The Biggest Short Squeeze of All Time | Animal Spirits 467

Añadido: 2026-06-03

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[00:00:49]Welcome to Animal Spirits with Michael and Ben. We have a long show. Well, we have a long dock. Ben has something at 10:15, so we're going to go in hour 10.

[00:00:58]I suppose we're going to take all the time. We've got 42 pages. There is so much to discuss. I feel overwhelmed. I am doing four podcasts this week and I still think I have more to say. I mean, the amount of news flow coming out is incredible. But I want to take a moment to acknowledge that I feel like I am having a moment. Michael Batnik is having a moment. Now, we are having a moment. We share a lot of overlap. an hour of good fortune, but things are going pretty well for me right now.

[00:01:30]>> So, this is the You don't get the reference, but this is the summer of Michael, like the summer of George and Seinfeld.

[00:01:35]>> I don't get the reference, but >> that's part of it. Like, all of this happening with the sun coming out. It's been a long crappy winter as they always are. Like, the fact that it's happening with the while the sun is shining makes it even more sweet. But I say this not to brag because bragging is gross.

[00:01:53]Nobody likes it. but more as just a an acknowledgement that life is hard. Life has its ups and downs and you know when you're when you're sick and you're like gosh I just I got to be I just want to feel better. Please make me feel better and then you're healthy and you completely forget about being sick.

[00:02:14]>> So I'm just trying to acknowledge >> um and take >> We talked about gratitude a couple weeks ago. That's a it's a good thing to be grateful when things are going well.

[00:02:23]It's not bragging. It's being grateful.

[00:02:24]>> So, but it it is also weird to be to have clarity like this that this moment in time, summer 2026, might be the peak for me, which is a weird thing to think about. I'll tell you what, >> apex mountain.

[00:02:38]>> This is my apex mountain. All right. So, so here's what's happening in and around my life.

[00:02:45]>> I have waited a long time for this. Last week, I wore a shirt from the from the 1999 finals. I was 14 years old. My father started taking me games when I was seven. To be able to share this moment with my boys is beyond special. I cried twice this week listening to podcasts. Um once from Mike Breen talking about how special this moment is. Uh and once when Leggler was talking about how good Jaylen is. Like literal and actual tears falling down my face. Um it is >> you you're in some sort of news story showing you shouting about the Knicks.

[00:03:20]>> So my friend texted me yesterday. I am apparently the face of of people that can't afford tickets. Um, which is obviously ironic, you know, but uh but the the the tickets are out of control expensive. So, my plans depending on how the series goes, um, if it goes the distance, I will be at games three through seven. I'm making the track. So, I think Nixon five, I mean, I don't actually think that, but I do think Nixon six, so we'll see. Um, all right.

[00:03:46]So, there's that. Um, the Giants after a lost decade are finally I think we bottomed. I don't think it's going to get any worse for us. Uh, movies are having a serious moment in time. What happened with Obsession and Backwards, which we'll talk about later in the show, is remarkable. Um, >> it's not just movies, it's your kind of movies.

[00:04:08]>> It's it's my movies, the movies that I have subscribed to and have had season tickets for a long time. Right.

[00:04:15]>> Yeah. your strange type of movies are having a moment.

[00:04:18]>> Um, we at Red Holtz, things are, thank God, going well for us and the company and our employees and our clients.

[00:04:26]Things are, you know, things are going well. We launched Porterhouse, the momentum strategm reminder that we need more advisors. Um, we have a lot of people that are interested in our services and we have a shortage of advisers to serve all of them, which is insane. I started my career and I'm using air quotes for people that are not watching cold calling and getting hung up on. So, the fact that there are now people that are coming knocking on our door is is something that boggles my mind every day. I don't I definitely saying this for a while. There's a bull market in the need for financial advice for the next 20 years.

[00:05:08]>> Yeah, >> huge bull market. We need >> um All right. What else is is uh uh we launched an ETF.

[00:05:15]>> Can't really say much more, but we did that. Uh and uh family and friends, like everybody's healthy and uh life is hard. My uncle, when my mom passed, my uncle said to me, and this is extremely corny, but it's also extremely worth digesting.

[00:05:32]Um he said enjoy life. This is not a dress rehearsal.

[00:05:36]>> And it's true.

[00:05:37]>> I like it.

[00:05:37]>> We only we only have one chance on this planet and life has its ups and downs.

[00:05:41]So if if things >> appreciate you starting with positivity cuz I'm I'm I I'm really sick of all the negativity in the world. So I I'm I enjoy a glass full take on the world.

[00:05:50]>> Well, listen, I know that life is hard for a lot of people. Um and if you're struggling and you're you're vomiting me, uh you know, expressing gratitude, I'm sorry for you and I hope things get better.

[00:06:00]I just wanted to take a moment and acknowledge publicly that like I'm having a moment and it feels it feels good.

[00:06:05]>> This is the top right there. That was it.

[00:06:08]>> Okay. Well, from here >> um all right, let's get into the market because [ __ ] is happening.

[00:06:13]>> Uh every day it feels like something is going nuclear. Is this is this the worst FOMO we've ever seen in our lifetimes?

[00:06:20]Post9 Post.com. Is this this it seems like every week it's something. It's a country. It's an ETF. It's a sector.

[00:06:28]It's a stock, right? It's Dell, it's Intel, it's SanDisk, it's Western Digital, it's >> there's something >> going just bananas all the time. You look at the charts and it's >> this morning we're getting dot like 1999 like returns from some stocks for a year like fourdigit returns. It's insane.

[00:06:48]>> Jensen Wong said this morning that Marll could be the next trillion dollar company and the stock is up uh the stock is up 16% premarket. Um, that's a big big statement is, but I I think it's I think it's accurate. I don't think because you could say 2020 2021, but that was >> that was stupid. That was like GameStop nonsense, right? This is >> that was like internet fun times. This is real.

[00:07:09]>> This is real.

[00:07:10]>> Whatever. However, >> and uh it's it's hard it's hard to fight it.

[00:07:18]>> Okay.

[00:07:19]>> If you if you if you are an investor and you feel underexposed, you're not feeling awesome right now.

[00:07:25]No, I agree. So, this is from the Wall Street Journal. Chip stocks powered the S&P 500 up 16% across April and May. A two-month surge matched only four other times since 1950. The index was higher 6 months later each time by a median of 17%. So, we're talking about a handful of times that this is the best two-month stretch since 19 one of the best two month stretches ever since 1950.

[00:07:45]That's pretty good. Uh, this is interesting. I've never seen this before. Sam Row. Uh, so this is S&P via Samro from an all I've never seen it presented like this and I told Chardat I said, "Hey, we got to recreate this."

[00:07:57]From an all-time high, how often did the S&P 500 make another all-time high within the next day, week, month, and year? 99% of the time, within the next year, the S&P 500 made another all-time high after making one.

[00:08:09]>> That's pretty insane.

[00:08:10]>> Yeah, that's good stuff. All right. I am not I'm not a I'm not a analog chart guy. You compare to lines, right? Like I've said this many times, lines can only go in three directions, up, down, or sideways. So when you see two things lining up, you know, one of my first blog posts, actually, I compared Altria to like Altria from whenever I wrote the blog post to the Dow Jones from a different time period.

[00:08:34]And I was like, this is very easy. It's very easy to find charts that line up.

[00:08:39]But this one I do find um uh interesting.

[00:08:43]>> Remember how many 1929 charts there have been over the years?

[00:08:45]>> Oh god. Yeah. Well, that's all that's all. Yeah, the worst.

[00:08:48]>> Okay, so Bespoke tweeted um the NASDAQ at 875 trading days after the release of Netscape on December 19th, 1994 and the NASDAQ at 875 day trading days after the release of Chat GBT and it's identical.

