowing everything out of the water. Even for the US, even for Japan, even for all these other in China, uh this is a crazy one to me.

17:02 >> Wait, you know what's funny about that? Because back to your point about people making excuses or whatever, like, oh, if LeBron wasn't on the Cavs, they wouldn't win. If Jaylen wasn't Well, yeah, but that's what happens, of course. >> So, if if um SK Heinix and Samsung weren't in EM, the fundamentals were way different. >> But they are. What do you What does that even mean? If this wasn't than that, they are. It is. It is.

17:30 >> Right. Right. And the whole point was emerging markets are just left for dead because they don't have a tech sector. Now they do. You're like, well that's part of the edge, right? This this one kind of shocked me. So in 2021, not that long ago, China was almost 40% of the EM index. Korea and Taiwan were 12 to 15%. Korea and Taiwan are now bigger than China. China has essentially got cut in half in the index. And Korea and Taiwan have picked up a slack. This to me is the beauty of diversification that you don't know where these winners are going to come from. in any of these in value stocks in emerging markets in the US any of this stuff. This is the beauty the Peter B you talked about Peter Bernstein before he said something along the lines of and I'm paraphrasing diversification.

18:13 Yes, it's a riskmanagement strategy but it's also an aggressive strategy because sometimes you don't know where those big winners are going to come from. That's the point. If you cast a wide enough net, you get these winners and they're unexpected often. No one expected this to happen. No one. No one was saying emerging markets, that's the big winner of AI. No one said that when Chad GPT came out. The question is, okay, fine. You're worried. This is all one big trade, right? It's just one big huge pot.

18:41 Everything's in this pot. What do you do if you're worried about it? >> So, last week we were talking about some of the low volatility stocks that are very underweight tech. Jason Zwag wrote a piece about this in the journal and he quoted Yuri and Timmer asking about this question like if you want to reduce your exposure to the one big trade which is a you know it's fair. Um Yuri Timmer from Fidelity said European stocks may not shoot the lights out but if the S&P 500 goes down they will probably go down less because there's less price buildup that would get undone. They can be a port in the storm. So outside of ASML, the Dutch um semiconductor equipment company, they are severely severely underway tech.

19:31 >> They are old. >> It's a backhanded compliment at Europe. >> It's an old economy stock market, >> right? And that that's diversification that Europe could be the one that because Europe had a good year last year and they're having a kind of a not as good of a year this year. But you're right that that makes sense to me. find those places where it's hard to find them places now. But if you're worried, that's that's it. All right, I want to talk about oil because markets were right again. And I think this has been a big theme this entire decade that we've been talking about. So oil is back down to $80 a gallon or $80 a barrel because it sounds like for the 56th time we have a a deal with Iran. This time it's going to stick. This is this is the real deal this time. uh and oil crashed again and it's back down to 80 and the energy analysts were ripping their hair out for weeks saying the straight of hormuz is closed. This is disrupting the supply chain in significant ways. Oil has should be $150 a barrel, $175, $200 a barrel. It never got close to there. And I'm sure if you're an energy analyst, I'm sure it was really hard because you're looking at all of the correct metrics and going, "The markets don't make sense. Why are they not following these metrics? These metrics show oil prices should be higher and the market said, "We know this is not going to last very long. So, we're not going to go to those levels. What's the point?" And the markets were right again about oil.

20:56 It's pretty impressive that markets are now markets are like their own form of AI. The intelligence for the intelligence for markets are growing over time. Think about how many things we've looked past this decade where the markets were right in the end that they never would have looked past in the in the previous I don't know 20 years ago or something. >> So is this saying the same thing because you've been saying this for a while and I think I think you've been right. If the average investor is getting smarter, is that the same thing as saying the market is getting smarter? Is the average investor impacting the market?

21:25 >> Yes. Bingo. Hm. There's less panic for headline events than there was in the past because markets move so much quicker and they just it just digests them faster. And I think it's something you really have to consider about how markets function now. And that if there ever is this AI blowup, it's going to happen in the blink of an eye. We're gonna get I think if there is like an AI whatever it's gonna be like down 20 25% in like three weeks. I really think the market's market's going to say, "All right, you know what? Let's just take our medicine.

22:02 >> Rip the band-aid off. Do it now." That's what's going to happen. >> I I will You could There's nothing you could say to remove me off of this fact that at some point, and this is not a prediction or a hot take or whatever, we will have a four-year bare market. Like, it's it's not just going to be up up only for the rest of our entire lives. Like, >> there will be a financial crisis at some point. The millennial generation will cause some sort of financial crisis.

22:26 >> There there will be. I don't know if you know last decade. Who knows? But there will be a multi-year bare market. >> The fact that even that I even have to like say this as if I'm going out on a limb tells you all you need to know about where we are. This is a bull market. It's a long bull market. >> We haven't had a recession. We haven't had a financial crisis. >> Allow me to be so brave as to suggest that there will be a bare market again.

22:45 >> Right. Listen, we're due for a pullback. Yeah, of course. We're always due for a pullback. >> Um, all right. So, let's talk about what SpaceX is doing to the market. Todd Zone has a chart showing the rolling 65day sum of money into thematic ETFs. And of course, um Kathy Wood and the ARC complex in 2020, the Arc Mania. Um we might never see anything like that again. Maybe we will, maybe we won't, but >> that's amazing.

