Is the AI Trade Over? (EP. 439)

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This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of RedHole's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. We have one request of you please if you are a financial professional advisor, investment manager, portfolio manager, analyst. We're going to take our survey. We put it out last week. We're going to do one more plug in the show notes. Click on the channel, it's in wherever you'll see your podcast. Go to at errolbinadvestra.com or at our wealth.com and sense.com. There'll be a survey we want to hear from more financial professionals. And also anybody else who missed it the first time around. We'd love to hear from you. All right. I got to take here. So the market is rolling over. This speculative stuff is getting dinged pretty good. I had this take here before this stuff all kind of started happening. There's no euphoria in this this market. This is like a kind of it feels this year like a joyless bull market. And so it doesn't like the for all the bubble talk and everything like this is going to be crazy. I don't think we ever got to a euphoric phase. So like I disagree. Okay. Let's do so there is obviously no euphoria today. However, over the summer and until the fall, when open AI was making announcements with everybody and Oracle, for example, who stocked jumped 25% on the day. There was absolutely euphoria. Now it's not here anymore. But one of the largest market caps in the stock market adding several hundred billion dollars overnight or whatever it was. That was that was absolutely euphoria. Do you feel like anyone wants a bubble? Like anyone is happy about it. Wait, hang on. Do you disagree with what I just said? Or are you? Yeah, actually, that was euphoria. I guess that was like an overreaction. But again, I think the euphoria is in the tech CEOs, not the not the end investor. Well, certainly not anymore. It's over. Whatever whatever euphoria we had is gone. Listen, if listen, if that let's say that was it, that was the height of the AI craziness, if that was it, that was a weak bubble, okay? That was nothing. Okay, so let me ask you this. What is it over? No way. It can't be. There's no way. If that was it, that's it. I love it. I love it. I love it, Ben. Finally, it take. No, I'm saying if that was it, that was the this is that was the worst bubble ever because we didn't we never got the exciting part like like the really big blow off top. Come on. If that was it, that was weak. That was not a good, it was not a good bubble. I agree. I agree. I agree. I would say, I don't know, 75% confidence that wasn't it. This is a very healthy. This is a very healthy reset. You need skepticism. You need the wall of worry. Unless it's time to worry, then you don't need it. And you can't have these massive gains in these junky stocks forever. That's no way that could have continued. Yeah. The difference is that the fear not difference. The fear seemed warranted. I'm not going to completely swoop them onto the rug. The fears are warranted. They're justified. The pullback is healthy. And also, that wasn't the top. How about this? I think the whole everyone, there's so much skepticism about like, gosh, this is good. This is a bubble expectation that being pulled forward. I think that mindset is actually good for this whole thing. Yeah. It's keeping a lid on the euphoria. I really do think it's actually like kind of help. So who created the DJ and dial was that? Was that you Josh? Okay. Not me. So Matt updated this for me through yesterday. And this is like the biggest degenerate stocks you can think of quantum computing and the meme stocks and all this stuff. And so that this basket, I think he equated them is down 20%. The S&P is down three. It's kind of funny. The S&P is down 3% in this whole thing. So obviously a much bigger drawdown. And if you look at through the individual names, it's way worse. The Round Hill meme stock ETF is down from a high of 11 to 6.2. So that's 40% drawdown. Some of these stocks are getting absolutely. Oh, yeah. There is, I've said this before I'll quote myself again, a healthy corrections only like healthy and other people stocks. If you own, if you want a lot of these stocks are getting mauled. And there's a lot of stocks that are down more than 30% like mega ones that Josh and I are going to talk about on what are your thoughts tonight. It doesn't feel so healthy. Yeah, we're talking like 30, 40, 50% declines of a lot of these names. But some of these stocks are still up like 100% on the year. So it's I told you this. I heard a story about someone who said, Hey, my husband has been trading quantum computing stocks all year. He made like a million dollars. And it's like, that come on. You can't have it be that easy in this junky stuff. So I think this is all a good thing. You know what? I think part of the overall story and why there's so much skepticism like the economist has this pad on the cover last week. How much? See, this is my this is my euphoria thing. The media is not trying to stoke any euphoria. That was that's the biggest difference between now and the 90s and the 90s. The media was all in on the euphoria. This is this time. It's not. It's so skeptical. So Gavin Baker tweeted, "Sam Altman's manifestly ridiculous $1 trillion spent in the commitments shifted the AI investing landscape. The market is more skeptical now. Ironically makes an IPO harder for them. Also likely ended any potential for a 1999 style meltup, which is healthy. I grew with the last part, which is healthy. I don't think the I don't think the 1999 meltup was off the table. But Paul Graham, very much a Silicon Valley dude, as I said, if you invested at the peak of the NAS, I can march 2000. It would have been roughly 18 years before you were whole again, 15 years before the index reached the same point, plus another 3% for inflation. So I think that the euphoria is amongst the hyperscaler CEOs, as you mentioned, they're they're not relenting. And everybody else is skeptical. And I think part of the bigger picture story is, of course, overall skepticism of AI and it taking people's jobs. Matter of fact, let me let me let me play this clip. This is this is Gavin Baker, not Gavin Baker. I'm sorry, this is Brad Gersner on the all in pod. One of the major concerns I have is the AI is becoming deeply unpopular in America. Silicon Valley is losing the battle around AI. Duma's are now scaring people about jobs. They think all these job cuts that are going on in America are the result of AI. And number two, they're seeing their electric bills go up and they think that's also the result of AI. I've talked with a lot of Republican Senator and House members who say they are afraid to mention the words AI because their popularity ratings go down. So there is skepticism everywhere. It is, as Brad mentioned, deeply unpopular. And it's part of this broader story of corporate America outpacing mainstream America. And people are sick and tired of all of the gains in the economy seemingly are cruelling to the mag 7. People are just over it. Imagine being in a blue collar job and thinking like, why should I why should I want this technology to come here and take it and make things worse? Yeah, nobody's nobody's nobody's rooting for it except for Altman and Satya who is doing for podcast. But the thing is all the skepticism we've had. Remember when the deep seek thing happened. It's like, oh my gosh, it's over every time one of these hiccups happens and people say it's over. Do you think that's stopping Mark Zuckerberg from investing in this more? No, people, the investors could continue to sell the stock. And that would maybe slow him down a little bit. But it doesn't seem like these CEOs care about any of the skepticism. Mark's not stopping. Look what he did with reality labs. Look how far he pushed that was it's tens and tens of billions of dollars of losses. All I'm saying, it's like, come on, if that was the end of the bubble, then that was, it doesn't really count. That was weak. All right. Healthy correction. That's where I stand. Stamp it. Healthy correction. I agree. I tweeted this chart that I had chart kid create. And I took this idea from Dan Wang's breakneck. I believe. Or maybe it was Apple in China actually. Actually, I think it was Apple in China. The numbers here are so insane. So there was chatter over the weekend that Tim Cook's run may be coming to an end. The numbers here are so insane that they literally, it doesn't seem right. I had a lot of people fact checking me like a lot of people and not mad. It does the numbers don't seem right. And I think what this does, we mentioned that there's no euphoria. Maybe the euphoria was in the market cap. Even though in video, the fellow PE kept going down because they were exceeding earnings expectations, $5 trillion is a lot of market cap. A trillion dollars is so hard to wrap your head around that Tim Cook, since he became CEO, added, 2011. 