[00:09:06]Um now whatever you could see the rest of the chart the like the the NASDAQ had only begun to explode after 875 trading days. I guess maybe one of the takeaways is this thing could go a lot longer and a lot higher than anybody thinks.

[00:09:21]Whatever be that like that's near the news is we're only in 1998 right now.

[00:09:24]>> Exactly. I just think it's the the parallels between the browser versus the chatbt should not be lost on anyone.

[00:09:32]It's obvious.

[00:09:33]>> All right. This is from the Wall Street Journal article. George Vanderhiden, once a Fidelity portfolio manager with one of Wall Street's best performance records, shunned tech stocks in the late 1990s in a bet that the bubble would soon burst, loading up on treasuries instead. performance slumped. He retired in February 2000, scribbling a message and his office whiteboard, two tulip bulbs for sale. He said at the time, "You try to manage the portfolio for risk, but the market hasn't rewarded you for it. The market has no fear.

[00:09:58]Obviously, the market peaked like a month later." Um, but that's how I would describe this market. This is a market with no fear. There's none. I know people are trying to like make up, oh, this is going to burst and the way the market is acting, there is no fear. Is that fair to say?

[00:10:17]>> Um, yes and no. I think it is a fair statement that on Tuesday, June 2nd, there is no fear.

[00:10:27]However, um, Warren Pice tweeted on May 31st, despite many expecting a seasonal top, retail traders are still jittery. The 2% pullback in miday. Now, that was that was May. Okay. So on June 2nd, there's no fear.

[00:10:46]>> But in >> 2% we're talking about, >> let me finish.

[00:10:49]>> Okay.

[00:10:50]>> In miday, the 2% pullback forced big inflows into cash and money market ETFs.

[00:10:59]Warren's point was positive price momentum and defensive flows is not something you typically see at tops. But remember there was a literally a 2% whatever. I don't want to say pullback.

[00:11:08]A 2% well pullback I suppose. But there was a there was a there was a rush into cash >> sneeze. That's like a market sneeze.

[00:11:16]>> So it's just let's just take take um >> the fear the fear could happen fast when it happens.

[00:11:22]>> So what am I I'm trying to There's a phrase I'm looking for. Take stock.

[00:11:25]That's the phrase. Let's take stock of the fact that things change so fast.

[00:11:31]Think about how bearish people were on the AI trade after Sam Alman said that [ __ ] on the podcast in in the fall.

[00:11:39]>> Think think about how bearish people were on the MAG7.

[00:11:43]Rewind all the way back to the pullback from the war. Sentiment changes so fast.

[00:11:50]But Ben, you're right. On June 2nd at 9:15 in the morning, there is no fear.

[00:11:56]It feels like we're on this these train tracks of AI and just we keep going and every once in a while the train gets derailed for something liberation day war whatever fears are and then we just find our way back onto the tracks and people like oh yeah it's AI powering this thing that seems to be where we've been for the last three or four years.

[00:12:14]All right continue from Goldman US IPO gross proceeds will total a record 225 billion in 2026. Previous forecast was 160 billion. Uh these numbers are just like not even close to anything else since the great financial crisis. It dwarfs everything. I think what the number was that the three companies alone did you have this last week for us? Anthropic OpenAI and SpaceX will together have more proceeds for an IPO than any of the 1990.com bubble stocks.

[00:12:43]All of them.

[00:12:44]>> I think it was it was 909 and 2000 combined. Now Denise on TCA Denise Chisel made a good point. We're going to adjust for the size of the market cap.

[00:12:51]Yeah, obviously market's way bigger today, >> but um yeah, we are we are in a moment.

[00:12:57]So last week, Anthropic raised a $65 billion series H funding at a $965 billion post money valuation and then 4 days later they said we're going to later this year. We got they filed their S1 yesterday. I haven't had time to go through it.

[00:13:14]>> I love how the the headlines all say Anthropic confidentially filed the S1.

[00:13:18]Like it's not confidential. We're all talking about it.

[00:13:22]>> I know we I know we keep saying this, but it is the fundamentals driving this.

[00:13:28]>> Now, it's hard to it's hard to like know how much of the pie is excess speculation and excess euphoria.

[00:13:35]Obviously, that's a part of it.

[00:13:36]Investors are rightfully excited, but last week Dell raised its outlook for the year after sales climbed 88%.

[00:13:47]Um, crazy that Del is still Dela still a company. Like we're Gateway missed its moment here. Where's Gateway Computers?

[00:13:53]>> It not only is Dela a company, it's a gigantic company. It now expects fullear revenue to be 165 to 169 billion, up from a prior range of 138 to 140 billion. So the stock gapped up 38%.

[00:14:08]I we just have to keep reminding ourselves that this is being driven by fundamentals. Here's here's here's a quote that I want to share.

[00:14:14]It's just to me the weirdest thing about this is so many of these companies have been around for a long time. Intel, Dell, Micron, Western Digital, like all these are not new companies that are springing up. These are companies that have been around forever.

[00:14:26]>> Correct.

[00:14:27]>> In technology terms at least.

[00:14:29]>> I have Ben, I tweeted this quote in 2017 um from the pseudonmous Adam Smith. He wasn't really synonymous, but he went he he penned his books under Adam Smith. He wrote The Money Game, which in my opinion is the greatest financial book ever written. At least it's my favorite.

[00:14:49]And he wrote a book called Super Money.

[00:14:52]And to me, this perfectly describes how we are all feeling about the bull market.

[00:15:03]We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter falls upon the summer air.

[00:15:10]We know by the rules that at some moment the black horsemen will come shattering through the great terrace doors, wreaking vengeance and scattering the survivors. Those who leave early are saved. But the ball is so splendid no one wants to leave while there is still time. So that everyone keeps asking, "What time is it? What time is it?" But none of the clocks have any hands.

[00:15:36]Is that chef's kiss or what? And I tweeted that in 2017 because at that time there were so many there were so many people wondering, begging when is this great ride going to end? When is the splendid ball when are the lights going to go off?

[00:15:56]>> I think you just have to have an open mind about this. And that's where I am is that I know all the historical parallels. I do get worried that oh my gosh, this is the excesses we've been waiting for that that could tip us over.

[00:16:07]and like honestly lead to a recession if the excesses get too big and there has to be a pullback. So that part does worry me, but I think you just have if you don't have an open mind about what technology has done to the markets, to our lives in the past 15 years, then you haven't been paying attention. Um >> I I think that's the right posture. The right posture is um obviously not oblivious to the risks. How could you be at this point?

[00:16:31]but an open mind that this could go on for a lot longer than you think and that some of the run-ups are justified. And have the bulls not earned the benefit of the doubt?

[00:16:43]>> I mean, honestly, >> I got the I got the bearish take later in the doc, but let's talk about the bulls more. Micron, this company went nuts. So, this is all the all the one trillion dollar. So, you made this chart looks like how many charts, how many stocks is it now? 10 11.

[00:16:57]>> This is this is the 11th.

[00:17:00]>> So, which is crazy. So, every stock in the top 10 of the S&P 500 now has a trillion dollar market cap or more. Just nuts. Uh, >> Ben, Ben, think about what's what's not a trillion dollar company below Micron.

[00:17:14]Uh, you know what I don't see on this chart? I don't see JP Morgan.

[00:17:18]I don't see Walmart.

[00:17:20]>> No, Netflix.

[00:17:22]>> Well, forget about Netflix. Um, >> I don't know. I'm just thinking of household names.

[00:17:25]>> But Walmart and and JP Morgan are are smaller than Micron. Okay.

[00:17:31]I guess >> it's kind of cool to see Eli Lillian on here too. So Bloomberg had some charts here. Trading days between 500 billion and1 trillion dollar market cap. Micron is the fastest in history. And guess what? The next two are also happening now. Samsung and SKH highex which is which and like Microsoft or Bertrra took a lot longer.