23:14 >> It's a it's a monster outlier. Um but >> especially when you consider the flows into everything these past few years, the fact that the Ark whatever Mania dwarfs that is pretty impressive. Yeah. So, anyway, it's back. Um, and Todd says, you know, it's space or nuclear, another theme, whatever it is, the the thematic theme is absolutely surging. So, um, we keep talking about >> still a 50% draw down from those highs. >> Yeah, we'll get that in a second. We keep talking about um all of the potential distractions and um things that want to like bump you off the horse, right? If you think about this bull market as you're riding a buck and bronco, it's really hard to stay on because there's been so many reasons to sell along the way. Whether >> you been on a horse in your life?

24:06 >> I've never been on a horse. >> I No offense, I can't see you being a horse person. >> I've never been on a horse. >> Okay. Not up in your cabin up north. There's no horse. >> There's horses, but uh >> we did a horse thing a couple couple years ago with the kids. Just a ride around a big field and streams and it's kind of fun. >> Um so one of the one of the the buck and bronco features of this market is oh my god, it's a bubble. Look at all this ridiculous behavior.

24:34 >> Right. >> Right. All the dgens, you have to tune them out. They're never leaving. So I say that because >> and that was a mini bubble in 2021. It really was. >> Yeah. But and then but they never left. >> But it was it was self-contained. >> They never left. >> Right. >> So the SpaceX on the launch day, I think it might have been the next day. I don't know. Levered there's there's a there's there's leverage shares for SpaceX both long and short. And the levered long on 615. All right. So that was uh that was yesterday.

25:06 On Monday, the levered long traded $282 million worth of shares and the leverage short, I don't know who is doing this, $219 million worth of shares. By far by far by far the largest one day volume of trading. >> So the these levered ETFs for SpaceX are going to have $5 billion in like the blink of an eye. >> Yeah. >> Right. They're going to have so much money roll in. Uh >> all right. So, so, uh, Arc SpaceX is the she owns $325 million worth of SpaceX in in ARKK alone. I believe she owns them in all the other vehicles as well, but this is the biggest position. I don't know. I don't know if I don't know how this works. I don't know if she got them at the IPO price. I don't know if she bought them at the open at 150 or 160 or whatever it traded. I I just don't know what their cost.

26:00 >> You don't think that they got some sort of allocation to the private? I >> have no idea. Okay. >> I don't know if ETFs get an allocation. I don't know how it works like that. >> Um, >> they can. Yes, >> they can. Okay. Over the last five years, ARC is in a 30% draw down. I'm sorry, not draw down. Over the last 5 years, ARC has returned. ARK has returned negative 30%. The cues are up 124%.

26:26 Okay. Actually, these stories are all saying that yes, ARC bought SpaceX shares on the on the IPO. So maybe they didn't have the private shares. >> The level of underperformance now, it's been much better in recent years. So, you know, this is this is skewed way lower by by the results of 2021 where all those co bubble names like docuign and Tok and whatever. >> They've had a come a little bit of a comeback, but >> it's done it's done much better. But >> the fact that a fund did this bad in this environment is would be shocking to people who were so into this for the innovation story.

26:58 >> So I hate I hate I hate like blaming whatever. Um because there's plenty of of blame to the extent that there's blame at all to go around. If you piled into Arc in 2021, hopefully that was a learning experience. I'm sure it was. I think if there's any blame on Kathy Wood and obviously she's doing the best she can. She's not, you know, she's trying to she's trying to get it right. missing the AI, you know, for for an innovation fund, missing missing the AI trade is >> she she set some very unreasonable expectations.

27:28 >> Yeah, that was tough. >> You're right. The thing is, if you would have seen these numbers from ARC, you would have gone, "Oh, well, tech blew up, >> right? That that's what happened. Tech finally blew up and that's why ARC is down so much." You wouldn't say, "No, >> tech we had the biggest technological innovation of this century and they missed it." >> That's the surprising part. >> That's really hard. Um, one of the one of the features of this bull run is that every time really every time the market falls a little, fear comes back so fast, it comes back so fast. Like people get bared up so fast, which is wonderful.

28:02 Um, because that's, you know, that's fuel. Like there is still a lot of disbelief. We were talking to Enore yesterday, Ankor Crawford for a talker book episode and in conversations that she's having and I would agree with you like it's more when is this going to end, not what should I buy. >> Yeah. Yeah. You're right. >> So Jason Gford from Sentiment Trader um tweeted, "Man, tiny option traders really got spooked last week. One of the highest proportions of hedging activity in 25 years and the market barely fell.

28:33 But to the point that we made that we opened the show with or or spoke about with Sevita taking profits that caused a pretty fast selloff. Micron I don't know how much it fell from its high and whatever. It was only a three-day sell-off. Did it fall 18% 20%? I don't know. But anytime there's a little dip, people just have one foot out the door. >> Yeah. Which like you said, the bigger the gain, the quicker the trigger on these things, right? I mean, there have to be a number of people who have just set stop losses, right? I'm up 500%. I'm gonna set a stop loss 20% lower or 10% lower or whatever it is.

29:07 >> Well, people that have people that have rode the gains of Micron and SanDisk and Western Digage and all these names, >> I give them a lot of credit. Like, it's >> right. Micron was down 20% in like three days. >> Was it okay? And again, I know I've said this on the show now five times, but I'm going to keep saying it because it's it did happen. Micron fell 30% in like 3 weeks in March after a blowout earnings number. And we just like all of these declines, we just pretend they never happened.

