Full Transcript: Ben Carlson on Risk, History, and Long-Term Wealth

Risk, Returns, and Staying Invested Through History’s Worst Markets

Justin: Ben, welcome back to Excess Returns. How are you?

Ben: Glad to be here, guys.

Justin: We wanted to have you on. You have a new book coming out, and it’s great, and I’m gonna tell you why. Because I feel like I could give this book to my wife, who knows very little about finance and investing, and I feel like she would learn a tremendous amount from it.

But I also feel like the book is very appealing to more sophisticated investors and financial advisors because there’s so many powerful statistics and, I think, frameworks and insights about building long-term wealth and managing risk. So great job on the book. I feel like the audience can be very wide here.

And books like this, I think, are great because, you know, there’s so much, I think, useful and important information. You have a way to kinda frame it up in an explainable way. So kudos to you, man.

Ben: Thanks. That’s kinda what I was going for. And I think that’s what I do with all my writing, is try to take complex topics and explain it in a way that’s easily understandable and more plain English for everyone to understand.

Justin: Yeah. So today what we want to do is, we’re kinda gonna try to, hopefully in the next 60 minutes, work through as much as we can. This isn’t a substitute for buying the book, of course, but, you know, Ben’s been nice enough to share some charts with us. So we’re gonna drop those in here to give us, you know, some, some visuals to look at as we work through these ideas and concepts.

But where I want to start with you is the Carl Richards quote at the very beginning of the book. It’s a quote from Carl Richards, but the quote is, “Risk is what is left over after you’ve thought of everything.” Can you talk about what, sort of what that quote means to you?

Ben: It’s interesting because I, I think that there are just so many different ways that people define risk as investors, right? There’s a lot of quantitatively based people who say, “Well, risk is volatility or Sharpe ratio.” They wanna quantify it and make it be a number. And I think for most people it’s more of, like, this squishy thing that’s harder to define.

There’s not a good definition of risk because whatever you do, there is something left over, right? No, no matter what stance you take. If you bury your money in the backyard, if you have all your money in stocks, if you dial up the risk and you’re a very aggressive investor, if you’re a conservative investor, there’s always some sort of risk whatever stance you take.

And I think that’s what I’m trying to get across in the book, is that it doesn’t matter what stance you take — there are trade-offs involved. I think that’s, like, the whole process of investing, is dealing with trade-offs.

Justin: Yeah. So in this first chapter, it’s funny, you’re talking about risk. And my family and I vacation at The Cape every summer, and it’s like clockwork. Right around the time of the vacation, my mom will call me and say, “Did you see the shark attack off the Cape?” or something. Or, “Did you see the great whites are off the Cape? I do not want you going in the ocean.”

I’m like, “Mom, listen, they have all these planes out there. Nobody’s gotten bitten by a shark.” Whatever. So what do sharks and mosquitoes tell us about how people perceive risk?

Ben: It’s funny because I give these same stats to my wife. We vacation every year for spring break in Marco Island, Florida. We do an Airbnb house on one of the little canals, and they have some kayaks there. And my wife says — all my kids say, “Oh, let’s go on the kayaks and go around the little bay.” And my wife says, “Absolutely not. There could be sharks in here.” And I said, “No way. There’s no sharks in here. That’s ridiculous.” And then the same day, my son and I are throwing fishing poles off the dock, and 40 feet in front of us, a bull shark jumps out of the water and grabs a fish. And she says, “See, I told you.”

The point is, those kind of one-off stories are the kind of things people latch onto and worry about. And my favorite research on this was the, the Shark Week thing. My everything — everyone goes through a Shark Week phase at some point in their life. It’s been around for like 40 years at this point. But they studied it, and the whole point of the show in the first place was to help people understand sharks better.

And what they found is that’s not what happened at all. They, people would see the shark attacks, and they’d go, “Oh my gosh, I’m so scared of sharks.” And even the studies they did showed that even if they gave a disclaimer — “Listen, shark attacks are extremely rare. These animals don’t attack that many people” — it didn’t matter. If you saw one, you assumed this is just what happens. Sharks attack you.