[00:17:49]>> Think look think look think look think look think look think look think look think look think look think look think Alphabet that wasn't like that long ago.

[00:17:52]>> It took it took Alphabet over a thousand trading days. So Bloomberg also >> Bloomberg has Micron's earnings are expected to explode higher. This chart doesn't look real. So it shows their trailing 12 months earning per share going back to 2017. And then the average analyst estimates for the next three quarters. And it's a 10-fold increase, fivefold increase. It's it's it looks like a totally different chart to your point about like the fundamentals. The crazy thing to me is just that this it wasn't like two years a even a year ago people were saying this is going to happen these memory that semiconductors are going to take off like this. This wasn't something people were foreseeing in this whole thing, right? This is a this is a new thing that no one was like pounding the table saying these are the stocks. It h this to your point about happening fast. This happened so fast and the rerating and the earnings ratings and the stock ratings of these it's just it's nuts.

[00:18:51]>> I want to give a a shout out to Roundill for the greatest ETF launch of all time.

[00:19:00]the greatest ETF launch of all time. So, they launched DRAM in early April.

[00:19:08]The ETF is up 127%.

[00:19:12]>> Oh, I've had this later in the sent. So, listen to this. This is from Roundill.

[00:19:17]The Round Memory ETF ticker drram surpassed $10 billion in assets under management in only 35 days, faster than any ETF in history.

[00:19:26]>> Wow.

[00:19:26]>> Holy crap. $10 billion in 10. So this is all those stocks that we just talking about. Micron, SanDisk, Skhinx, isn't it's only like six stocks essentially.

[00:19:35]>> Oh, I don't know about that. I have no idea. I don't know what the holdings are >> that make up the majority of it.

[00:19:39]>> I would Okay, I would assume it's a bigger B than that. But there's $14 billion in assets as of yesterday. This is credit to them. Um these guys are good, but better to be lucky than good.

[00:19:49]Uh unbelievable. Love to see it. Good for them.

[00:19:52]>> Okay. Right. So sorry. Yeah. the the top st Oh man, >> what a >> we we shared a chart on on TAFF the distance between SMH and its 200 day moving average and there's nothing in history like this at least well I'm sorry it goes back to 2001 so maybe maybe it's crazier 99 but for goodness sakes like if if you are putting um new money in here I'm I'm just have some sort of an exit man, like you got to you got to fight you got to fight the fear, fight the fight the FOMO.

[00:20:28]>> Well, this is the kind of thing where you said like people have such big profits here that there's going to be a time when these stocks something happens and people okay my gosh I need to I need to lock these profits in now and there's going to be a huge cascade of selling even if it's like a one day or one week thing. I keep saying this when Micron reported its blowout numbers last quarter. Blowout numbers. The stock fell 30% in about two weeks, three weeks. And that was guys, that was like in March.

[00:20:55]So, I'm not I'm I don't I'm not I don't want to be that guy. It's super lame.

[00:20:59]But just be careful.

[00:21:00]>> Yes, there's going to be those stats that say, "Oh my gosh, these stocks are down 30% but still up 400% for the year or whatever."

[00:21:05]>> And by the way, we we we own a lot of these names in in Porter House. Like, we own a lot of these names. Um, and if and when they break our whatever our rules are, they'll they'll get sold.

[00:21:15]>> Yes, that's the point of momentum strategy. Uh, the AI trade is global.

[00:21:18]This is one of the things that I've kind of been talking about for a while and wondering or predicting whatever you want to say. So, Michael Slas looked at um a basket of Chinese AI stocks and a basket of US AI stocks. And this is going back to the start of 2024 and they're essentially following each other beat forbeat. Chinese stocks are actually outperforming a little bit.

[00:21:36]Going back to the same thing, the emerging markets ETF versus the NASDAQ 100 has kind of tracked it pretty similarly and are up about the same as each other since the start of 2024. So, this is the kind of thing where this this is not just on our shores anymore.

[00:21:51]This is a global phenomenon. And I actually I've been thinking that AI the internet really didn't level the playing field as much as people thought. I think in terms of like US domination of the world, I think AI might be the thing that does it that sort of brings the rest of the world up to us. I think it's possible.

[00:22:10]All right, I want to give the AI barecase now and talk about my favorite new macro podcast. Uh, so TS Lombard has a podcast. Dario Perkins is a guy I follow on Twitter. They have three macro people. They're all British and they make macro calls and then if they get it wrong they all rip on each other on the next podcast. So that so I really I really enjoy it. So they said let us lay out the bare case here because everyone has the bull case.

[00:22:36]>> So Dario Perkins says I did the numbers.

[00:22:38]>> 80% of the revenue right now is circular meaning it's going from Google to Oracle to like it's it's the capex from one company going to these other companies.

[00:22:48]So, a lot of it is he's he's saying it hasn't quite broken out yet to the wider world of businesses yet. A lot of it is still circular. So, all this capex we're seeing is them shuffling the chairs around, so to speak. And he's saying if we don't see the leap, then that's that's a worry. If it's just these companies spending with each other, and it's interesting, Ben Thompson, I know his podcast last week said that Nvidia is now starting to break out their quarterly numbers by hyperscalers versus non-hyperscalers because I'm sure they're getting crap about this. Hey, is this just a big circle jerk? Are we What are we doing here? So, um, anyway, it's worth a listen. So, it's called global data is the name of the podcast. I I think it's worth worth a listen for the bearish take because I think we've are now in the camp that I feel like the bearish takes before an AI were kind of getting the most oxygen and now I feel like the only thing you hear is bullish.

[00:23:39]So, again, trying to keep an open mind.

[00:23:41]I want to I want to think about both of these things >> still >> and like what I should be looking for for like mile markers and goalpost to be like all right fine that bears trope that one was knocked down >> right anyway >> you know what you know what I found you know what I found really helpful for me early in my journey as a as a as a young investor I used to write down everything when I bought or sold something I would write down what I was doing and Ben and I have joked about this in the past in 2011 11 I think I shorted Amazon and um I would I would like frequently reread what I wrote like with a passage of time and I don't mean like years later I mean like like three months later I would look back and believe me it didn't take very long before I discovered that I was not in fact uh the next Stanley Ducken Miller and if you do that especially in a time like right now because whatever happens you will it it will have appeared obvious in hindsight for the most part and I would say Listen, if if if the bull market goes another year, if we're up 30%. I don't I'm I don't think anybody's going to be like, not anybody.

[00:24:47]I don't think a lot of the narratives like, well, of course we're up another 30% blah blah blah blah blah, right?

[00:24:51]Like there there will be more disbelief in my opinion. But if we're down 30%.

[00:24:56]Everybody will have seen it coming.

[00:24:58]Everybody will have said it was so obvious. Oh yeah. Okay. If you think it's so obvious that we're in a bubble, then sell or short or whatever. But write down write down it's really it's a really helpful exercise. Write down how you're thinking before you buy or sell something and do that for a couple of months and see if it doesn't sober you up about your own abilities to predict the future.

[00:25:21]>> Yes, I agree that that that's one of the reasons that I like having a blog because it keeps me honest with that stuff and it's one of the reasons that we have policy statements for for our clients writing stuff down reminding you of your goals and why you're investing.

[00:25:34]Duality Research had a good one showing that this is really a tale of two bubbles or not bubbles, two bull markets. Sorry, I got bubbles on the brain here. Also, the other thing is no one can time a bubble. No one can do it.

[00:25:45]It is impossible. Isaac Newton was probably the smartest person to ever walk the earth. One maybe one of the top three. And he got caught up in a bubble in the South Sea. One of my favorite stories. It It's impossible. No one can time it. One of my favorite stories about humility in this in the stock market is Stanley Draen Miller who I think everybody has on there like Mount Rushmore of Mount whatever your style is. He's on the Mount Rushmore if not the GOAT. Okay. Draen Miller was in the business for almost 20 years prior to the top in 2000. He had been killing it. He already was a legend for shorting the pound. He was a guy and he fought the bubble. He fought. He fought.