29:33 >> So your your idea about people changing their minds really quickly, I think that is going to be one of the problems with this new AI trading. So Robin Hood put out a tweet this week. Egentic trading is live for all customers. Connect any AI agent through the Robin Hood MCP server. Fund a dedicated Agentic account. Let it research, trade, and rebalance on your terms. So, I watched the they had a little uh video that showed how it works and I watched it and it looked pretty cool. It was like pick 10 stocks that are somehow related to the biggest private companies and then oh if the stock is down 10% sell it or it was talking about rebalancing and it's showing these prompts putting in and and what happens is you set the the rules for AI but then you have to sign off on it too right you you it doesn't I think it can do it automatically for you but a lot of times there is checks and balances so AI is not just running rampant and I think this is very cool it just you know at the end of the day this kind of just takes back testing to the next level. It's not really like something brand new. Back testing has existed forever. Formula Lake trading has existed forever. Um am I interrupting something?

30:40 >> Sorry. >> Talk talking to Nick fans. Okay. Um but I think the problem with this it it's really cool. I'm sure there's going to be a lot of people who can can make their own, you know, rules up and it's going to be very helpful for them. But I think people are going to be constantly tinkering and changing their own rules. And the whole point of a back test is in the back test, you don't go and change it every time it doesn't work. You stick with it no matter what.

31:06 >> So true. So so so true. >> I So I just I I think that's going to be hard for people to like fingers off the keyboard. I'm not changing something even if it's not working right now. That's going to happen all the time. That's what's going to happen with this. >> Yeah. >> Is that the changes are going to be constant. >> Yeah. >> And AI is going to go, "Oh, great idea. Really? All right. used to buy small cap growth stocks. Now you don't want them.

31:29 Good. Good for you. >> Um the market is open. Let's see what SpaceX is up to. >> Uh oh my god. >> $212 a share. So it's going to pass Amazon and market cap maybe today. Um, again, the numbers are sort of phony baloney, but you know, this is uh this is >> I guess if if it ends up having a huge pop and then it just comes back down to earth a little bit and settles in where it was at the IPO, it's like, was this was a small float really worth it?

32:05 >> I'm not saying it's going to happen, but if >> worth it for the company, I don't know. Well, I think part of the reason why they did this this way is because I don't have the details in front of me. There are escalations and triggers about if the shares are up x% then they are allowed to unlock more shares and sell into it. So, >> I mean that's a whole that's that you know that that's part of the reason why people are upset. It's like >> you're gaming the system so that you can dump more liquidity on us.

32:34 >> But yeah, you but people are buying it so you can't you know I I don't Oh, it is what it is, right? And a lot of it is retail. >> Eyes wide open. Everybody, you know, they've been very transparent. You may not like it, but they've they've laid out the rules. >> All right, Ben, last week I spoke about how incredibly the resilient incredibly resilient the economy has has been. And I started I started I think with with tariffs like I didn't even go back to to CO, right? But Jonathan Gray had a quote that I pulled from the transcript and he he he actually said the exact same thing. He went back a little bit further. So COVID of course and that was you know the government helped helped us get through that. Um and part of the reason I guess why the consumer is still to a certain extent spending. Um but there was the Russia Ukraine invasion which impacted us I guess just on you know gas prices got through that >> gas prices went up oil prices went up inflation went up even more because of that.

33:30 >> The Silicon Valley bank shock. >> Yep. like that was, you know, contained and but like there's just been there's just been so much there's someday all the Yeah. >> So I I know we do this a lot what I'm about to do and I'm going to keep doing it until it until it no longer until it's no longer the truth because it bears repeating because it is the truth. Capital One CEO. I would say if we didn't read any news and all we did was just really look at the data that we see in the economy and the data that we see on our portfolio, we have a really quite positive view. I think the consumer is really the strong shoulders the economy stands on.

34:14 Unemployment continues to be very strong. Now, I promise as soon as this turns, as soon as the CEOs of these gigantic financial companies that serve everyone, not talking about AMX, talking about Capital One, as soon as they start to say that the consumer is weakening, that spending is pulling back, I promise, I'm not cherry-picking, I will I will share it, but the economy continues to push through. It is interesting that this this company is still in like a 23% draw down and that the the CEO is not trying to like blame inflation or gas prices for the reason their stock price is down. They're still saying no things are looking good still.

34:57 >> It wasn't too long ago that we were >> did go crazy. >> What did the stock went crazy and so it's in a 20% draw down but it went it was up a lot. No. >> Um, last week, last week we got CPI data. Man, the market is moving so fast. So, we had the you know what, let's not forget because you know we've bounced since but Friday, two Fridays ago was the worst day of the year by far. Small cap tech fell 6%. And then the next week we got CPI data on Wednesday.

35:44 >> Yeah. Okay. Not great, Bob. and the market um opened down, rallied to intraday and got slammed into the close. I think it fell 1%. And this was after three consecutive days of selling. And I said to Chart Kid, Matt and Sean, where I was in the office with them when the I think the S&P was down 1% that day, maybe more. I said, "Guys, imagine if inflation came in hotter than expected." Because it was actually, like I said, inflation numbers came out at 8:30. The market popped, it was not as bad as we feared, and then nothing but selling for the rest of the afternoon and close on the lows of the day. And I said to them, "What if inflation was hot today?" And we all looked at each other and said, "Oof, would the S&P have been down 3%."