2011. So every single day, not every market day, every single day. And I believe the market cap was like $350 billion. What do you took over? Yeah, it looks about right. Was that about right? Okay. Yeah. $700 million a day, Ben. $700 million a day in market cap added. So I don't think people remember at the time, but when Steve Jobs passed away, Apple had a little bit of a sell-off and everyone's going, oh my gosh, this company is done, right? And a contrarian guy catching the falling knife, I went in and I bought Apple then in 2011. Yeah, but I blame you. I sold it in 2015 when I came over to Rittles. I've moved all my money over. And I said, I don't, I had the only two stocks I owned were Apple and Google in 2015. They were both in my, they were both overvalued. Obviously. But I don't think people forget that people were so skeptical of Apple. I'm like, if Steve Jobs is gone, how is this company ever going to be over? He's a manager. He's not an engineer. Like, what does he know? So you, but you posted this on Twitter and then it went viral on Elon Musk's reply to it. So you're, you're, um, don't even look at your replies today. Yeah. Elon said, impressive. And it is, it's, it's a wild, it's a wild, wild stat. All right, back to the AI hate. So this week from the Wall Street Journal, Wall Street blows past bubble worries to supercharge AI spending frenzy, also from the Wall Street Journal, when AI hype meets AI reality, a reckoning in six charts, there is, there is definitely skepticism all over the place. And then, and not in like journalism news, like let's look inside the market, what investors are actually doing. Lisa Brahmux tweeted, tech bonds are getting hit hard of late as debt traders start wondering if they're getting left with the bill for the stock market's enthusiasm. Oracle's 3.5 billion of 30 year debt issued in September has cratered by 8% from the October peak. Okay. You can't say cratered runs in 8% loss. It's a bond. It's, that's a crater cratered. Come on. It's declined. That's a crater. Um, all right. Uh, on the, on the positive fund work, the Oracle is the one of them that actually has taken out a lot of that, right? On the positive fund, the month is like, no, listen, I think I can't, I can't have Oracle crash because listen has to fund to be a new couch football coach, but Michigan fires her on more. So I can't have Oracle crashing. I bought the crash. I hand up. I bought. Who did you buy? I bought Oracle. I sold Disney. Finally, I bought Oracle. How much did they fall by 30 something percent? Oracle is on 30%. Okay. Uh, well, how's this? Another, uh, another one from this morning, where is this chart? Yeah. Right. Oracle is on 30. It's, it's crazy. When you look at the, and we're going to look at this in a little bit, but when you look at the drawdown profiles for tech stocks or pretty much anything, all these had 30 or 40% crashes in April, then they came roaring back and now they're down 30% again. It's this year is a wild year in terms of volatility. Um, where is this chart? Oh, here. Okay. Finish times this morning. The headline was like the AI trade Oracle's now $60 billion negative or something like that. Look at this chart. It's a little bit lower in the day. Oracle market cap September 10th pre market Oracle and open AI announced a $300 billion AI data center agreement deal shares close up at an all time high up 37% all right. That was a euphoria of 37% of the day 37% or that was that was that was not so you're right. Those numbers were insane. Uh, shares close 8.8% below their price, pre the open AI deal announcement, a loss equivalent to 60 billion dollars in market cap. Do you think part of the AI skepticism is not just the feel like fear of job loss, but it's like we live everyone is seen what social media like did to tear apart the fabric of society. And they're like, do we really want to do this again? Yeah. We want to like introduce this technology that has the capability to tear apart society. But guess what? Are we? That's a thing. We can't slow it down. So you can you can sell these stocks all you want. These companies are still going to it's not going to stop. That's the problem. Does open AI get to 50 hundred billion dollars in revenue? I mean, they have to for this to work. I can't we'll Microsoft allow open AI to fail. No, wouldn't see that's the thing. If there's too much money on the line, we'll get to that and say, put a pin in this because I have more of Microsoft opening. I later in the back. All right, Patrick Collison, uh, founder and and CEO of Stripe said an interesting trend we're noticing at Stripe. US startups are pulling ahead of their peers elsewhere. You see these charts, Ben? All right, look in the dark software startup revenue index. These charts showed average revenue growth for the software startups at each location. US startups typically gross somewhat faster than those elsewhere. However, since mid 2023, US companies have accelerated a lot. I guess I would have just assumed this was always the case, though, it seems like US startups have always outperformed. He says interestingly, this is not just because of AI startups. If we strip those out, they're still a big divergent. So here's their hypothesis. These US startups, even those that aren't AI companies are adopting new technologies, of course, AI, stable coins, et cetera, faster than companies elsewhere. This pattern of faster adoption among US companies was also seen with the internet itself. Whatever the cause, the pattern is striking. I think I think you're going to see it in the fundamentals. Yeah, I don't think the story's over by a long shot. Here's this is not an original take, but the tech, the tech industry is going to be the next financial industry. Think about how hated bankers were after the 2008 financial crisis. That's the tech industry now. They are at the top of the perch. They are going to be the most hated industry like after this is all said and done. Yeah. First thing is not even I don't think you can debate that. The technology, the industry is going to be hated. They're going to be the villains. All right, Spencer Jacob from the Wall Street Journal had a post why we could use a law, a good long bear market. Stocks have only experienced brief downturns over the past 16 years, creating dangerous complacency. And I think there's a lot of people who have this. That's true part. I reject that idea. All right, let me, let me go through some of the stats. Then we'll then we'll just talk this out. Okay. He said long bear markets accompanied by recession discredit the last boom's wildest themes and its tree leaders. They also remind us of what capital markets are for, mostly matching good businesses with patient savers and s s s eggs. The average time to reach previous high when bear market with a company by recession was 81 months. It took just 21 months without a recession over the past 16 years downturns have lasted less than eight months before the old high was reached. Hardly anyone younger than 40 now even had a 401k during 2007 to 2009 wipeout. Most Wall Street pros hadn't graduated from college at bear markets are educational, but the tuition is a doozy. Why do we need a recession? Well, there's a lot of people who think we need to just clear the decks. Clear the decks, right? We need to we need to start over, wipe the slate clean. I don't necessarily agree with that, but I guess the point is we need to have a slap on the wrist. You need to touch the stove, the hot stove, everyone's in a while to understand like, well, I can't you can't take this much risk. It's it doesn't make sense to take this much risk and and it's going to there's going to be a come up and something. That's the idea a lot of people have. I we've we've had it. We've had it. I understand this at times. My other thing is don't quote me on this. I really do think this. I'm quote are you bad? Whatever you're about to say, I can't wait because I'm quote are you? I really do think that the speed of these recoveries. This is just going to be the new normal. I don't think we're going to have these extended 81 month. This is going to last forever. I think that is I think we're past that. I think the speed of of financial markets, the speed of information, the speed of technology means that these recoveries and these downturns are both going to happen fast when they didn't the past. Ben, look at this chart. So I'm looking at the drawdowns of the I'm that was impressive that you just pulled this up on Riverside like that. How did you thank you? I'm very good at this. You're like Tom Cruise in minority or part moving things around and okay. So let me throw this in the doc so the boys can grab it. To Spencer's point and I like Spencer so what I'm about to say is there's nothing against him. He's good. Don't like to don't love to take. All right. We had big long bear markets accompanied by recessions both in the aftermath of the dot com bubble bursting and after the GFC of course, right? Stocks fell 50% and 57% respectively that's the S&P and we haven't seen a long bear market accompanied by a recession. However, look at all of these sell-offs over the last decade. There's one, two, three, four, five, six. I mean, there's a lot of them. Now, sure, most of them outside of 2020, which was a man-made recession in 2022, which you know, you could quibble with that of recession. Not I happen to think it was. Most of them were short-lived. But your recession truth are now in 2022. What did that happen? You don't remember the time we were arguing this is not a recession. Oh, really? Oh, yeah. You turned it over. Here's the thing. Wait, no, no, no. That in and of itself, we spent 20 minutes on that. I don't know. I don't know what that I wanted declared that it was a recession. You sound like one of the reply guys to me on my Twitter. No, you're right. No, it was a session. There was a lot of nuance in that. There was there was a problem. You can't have a recession with 3.5% unemployment. You're right. No, no, I will see the point. One that is accurate for sure. There were industries in recession. Big ones technology. They're always will be though. Technology. No, but technology, monster industry, tons of layoffs, real estate, housing, iceberg recession, iceberg recession, deep ice recession, and all the recession. You have a diversity con. You're right. Was the economy in a recession? I would see the point. You're right. It wasn't. But the point is investors need a reminder that risk risk exists. How many reminders do they need? They've they touched the stove many times. I got burned. Here's the other thing here. Those 2000 to 2002 in 2007, 2009, those events are very rare. They don't happen all the time. You don't you don't get those ones a decade. Yeah, those are crisis two to three decades. Yeah, I don't think we need. I don't think we need those. No, those those like reset the system things. 