[00:26:32]He fought. He was underinvested. Um he hired a couple of young kids because he was like, "All right, clearly I'm out of sync with the market. I need some young blood. Maybe they have a better idea of what's going on than I did because well, whatever. We don't need to get into his backstory, but um and he went all in, in his words, within hours of the actual top into tech stocks. He lost $3 billion in 24 hours, something like that. And as he reflected on what he learned, his answer was nothing. I knew I shouldn't have done it, >> but I did it anyway because I couldn't help it.

[00:27:01]>> Couldn't help it.

[00:27:02]>> That was from your book, right?

[00:27:04]>> That was from my book. Um, all right.

[00:27:06]So, what So, back to back to this chart.

[00:27:08]What are we looking at here?

[00:27:09]>> All right. So, I you talked about analoges between the 80s and 90s and today. I think this is another one that it was that period, however you want to start, whenever you want to start it, 82 to 99, 80 to 2000, whatever it is, it was really two different bull markets that were just kind of mashed into one over time. And so, Duality Research looked at in the 2000, so 2013 to 2020, new highs in the S&P 500 came at low VIX prints, right? It was like the stair step up.

[00:27:35]>> But now in the 2020s, uh, since the pandemic, new highs have come with higher VIX prints. So, there's more volatility when it happens. And this is showing that since the pandemic, this is a totally different market. The bull market is acting differently. So here's uh the market is still grinding higher but without the same complacency we saw in the 2010s. In other words, investors are still paying up for protection even during rallies pointing to a more hedged, more cautious backdrop, which is interesting. You talked about like >> Yeah. So that's why I push back a little bit because you're right, there's no fear today, but fear comes back so fast.

[00:28:09]>> It comes back so fast.

[00:28:12]Um, all right. So, we let's we'll do a little bit about SpaceX here. I'm doing a full episode because it deserves a full episode tomorrow on Talking Wealth with Aaron Dylan about what advisers need to know about SpaceX because clients are asking a lot. This is the hottest.

[00:28:28]>> We got a ton of questions.

[00:28:29]>> This is the hottest IPO of our lifetimes. What does it mean for index inclusion? What does it mean for buying?

[00:28:33]So, we'll get into that a little bit today. Um, my dad texted me yesterday, should I buy the SpaceX IPO? My dad never ever asks me about individual stocks ever. So, this is on the brain.

[00:28:48]Um, >> what did you tell him?

[00:28:52]>> What did I tell dad? I said, uh, no. He said, okay. I said, the price might go up in the first few sessions. Who knows?

[00:29:01]But it's a cluster. All right. So, let me elaborate.

[00:29:04]>> I can't I know you're going to get into this on talking. can't force myself to get up in arms about SpaceX being an anthropic eventually being included in index funds. I can't make myself get mad about it.

[00:29:14]>> Okay. So, >> a lot of people want to be mad about it.

[00:29:16]I I can't myself get mad about it.

[00:29:18]>> There's no there is.

[00:29:20]>> Yes, these companies should be in a cap weighted index. If they are like a top 15, top 10 stock in a cap weighted index, how could they not be included?

[00:29:32]It would be bizarre.

[00:29:34]>> Exactly. That's my point. People are upset because the NASDAQ is ch and the index providers are changing the rules.

[00:29:39]Guess what? These rules were not handed down on a tablet by Moses. What do you mean? We're allowed to change the rules.

[00:29:45]The market looks so much different today than it did back then. The rules are allowed to change.

[00:29:50]>> Okay.

[00:29:52]>> The question is um are the rule change or the rule changes protecting investors? And everybody has their opinion. I think to include an IPL of this size in the index after 15 days is kind of nuts. There is all sort of shannery that can be played.

[00:30:14]I don't think there's enough time for price discovery. I believe that they should be included in the index, but 15 days 15 days or or even five seems nuts.

[00:30:23]Now, the part that I think the part that people have are are upset with is exit liquidity. um they are they are coming out with a very short short float so that the index has to buy all of it and it's manipulating and it's I that so that part I sort of understand but but the the nuances of it matter. So here's Matt Lavine.

[00:30:43]So the schematic maximally cynical approach for SpaceX would be something like this. do an IPO, sell like one share of stock to the most ardent possible Elon Musk fan asset manager at a $2 trillion valuation, sell perhaps tens of billions of dollars of stock to ardent Elon Musk fan retail investors, whoever is willing to buy at that $2 trillion valuation. Lock up all the rest of the stock so that no one can sell. Get in all the indexes because you are huge.

[00:31:14]something like 24% of the stock of the average member of the S&P 500 index is held by index funds at a $2 trillion valuation. That's like $500 billion of stock. Sell $500 billion of stock to index funds at that $2 trillion valuation. They can't say no. That is the maximally cynical approach is to sell as little stock as possible to price sensitive investors in order to keep the supply low and the price high and then sell as much stock as possible to index funds who can't negotiate on price. Actually, can't negotiate on price understates the issue. If index funds need to buy 24% of your stock and only 20% of your stock is available to buy, then the index funds are forced to chase it, driving up the stock to whatever price you like. you have effectively created a short squeeze for the index funds. They have to buy stock at any price and there isn't enough stock for them to buy. Just keep bidding. You tell Vanguard. Okay, so that's Matt Lavine. But the reality is um a little bit more nuance. Here's Lou Wang and her colleagues also at Bloomberg. They say fasttrack timelines vary by index, but if S&P follows its competitors, the resulting passive demand for SpaceX uh from funds tracking indexes would be nearly $20 billion according to Blink intelligence analyst James Ciphford and Rob D Rob Dubof's estimates with a $75 billion raise. All right, so they're raising $75 billion.

[00:32:40]That would be roughly a quarter of SpaceX's offerings. So, to be clear, SpaceX will not be in the index at a $1.8 trillion valuation. We had a we had a bunch of listeners email us like, "Hey, is this is this total horseshit?

[00:32:57]Like, should I sell my index funds?" Um, so here's where it is going to fall inside of the index. This is this cal.

[00:33:07]So, Cali um Cali Cox calculated this for us based on you know putting a few pieces together of the new float adjusted rules. The float is what's actually being available. Okay. Um she Cali said it's going to be right around Amgen and Gilead and Shopify and Honeywell. So, so if you look at this graphic that chart created, it's going to be like the 195th company in the S&P.

[00:33:32]It's not automatically going to be a 3% position right away or something.

[00:33:34]>> But that's assuming that they wave the profitability requirements, which are probably going to sounds like they're going to. And we don't know when it's going to get included. I think the bigger idea is what do future unlocks look like and how much supplies ultimately could be dumped on index funds and what does that do to the price and we will cover all of that if you want more on talking wealth. But >> I'm sure this is going to cause the index providers to change more rules in the future if they try to man manipulate them.

[00:33:58]>> All right. though halfbaked idea that will never happen.

[00:34:03]What if there's a new rule for private companies where um once you cross a certain threshold in market cap you can't be private anymore.

[00:34:18]You can't you can't come public at a trillion dollar valuation. What if there's a limit? Like if you want to be a publicly traded company, there's just a limit. You can't come public at a $4 trillion market cap and only release 4% of the float to investors pushing stocks higher. Push it like I don't know. It's probably not going to happen. I'm I'm sure that's, you know, probably not a great idea for various reasons. Uh it's an interesting experiment. We'll see what's what's going to happen. And that brings us to one of the big questions is um how much supply can the market handle?

[00:34:50]Because the money's got to come from somewhere. And if OpenAI is coming public and SpaceX is coming public and Anthropic is coming public and they're raising 200 billion, what was the number that Goldman was it 250?