36:31 The nar my point is that was that was a week ago and we're up we're 4% higher than we were there. The narratives change so fast. >> So here's the thing. It's so in inflation went from 2.4% in February to 4.2% 2% by the end of May. And I think this it's it is surprising to me that the market didn't freak out, but I think this is another case of the market going, "All right, just like oil markets, we're we're not going to freak out because we know that this is this is oil prices. This is hopefully this will come back down and not completely reverse itself." But it is kind of crazy. I was thinking about this. We talked about this for years after after mortgage rates went from sub 3% to 8% and now have settled in at six for a long long time. Like what is the reason for the consumer being so strong? One of the big reasons is because 35% of all household budgets is spending on your housing. Okay, it's the biggest part of everyone's household budget in aggregate. And so many people locked in not only low interest rates but low home prices, right? So they locked in a low monthly stipen for their housing, right?

37:38 That's what gave them all this disposable income for years and years and years because it's like you're giving yourself a raise every year that you're not paying more in housing. Now, you took that raise off the table. You bought a new house, right? You traded in for a new mortgage payment. But think think about this. I was thinking about this. The inflation rate at 4.2%. That's I'm borrowing for free for my house at 3%. on a real basis right now.

38:05 It's kind of insane when you think about it that way that it that's still we talked about this for a long time I was saying but I'm just it's coming back to me like oh yes of course and there there have been there's been people who have traded up like you right who went from three to five or six or whatever and moved on and there aren't nearly as many people with 3% mortgages but that was a that's a big piece of this >> huge >> it can't be overstated >> if everybody if everybody who's locked in at three was was was at 5.5% it 100% 1 million% would impact consumer spending.

38:37 >> Think about it if you think about it if you had to rightsize your mortgage payment for the current current housing prices right now. >> Right? That's what I'm saying. >> How many people couldn't afford their own house? A lot of them. >> I did have an inflation moment and I I said I said when inflation hit 9% in 2022, people like you and me, we don't get to complain about inflation. There are people who are hurting for inflation don't get to complain. This is not a complaint. This is just an eye openener.

38:58 filled up my boat for the first time this week and uh it was a lot uh way more than I had ever done before. Right. I'm not I'm not a boat guy, but I'm like what did I pay last year? Oh, it's it's way more money. And I asked the girl who you know they have the people who come and fill your tank up for you. >> Mhm. >> She said that there's been a lot of complaints like how how have people been dealing with cuz if you know I have a pontoon I don't know a 30 gallon tank or something and it cost me 220 bucks or something to fill up. was a lot. But there's there's enormous boats, right, that take I don't know how many gallons to fill up. And she said, "Yeah, there's been a lot of people complaining. It's like I think gas prices for boats went up even more than regular gas."

39:39 >> And not slowing down spending one iota. >> No. Yeah. Right. Is that going to change my behavior? Absolutely not. Kids got a tube. All right. Um, we better might as well mention your outfit and then then I think we're going to have a moratorium on Knicks conversations for the next month. Is that fair? I promise I will not say anything until next season. >> I I I give you Listen, you had a once in a-lifetime experience. You were at the game in San Antonio, right, which had to be awesome. I told my kids with 10 minutes left in the game. The Spurs are still up by 12. I said the Knicks are going to win this game. Either the Spurs are going to win by 10 or the Knicks are going to win a close one. And uh that's how it went. So, you got to celebrate the championship in San Antonio, which is probably a good thing because New York New York may have burned down to the ground if it happened in the city.

40:24 Correct. So, let me just let me just say a few things. And of course, I could speak for 19 hours about the run we just went on. This is not a next podcast. I know most people don't give a [ __ ] so I will I will spare you. >> Um, you know, we talk about being wrong all the time in the market, just like all the time. That's just the nature of >> predicting anything. >> Doesn't matter if you're trying to predict what the box office is going to do or the weather or the stock market or or sports, we're always wrong at predicting. Or the dot plots.

40:51 >> I was the number one. And I I I was I was the number one. This team will never win with Jaylen Brunson and Carl Anthony Towns. And I'm only talking about from the defensive point of view. Jaylen at the top, Carl underneath. I never thought that we could win with them on defense. And I am the biggest Jaylen fan. I I was never now I didn't know how good he was, but as soon as he got here, as soon as he got here, I never thought that we could not win a championship with him. He is that guy. and watching him every night for the last four years.

41:23 I'm not surprised. I know the rest of the world might be, but I think Nick's fans knew that he was that guy. So, I've ne like I wanted to trade Carl for for Giannis recently. I've never been and and now there was a there something happened in this defense. I don't I don't know what happened. Something changed and I've never ever ever been more happy obviously to be more wrong. Um, I'm just feeling the the streak of gratefulness that I'm feeling is continued. Winning is really hard. Like winning a championship is is really hard and eating eating [ __ ] for so many years. Like I went through I went on I was on NBA reference the other day.

42:04 >> I will give you credit because there's a lot of bandwagon Knicks fans obviously. Um, you took me to a Charlotte game like two seasons ago and it was a meaningless regular season game and like you're an actual fan. And you're not one of these fair weather people who just jumped on the bandwagon. So I'll give you credit there. >> I never stopped. Like I never stopped through when when it started with Don Cheney after Van Gundy left through Derek Fiser and Fdale and Hornichek and Danton and Isaiah Thomas and Larry Brown and I'm sure I'm missing a coach or two, Kurt Rambus, Herb Williams. Um, oh my god, I never stopped and it was so bad. Like it was so so so dark. So to be eating this fruit tastes really sweet. Um, and I'm happy for this team and the players and the organization and the fans and I don't listen the bandwagon fans whatever like it's cool. It's unites the city. I just >> I don't know. I don't I think I New York was by far the better story for the win.