2008 could might might be a once in a lifetime crash for us. It might be. Though those things don't happen that often. We'll be because think about 1990. This is on his chart right here where he talks about month's week. Previously, there was a recession in 1990. There's a savings and loan crisis. The real estate industry was very bad of the night. It wasn't. It's kind of forgotten recession. The S&P feel 19%. It didn't fall. It didn't fall 50. It didn't fall 60. So there's these times where you can get a recession and not have the whole system crumble beneath your feet. Yeah. I would I would I would suggest that we probably in our lifetime, I would say like I don't know, minus 175. We'll see another 50% decline. Feel pretty strongly about that. Yeah. But do we need one? Like is anybody going to be better off because of one? Absolutely. No, we should avoid that like the plague. I think there is there is this feeling from some people that listen, we need to read. Everyone needs to get a slap on the wrist and people need to experience pain, but not me. I'm not going to experience pain. I'll be fine. Right. People. I think a lot of people who want this like they're holding on. They'll be okay. They want you know that the scene in Jurassic Park where Samuel Jackson says hold on to your butts. Yeah. And it reboots the system. People. Many people are rooting for that. Yes. And I guess what? That's exactly what Jackson Jackson is left with just an arm. Just an arm. Careful. Did he get his arm chewed off? Okay. Remember Laura Dern. She's just holding his arm. Oh yeah. That's it. You don't want to be just the arm guy. All right. Let's not want Michael Burry. So he put on a note last week saying that he's closing down his hedge fund, which I didn't even realize is still open. And I want to make this point here. There is a difference between making a legendary trade and being a legendary investor. Lauren Buffett is a legendary investor. Right. Do the Robertson legendary investor. There's a lot of people I could name. Stanley Drucken. Michael Burry and a lot of the people who came out of the 2008 crisis were made a legendary trade like John Paulson made a legendary trade once in a lifetime. Unreal. Couldn't couldn't couldn't do it again. Right. He did all these other things and it didn't work. And honestly, so Michael Burry has been he's in 2021. He called for hyperinflation in 2019. He called for an index bubble. He said to sell it a million times. I listened to Michael Lewis has this podcast on he's been doing this retrospective of the big short. And he pulled all the people from the book and he's interview him again like Greg Lippman. He's and he's interviewed all the who the guys work with Steve Eisman. I can't remember all the names. And he interviewed Steve Eisman. And it's funny because when you hear these interviews, these people are almost nostalgic for that period. And I feel like Michael Lewis in a way feels nostalgic. Like the people who called that crisis. And they're gods. Yeah. And they feel like they want it to come back. Like they miss that period. And so Michael Burry last week tweeted a picture of Christian Bale playing himself in the big short movie. How could you have that experience where you're the star of this best-selling book. And then Christian Bale plays you in a movie. How could that not mess with your head? Yeah. And how could you not want to call the crash all the time after that? Yeah. I mean, when you're on the top of the mountain, there's only down to go like that. How could that not screw with you? So again, these people made legendary trades that does not make them legendary investors. And it seems like Eisman is really the only one who pulled out of that vortex of the negative, right? And kind of, but you know, none of these people ended up like having you don't know how their results have been since then because they probably haven't been very good. You'd hear about it. If they were like compounding capital 20% a year since the great financial crisis, then it's like, oh my gosh, these people are legendary investors. They they short of the housing market. And then they turned around and made money on the other side too. There's another takeaway. Don't listen. Don't follow what these people said. Because I think I saw science performance tweeted recently. And it was fine. Despite everything that he said that has been wrong publicly, it doesn't matter. They're not making an opinion and that's taken with it. Come hell or high water. Like they're they're they're trading their they're they're moving around. They're responding to the market. So they say this is a bubble. They're not going to cash in. Right. So so take what they say with the grain of salt. It doesn't matter who they are. Remember in 2020, it was drunken Miller. I can't remember who else was saying it that like this is the worst environment they've ever seen. And it's going to get a lot worse. It was it was all of the geniuses. Yeah, but that's the one. Just nobody knows when these people make their predictions, just I but yeah, so there's a difference between making and I honestly think we're going to have more of this where people make legendary trades as opposed to being legendary investors. Like we're never getting another person who has a track record as long as Warren Buffett. No, I can I can say they'll never happening. Never that will never happen again. All right, boomers are passing down fortunes and way way too much stuff. Bloomberg wrote an article about the great stuff transfer as it's being called great idea, right? This is the idea of this story. Kudos to Bloomberg on his one. Great idea. I remember when my grandfather died and he had no money, lived in a tiny apartment in Florida, whatever, 1500 square feet, whatever it was, maybe even smaller. And I remember cleaning that out was a bear cleaning out three, four bedroom houses is going to be a lot. Yeah. So I think what you have to invest in in the coming years is dumpster rentals. How do you invest in dumpster rentals? Because think about all the stuff you're going to be throwing. So they talk, they give all these stories about people throwing stuff away, baseball cars in China and collections and hoarding stuff, cold wallets. But think about all the renovations that are going to have to be done in these houses that people have lived in for 40 or 50 years. Like honestly, like I'm going to start a dumpster rental company. You know, because when you do a renovation, you put the dumpster in your front in your driveway, right? And then everyone in your street, all your neighbors have to ask, "Hey, what are you guys doing over there?" Right? Everyone has to ask. So I put some pictures in here of my stuff. So my dad has all these baseball cards and football cards from like the 1950s and 1960s. Check some of these out. I found these pictures that I had last summer went there. Mike Schmidt, classic mustache guy. So we're talking. He's got Willie Mays, Pete Rose, LK line, Roberto Clemente. Yeah, Mike Schmidt. I feel like Mike Schmidt drank a million beers. He was definitely a here comes trouble guy. I think it's a Nolan Ryan rookie car. I put this into Chad GBT and I said, "Hey, are any of these things worth anything?" And they're like, "Listen, if the edges are frayed, probably not." They're probably worth a couple hundred bucks. But he's got some really good ones from like the 50s, 60s. So that's not going to walk away with someday. Great. That's my stuff. But yeah, I say go long dumpster rails for renovations too. So Ben and I did a podcast with Derek Thompson on the topic of our young people screwed. And there's a lot of companies that are blaming the weakness in young people for their woes. A lot of the bull companies, Chipotle, Kava, they're not mentioning their overexpansion. They're not mentioning how expensive they're such a cop out. Blaming young people? Yeah, they're not mentioning how expensive their slopples were. So who do you trust? And listen, there's obviously lots of shades of gray here. But Chipotle are so far. So so far, who would I would say probably Kate, not probably. So if I definitely cater to that audience, Anthony Noto, CEO, said we've seen very strong performance of credit. So we're really not seeing any deterioration in the consumer at all. Right. So it's consumer choice, not that they don't have any money. Right. And you were early to that train. You got off Chipotle like three years ago. It really was. Now you're coming back. See you're no, no, no, no, I'm not coming back. In fact, I have no interest in dumpster diving in the stock. So how much is the stock down? Fifty percent. Tons. Tons. Tons. I listened to the conference call. You know, I think I, I think this is the quarter that I've listened to more conference calls that I ever have. And I'm not saying that there is necessarily like quantifiable edge here. But I, there is definitely quantifiable insight. Fifty five percent drawn on this feels like a stock every time it falls 50% like it's a screaming by. Yeah. Well, not this time. I'm not buying it. You know why? I don't, I don't trust the CEO at all. Not for a second. That is true. They have the news because their CEO left them into Starbucks, right? Not for a second. So because of the fact that he is like pulling a slate of hand and not being honest, you don't trust him. I don't trust him. Blaming young people. Okay. No, that was in the opening remarks. And I end