And that’s my point, is that often people latch onto the wrong kinds of risks — the most sensational risks — as opposed to the ones that actually impact them. I think the current environment is a perfect example of this. I think if you looked on a long-term chart, any sort of geopolitical risk would never really show up on a chart. A lot of financial risks will show up on the chart, right? If, if there’s a financial crisis, those kind of things show up. But I think most people would assume it’s the opposite, that it’s the geopolitical ones. Those are the things that matter. Not these financial crises. But the truth is it’s the opposite, and it really is the financial stuff that matters more than these sensational headlines.

Justin: Why do you think the media is so focused on this? Is it, because this is what gets attention and gets clicks, and if you have an advertising-based business model, you gotta get people to watch, and so it’s more the sensational stuff?

Is that what it is, rather than talking about, I mean, we’re gonna talk about market timing here, but it would probably be much better for investors if we were focused on the risks of bad market timing versus focusing on these crashes or inflation spikes or scary geopolitical headlines?

Ben: Yeah. It’s just the negativity stuff. Obviously it works, right? My wife asked me the other day, “Why don’t you watch the news anymore?” And I went, “I can’t do it.” It’s because there’s so much negativity. I have to, like, filter it out of my life because otherwise it just bums me out. And obviously I think we’ve just learned in the information age and social media era that bad stuff travels much further than the good stuff, and that’s a kind of vivid thing that, that you remember.

Justin: So the second chapter is, “Doing Nothing Is Hard Work.” And it’s funny, we just had Chris Davis on the podcast, and he told a story where after his stepfather died, like, in 2007, his mom, who was older, had all these municipal bonds. That’s what he had put her in. And as those municipal bonds matured, like, his mom and Chris would sit down and they’d pick individual stocks that were mostly held in the Davis portfolios at the time.

And then, you know, come 20 years later or so, she had never touched any of those stocks, and yet Chris Davis was running portfolios and strategies and everything. And yet his mom’s portfolio dramatically outperformed the firm strategies by doing nothing. So that’s kinda your point with this, right?

Ben: Yeah. There’s an old Roman army rule from back in the day that, like, they said action removes fear. Which in some parts of life, like in war, actually that is helpful. And in certain parts of life it is. But I think there’s something about just trying to put your hands on the steering wheel as an investor when things do seem scary. It just puts you at ease, and it makes you feel comfortable to do something, even when doing nothing is probably better for you.

And I think that’s a really hard thing to wrap your head around, is that, “Well, I’m trying to do something here. I’m trying harder. I’m studying the market more. I’m looking at these companies more. I’m making more trades. Why isn’t this helping?” And I think that that illusion of control is a hard thing to get past as an investor.

Justin: Yeah, and I think it kinda shows up in this next chart here too, with this penalty kick. Strikers versus goalies and how they’re kinda jumping one way or another when it’s best if they just kinda stayed still, right?

Ben: Yes. Yes. I was never a soccer guy growing up, but both of my daughters play. And my daughter was in a penalty shootoff — she was nine years old or something when she did this. It was the most heart-wrenching, gut-wrenching thing I’ve ever done in my life, like, watching her go through this.

Justin: Was she the goalie, by the way? Was she the goalie or was she a—

Ben: No, she was not the goalie. Okay. Thank God. Yeah. Because it’s funny. You feel terrible because the goalies always end up crying after these things when they’re little kids.

But the goalie is at a huge disadvantage because the goal is so large. And they asked these goalies — they tried to study what in professional soccer matches the goalies are doing. 95% of the time they dive left or right. And if you see one of those saves, you’re like, “Oh, my gosh. It’s amazing.” But when they looked at how the strikers kick the ball, it’s basically a third down the middle, a third to the left, a third to the right. And they told the goalies, like, “If you just did some game theory and changed it up a little bit, and stayed in the middle occasionally just to try to throw them off a little bit, you could actually increase your save percentage by enough to potentially alter the outcome.”

They brought the data to the goalies and they said, “Here’s the data. What do you think?” And they all said, “You’re nuts. We would look like idiots if we just sat there doing nothing.” And I think that sort of action over inaction explains a lot of what happens in the investing world too. It just — you don’t wanna feel like an idiot or look like an idiot because you’re not doing anything when everyone else is.