42:56 Like it was so cool to see for me not having any any car whoever won. New York was by far the better story. >> I'm not one of those like oh they're not a real fan. I mean it's great. It's the more the marrier. Like the more the marrier. Um, and what Jaylen did, so since he came to the Knicks four years ago, this is where he ranks in the playoffs. Second in wins, second in points per game, first in 30 point games, first in 35 point games, first in 40 point games.

43:25 I can't believe that. Um, I never thought that anybody would be would replace Eli as my favorite athlete of all time, but Jaylen did. >> He's a very likable guy. doesn't seem to have ego or talk to the refs all the time. Yes, I like it. >> I'm almost done. I'm almost done. >> Okay. >> But I think I think for real sports fans that understand how much of your life, your time, your energy, your emotions you give to your team, like it's very special to win cuz it's just it's nothing but misery, right? There's only one team that wins every year. And most years you're not close, but some years you're close. there's just it's nothing but misery punctuated hopefully by a few brief moments of euphoria which I am currently um living through. So I'm I'm happy for the city. It's obviously been like some pretty dark years for for Manhattan. Obviously I I hate some of the stuff that has happened with Spurs fans getting beat up and and burning the buses. And it's really shitty that this happens. Listen, Manhattan is a gigantic city. There's millions of people there.

44:28 These there's there's [ __ ] everywhere. And I hate that this happens. Um, so that makes me sad. I'm exhausted. I'm happy it's over. Like game five was weirdly in San Antonio. By the way, the the San Antonio fans were fans were great for the most part. Although when you said to me like, "Were you interrupting something?" So my friend was texting me that uh a father and son like a father got hurt really bad. Um like brain brain bleeding on the riverwalk. I think I might be done going to uh traveling for the next. It's just like not worth it. I don't want to get I I had I had a close call which I I won't really share but uh no fault of my own.

45:06 >> Yeah, you probably got to feel a little nervous wearing the enemy's colors in you know. So >> and next year like the the the target you know people don't like New York to begin with. So I think I might be I think I might be good there. Anyway anyway um the whole thing the whole the whole it's been two months. It's so exhausting. Just so exhausting mentally and emotionally. I can't I can't even imagine what it's like to be >> an actual player or coach, >> a player or their family. So anyway, I'll I'll leave it here. I am I'm taking uh Robin and the boys to the parade on Thursday.

45:42 And man, it's been it's been special. And and uh actually, I will end it here here. I really do appreciate all the emails and all the texts. And I know it's not easy to root for a New York sports team. Any team that's not your own, especially one from New York. You know, we're obnoxious. We're loud. But people that reached out and there was like an outpouring like so so so many texts and emails and >> I thought it was a likable team.

46:03 >> I feel I I felt I I feel the love. So thank you. Thank you everybody. >> Yeah. And every fan base has annoying fans. Like no one everyone has people like that. They're everywhere. Um and if anyone is you're exhausted but if anyone deserves a vacation it's your wife not you. >> She's been something else. >> All right. So Nicole had the an idea for us. She said hey the last time Nick won is 1973. Correct. I guess they called the top in the market because there was a big bare market after that. She said, "Let's do an inflation thing for this."

46:31 And it's funny, they put it in mixed colors for me. I had Claude Webinana Webana do this for me. My little assistant Claude. Uh so this is prices they do nominal and real. Okay. Uh so inflation is up six times since 1973, which is kind of crazy to think about. That's just compounding, right? It's three three and a half%. Uh homes are up 15 times in that time. New cars are up 12 times. The cost of college is up 24 times. Health insurance is up 50 times and groceries only up four times. It's kind of crazy. Groceries have actually are the only big thing that has grown less than the rate of inflation since the 1970s.

47:05 >> Hm. >> I guess I guess I should add Claude do wages too. >> I wonder I wonder what the what the tickets were back then. >> Oh, that's a good $5 probably $10. It had to be really really low because no one as much either. >> My actually h I actually have my finals tickets from 1999 but I didn't bring them out. Um, he sent me a a picture of a playoff game. Oh, okay. Round one.

47:30 Yeah. I was like, what? Round one. Uh, section 119, row D. Oh, it was road D's back then. So, fourth row, it was where's the price? $96 in 2004. >> Okay, here's interesting. So, wages, according to Claude, so inflation's up six times since 1973. Wages are up eight times. But as we said, prices a lot of stuff's up even more. All right. Are we good with the Knicks?

48:00 >> I'm good. >> Okay. Nice outfit, by the way. My My son loves the chains. My son has a Michigan chain, a Lions chain. That's the thing. Oh, you have the championship. >> So, I bought I mean, I bought this for the kids, obviously. I'm not a jersey guy. I've I've never worn really jerseys, but I bought two Finals jerseys. I bought uh Josh and Jaylen. >> Yeah. You look like a turtle from Entourage right now.

48:19 >> And by the way, these hats are ridiculous. It's like I I feel like the biggest [ __ ] wearing this. I'm not I'm never wearing this again. This is going to go on the shelf. But like my head >> 12 that's a 12gallon hat. It's huge. I wore it. I look like an idiot. [laughter] >> It doesn't fit in his head. It looks so silly. >> That is a That is a huge hat. All right, let's talk about the politics of AI.