[00:35:04]>> $250 billion in new shares coming to market. You have to sell something. And how does what does that do? Okay. Well, funny you should ask because Google apparently uh needs to raise money or they are choosing to raise money. So Google is doing an $80 billion equity offering. It is the first time since 2005.

[00:35:30]>> This this is a narrative buster to me.

[00:35:32]This whole story is so bizarre to me.

[00:35:34]>> In what sense?

[00:35:36]>> The fact that um people have been talking about Buffett sitting on a cash pile and the timing of Bergkshire Hathway getting into this is bizarre to me.

[00:35:44]>> So they they bought Google last year. Um they're buying more. They're buying $10 billion which is I mean what's their cash pile? Is it $300 billion? It's >> um they're only so it was done by a via private placement at only like a 4% discount to current prices which and the whole story is fascinating. It's very interesting.

[00:36:02]>> The a company as big as Google and mature as Google raising equity is so weird. I I looked it up. It this I'm like when has this ever happened before?

[00:36:10]It's this is basically a one one of one that this has happened.

[00:36:14]>> A company that produces this much Yeah.

[00:36:16]this size, this mature. I mean, Tesla did a bunch of equity raises, I guess.

[00:36:21]Like, I I was I was scouring all the LLMs like when does this happen before?

[00:36:24]They're like never. This is new.

[00:36:26]>> So, here's >> like like this has never happened before.

[00:36:29]>> Here's their press release. During its Q1 2026 earnest call, Alphabet announced uh that its 2026 capex are expected to be 180 to $190 billion and that it expects 2027 capex to significantly increase compared to 2026.

[00:36:49]The equity offering is part of Alphabet's plan to fund its investments in a balanced way while retaining a healthy balance sheet.

[00:36:57]Uh their other sources of funding include strong operating cash flow. Over the last 12 months, they generated $174 billion of cash flow and debt issuances.

[00:37:05]Over the last year, they raised $85 billion of debt. So, people are rightfully saying like, "Hey, wait a minute. What in the world is going on?

[00:37:12]$175 billion of operating cash flow, issued $85 billion worth of debt just over the last 12 months, and you still need more money." To me, the clearest the the the my reading from this is I should buy more Nvidia. I own Nvidia.

[00:37:24]buy more.

[00:37:25]>> That one of the the narratives I was thinking about this is obviously this means there's so much demand. Yes. That they need they needed money this bad that they had to raise equity which is to your point crazy with how much capex they already produce. The other one is these are way more capital intensive businesses now. And if they can't fund everything with cash cash flows like that that potentially changes the business model. And those are the two things that I came away with here.

[00:37:50]>> So I forget the exact details. They did $10 billion in a private placement with with Bergkshire. They're doing a $40 million at the market equity offering sometime in the third quarter. Um, and there were some preferred in there. Now, this is like nuance. Really, who cares?

[00:38:04]Part of this is to pay the tax bill. So, they issue a lot of stock to their employees that is treated like cash comp. They have to pay income tax for that. So, they're doing that. I saw somebody make a point like, well, cash is fungeable. They could they don't want they they could just use it from operating, right? But, but they did say that's part of the use for this. So the stock is doing what pre-market this morning it was down two and a half percent. The stock is down the stock Oh the market is open. The stock is down four and a half percent. So to me this is going to be very interesting how the market digests.

[00:38:34]>> So there goes there goes the uh discount right away. Huh.

[00:38:36]>> So >> you said they bought at a 4% discount.

[00:38:39]>> So Google's at 355. Um so we'll see how the market digests over the next couple of days and sessions. But it will be interesting to think about this in conjunction with all of the new supply that's coming to the market.

[00:38:52]>> I feel like we just need to start putting a file together for the thing that signal the top, right? Cuz one of these things has to be it. Remember when Google raised money? That was it. That was >> Yeah.

[00:39:02]>> Not not that easy. All right, let's talk about South Korea real quick. Uh so someone from South Korea sent me a picture of my book at a at a bookstore there, which kind of cool. People sent me uh pictures from India and South Korea and New York of like seeing the book out in the wild, which is kind of cool. And so I wrote back to the guy and I said, "Hey, how crazy is are things in South Korea as far as investors go?" And he got he said, "It's crazier than you think. It's the speculation is nuts." So I got a few charts here.

[00:39:28]>> Wait, hold on. On the speculation thing, like are you hearing from friends?

[00:39:35]>> No, I'm really not. You're right. it it that that part of it seemed like I was hearing from more people in the 2021 meme stock thing than I am with this.

[00:39:45]So I I guess is it possible that this is obviously retail is involved but is it possible that so much of this is really just professional investors in these and not not individuals? I don't know. So over the past 10 years the South Korea ETF EWI is now outperforming the S&P 500. All of that outperformance in for the past 10 years has come in the past year because it was wildly underperforming through 2024. Uh this is from Bloomberg. We talked about how South Korea passed the UK before passed Canada. Now South Korea has a bigger market cap than India which has actually kind of stagnated a little bit. Um South Korea is just going nuts. Eric Belt Chunis the two times SKH ETF in Hong Kong has grown AUM 10 times this year is now the third biggest ETF in that market accounting for 8.5% of all assets >> unbelievable >> a leverage ETF a single ETF is almost 10% he says that's insane it would be like an ETF in the US having $1.3 trillion which doesn't exist >> it trades over a billion dollars a day >> which is the US equivalent of 150 billion which has never happened before holy crap and now everyone of course says It's two stacks, idiots. Yes, we know that.

[00:40:54]>> Well, yeah. Duh. By the way, just just getting back to my point, the comment we made a second ago about retail investors. I think retail investors that are trading all the way are all the way in. Like, if you've been involved in the stock, you are all the way in. I guess my question was like, is it is it pulling in new people into the market the way that 2021 did? I don't think so.

[00:41:12]>> That's true. I think we pulled forward a lot of demand.

[00:41:15]>> This is in an interesting dynamic. Kevin Gordon tweeted, "Quite the gap. The S&P 500 continues to look stretched relative to its 200 day moving average like how far stretch we are above yet the percentage of members of trading above the 200 day moving average continues to struggle to move higher. Um whatever not really surprising dynamic. We know what's going on back about concentration again. Yeah, it's a lot of the lot of the mega caps doing the heavy lifting and yeah, people are all in on tech.

[00:41:40]Cumulative flows into tech uh year-to- date or actually since the March low, my bad is this is from Todd Sing is like 30 billion and the cumulative flows X tech is negative4 billion. Did you did you listen to Dan Loe on Patrick's podcast?

[00:41:54]>> I didn't listen yet. He was basically like, "Yeah, this is this is by far our biggest exposure is tech." And uh, you know, I mean, makes sense. This is this is where the market is.

[00:42:05]>> If you want to if you want to get out of Xtech now, you're you're getting rid of like half the market. It's a it's an enormous bet.

[00:42:13]>> Uh, we haven't spoken about money market funds in a while. On the other side of the spectrum, there's now $8.28 trillion in money market funds.

[00:42:24]I don't necessarily want to say that this is going to like In fact, you know what? I was 100% right here. I was 100% >> You called this. I'll give you credit.

[00:42:31]>> Yeah, I was 100% right.

[00:42:32]>> This money's not leaving.

[00:42:33]>> This money's not leaving cuz it's just >> Yeah. Go ahead.

[00:42:36]>> It helps that people thought the Fed was going to be keeping lowering rates and that would do it. But the rates have stayed pretty steady and we're still getting what three and a half four% for money markets. It's not bad.