the, and the Q and A. I just, I didn't like, I did not like what I heard. So last night on this topic, I listened to Apollo, legendary founder, investor, Mark Rowan. And I listened to, and Apollo was one of the biggest private credit players in the market. And I listened to Blue Owls, Mark Lipschultz, who was clapping back at Jamie Diamond. And Mark Rowan was asked about the opportunity in wealth management and the pushback specifically with rates coming down, how attractive is private credit. Listen to this answer from Mark Rowan. Private lending was a better business four years ago and three years ago and two years ago and last year. By the way, I wish I own the video four years ago and three years ago and two years ago and last year. This is fundamentally what people fail to understand. The rotation into private credit is a rotation out of equity. That is what investors are doing. That is what we observe. They are making a decision to take risk off because they perceive the ability to earn long run equity returns in first lean debt top of the capital structure as an attractive opportunity. But I think we cannot as an industry deny that there was more value just like there was more value in the equity market. Okay. Right. The guy's tongue. Biggest answer. Good answer. The guy's tongue the truth. That is a phenomenal answer. I don't want to repeat what he just said. You just heard it. He's telling you the truth. Okay. Now contrast that with the with Mark Lipsholtz when he was asked a similar question about how investors should think about what's going on. And by the way, I think we have blew out later in the dock. Not not pretty. What's going on in that stock. All right. So Mark Lipsholtz, well, he he he sounds defensive. He sounds antagonistic. All right. So an analyst asked a question about some of the publicly traded BDCs which is getting murdered. So tell me if this answer makes you feel better or worse as an investor Ben. So as to what investors don't understand, it's probably hard for us to, you know, to give you a comprehensive answer. If I you talk to a lot of investors, we can offer some theories. I can certainly tell you what we're doing. We're doing two things that I think at the end of the day, you know, we'll solve this problem. One, we are executing, executing, executing, executing. Business is good. Business is continuing to be good. And we're focused on continuing to deliver. You know, we haven't seen an opportunity as good for investors and by extension for Bluowell as the digital infrastructure, investment cycle that we're in. And so we're just going to continue to, you know, deliver results for investors and continue to deliver. Oh, you're just going to continue to deliver to continue to deliver and business is good. Really? If business is so good, why is the stock down 48 percent? Why is the BDC down? Whatever it's down. Why are you merging some of the funds? Why are the you getting, I don't know if they're getting exemptions? Why are they limiting redemptions? So you listen to these people and it gives you some sort of insight as to who you want to put your money behind. I think it's incredibly valuable. So someone, I think someone asked us that a few months ago, like, what do you actually get out of these earnings calls? That, that's like, are they being level with you? And this was always the thing for me when we, when I used to be in a manager of managers business and I'm picking the managers to help perform whatever, the ones that I appreciate the most would tell you straight up when you're underperforming. Listen, this isn't our cycle. We're out of style right now. Or listen, we missed it. We missed them. Whatever the trade was, we missed it. We're not in what's working right now as opposed to the people who make excuses and say, it's the Fed. Or we, we would have been right if only this would have happened. Like, I always appreciated the people that, yes, that would level with you and be honest to any of the people who like BS you like that guy. You can't trust them to tell you, to tell it to you straight. So how are you going to trust them to run a company? Okay. Back to sorry for the tangent on, on the sofa, I think, but back to what we were talking about. Here's a good chart from Apollo, about 5% of the US population are experiencing third party collections. The blue line is the dollar amount and unfortunately the dollar amount is up until the right as everything has gotten more expensive, no surprise there. But look at the, look at the proportion of consumers with collection, which is the green line Ben. Now it, it is going up, but off historically, literally historically low. That is pretty crazy. Okay. So it went from a high in mid 2010s of 15% now down to like 5%. Okay. A couple of weeks ago, I said, hey, listen, when the stuff starts getting disrupted and the economy slows, they're going to take some of these tariffs off as a form of stimulus. It's already happening. Trump administration is preparing tariff rollbacks on goods from countries beyond those that have reached agreements with the US in an effort to lower prices. I think they're looking at coffee and food and some of these things. Do you think that the White House saw the like employment data and got a little freaked out or saw the whatever data that we didn't get and said, all right, you know what? Actually, we're going to pull these off. But this, this makes, this makes sense of this would happen, right? I don't know. I don't know their motivation. I do know that last week when I was in Washington DC, it was very eerie. It was an absolute ghost town. I had a great time, by the way. You know, I love to wake up early and walk around cities also listening to the Harry Truman book. Man, what a wonderful walkable city DC is, right? Phenomenal. Harry Truman, who actually redid the White House, who's the first like president to really invest in the White House, and say, wait a minute, we had to up our game here. Did you know, this is news to me because I don't follow politics like this during the shutdown because I have a friend who works for a congressman. The congress people, the elected officials were getting paid. Yeah. Isn't that the worst thing? And my friend hasn't had a paycheck in seven weeks. People in TSA aren't getting paid, weren't getting paid. But the politicians were, is that awful? I think everybody agrees. It doesn't matter where you, where you are. Absolute horseshit. The politicians should not be able to hold the country hostage because they can't come to an agreement. Absolute garbage. All right. What's the Chardonnay price? Okay. This is, Ben, once in a while, you get a new blogger. It's rare these days. I feel like the heyday of bloggers is long over all those sub-stike actually. Maybe that's not true. Be that as it may. There's this guy who writes a blog post, a sub-stack called Chardonnay. I believe that we referenced him a couple of months ago. So he has this incredible chart that looks at CPI, which includes obviously a basket of goods. But what he did was he looked at, hey, let's take away some of the things that are not like everyday inflation. Let's take out used cars. Let's take out some durable goods, wash machines. Now, it's not that these don't matter because they do. But he wanted to focus on like everyday inflation. And people really think about it. I mean, this chart is just magnificent on the eyes. So these are the TLDRs. So he said, "Television's gone. Mattresses out. Use cars get lost." So what was once 338 lines suddenly became about 40 lines of goods and services that show up in an everyday budget? Okay. Before the vaccine roll out, official inflation and my index were basically indistinguishable. Same thing. Once inflation picked up, the official numbers started to come in much hotter than what my index showed, likely because used cars ran red hot in 2021 in 2022. It was probably housing with probably a big part of it too. Since then, I think that's an everyday type of expense. Since then, the chart and a price index has been running about 1 to 2% hotter than the official CPI lately, though they've started to converge. And I think this is what people are talking about. When they say CPI is not whatever percent it is, like I feel it feels higher. And guess what? Yeah, it probably is. Well, no, it isn't, but it's just the stuff you're buying feels higher. Well, yes, that's the same thing. The buying more often though, but yeah, things that you buy every day are higher than. But no one ever feels like the aggregate economic data is them because their personal experience is true. So no one so no one never believes the inflation number. True. Yeah, if you're if you're if you just body use car, you go, "Gah, inflation is a lot of control." If you bought a television, you'd go, "Oh my gosh, deflation." I'm thinking a lot about my new car these days. Oh, forgot to mention this. I got into an accident. Oh, what happened? So I haven't been in an accident since I was like 19 years old. I'm indexed. Who's fault? When I was 19. Oh, no. Oh, but you tell me who's fault it was. Okay. It was a one car accident. You hit a light pole? Yeah, I'm in the parking lot in Roosevelt field going to decks with Kobe. And Paul came out of nowhere. I honestly don't know what I was thinking. Like I just didn't see it. And it was literally it was you're backing up or you're going forward? No, I was going straight. It was right in front of me. It was like a handicap hole. And I saw it. I slammed on the brakes and Kobe's like, "Daddy!" So I get out and not like not damaged that I'm like taken to the body shop. But like, yeah, it looks like my car is definitely. So you decided that your car wasn't underwater enough? You had to like make it even more underwater. So I just I