48:36 >> So Enthropic last week said the US government studying national security authorities has issued an export control directive to suspend all access to Fable 5 and Mythos 5 by any foreign national whether inside or outside the United States. So they Anthropic is starting to get regulated. Now, here's the thing. Whatever happens, whatever kind of regulation politicians put on AI, it's not going to be good. Probably, I don't think politicians understand this. Whatever kind of regulation they do, it's not going to be helpful. But these AI companies deserve it because all they've been spouting off is about how crazy bad things are going to get and the we can't even release this because the damage it could do. And we Dar Dario said on a few podcasts like, "Hey, listen. We need regulation." and they ask them what should it be? I don't know. It's up to the government officials. Like the fact that they've not self-regulated at all in many ways like they deserve whatever is coming to them. Like they they'll complain about it. But whatever happens, if you've been saying we're going to destroy 50% of white collar jobs and like this could rule ruin the world because of biological weapons or something like you don't get to complain about whatever the government does because the government is not going to probably have the best regulations they're going to like. But so what?

49:49 This they've made their bed right now. They have to lay in it. >> Let's talk about AI's uh impact on on the economy and the job market. So this is a pretty this is a pretty depressing email, but I'll I'll share it anyway. Um somebody said the conversation on jobs has been binary. A will add jobs or AI will take jobs. That's that's not the way this is working out. Every company I am working for is hiring developers and other staff to implement AI. They are hiring me to guide them. The goal is to be leaner, not have to hire and to replace jobs eventually. They are worried that their competition is going to be leaner because they are using more AI. They are worried AI might take their entire business. So they want to be the ones using AI to take the industry over.

50:34 There is a rush to implement. In the boardrooms, the conversation with everyone is about how many people can we replace. We are going to see growth of jobs and then they will be dramatically gone. I think Ben might be right in that the next recession could be when it happens. I think my job has the same problem. I have a window. I have to maximize my income. This will go away. AI will take my job. Frankly, I use AI to do my entire job now. I am just better at it the most. Eek.

51:01 >> I don't believe this. Sorry. I don't believe these doomer takes. Good. >> I don't believe them. Um >> maybe maybe in some tech firms. Yes. I don't I don't think this is the whole economy. I'm sorry. I don't believe it. >> Okay. >> That's that's not how that's not how the world works. >> I think I'm with you. The journal did a long post the future of work and AI and they asked economists, will AI, they asked him three questions. Will AI lead to net job losses or job growth across the economy? Um, and it looks like most answered no change, which is a copout. I don't know how you could answer no change.

51:37 [laughter] Um, five answer net loss, two answer net growth. And they asked based on what we are seeing now, is AI a technology more likely to replace workers or complement them? Um, it was overwhelmingly compliment. It looks like it was about 2 to one. And then lastly, how much will AI change the way companies hire and develop talent over the next five years? Um, major impact and some impact were about neck andneck and minimal impact. Justin Walers with a hot take minimal impact.

52:10 Okay, I pulled two quotes that I thought were very interesting. Uh, David Deming, David is a the dean at Harvard College and professor at Harvard University. He said that depends on their outside option. Um I guess in terms of like job switching, telephone switchboard operators were immediately displaced by mechanical switching technology. That job essentially disappeared overnight. But the young women who would have become telephone operators became stenographers, administrative assistants, and waitresses instead. Uh this shows the importance of flexibility and education and training. This is the kudigra. I could have just skipped to this quote.

52:48 People are the ultimate general purpose technology. >> I like it. >> That's a good quote. Uh, one more from Joshua Gans. He's a professor at the University of Toronto's Rottman School of Management. He said they will be re-mployed in other things. It is only when technological change takes out an industry in a particular region and people don't move that we see major technological unemployment and wage reductions. >> Right? So that's like factories going overseas. >> Correct. The >> this is the fun part about these type of innovative cycles though is that just no one knows. It's everyone is guessing and extrapolating and making expectations and yes, >> no one knows.

53:26 >> That's right, >> Ben. We got a decent report on the residential real estate market. It's been a while. Existing home sales in the US accelerate to their fastest pace of the year in May with contract closings rising to an annualized rate of 4.17 million. Um, the median sales price of an existing home climbed 1.3% from a year ago to 429,000. All right, here here's here's one of the takeaways I have from this. So, look at this median sale price from Red Fin.

53:55 Shows lines by year. We're at alltime highs. I am starting to get um bullish on residential real estate stocks. It might be early. This might be this might age horribly. Um >> well, they've been bouncing considerably, right, the last month or so. >> So, there's been Yeah, there's been a bounce. So, it could be a dead cat bounce and I might just be I might just be, you know, giving the stock market in the short term too much credit. But my my thesis is this.

54:24 I think that even though home affordability quantitatively hasn't changed, it's still horrific. I think there is >> mortgage rates have gone up this year. >> I think there is a realization that and it's it's been gradual. It's been like a multi-year process that okay, this is just what houses cost now. >> Yeah. Here's the thing though. Look at the next chart I just put in here that shows us existing home sales and you can see the minor minor upturn.

54:56 >> Yeah, it's it's >> it's still way way low and it's good that it's beating expectations, but let's be honest, this is still far below average and far below where you'd think things should be given the amount of young people in the economy. >> Well, that's the thing. We haven't I mean the demographic part of it there is still this is the largest cohort in the nation in terms of age and they need to buy a house.