[00:42:45]>> So, I don't think this impacts the stock market at all. There's probably personal finance ramifications here, but >> uh yeah, you credit to you. You called this one. Uh okay, Heather Long, let's look at the other side of things. This is stunning. She says, "Personal savings rate in April 2025 was 5.5%. Personal savings rate April 2026 is 2.6%." That's a sharp plunge. It underscores how squeezed Americans are right now with higher prices and incomes not keeping up. Maybe you can explain away some of it by baby boomers retiring, but not all of it. Now, a lot of people saw these numbers and said, "Oh my gosh. How is the an economy like this with a booming stock market and all this stuff and people can't afford to save money?" This is that's the intuitive re way you read that. The counterintuitive way you read this and how re it actually works in reality is no no no. The wealth is so much higher. People think they don't need to save as much. And this happens all the time. This happened in the '90s.

[00:43:38]This happens in every boom. The savings rate decreases when asset prices boom because people's wealth is up and they don't need to save as much anymore.

[00:43:49]>> Nailed it. I mean, >> right, >> my savings rate is way down probably because exactly what you just described, >> right? Uh Mike Zakardi posted a chart from Bank of America that shows just that the savings rate tends to be negatively correlated with household wealth. When wealth goes up, you >> of course it is. Of course it is. You're afraid to spend in bad times. Duh.

[00:44:09]>> Right.

[00:44:10]>> All right. This is uh from Torson Slack.

[00:44:14]He says here's a chart showing the US ADP weekly employment.

[00:44:21]He said it is Javon's paradox playing out in real time.

[00:44:25]Cheaper technology is creating more demand and more jobs. And this would be amazing.

[00:44:33]This would be an incredible outcome. Um, we will see. I don't think that I think it is way too early to draw any conclusions, like ridiculously early to draw any conclusions, but I hope it happens. I hope that all the fears and fears that I I I shared, I was the Satrina report bummed me out. I'm not going to pretend like I wasn't bummed out. I would love I mean, we would all love for nothing more than for this to not be the case.

[00:45:03]This is this is there's certain segments that are going to be disrupted.

[00:45:08]Obviously, I think the hardest part is the people who are in technology are the ones who are seeing the biggest disruption right now and there's the people in technology are like running around with their hair on fire because they see what's happening to software developers in their space and they're going no you people don't get it. You have no idea what's coming and I I can't tell.

[00:45:25]>> I think I think they don't get it. I don't think they understand human beings >> as a group overgeneralizing. No, I I I definitely agree that I think the emotional intelligence, the EQ of of tech in general is a lot lower than other industries. Is that a slight?

[00:45:41]>> So Kevin Roose, no, their IQ is higher.

[00:45:44]Their EQ is lower. That's that's the that's the computer brain. Like we all know people like that.

[00:45:47]>> Kevin Ruse tweeted, "Overheard in an AI lab. How are you spending the last 300 days of work?"

[00:45:52]>> Buco Capital retweeted and said, "Increasingly think the only options for AI labs are to end up in prison or as government employees." I think he's being I mean I'm guessing he's being hyperbolic, but um he he said rhetoric and outcomes they are pushing for are completely incompatible with current society. They're either wrong, enemies consumed.

[00:46:12]>> So >> right, the point is if if if everyone in AI is right that whatever 50 million jobs are going away, something's going to happen.

[00:46:20]>> Yeah. So >> we're not just going to let that happen.

[00:46:23]A friend of mine shared with me a YouTube video on so somebody walking through Google's Gemini Spark, which is like the agentic stuff, like here's how it here's how it helps you throughout the day, right? Um, so this is coming. I mean, it's here. So I I haven't messed around with it yet and and engaged, but here's an example, a few micro examples of something that I would love to have.

[00:46:43]Um, I don't want to be on Twitter. It bums me out. It's a cesspool. Um, however, that is where we get amazing content for the show. Like there's >> you have the right filter in place.

[00:46:58]Twitter is still great.

[00:46:59]>> There's there's there's tons of gold and there's great aspects of Twitter, but I don't want to be I don't want to be engaged because I get drawn into the negative aspects of it. Okay. So, but I need it. So, like I basically want like a I want my agent to go through all of our transcripts, our our podcast transcripts, find out the people that we pull charts from all the time like my car and Bunis and blah blah blah blah and just deliver them to me like Daily Chartbook does, right? So, I I'm sure I can build that. I'm sure that exists.

[00:47:27]So, I will like look to do something like that. Um, >> so that's what Gavin Baker was on Patrick's show and he said, "What do you use it for?" He said, "I I have I take all the podcast about AI and I have I have it summarize it for me."

[00:47:39]>> Here's another example that's going to exist. If I wanted to know the price every day for what a Chipotle bowl cost in New York City and I wanted the a the AI to track that over time, it could do that very easily. It could go into Chipotle, create an order, and then just not hit submit and find out what the order is, right? and just do that every day. So I could see the trends like that. You could do that.

[00:48:07]>> Okay. Why would you need that?

[00:48:09]>> You don't. But just as like we're we're covering Chipotle, right? We talk about it. No, of course you don't need it's it's a silly micro example, but my point is the possibilities are endless. Okay.

[00:48:18]Like for for So um I am going to the NBA finals.

[00:48:22]>> But this is why AI is going to lead to more work for people. I I listened to a a big tech person on a podcast a few weeks ago and he was talking about how awesome it is and how it's going to destroy all the jobs. and he's I just I don't see how it doesn't sort every job.

[00:48:33]And the host asked him, "What is like the coolest thing that you've used AI for?" And he said, "You know what? I had all these pictures on my phone and I had AI go through the pictures and like sort them in different buckets." And it's like >> amazing.

[00:48:44]>> What good No, but what good does that do you as for as a human being? It's just something that's kind of cool to have.

[00:48:49]It doesn't actually do anything for you.

[00:48:51]>> It's just cool to have.

[00:48:53]>> You're giving yourself more work with AI. That's the thing that's gonna happen.

[00:48:56]>> I love it. more work >> as a as a hyper uh attention sort of person. I I love more work.

[00:49:02]>> People People think that it's going to save them time. It's just going to be doing more tasks that you weren't doing before.

[00:49:08]>> Yeah, sure. Of course. Of course. Here's another thing. Um like I want to monitor the ticket situation for the NBA finals.

[00:49:16]I have to check it all the time. It's annoying. If that can be automated, >> if you have an agent do that, and of course you can, >> right?

[00:49:24]>> Fantastic.

[00:49:25]Um, all right. So, so it's all happening in in news that's not happening. That was a God, what a terrible segue that was. That was super lame. Um, Michael Sailor uh last earlier earlier last year in February 2025 tweeted, "Sell a kidney if you must, but keep the Bitcoin."

[00:49:42]Well, well, well, look how the tables have turned.

[00:49:46]This from Wall Street Journal. Strategy, the Bitcoin hoarding firm founded by Michael Sailor said Monday that it sold 32 Bitcoin. I mean, it's 32 Bitcoin.

[00:49:52]It's not a lot of Bitcoin, but nevertheless, he sold 32 Bitcoin last week for roughly $2.5 million. Market's first sale since the depths of the crypto winter in late 2022. Um why?

[00:50:01]Because they need to make payments on I don't know if it's their preferred stock or whatever it is. Uh he told the Wall Street Journal, "If you sold one Bitcoin to buy 10 more Bitcoin, technically you sold the Bitcoin, but economically you bought nine more Bitcoin." That's like Kenny Atinson language. Analytically, they they they won. Give me a break.

[00:50:17]Come on, dude.

[00:50:18]>> I think that this is short-term negative for crypto, long-term positive. If they're if they're a forced seller of Bitcoin, I think that's actually good that the I don't think him being the face of Bitcoin is good for crypto.

[00:50:30]>> Yes.

[00:50:31]>> I think actually if they're forced as a seller, I think this is a good thing long term for crypto.

[00:50:35]>> It depends how it depends how much crypto they're forced to sell, but I I agree with your general statement. So, Bitcoin is at 68,000 um and uh going lower strateg that that red. Oh, no.