Justin: I can’t tell you how many soccer games I’ve been to where the actual shots on goal are, like, directly to the goalie. There’s something about the visual aspect that, you know, puts the ball where these kids wanna kick it. Anyways, what do you think about the idea of — do you think successful investing is about a few great decisions? Or is it more about designing a system that helps reduce the number of decisions that need to be made in the moment?

I’m thinking of, like, the Warren Buffett thing. Even though, listen, the greatest investor of all time, a few great investments drove most of his track record. And sort of staying out of — I guess it’s both, and he’s trying to stay out of mistakes as well. I don’t know. So what are your thoughts on that?

Ben: I guess you could say that, especially during, like, the big bear markets, if you can avoid selling out of those, that, that, that’s a huge thing. Making the worst possible mistake at the worst possible time and selling when stocks are already down 40 or 50% — that kinda makes sense to me.

I do think in today’s day and age, the idea of limiting yourself and placing filters probably matters more than ever. Because I always like to say that there’s never been a better time to be an individual investor. The amount of products and strategies we have available today — these types of strategies that we have now in ETFs that are a tax-efficient wrapper that you can buy and sell in a liquid way during the day for pennies on the dollar — is kind of amazing.

These strategies that would’ve only been available if you had, like, a huge prospectus and went through a financial intermediary or had a hedge fund in the past can now be bought and sold really easily. But I think the fact that there are so many of these strategies makes it harder than ever to know what you should say yes to and what you should say no to.

And I think having some sort of limitations and filters in place to guide your actions is more important than ever, because it’s just such a fire hose now. There are new ETFs all the time. There are new funds all the time. There are new strategies. AI is just gonna multiply this, you know? Think about how easy it’s going to be to research and make new strategies now that AI is here. You’re gonna have the ability in the future to bypass the ETFs and go straight to making your own strategies, right? So I think taking out that temptation and putting filters on your process is gonna be more important than ever.

Justin: You have a couple of chapters here on inflation. And, yeah, obviously you had written this book well before, you know, inflation started to come into the picture with what’s going on in Iran. So I think it’s important — and great that you were paying attention to it, because it is important.

But we’ve been in an environment where we had kind of very little inflation. Well, I guess 2002, but it was... So anyways, the point is, what do you think of when investors kind of think back and say, “Oh, this is another 1970s where we’re gonna have runaway inflation?” How do you address that?

Ben: I think the really hard part is, and, and to be honest, after we had the huge inflationary spike in the early 2020s, the psychology behind it probably surprised me as much as anyone, because I didn’t think about how much — I, I think most people just had it in the back of their mind like, “We’re not gonna have one of these periods again.” The 1970s seemed like this one-off period, right? They had these huge inflationary shocks back in the day, but that was, you know, before the Fed was around, and these cycles were based more on, you know, war than anything else. You’d have these huge inflationary spikes and these deflationary busts, and it seemed like we had rooted that out of the system.

And so seeing what inflation did to sentiment and how much people hated it was really interesting because, yes, we had 9% inflation, but this is nothing if you compare it to the ‘70s, right? Look, the ‘70s was just brutal. And it wasn’t just the ‘70s, it was the late 1960s to the early 1980s. We just had this enormously high inflation. And I do think that seeing the psychology and how people reacted to that risk is really interesting. It’s something that I just think we weren’t prepared for in any way.

Justin: One of the things that you did is when you kind of talked about ways that investors should think about hedging inflation, you know, you didn’t start the chapter with “buy gold, commodities, or other, you know, traditional inflation hedges.” You kind of made the point that, you know, what’s important for most people is a good job, a fixed-rate mortgage on their house, and stocks for the long run as the foundation of an investment portfolio. Why did you frame it that way, which I think is great?

Ben: Yeah. I, I always look at inflation as more of, like, a personal finance problem than an investing problem. Even though stocks are on there, I, I think it’s more of a long-term thing that you’re trying to hedge as opposed to a short-term thing. Because even if you look at something like gold, the track record as an inflation hedge isn’t the greatest, right? There are very few, you know, one-to-one correlations in terms of how to hedge inflation. Sometimes gold works, sometimes it doesn’t.