55:19 >> True. >> All right. Uh real quickly, you talked last week about the rule of 55. The Wall Street Journal had an article this week, the retirement tax break that most people overlook and they talk about the rule of 55, how you can if you leave your employer the year you turn 55 or older, you can pull money from a 401k with penalty free. Did they quote >> and and I I said no one knows about this and they said in a recent Wall Street Journal personal finance quiz more than 80% of readers got a question wrong about the earliest age you can make penalty free 41k withdrawals. So yeah no one knows about this which the retirement system is so jacked up in this country because we have so many different accounts. We have IAS Roth IAS 401ks Roth 401ks 529 HSAs SE IAS solo 401ks. It's too much. And some people get more ability to put money in than others. So, there should just be one big pot of money. Everyone has the same limit. And it it counts for everything.

56:14 Your 529, your HSA, your retirement. It's all one bucket. That's what it should be. Is that going to happen? No. >> No. Um All right, Ben, I want to play something for the audience. I love this. We're in the studio. you were in the studio um reading some you were doing some some promotion for the book for for your book risk award reward. That's what you >> Yeah. The Compound Media team helped me make some some social media clips that were promoting the book >> and we got some bloopers that I thought were were were just adorable. So, I want to play him. I love this.

56:46 >> This would be a funny social of just Ben's out. [laughter] >> Take the financial media one out of that. I I don't piss people off. >> Take two. >> The stock market, it's volatile. It's a roller coaster. Shut up. [laughter] >> Cut that, Ben. Breathe. >> Take three. >> I go into these details even more with my new book, Risk and Reward. Out now, wherever you find your books. >> No, >> you overcome out now everywhere.

57:12 >> No, just say available where books are sold. >> I detail all of this and more in my new book, Risk and Reward. Out now, wherever you find your books. I [laughter] >> I was going to do the thing. >> Don't do out now. Just say in my new book. >> Okay. No, he has to say out now everywhere. >> No available sold. >> I detail this and more in my new book, Risk and Reward. It's available now anywhere you find books. I can't. All right.

57:38 >> More on this and more and more and more on this. More on this in my new book, Risk and Reward, available now. >> You know what? >> I want to use [laughter] that. >> I don't think >> I don't like that one. >> Tons more charts. Nope. Way more charts in my book, Risk and Reward, available now. >> That was great. >> All right. If you read this book, you can earn more, spend more, save more.

58:04 [laughter] >> That's a wrap. >> That was like inseparable. My brain was like just nuts. >> And that's a wrap on. >> Yay. >> All right. That was awesome. You know, >> good job by the compound team. >> It's really hard. Um I did some of that the other day for something that we're recording. It's really hard. >> It's harder than you think. >> It's so It's awkward. It's It's It's difficult. You >> That's why it's funny when you hear a podcast. It's It's been so edited in many ways and the ums and are taken out and you don't realize that no one talks as clean as people can be made made to sound. Right.

58:38 >> Even this podcast. >> That's true. >> We're not that good. All right. Um Elon is the first trillionaire. Chartkin made a chart showing Larry Page. The combined net worth of Larry Page, Jeff Bezos, Mark Zuckerberg, Jensen Wang, Warren Buffett, and Rob Walton is that of Elon Musk and the Wall Street Journal. Bless them. They did this great post um where Ben Cohen uh and and Andrew Malikica said, "Picture a line with $1 million on the left and a trillion dollars on the right. Where would you place one billion?" And credit to me, I was uh I was better than most, but still not even close. So, it's basically all the way to the left. $1 million and a billion dollars compared to a trillion dollars are basically the same thing. So, here's some context. And I know you you you scoff at this, Ben, but we need it.

59:31 >> If we stack dollar bills, it goes to the moon. >> Here we go. All right. A million seconds ago was about two weeks ago. A billion seconds ago was in 1994 when Pulp Fiction was about to open in theaters. A trillion seconds was back in the Ice Age. Here's one more. A billion pennies a billion pennies takes you from New York to Cape Canaveral in Florida. >> Okay. A trillion pennies takes you to the moon and back twice. So moon back, moon back.

60:12 That's a trillion pennies. >> So Elon Musk, he can afford a house. >> So So people, politicians in particular are very upset, are very >> The good news is the discourse around this is very reasonable on both sides. So I will try and offer a reasonable take. Poverty is horrendous and I think most reasonable people if there was a way to snap your fingers and make the world a more fair place with less horrific um hunger and and problems. Of course everybody would like to do that. And so you vilify the politicians vilify somebody with this amount of wealth.

60:57 It's It's beyond the pale. Who needs this much wealth? Let's redistribute it. Let's tax him. Let's whatever. Whatever. Whatever. Of course, I understand the sentiment behind that. I don't agree with it. Economically, I don't I don't think it's that simple, but I understand where it's coming from. It is mostly coming from a decent place. The part that is never discussed is that SpaceX the IPO it created so much wealth.

61:30 Yes, the most of it went to the creator. That's the way the system works. A lot of it went to the investors for taking the risk. That's the way the system works. It created 4,400 millionaires according to the New York Times. And I don't know a better way to lift as many boats as possible other than the capitalist system that we have. And are there maybe things that we can do? I I you know, I don't know. That's not for me to figure out. But um but a lot of people a lot of people benefited in life-changing ways. And I think this should be celebrated, not um not not torn down.