[00:50:45]Okay. It's more red today. Okay. It's down. Don't you think that a lot of that that a lot of it was kind of priced in?

[00:50:51]Like people knew this was coming?

[00:50:53]>> Uh what do you mean?

[00:50:56]>> I don't know. The stock's already in a 70% draw down or something. I know it's more today, but >> Oh, I think I mean it's down 7% today. I I don't I don't know. I don't know if it's priced in. I think that was probably a result of crypto being down.

[00:51:05]>> I wonder how the people who went all in in the stock are doing because there's a lot of people who talked about like I >> we we heard from a lot of Right.

[00:51:12]>> Yeah. I uh it's it's it's sad. I don't >> All right, let's talk real estate. And I I read this real estate story about real estate agents are quitting the slow housing market, which is like there's no activ there's not a lot of activity, right? So, of course, people here's here's a line from the Kim Taylor better career in the housing market mid 2023.

[00:51:31]She launched her own brokerage account with her hus brokerage firm with her husband. All right. Uh she started out with a team of seven agents and quickly bought six more aboard on board. By 2024, high mortgage rates and prices were weighing on demand. home sat on the market. Most her agents had to find other part-time work or full-time jobs to stay afloat. Her husband took a job last year working for a school district.

[00:51:50]She said, "We became a bleeding artery.

[00:51:52]The last 11 months have been the hardest of my career." And so, this is happening to realtors all over the country, of course. And the thing that the hard part about this is this is nothing that these people did personally.

[00:52:04]They they didn't create this. They had no control over this. The fact that the housing market boomed, rates went lower, then the housing then rates went higher and the housing market slowed. these people had nothing to this is just bad luck and I think it's important to recognize that you talked about like all the stuff going well at the beginning of the podcast for us like some of this is just great timing great obviously hard work yes but like right place right time too and sometimes you're just in the wrong place at the wrong time >> absolutely uh I I I think that we have earned a lot of our success but I freaking met Josh at the train station by an absolute miracle.

[00:52:45]And had I not met Josh, and I've I've said this a million times, the reason why I am so appreciative is because I was eating [ __ ] Like, my life was going really poorly.

[00:52:57]I was 25 and I was my only friend that was unemployed and I was unemployable.

[00:53:03]Uh I was in a dark dark spot and and it was my fault. It absolutely was my fault. Um, I was staring at the consequences of my own actions as a stupid young idiot. Um, these people did nothing wrong. They were in a a booming industry that they were rugpulled. And I mentioned like I mentioned the the strategy investors that said they lost their money. I mean, there's degrees of sad that was like a choice that they made and whatever. Um, this is sad. This is truly sad when people's actual livelihood is being torpedoed. And it is interesting um that so much of the conversation during the boom time were these people don't deserve 5%. What are they even doing?

[00:53:43]>> Right? So this the number from so the typical agent with two years of experience or lessed three transactions in 2024 and earned $8,100 in gross income. The typical agent with that completed 10 transactions earned $58,100 in gross income. So it's not like these people are rolling in it right from their >> brutal. Really sad. It's tough. And so obviously there there's people who are leaving and it said about 71% of agents served with the N in 2025 said real estate was their only profession, the lowest proportion on record, meaning they have to have other jobs to stay afloat.

[00:54:15]All right, Ben. So movies are having a moment. AMC Entertainment records highest May attendance since 2019. Man, I nailed the movie trade and I bought the wrong stock.

[00:54:26]So I bought IMAX. I've held IMAX for a long time. Um, it's doing fine. Well, I thought IMAX did okay. No, >> no, IMAX is doing fine, but AMC is up Well, I mean, I'm not buying AM. It's a it's a it was a, you know, it was under a bucks. I'm sort of half joking, but it was up it went from it was up like I don't know 40% in the last two days.

[00:54:46]>> Yeah, but that's just because it's like maybe not going out of business anymore.

[00:54:48]This is still a stock like 99%.

[00:54:51]>> No, no, I know it was it was sub it was subs. I was I was teasing. But um but >> what's down 99.4% 4% from the highs in 2021.

[00:55:01]>> What's especially interesting, by the way, that was so weird that AMC was and GameStop were the two faces of that period. Just what a >> AMC what um All right. What makes >> at least the boom right now is like a real thing that that you're right that was that was that was not a real thing back then.

[00:55:19]What makes this current moment in cinema so very interesting and exciting is that the two gigantic hits over this and last week um juxtaposed with what happened with the Mandalorian is exactly what you want to see. So Star Wars earned just $6.5 million on its second Friday. $6.5 million, dude.

[00:55:46]That's a 70% drop. a 70% drop. So the fact that backrooms which opened to $81 million by far by far by far its biggest opening weekend and Obsession which is going to cross $100 million like both those movies are going to smash Star Wars is unbelievable. So, I listened to I listened to um The Big Picture did a podcast with uh this guy Kane Parsons who was the director of uh of Backrooms.

[00:56:19]He was 18 when they green lit this movie.

[00:56:22]>> Jeez.

[00:56:22]>> He's 20 years old.

[00:56:23]>> What was the story? He was a YouTube He was making movies on YouTube. That's what he was doing.

[00:56:26]>> So, I came home and the ne the next morning actually Kobe said, "Daddy, you saw back rooms?" And I'm like, "How do you have back rooms?" He goes, "It's on Roblox." So, Backrooms was a YouTube series.

[00:56:40]They've There's been over 224 million views across 22 videos. So, I raw dogged it. I had no idea. I I didn't see the trailer. I didn't even know that this was a YouTube thing until I heard about this kid. So, I went to see the theater and uh I saw an 850 on Friday night and there was at least at least two other earlier showings. So, it was on at least three screens. When I left at 11:00, there was a ton of young kids pouring into the theater. So, Arts, Bill Arts, who is a huge movie fan, um slacked me.

[00:57:22]Okay, I don't I don't know what to make of back rooms and I'm going to quote myself because I don't want to freelance. This is how I felt. I said, "So, I love that this is all happening." And that was also my reaction. Did I love it? No. Was there some aspects of it that I did love? Yes.

[00:57:39]More weird [ __ ] and risk-taking? Yes.

[00:57:42]Exclamation mark. Um, so I saw it in a pack theater and there were a lot of bright pieces. So, like it wasn't just a dark movie, so you could see the audience, right?

[00:57:52]And every time I looked around me, the audience was enthralled.

[00:57:59]Just a dead stare at the screen, no phones, and it was a young crowd, dude.

[00:58:08]Like, it was a young crowd and nobody was on their phone. And Art said, "That's exactly right. I don't think I'll watch it again, but it was a singular experience that I won't forget.

[00:58:17]It's just really cool that we're getting stuff like this rather than IP slap."

[00:58:20]And I couldn't agree more. I'll I'll just say the the opening scene was was in my opinion pretty terrifying, but it wasn't like it wasn't like a scary movie that like um you know you can't that that a normal person would be too scared to watch. Uh it was something else and it's exciting. And then Obsessions, another indie movie I think broke broke $100 million. I mean, and that was another kid. So both these kids were on Fantasy's podcast and the maturity. So that other guy uh who did Obsession, I watched one of his YouTube shorts called The Chair, which was excellent. What's this kid's name? Um >> so these are these are horror movies cuz I I have no idea what these movies are about. It's just interesting to me that the horror movie has subsumed the superhero movie, but so like in the 40 or the 50s and 60s, all the movies were westerns and now they never make westerns anymore. This that's going to be horror movies someday. They're making so many horror horror movies is the genre.

[00:59:15]>> It is, right? This is the western of of then >> because it's so cheap. So this kid, his his name is Curry Curry Barker.

[00:59:22]>> They gave him a million bucks to make this movie.

