The Best Bear Case on AI (EP. 478)

Michael Batnick and Ben Carlson kick off this episode of Animal Spirits by discussing the current bull market. Ben asserts that we are officially in one of the greatest bull markets of all time, citing the S&P 500's impressive returns in the 2010s (13.4% per year) and 2020s (15.7% per year). He notes that the S&P 500 is up almost 1500% since the lows of 2009, and the Vanguard Total Stock Market Index (VTI) is up almost 1500% in total, with 17% annualized returns since the bottom in 2009. Ben believes the bull market started in 2009, a point Michael challenges.

The Bull Market and Young People's Financial Habits

Michael agrees that we are in a great bull market but argues that it started earlier than Ben suggests. He also points out that despite the massive gains, there's still a "wall of worry to climb," with many investors concerned about high earnings. Ben counters that this worry is part of the bear case, suggesting that earnings are "too good" and unsustainable. Michael then brings up the consternation among young people who feel they've missed out on opportunities like the housing and stock markets. Ben, however, expresses little sympathy, stating that young people today are too coddled and have unrealistic expectations, often comparing themselves to wildly successful peers seen on social media. He argues that no young generation has ever had it easy and that the current focus on young people's struggles is excessive "virtue signaling."