don't know. I think I don't know what happened, but I went into a pull. So anyway, I've been thinking about what car I'm going to get a lot as my car at least comes due. I think I might get a Jeep Grand Cherokee. Not a hybrid. Just a straight-up gasoline Jeep Grand Cherokee. Okay. I feel like you've changed your mind on this like 13 times. I have a range rover to a Toyota. Yeah. Not ready. Okay. Right down the fairway. What do you think about that? My mom used to have a Cherokee. I drive it all the time. I loved that car. Yeah. That's a great car. Right. It's it works. A to B. Yeah. All right. Let's talk more AI stuff. Yeah. So so Bezos project Prometheus coming out of the gates with $6.2 billion in fun. I guess he's not going back to Amazon. I think I put that hot. Take the bed. Duncan wants you to Alexis. Alexis. Yeah. I somebody did tell me to get the Lexus the TX the GX. I can't remember which one. But let's say let's say you're in a year of technology like Bezos been in your whole career essentially. Like you're going to let this opportunity pass you up and not get involved. Of course he got involved. Yeah. So it's so over. Come on. It hasn't even started. We don't even have the robots yet. All right. So I liked so Jerry Newman was on Adlots with Joe and Tracy. And I liked he had he had kind of a contrarian take. And I don't know if I buy it but he said what happens if opening I get hit by a bus right opening I goes under Microsoft is not a bunch of money a whole lot of big companies are out of bunch of money. I don't think much happens to the economy in the dot com bubble people were spending money for their options before they let go it was a much different dynamic. So he's saying like so what if if one of these big A I come and I said you know Microsoft is not going to let them go out like none of these companies opening I cannot go out of business. Microsoft would just do it if open I love a contrarian take because everything is consensus these days including everything that we're saying. Yeah. It was very it was very contrarian. That's what I liked about it. If open AI and I like that guy he's smart and entertaining but if open AI get hit by a bus we're in deep deep trouble because like the economy is the well the stock market said a crash and you would think that not you would think let me not hedge that the stock market crash will have a deep impact on the economy obviously so deep I don't know I don't what deep just from open AI I don't it's not just open AI the entire economy is resting on the shoulders of these hyperscalers no it's not get out of here no I think it is the entire economy come on man get out of here I will knock it out of here all of the growth in the economy is happening because of the hyperscaler spending. Grok is this true actually so okay so in terms of like what open AI is actually paying Microsoft this is from the financial times so the the the the open AI quarterly inference cost at Azure now this is this is only inference it is not the more expensive part of the AI story so they said open AI appears to have spent more than 12.4 billion dollars at Azure on inference compute alone in the last seven calendar quarters so forget about the promises that have been made to Oracle and every other company on the street where do you think all of the beat from Nvidia is coming from it's coming from the promise of these LLMs at what they're going to deliver so the entire market rests on the shoulders of open AI not getting hit by bus so speaking of Microsoft and CEOs of telek it is Satya Nadella was on the Dwarkash podcast and it was so refreshing to hear a guy who just like told it like it is and told it was not a bullshitter and like that guy that's a person I trust I trust Satya I have terrible listening comprehension I think when it comes to this tech stuff I don't understand any of it I listen to the entire podcast and there was like not one part that I was able to like pull out and say like oh but then I see people tweeting the clips and I'm like oh yeah when I see the clip it makes sense but when I'm listening on my own I'm like a child like I have no idea what's happening it's hard to understand some of the AI stuff that they're because they're getting so technical about it so here's here's the thing there's two things the two ways look at this one the market already knows what's going on right like how could you think you're smarter than the market this this is like for all the people who say like look at the depreciation expenses of these all these data centers and GPUs are going to be depreciated in three years and have to buy them again like the market knows this wait well yeah I can't just interject one thing I think the opposite is true the market doesn't know this the market doesn't know anything which is why you're seeing such violent price swings because we're all just guessing we don't know that's the point we don't know nobody knows but the thing is the market is always smarter than everyone the yes of course of course but two things can also be true the other thing is sometimes the market is wildly off the mark yes so how do you how do you wrap your head around like listen everything everyone's talking about AI everyone already knows it we all know it but nobody it's not like it's like this because everybody knows but nobody knows people think well yeah no one know that that's obviously the problem by the way I asked Chad to do some coding for me this week I asked Nick Majuli hey how do I fix this thing on my blog to make it look bigger and fancier and when people send it for my newsletter I wanted to stick out stand out more Nick said just put it in a chat GPT and it gave me the code and allows me to copy the code and I said well where do I I don't I've never coded anything before what I put this in and it was magical did you say ash chat GPT yeah well he kind of showed me a little bit but it's it's magical I did something similar there was an arithmetic problem and I'm not even kidding it was it was straight up a arithmetic not like plus plus plus but I couldn't figure out for the life of me I was staring I'm like wait a minute I'm looking to spreadsheet I said I don't understand I don't just say what I'm doing wrong and I said hey wait a minute boom yeah two seconds but why do you think technology people are so excited about AI they because they're the ones doing that how about this the the arithmetic the set of arithmetic it might have even been caught because I don't even know what type of math it was there was there was no scenario in which I got to the bottom of it none I could have stared it for seven hours all right uh we've been talking about stocks falling a lot in one day and we had a guy email us in and give us an answer he said um Ben raised a question how many securities had 30% drops he said from March 31st 2020 to today so just basically this decade for the S&P it's only 15 names Russell 1053 Russell 2469 he also said he responded he said if you do 20% instead of 30 the numbers quadruple like yeah to 60 names 205 and 955 so actually I guess fewer names if on 30% the S&P that I would have thought but a decent amount of phone 20% yeah it's fun it bespoke did something similar they said 19 stocks have fallen 30% of their earnings reaction days this season and the meeting market cap to those companies was less than three billion dollars versus 14 that have gained 30% so this does happen no but yeah of course it does but the meeting market cap was three billion dollars great so it's small right it happens all the time in the Russell 2000 yeah all the time all right this is a really good question from hashtag or @longequity sometimes compounders stop compounding what lessened you take away from this so he shows Nike and Pfizer and chart communications and estate lawter and like six of these companies that had these beautiful long-term charts that have now come crashing down on the other side like these are compounders and in the last year or two all these things have come back down to earth I'm trying to catch a falling knife and Nike so that's not this is a good question like what do you what do you take away from this so the the answer by the way I don't like Nike's knife they you're gonna cut your hand um my whole thesis with Nike is I'm betting on Katelyn Clark that's it okay I'm betting on Katelyn Clark to like have her own shoe line and as long as she stays healthy that's my Nike thesis okay no offense that sounds like my thesis when I was uh back in 2010 when I bought which which myter because of the Olympics oh I bought like an Australian mining copy was a BHP built-in built-in is that even the profit because yeah anyway don't love that thesis but hey credit to you so all right buco capital has the has a great take on this take or the answer like what's the takeaway buco said the actual answer is that this is the rule not the exception great returns attract competition that's the beauty of capitalism for the consumer the more interesting question is what companies do to avoid this fate I was I'm the the new book that I'm listening to is um is called invention the book the audio the audio the autobiography of um James Dyson the guy that of Dyson the vacuum cleaner oh yeah I have that book somewhere I just never read it it's I just bought a new Dyson this week the vacuum cleaner or some magical they were so good so I don't I don't know that I wouldn't necessarily recommend the book um although oh there's a great quote that I that I wrote down he said everything changes all the time so experience is of little use I feel like that's so applicable in the stock market to markets yeah that's pretty good so um but anyway my point was this so when he was building the vacuum cleaner before the Dyson did you I'm sure you had