[00:59:26]>> I'm impressed. I'm never going to see these movies. I'm impressed.

[00:59:29]>> It's It's so cool, man. I'm so so so excited that we are over the hump. Now, there's still a ton of sequels, >> but you didn't you guys didn't ex you and Billard didn't exactly sell it to me. Will I ever watch this movie again?

[00:59:40]No. I don't know that that sells the movie to me.

[00:59:42]>> Hold on. I want to come back to this for a sec. Dune 3 is still going to be one of the biggest movies of the year. Like the sequels and the franchise movies like Mario, like those are still dominating the box of us. But the fact that we're getting this as well and hopefully there's more of that uh less of >> Yeah, young filmmakers. That's cool to see. I agree.

[00:59:57]>> All right. So maybe we didn't sell the movie that well. Listen, don't watch on your couch. I mean, you might as well skip it at that point. But going to the movies to see this was an absolute experience and 100% and 100% worth it. If you are like, now if you're not a movie person, don't watch it because you're gonna go be like, "What is that bullshit?" Like, fine, don't watch it.

[01:00:17]>> No. If you're not a horror movie person, I'm a movie person. I'm not a horror movie person. It does nothing for me.

[01:00:22]Horror movies don't move my heart rate at all. They don't do anything for me, so I just can't watch them.

[01:00:27]>> That's so crazy. I know that I know that you're not alone in there, but uh I was terrified, at least in the opening scene. So, I love it. I'm I'm I'm I'm jacked to the tease, as uh Mr. Gosling said in in the big short. Um All right.

[01:00:40]Did you So, did you finish Halfman?

[01:00:44]>> We're about one episode away. So, that is honestly it's one of the most stressful shows I've ever watched. And I almost after the first episode, I I told my wife, I'm like, I don't know if I can finish this show. It's it's too much.

[01:00:54]But then somehow it like draws you back in and it it goes crazy, then it draws you back in. And it's that I can't even explain what kind of show that that is.

[01:01:05]>> It is Uncut Gems. the the anxiety that you get from watching Uncut Gems. It's that on HGH. It is >> but it's for something is really well done though.

[01:01:15]>> It is so dark and so demented, depraved, and twisted. All right. So, it is it was so well done. It's one of my favorite shows. Like, it's one of the It's one of the the best miniseries I've ever seen.

[01:01:27]I thought it was >> But it also kind of pulls you in and has emotions to it, too. It's It's dark, but it also has emotions. It's very bizarre.

[01:01:34]I can't even like compare it to another show before. I'm so excited for you to see the finale.

[01:01:38]>> Okay.

[01:01:39]>> All right. Um, finally, friend of the show, my friend was an executive at Amazon Studios, and two years ago, he called me and told me that I might be in Spider-Man Noir, the Nicholas Cage show. And he told me that he was writing me into the show.

[01:02:00]And I was like, "Oh my god, that's so cool." And it was like, I think it was two years ago. So, as it's getting closer to release, I'm getting like, you know, a little bit anxious. Like, I'm like, am I this, you know, this could be fun for me. I want to show my kids. Uh, so I'm in episode three.

[01:02:14]Nicholas Cage plays Spider-Man Noir, and he goes into a hospital with an alias, and his ali his alias is Officer Batnik.

[01:02:24]So, he's outside the hospital, he's going through some fake like ID cards.

[01:02:28]He's like, he goes, "Batnick, batnick, batnick." That's the one. So, he goes to the hospital. Who are you? I'm officer Batnik. He goes into a bedroom. He goes, "I'm Officer Batman, blah blah blah blah blah." Um, my kids had like no reaction.

[01:02:40]They were like, "Oh, daddy's in Spider-Man." I was like, "What?"

[01:02:45]>> Nothing.

[01:02:47]>> What? Like, uh, I I thought their head was going to melt. Um, no reaction.

[01:02:52]>> Okay.

[01:02:53]>> I think it's like the coolest thing ever. So, thank you, Matt.

[01:02:56]>> Hey, kids keep you grounded, right?

[01:02:58]>> Sure do. Anything for you, Ben?

[01:03:01]>> Um, yes. Yes, you had the I I was listening to the rewatchables with Stephen Spielberg and I've never seen I've never seen >> I've never seen Space Odyssey before.

[01:03:10]>> Okay, >> we we we got to play this clip. So, this gave me Nakus, which is a Jewish a Yiddish word for just joy. This made me so happy. So, the the Rewatchables is my favorite podcast.

[01:03:26]Not even like I I love it's my favorite podcast of all time. There's not even number close number two. Um, and to see Shawn Fantasy have this moment of joy brought a tear to my eye. It was it was I thought it was so it was so cool to see him get to experience this. So, I want to play this for the audience for you guys. So, he's he's he's talking to Steven Spielberg, which is that in Doctor Strange Love, Major Kong says, "Fire the explosive bolts." And in 2001, the entry hatch sign reads caution colon explosive bolts.

[01:04:01]>> Oh, >> which is his own little >> I never saw that. You know something?

[01:04:06]>> Look at Sean teaching you about movies.

[01:04:08]>> Hey guys, I'm just saying that I'm having such a good time talking to both of you about this movie. But that one insight just makes this day for me.

[01:04:19]>> That's great. It absolutely does best in the history of the category.

[01:04:23]>> Criteria orgasm right there.

[01:04:25]>> Is that the coolest freaking thing ever?

[01:04:27]>> That was pretty cool.

[01:04:28]>> Like, >> so I I told you last night I told you I watched the Martin Short documentary on Netflix and he he intersperses in the documentary a lot of home movies and he has a cabin on a lake in Canada that they would go to every summer. And the people who hung out the most because their kids were all the same age, it was Marty Short and his family, Tom Hanks and his family, and Steven Spielberg and his family. And they said, "Listen, all our kids were the same age, so it just kind of made sense to do." And all and they showed all these home videos of these guys and it was Marty Short and Tom Hanks acting out scenes for Stephen Spielberg or something. It's just nuts.

[01:05:01]It's Anyway, really worth a watch.

[01:05:03]>> Interesting that those those kind of guys were uh were friends.

[01:05:06]>> So, all right. Um, what a time to be alive. What a time to be an investor.

[01:05:12]Uh, if you like me are uh enjoying a good time in your life, be thankful. That's my Jerry Springer.

[01:05:21]That's my Jerry Springer impression.

[01:05:22]Take care of yourself.

[01:05:24]>> And >> not everyone is, obviously.

[01:05:25]>> Not everyone is. So, um, all right.

[01:05:29]>> You're right. This is This is an exciting time in the markets for the stuff that we do. This is a very exciting time.

[01:05:35]>> This is a time Yeah, we will we will look back on these times hopefully with fond memories. Hopefully, this doesn't turn into a bubble that burst. But for now, it's it's really something to >> I just know there's going to be pain at the end of the rainbow at some point.

[01:05:46]There's there is there just is this is how markets work. Everything is cyclical. Is that cycle 5 to seven years from now or is it one year from now or three years from now? I don't know.

[01:05:56]There's going to be pain at some point.

[01:05:58]>> Prepare yourself for it. It's going to happen.

[01:06:01]>> So, next week I will take the other side of that barely. I will just offer a we because we spoke a lot about keeping an open mind.

[01:06:08]>> Mhm. I will have the other the other take next week that this doesn't have to end badly.

[01:06:13]>> Okay. I'm not saying it even has to come from AI, but it's going to come from something. Don't don't hedge. You said what you said.

[01:06:21]>> Okay. Yes. Everything is cyclical. This cycle will come to an end at some point, >> but it could last a lot longer than people think in the meantime.

[01:06:30]>> All right. Animal spirits at the compoundnews.com.

[01:06:33]Thank you very much everybody for listening for the emails. Hope everybody is enjoying their early summer. Go Nicks. We'll see you next time.