I think that’s the point — I was trying to get more around the personal finance aspect of this. Because most people, the reason I think inflation makes people so mad when they see the government statistics is they look at the number and they say, “That is not me, because my housing costs are this, and I live here, and I pay this, but I don’t pay this.” No one’s personal inflation rate is anything like the government’s long-term average. But that’s the point — it’s an average, and the range around the average is really wide.

And so I think if you think about it more in personal finance terms, that makes more sense to me, because your living standards are gonna be different than someone else’s depending on where you live. Someone who lives on the coasts or in a big city is gonna have vastly different housing costs and transportation costs than someone who lives in the Midwest. That’s just the way things work. You have to think about it on a personal basis and not, like, an aggregate economy-wide thing.

Jack: And you also talked about human capital, and that’s something that’s just underappreciated by people in a lot of different ways. It’s underappreciated as part of their portfolio in terms of the present value of what they’re gonna make. But it’s also underappreciated as, you know, one of the best ways you can deal with inflation is to focus on your human capital and make more money, right?

Ben: Yes. And I think it’s — not many people write about it in personal finance because it’s probably easier to come up with ways to save money and pay off debt than it is to talk about how to increase your wages. And I think now probably more than ever, as we have this potentially big labor disruption coming with AI, I think it just makes people nervous to even talk about it.

But that’s the thing — people talk about how to compound their capital and how to increase your investment returns. Guess what? One of the best ways to increase the size of your portfolio is to make more money so you can potentially save more money, right? That’s how you compound capital more, is by increasing the amount of wealth you have. You can be the next Warren Buffett, but if you don’t have any capital to put to work, it’s not gonna help you at all, right?

Jack: Yeah. Most people who get rich get rich through their own human capital, right? They don’t get rich through — I mean, it’s great. You do see people who hold portfolios for a really long time or buy Amazon at the lows and get rich doing that. But the vast majority of people, it’s done through their own work.

Ben: Yeah. And people talk about the fact that young people have the ability to take more risks. Like, you should have all of your money in stocks if you’re a young person because you have decades ahead of you. But the other reason for that is not just the time horizon, but it’s the human capital asset, right? The reason you can take so much more risk as a young person is because you have the ability to put money to work during bear markets. You don’t have to wait them out anymore. You don’t have a huge starting financial asset base. You have time to slowly but surely add into bear markets, and you should hope for them.

Jack: Justin mentioned stocks as an inflation hedge, and that’s something people don’t get right sometimes because they worry about what happens to stocks when you get unexpected inflation. But can you flip that and talk about why stocks are a really good inflation hedge?

Ben: Yeah. It’s interesting because if you think about what happened before inflation spiked — and obviously the stock market took a tumble, what was it, down 25% at the worst in 2022, from peak to trough — I show in the book that, you know, when inflation is rising from one year to the next or when inflation is higher than 5%, stock returns tend to be below average, right? And that makes sense from a short-term perspective.

But the long term is that you have to take a look at what stocks did leading up to that. And when inflation was very low in the 2010s and the stock market did really well, that was your inflation hedge heading into the inflationary period, right? The inflation hedge doesn’t always have to happen exactly when the inflation is occurring. It doesn’t have to be when the inflation is, like, from this date to this date. This is when inflation happened. How did your portfolio do? No, it’s leading up to it — how much did stocks hedge you leading up to it, over the previous 10 years? And that’s where, that’s where the inflation hedge happens.

It’s not always during it, and you have to, like, nail the trade. And I think that’s the thing that people mistake on these macroeconomic things, especially inflation — “I have to nail the trade perfectly. I have to go all in on energy stocks or commodities. I’m gonna own copper and gold and all these things that do well when inflation does well.” And as we know, that’s just very difficult to do because a lot of times with macroeconomic data, the markets move way quicker than the data does, right? And by the time you think you’ve figured out the trend, the market has already moved on and looked past it.

Jack: And that’s one of the great things I think you got across in the book — this idea that it’s very hard to time anything and then hedge that thing when you time it. A lot of your hedges for anything have to be done over time and in place all the time, because you’re not gonna figure out when the right time to put it on and off is.