a Hoover vacuum cleaner growing up I did right yeah like it was so 80s do you remember the bags with the zippers on them and so that yes I do so the point is I think they made five hundred million dollars a year sung the bags that's it was classic innovators dilemma like their entire business was the bags inside of the vacuum cleaner so they just were going to go ahead and encourage is they were just that was their business model they were never ever ever going to do what Dyson did and then guess what Dyson killed them right so that's it that that's business all right cliffaz is on a qr and he's talked about a qr is or sorry he's on outlots and he's talking about a qr is thinking about making a push into sports betting and I thought about this because I've heard a lot of people say I wondered if this is good or bad for like draft kings slash fan dual slash polymarket slash kalshi all the ones that have the betting is this good or bad for them is to have the big whales coming because you'd think it'd be good because we had a huge layer of liquidity it would be more volume but is it bad if they're arbitraging away because I've heard stories from that like fandal and draft kings if you're a really if you're a whale of of a gambler and you're really good at it they will find you and they will kick you off the platform I don't know if this is true yeah you know what I'm the opposite of a whale that I get no incentives they say hey look how much this has like keeps losing when I when I'm giving many incentives he just keeps losing but let's say a qr and citadel get into and they the arbitrage away a lot of the parlay stuff right and they they see there's massive mispricings because people who are betting on them like you are idiots and don't know the don't know the odds okay come in am I am I an idiot because all the bangles had to do was not literally let the stealers get six points on defense in the final drive am I an idiot because that happened yes I guess I am so do you think is this will this actually be a bad thing for these companies because they couldn't make these enormous spreads anymore yeah that's a good question like would they make it about volume or is the spread is is a spread the thing for them or they make all the money off of idiots who don't know what they're doing very good question I'm not sure is the answer I don't know all right um so bitcoin is getting killed I think it was under 90,000 last night and is this one of those things where crypto is signaling more pain to come or is this just like a risk off asset and like this is it because I I look at this so it's crazy the volatility I mentioned before this is ibit was down almost 20% on the year through April then it was up 35% just a couple months ago and now it's like flat or down on the year like remember when people said the ETF is going to take volatility out of bitcoin yeah but look at look at the drawdown profile of bitcoin it's almost exactly the same as meta it follows it to a tee like bitcoin is still acts like a tech stock but it's not but it's not following the cues at all okay yeah but I my take is I think Mark Zuckerberg is actually Satoshi what do you think um so bouchoon is tweeted ibit is now Harvard's largest position and it's 13f and it's biggest increase position increase in q3 pretty wild Harvard um here's my question about bitcoin what is the next catalyst because all of the promise all of the catalyst which was ETF adoption institutional buying it all happened so what's next like what breaks the spell now maybe it's just the bull market resumes like the broader macro bull market comes back but i don't know so i don't know the answer to your question i don't have a very strong i guess the catalyst would be money just keeps pouring in people have it on autopilot now because yeah but that's not the catalyst if there's just like auto flows in i don't see why that's not a catalyst if more money keeps pouring in how is that not a good catalyst because because that's go up because that's literally what's been happening for the last year and it's gone nowhere it's flat it's down on the year yeah but it pulled forward so much so many gains right it's down on the year but it's still up a lot from i don't know but do you do you still think that it is a precursor of things to come and like okay the stock market is going to roll over an hour is it not like that anymore i think it's different every time sometimes it is sometimes it is and i don't know yeah that's fair all right let's talk about you wrote a good post on the 50 year mortgage this is a very sensitive topic i think people hate more government intervention more fake money i think they hate that people that would use the 50 year mortgage are people that who could least afford it because you're not really saving a lot of money and you're just paying way more interest yeah you'd be you'd be harming like the middle and lower class probably because the you you ran a you ran a calculation on a 500 that was a $500,000 mortgage ban yeah so the 30 year mortgage monthly payment is $3,000 the 50 years 2630 and change so it's a difference of $366 a month which is which is definitely not trying to minimize that that's not nothing but you're looking at 80% interest in the beginning for a 30 year versus like 95% interest it's all money it's all money to the bank and here's the other thing i looked at this using the same interest rate i said six percent a 50 year mortgage would definitely be a higher interest rate too so it would take the monthly payment difference down even more because you'd assume the 50 years probably if 30s at six okay you should have 50 years probably at six and a half so i didn't even do that okay the multi-payment has even worked out about it no no the multi-payment is less that's what i'm saying you you'd have less of a savings no you're saying the fit the 50 year interest would be less no the 50 year the 50 year interest rate would be higher right right my bad so your month the monthly payment different would be even lower um Alison Schrager said i think the 30 year fixed rate is a freak of financial nature something that requires tons of intervention and causes all sorts of distortions but i'm not sure why a 50 year so much worse that's fair that's yeah how many people actually how many how many countries do floating rate mortgages most of them most of them i know Canada those a lot of you the u_s_ is is kind of on its own island but so but so what so but so what happens uh in inflationary periods when interest rates go up it's like uh oh i can't afford my mortgage yeah your payment goes up i think a 30 year fixed rate mortgage is one of the the greatest financial inventions that we've ever done in this country some people hate it for whatever reason i think it's amazing all right we're going to talk about this we're going to do an episode on uh home stuff with with with look our friend Logan modashame because there's we spoke about us with with Derek the median age of first time home buyers is now 39 years old according to the national association realtors now 59 no that's all buyers yeah all buyers so so i said first time buyers it used so it used to be 30 and now it's like 39 yeah so it's i think they said 40 last week NAR in this kind of Brian puts out all the other surveys saying wait a minute is it really 40 if you look at these other surveys it doesn't look it's increased at all and so a lot of people are saying wait a minute the NAR data is bad their surveys bad these other servers right so all this stuff that we've been saying like the first time home buyers now we've got to be 40 years old or something that might be wrong and honestly and we've been using this data everyone's been using this data to to support the case that millennials are screwed housing is broke which by the way both both doesn't mean that it's not but if the data that sounds like an argument is it sounds like the data is faulty and Logan's going to kind of set the record straight for us so that'll be out hopefully soon all right there's a story in the Wall Street Journal or sorry New York Times they rushed to my homes during the pandemic now some feel trapped and it talks about how Americans who bought their first houses when mortgage rates were low now they're ready to move but they feel locked in by the rates i'm sorry we can't feel sorry for everyone not everyone gets your sympathy you don't want to problem now they they they rushed so they talk they have all these stories about these people who rushed into my house in like 2021 because rates for low and and houses are going fast and now they like their life has changed so they want to move but they can't because they're stuck in a 3% mortgage sorry you know you not everyone gets your sympathy like if you bought a house and it's up 50% anyway 3% mortgage but it would be expensive for you to move you don't get any sympathy the person who didn't get to buy and didn't get the 50% price appreciation and didn't get the 3% mortgage they have my sympathy not you yeah not everyone deserves your sympathy okay and I have a I have a thing coming later about my I'm it's going to seem like I'm looking for sympathy but I'm not sometimes you just have bad luck um all right let's we'll skip this schwaab stuff if you if you save something in the dock for two weeks in a row deleted it's never going to happen again come on let's just it's not going to happen there's too much stuff that happens in a given week all right fine you know what we'll do this real quick so schwaab announced that they're buying forged global they project in their press release a private wealth capital allocated to alternatives is expected to reach 13 trillion by 2032 up from four trillion dollars today um that's aggressive I got about