62:09 >> Well, we're never going to solve this one. Uh, I I I don't think wealth inequality is never getting solved and we're never It seems like we're just can't tax rich people more. So, I think this is just something people are going to argue about forever. >> I think that's probably right. Um, okay. Let's talk about some recommendations. >> All right. I have one for you. Have you watched Widows Bay on Apple? >> Yes. >> Okay. So, if you watched the first episode, this is Matthew Rise, who you said, not not a great actor. Was in the Clair Danes one on Netflix. I love this guy. I love The Americans. I think it's one of the most unheralded shows of this century. I loved it. I love that guy.

62:42 And I watched the first episode and I'm like, what what is this show? It's like kind of mysterious, but it's also kind of light-hearted. Then it takes a turn and it gets dark and it's kind I guess it's Stephen King, would you say, is >> Yeah. Oh, yeah. Yeah, that's right. That's right. Yep. >> It's kind of a Stephen Kingish show. And usually I we talked about I'm not a horror person. Not usually my thing. I really like this show. My wife, she's like you. She can't look like if there's a she knows there's a jump scare coming, she looks away and says, "Tell me what's happening." She's like you. I for me, like I said, it does nothing for me. So, I just watch. I'm like, "Oh, it's a scary clown or whatever. It's a crazy old lady with long fingernails." Uh, but I really am enjoying this show. I'm And I'm surprised that I am. Thoughts for you? Because you watch horror all the time. So, is it is it too much for you?

63:25 >> Too much? No, this is to me this is I understand it's a horror genre, but this is not a scary show, I don't think. It's not It's not like >> It's like a suspenseful show, right? Something like that. >> There's there's some there's some scares, but I wouldn't say, you know, it's like it's like lighthearted. It's like it's it's comedy horror for lack of a better. >> Yes. >> You're right. It does have some light-hearted parts. Like again, I think the first episode of the show, you would never expect where it's going to go the next four or five. We're halfway through it or so.

63:48 >> I I know I said this about a lot of the shows that I enjoy. I really don't need a season two of this. I think they already agreed to one. >> Okay. I agree. >> Um you're >> right. It seems like a one >> get it all out there. >> But yeah, no, I'm enjoying it. And uh and Apple man, Apple is Apple has has found their groove. Uh, I'm watching Cape Fear with um >> I didn't know if I wanted to watch it just because I I've seen the movie. I'm like, do I really need it? I don't know.

64:14 >> It's good. >> Okay. >> It's it's it's ridiculous. Um, it's Amy Adams, uh, Patrick Wilson and Javier Berdm. Uh, produced executive produced by Spielberg and um, and uh, Scorsesi who who famously swapped movies. There was the Capefar for Schindler's swap, which man, the alternate scenario of that is is bizarre to to think about. Um, >> I guess my whole thinking is I have a hard time watching movies where things bad things just keep happening. >> Oh, this is ominous. Yeah, this is this is pretty dark. So, maybe not for you.

64:44 But, you know, I revel in the darkness. Um, I watched on the flight. Is this thing on? So, I watched the first 15 minutes, fell asleep. uh probably missed 40 minutes of it, which is I don't I don't I don't think I've ever done this before and I just watched the rest of it. And I don't know if I can comment on a movie in which I missed a 40-minute chunk, but >> I'll fill you in.

65:14 >> Okay. >> It took itself way too seriously. That's the problem for for a movie about a comedian. Took itself way too seriously. >> It definitely wasn't a comedy at all. >> But how can you have a show about a stand-up comedian that's not funny? >> Well, you know, I'm a sucker for for movies about divorce. So, I uh I thought it was okay. >> Okay. I >> It's It's It's an airplane movie at best. >> Yeah, I think that's where I watch it.

65:40 All right. I rewatched a classic that I haven't seen in a long time. And this is a movie that could never be made today in a million years cuz no one would believe it. It's called Dave with Kevin Klein where he is a lookalike with the president and then the president gets sick and he becomes the president. And I haven't seen it in forever. It's one of my favorite. I think the '90s has the '90s is just the best in terms of White House stuff. Right. Was that Sigourney Weaver?

66:01 >> So, it it's Kevin the cast. I couldn't believe how good the cast was. I forgot about it. Kevin Klein, Sigourney Weaver, Frank Langella, uh Ving Reigns, Ben Kingsley, Charles Groden, Laura Lenny, Bonnie Hunt. >> Whoa. >> It was just like a murderer's row of oh my gosh, that person and that person and that person. And it's it's such a sweet look at like the White House and politics that could never be made today cuz you'd go, "No, that but you could make that movie in the '90s because politics were different." And uh I just I don't know what it is that that and the American president is like neck and neck for the best presidential movies ever made. They're both made in the 90s.

66:39 >> Both of them. >> Get off my [laughter] plane. Anyway, yeah, I can't remember what's on Amazon or something, but I love that movie. Aged perfectly and horribly. All right, congrats to you. Thanks for coming on the show today. Looking like a guy from the Bronx. Uh, is that fair to say? >> Yeah, I feel completely I mean, yes, I'm wearing this outfit ironically. I understand I look like a complete buffoon. >> No, you can't. You have to you have to buy all the championship stuff. You're keeping everyone in business right now.

67:10 We your next gear purchases your disposable income. >> All right. Uh, animal spirits of the compoundnews.com. Personal emails, personal responses. We'll see you next time. [music] >> [music]