Ben: Yeah. And the market moves way quicker than we could possibly imagine, right? In a recession, markets bottom way before earnings do, way before the unemployment rate peaks, all these things. If you think about it, in 2022, the stock market bottomed on 8% inflation. People were freaking out that a recession was right around the corner. Inflation was still at 8%. The Fed had raised rates to 5%, and everyone was going, “You know, we’re done. There’s nothing that can be done here, right? No one can save us. The Fed’s not coming to people’s rescue.” And that’s when stocks bottomed.

And I, I do think that witnessing, you know, 20-plus years in this industry, witnessing all of the different pundit forecasts and predictions about what’s gonna happen, how the macroeconomy’s gonna do this, and how the market’s gonna do this, and just seeing how wrong people have been. And these are people who are 10 times smarter than me. There are people who are just so much smarter than me, who understand the economy down to a T. They can slice and dice all the data that they want, and they still don’t quite get it perfectly with their predictions. And even if they get their predictions right on economic data, they could be wrong about the market’s reaction to them, right?

If you told people what would happen this decade — we’re gonna shut down the economy for two months, and everyone’s gonna live at home. The unemployment rate’s gonna go to 14%. Then we’re gonna come out of that. There’s gonna be supply chain shocks. Then we’re gonna have 9% inflation. And by the way, after that, you’re gonna have, like, the highest wage growth we’ve ever seen. And then a couple years later, we’re gonna put tariffs on the economy. And then we’re gonna go to war with Iran. And by the way, before that, we had oil price spikes because Russia invaded Ukraine. And how did the S&P 500 do? 15% per year. No one could have possibly predicted that would be the outcome. Because the reaction function is just so difficult to foresee.

Jack: I don’t know if it’s been the same for you, but this has been one of the lessons of hosting a podcast for me, because we interview people who are always smarter than us. And sometimes they make predictions about things. But if you look at those things in aggregate, you just realize it’s very, very difficult, even for really, really intelligent people, to figure out what’s gonna happen in the short term with anything.

Ben: Yeah. I think that’s why it’s so important to think with, like, baselines and a range of outcomes, right? Here’s my baseline, and here are potential outliers that could happen. And how do I create a portfolio or an investment process that is durable enough to sort of follow along the baseline trend, but also survive the outlier events?

And that’s what I try to show in the book too, is that it’s not always easy. There are really, really terrible things that have happened. And despite those terrible things, the results have still been pretty good.

Jack: This gets into the next thing. You had this quote, “I’ll just wait until the coast is clear.” And as an advisor, I’ve heard this a million times. Whenever anything’s going wrong, it’s like, “Let’s just go into cash, and we’ll wait this out, and then we’ll see what happens on the backside of it.” Can you explain why that’s a bad idea?

Ben: Yes, waiting for the dust to settle. I remember that was a thing people said during COVID too — “I’ll just wait for the dust to settle.” And I, I think that’s one of the more instructive periods ever — that when, when we first had the bounce during COVID in April 2020, and stocks were rising, there’s that, there’s that famous Jim Cramer meme where he’s talking about how the stock market is rising, but unemployment is going nuts, and the unemployment is rising. Things just seemed like they couldn’t possibly get worse, and the stock market was up. And everyone said, “This is a dead cat bounce. There’s no way things are going to get better.” And the stock market was already up and back to all-time highs before the vaccine was even rolled out, right?

And there are so many examples of that — just saying, “I’ll just wait till the headlines tell me.” By the time it’s in the headlines, it’s already too late. The market has moved on.

And the stock market is obviously not always right. There’s the old claim that the stock market has predicted nine of the past five recessions, right? But I think collectively this decade, the stock market has been shown to be a lot smarter than the individuals who try to predict what’s gonna happen next. And every time people say, “Well, the stock market is detached from reality or doesn’t know what’s going on,” more often than not, they’ve been the ones who’ve been proven wrong, not the stock market.

Jack: Yeah, and one of the things you learn is the coast is really never clear, like completely. So if you’re waiting for the coast to be clear, you’re gonna be waiting a long way.

Ben: No, there’s always uncertainty. It just feels more uncertain at certain times.