this how about this for analogy private markets to financial advisors is like AI to people like some some people just don't want it yeah right it's the same thing like you're going to we're going to force down your throat but a lot of people don't want it at all hit the nail in the head I got to be honest I had no idea that forage was public they went public in a spec um at a stupid valuation six billion dollars like everything else looks like they're going getting bought at like a six hundred million something like that oof so here's my take I think that the private market stuff is going to happen I don't think that there's going to be a widespread revolt that sort of stops it's tracking this I think it's I think it's done um it's just a matter of degrees and what we get um I think I think they're just going to be disappointed in the flows into this stuff yeah I think that could be two I think they they could make a hard push on the flows don't don't reciprocate however if we go into recession and interest rates go back to zero percent which I think they will I think you said it's never happening too oh yeah definitely do if we get a recession next three years interest rates are going to zero I love this take market down alright good for you finally a stand okay um and when that happens are people going to like look at private again I go oh actually private credits eight and this is zero well yeah so it's not that good so all right so my take on this is I it is going to be a rocky transition between here and 20 years from now when this is all available and I do think that in 20 years from now people are going to look back and be like wait seriously there was a time where like people couldn't invest in this stuff why yeah you're right there'll be better rappers and better and there already are in a lot of ways but so so pitch book and I don't know if I'm the only one that reads this stuff I feel like I never see it being circulated but they do like a weekly run down that's like really really really super duper high quality so I read it okay it's got you got your ear to the ground with private credit stuff huh the credit pitch from pitch book you damn right I do Ben they say while the 12 month run rate of interest income from payment and kind loans bent here point I could hear people's eyes clearly say over like what who gives a shit why give a shit the payment in kind loans which basically is like all right things aren't great right now I'm not going to pay you cash right now just just tack it on it's an I owe you to the end of the to the end of the payment payment in kind loans payment in kind loans for the top 15 exchange traded BDCs remains a hefty one billion dollars it declined in the second quarter which is the third straight quarterly dip perhaps indicating that lenders have reached their threshold for non cash paying interest so lenders are saying like nope been there done that you pay you pay fair enough fair enough all right so this brings us to blue owl so the Wall Street Journal had a report not long ago blue owl capital was an upstart investment firm that lent money to midsize US companies such as serially frozen bakery I hate frozen bakery food you I don't have an opinion okay fair these days yeah Ben's like I'm f**king over this we just move on these days the firm is financing massive data centers costing tens of billions of dollars for the likes of meta and Oracle a sign of just how quickly Wall Street has become the enabler of America's artificial intelligence boom so they showed a chart looking at the bond issuance by big tech AI companies and it's more now that it has been the past several years combined and this is before yesterday Amazon announced that they did a 12 billion dollar offering so like I mentioned earlier the stock blue owl is getting killed it is in the epicenter of two things were two places you don't want to be number one BDCs are getting slower the liquid BDCs are getting slower people don't believe it they're scared of first call first branch tricolor whatever they're selling rightly or wrongly they're selling this is another it is this is a lot like AI where it's like the skepticism has like it's at the lid on a lot of this stuff yes so by the way I sold a blue owl stock that I own thank goodness I sold it a couple of months ago I think we're selling it down here you're a donkey that's just my opinion um but but then and also and also so there's there's the BDC side there is the AI skepticism side hey wait a minute like this deal with meta like they have an opt out like what's going on here and then also there was a really gnarly article in the financial times blue owl credit a blue owl private credit fund merger leave some investors facing a 20% hit and I encourage you if you're interested to read the article it's not great it's not it's not great we're already going to log in this topic but there's some force mergers happening I think there's pending shareholder votes but votes but it's not pretty so they did a picture of these guys when they went public or something they rang the bell has anyone ever looked cool like cheering the ringing of the bell can't look cool it's like we're in crocs can't you can't look cool doing that can't um okay yet but yeah this no you're a lot of the stuff I roll my eyes about with private credit but like this isn't I think this is legitimate story worth paying attention to this is a story absolutely yeah there was an article and charter or a great survey visual and charter showing many young Americans are jilting marriage so you don't see that we're jilting too often um uh the share of us households with married couples peak that 79% in 1949 and it's now down to 47% I was talking to Josh the other day feeling divorce is like under decline now I'm sure there's data for that but just anecdotally I feel like divorce was so hot in the 90s my parents got divorced uh a lot of people's parents I know got divorced think about how many movies dealt with divorce in the 90s Mrs. Daffyre killed me every family movie had a at a divorce and what was my dad thinking taking me to see Mrs. Daffyre wait wait too soon anyway um this is a closet Chris's movie had a divorce in it this is all part of that'd be a good list top 10 divorce movies this is all part of the bigger story of young people taking longer to do things that was once done earlier maybe not a popular take I don't think you should be getting married in your 20s and buying a house I didn't know in fact I think that's part of their waiting longer I think is a good thing that's part of a lot of the reason that makes you it makes you more mature in your appearances as well like I don't think it's a big deal you have no business having three kids in a house before your 30 now I know people make it work but in but all of America it's too much responsibility I think this is like like this is more normal yes and they're asking the percentage of 12th graders saying they're most likely to get married in the line I didn't look at that I can't I can't trust a survey of high school students I'm sorry they they lie all right quick PSA this is from the Wall Street Journal but a bunch of other places had it the limits for your retirement accounts are going up in 2026 24,500 up from 23,500 for a 401k 7500 up from seven for your IRA you get a bunch of extra money for 50 year older or if you're six year older we spend a lot of time focusing on the markets right and focusing on investments and stocks and private credit and all this stuff if you max your 401k out it almost doesn't matter what you invest in put it into something anything with risk and you're going to do better than most people I endorse this message let's let's get to it Ben I got a story you know sometimes you have such a bad day that you don't even you're not even mad you don't swear you just kind of do an angry laugh that was my day yesterday let me tell you what happened my day yesterday I started off just a very bad Monday my wife's car is flat tire right so I got to bring it into bell tire to fix there's a screw in it I can hear it coming out I have to take the tire off myself I know how to change a tire now you know I can't wait till the world's come and do it for me so I got to bring the tire and so already it's 30 degrees out my fingers hurt I'm trying to you know I'm hitting my knuckles against the thing oh it hurts so flat tire for in the morning sick kid my daughter has an upset stomach had sick of home I didn't have to deal with it but that's another thing finally we had we did a bunch of home projects I've been talking about we had new floors we painted the walls we painted the trim everything was nice then the door it's just all beat up from the kids over the years and then all the work we had done the the door from the garage of the houses all beat up so I said you know what I just wanted to door to look nice it'll make everything look finished so one of the two big home improvement places there's two of them I'm not gonna say the name it is one of them I said I just needed a door can I just pop the pins out and put the new door and they could say no no what you do is because they might not fit you have to get a whole new door so yeah it's the frame and we'll put the bottom plate on and it's new trim and it's gonna look so nice just do the whole thing it's a little more expensive but it'll look so finished you know what yeah I'm doing a project let's do it right so the guy shows up yesterday and my wife calls me and says this does not look good just the look of it doesn't you need to just tell so he walks in and he said where's the door and she said you you're installing it you should have the door he said I don't have it so he had to go back to get it now this guy's installing the door he takes the trim off he puts the door on and he's there for like three hours at this point already doesn't have the door on it's just open and it's 30 degrees out and it's cold and he's holding it and he said I need to call from I hear him on the phone he's calling he's asking for help from someone he said like basically I don't know I'm doing this guy literally never installed a door before now what are you doing this situation so he has his buddy come I know what you do nothing because so this guy his his other guy comes and he's helping him this guy is walking through my god fine you know what that was a little rocky at first but this guy he's got a helper now this guy is gonna help him this guy's saying how about you have to be level and to shut the door it's like there's all the stuff you have to do right so this guy's helping him like this will be fine this guy's here now it'll it'll be better the bad start this guy helps him a little bit many leaves so this guy's finishing this was honest to god the worst it's comical how bad it was there's cock everywhere there's he put holes in the wall there's dense there's dings the door barely shuts this is I like I so what are you let this happen I mean did he what's the result this guy was not he was there till 7 p.m. last night he got there at two and he fight he goes all right I'm done and he leaves um he did not have anything to clean with he asked us if he could borrow a broom and a dust pan to clean because he didn't have anything so of course I call the place today said this is unbelievable he's like our house is like ruined you've got to come back and fix this so they're going to but this was like if I asked him to fix it he was going to make it worse it was a project now so we think I finally leaves we're like decorating for Christmas and then it's time for better at kids go to bed and George goes into the bathroom and proceeds to extrism head turns around and throws up all over the wall not the walls on the walls all over the toilet on the floor the worst smelling vomit ever smelled my life my Courtney had to leave because she she was gagging so I had to clean it up I needed like a hazmat suit so that was my day yesterday two sick kids a flat tire and the renovation from hell wow but it's one of those times you know what I poured myself a big glass of red wine and said let's rip the band it off and start new to the next day how's your day that's not that I'm doing good I really good I'll tell her why that's a bad day that's a bad day all right um recommendations did you watch death by lightning I loved it oh you did did you watch it I did okay you okay so I thought it was fantastic it was four episodes I thought Tom Wobbsgam as the crazy guy was he's unbelievable he's so good but he's the thing so I've heard of James Garfield before I've heard of Chester AR for the names I had never heard this story before that he was assassinated I did no idea this happened no clue so um okay I felt like I was learning as I was watching it was so it was four episodes that was the best part four episodes so the book destiny of the Republic is by my one of my favorite authors Candace Miller highly recommend her books if you are interested so she wrote a book called Destiny of the Republic or Destiny of the Republic and I don't know if you noticed this right didn't but the fourth episode was called the Destiny of the Republic okay so the cast was amazing and I thought Wobbsgam was amazing like totally amazing and it was cool to see these characters brought to life Michael Shannon too they kind of looked like the guys too they're great um and I I I did enjoy it but it kind of felt like such a Netflix show like what was the point of it see I'm sorry I thought I was gonna say I've been complaining Netflix has had low quality shows I thought this was their highest quality show in a while I I thought it was fantastic okay maybe because I just didn't know the story so I thought the tone was learning the tone was interesting because it was like so it was sort of like like what genre was that show it was see I thought it was because they had some humor involved yeah like I thought that I don't know I thought that was it but the fact the way that he became president with his speech and like I thought that was just really well done yeah it was an accidental president but Wobbsgam where has he been because he is so good he reminds me of like Brendan Fraser on the mummy but better which they're bringing back you know with Brendan Fraser and Rachel Wise it's coming back I can't wait I love that movie okay so I've got I've got an audible of the week okay so at the end of his book Andrew Usor can actually mention this book and said I was trying to frame my 1929 book after this so it's called the Titanic Titanic tonight to remember by Walter Lord and all it is is there's no preamble there's no backstory there's no like biography stuff it's just this is what happened when the Titanic hit the iceberg and this is what all the people did okay it's okay and it's not that long on a two times you can listen to it in two hours it's really really good just like what happened and all the people being like wait like people getting out of the rooms at night and be like what happened we hit an iceberg go back to bed don't worry about it and like all the stuff that people decided to bring and the how the fact that they're running off lifeboats and really really good I like I enjoy it okay good rock all right I watched the the Eddie Murphy doc being Eddie Murphy I assume that you are a huge Eddie Murphy fan obviously literally who wasn't yes love Eddie Murphy yeah it's worth watching not the best doc I've ever seen but it's worth watching so at the end and this is not not a spoiler really but at the end so at one point during the during the doc he's talking about how he ordered two dummies so he can be like a ventriloquist if you ever don't stand up and it's it's it's Bill Cosby and it's Richard prior so at the end up of course he hasn't done stand up because he got too famous since 1987 I guess I don't know if if Delirious was the last one oh wait was raw 87 came over which was which I used to own Delirious ridiculous I on the DVD funniest thing ever so but anyway so at the end of the doc the puppets come and he does like 30 seconds and it's like the funniest thing ever okay he was it's just like come on man I know you're too famous but like please he was one of those guys when he was on comedians and cars getting coffee with the sign felt he still had it in him a little bit but he got too big I think but he in one of his I came over with was raw Delirious he had this bit where he talked about how all Italians thought that they could beat people up after Rocky oh my gosh it's just that's one of my favorite bits of all time yeah it's so good truly a wonderful and legend all right lastly speaking of comedy I saw I saw Louie at the beacon so in 20 like 14 or maybe 15 when was to flake in I can't remember but whenever that was Josh and I what already Lang's apartment I don't think I ever told the story before have I on the air I don't think so all right so already Lang was my favorite character on Howard I am a lifelong Howard Stern listener and when Howard and already broke up when they had that fight I remember I was in my bedroom like wait why am I'm a dead fighting and so anyway I already was like my guy and we were in his apartment and it was surreal to say the least it was Josh one of our these friends is a comedian who was a friend of fans of Josh's so Josh and I did already podcast Josh's friend was like a couple of hours late so me Josh and already were hanging out in his apartment from like 11 to 2 we watched sports center um when Adele's talking about to flake it and then we watched my favorite documentary of all time it was called the 75 I believe about the about the corrupt yeah the 75 about the corrupt cops in New York City and we were just just watching them it was unbelievable um really a pinch me type of moment like how did I get here and so so artist friend walks in and he said hey you hear about Louis and already he's like yeah I heard some stuff what did you hear and so they they they that's a good question so he tells him I'm like wait what huh Louis my favorite comedian of all time and it was what came out I don't know if it was a couple months later a year later whatever it was I sort of like kind of forgot about I was like wait what then it came out anyway so Louis needless to say did some bad things he's been canceled forever or cancel himself disappear whatever all right all that aside it was so good like it was he's for me that is my type of comedian just belly laughter un unbelievable I don't know if he he doesn't do nothing he does like his own things so probably be on his website in a couple months it was such a good special okay yeah we saw him live before he got canceled and uh there's one of the best shows ever about you I mean it's rare to like get like multiple actual belly laughs right we're like your face hurts yeah um smart comedians all right and then you know what we're gonna say this for next week so Michael Sembalist did a really good dive onto the media landscape Netflix YouTube and he has his he he ranked his top films in the 21st century so we're gonna talk about that but next week he's a he's a Ben guy he's a Ben guy same for next week he's a huge bad guy that was my first that was my first observation he is a Ben guy all right um thank you for surveying the show notes please serving the show notes please thank you very much for listening thank you don't get in the entire production team for doing what they do for us every week thank you for listening animal spirits at the compound news dot com we'll see you next time (upbeat music)