Jack: You got across this idea of market timing really well with this idea of Bob, the world’s worst market timer. You talked about it at the beginning of the book, and you brought him back in this chapter. I’ll throw up the chart you had in the book, but can you explain the lesson of Bob, the world’s worst market timer?

Ben: So I thought about this — the peak before the great financial crisis was October 2007. We didn’t hit new all-time highs again until spring of 2013, so it was a pretty long time from that crash until we got new all-time highs. And I remember when we did hit new all-time highs in 2013, it wasn’t like people were celebrating. There were a lot of people who were going, “Oh, no. I saw what the last all-time high did. If we do this again, we’re gonna fall off a cliff again, like Wile E. Coyote style.”

And I remember thinking like, “Okay, fine. Let’s say we get back to all-time highs and we do have another crash. Like, what if you just bought at all-time highs? If you bought at, like, not all all-time highs — because the data we’ve seen on that is actually pretty good — but if you bought at, like, the worst all-time highs, right? The peaks, that one all-time high that’s gonna be the worst one?” And I ran the numbers, and I didn’t really know what was gonna happen. And they were much better than I thought. This guy put all of his money into his checking account, and every time there was an all-time high, he’d put it to work. But then he’d keep it invested, right?

And I ran the numbers, and it’s by far still my most read blog post I’ve ever written. People still read it to this day, you know, 12 years later or whatever. And it’s funny because it was kind of the impetus for the book, because so many people seemed to like it and the long-term attitude that it had.

But other people would constantly poke holes in it. “Well, what about this? And what about this timeframe? And what about this country? And what about...” And I think those exceptions are sometimes what keep people from taking risk. If you’re constantly looking for the exception to the rule, of course you’re gonna find something, because every market, every strategy, every asset class has a timeframe where it’s gonna look awful and you’re gonna feel like an idiot. And that’s just the way these things work.

Jack: You had this chapter, “The Most Important Concept in Investing.” And do you listen to the Founders Podcast at all?

Ben: Yeah. Very well done.

Jack: Did you listen to the Andre Agassi one?

Ben: No, I did not.

Jack: You should. It’s really, really good. So Andre had a very tough upbringing. His dad was exceptionally, exceptionally hard on him. And that probably plays into what you were talking about earlier in the chapter. But he gets at this idea that a win does not feel as good as a loss feels bad. Can you talk about that and how it applies to investing?

Ben: Yeah, yeah. So I do know the story because I read his, his biography — I don’t want to spoil it on anyone who read it, but it’s done by a ghost writer who’s very well done. But like, yeah, the way that he wrote the book, it, it explains it well. He talked about how it took him forever to finally get over the hump and win a major in tennis. Even though people were calling him a choke artist and overrated, he finally won. And he was like, “I won,” and then, “Oh no. I can’t believe it. It didn’t solve all my problems. It didn’t make me feel any better. I still remember the losses more than the wins.”

And that’s the point of the stock market, is that I, I said the stock market makes you feel terrible every single day if you look at it. Because it’s surprising how many down days there are versus up days in the stock market. It’s like 53% of all days are up and 47% of days are down, or something like that. It’s closer than you’d think. These are small edges in the stock market that build over time. My point is the more you look, the worse it’s gonna feel, because losses sting twice as bad as gains feel good.

And Daniel Kahneman and a bunch of these behavioral psychologists have quantified that with surveys and all these different types of tests. But I think anyone with a favorite team understands this — you’ve seen your favorite team lose a game, and you always remember that. And the pain hurts way more than your favorite team winning something. It’s just a human reaction function.

So I think that’s why I said it’s the most important concept, because dealing with those losses and how you react to those emotions is gonna have a lot to say in how successful you are as an investor.

Jack: How do you think about that from a practical perspective? I struggle with that a little bit because on one hand, coaching is what you do with that — to some degree helping people understand that this exists inside of them and how to handle it. But on the other hand, you could argue, you know, maybe there’s some things you do in terms of how you build a portfolio knowing that this exists. Do you have any thoughts on that?

Ben: I, I just think, I do think that defining your time horizon is one of the most important things you can do as an investor. Before you get into anything, any trade or any investment — how long am I gonna... Like, how am I planning on owning this? Is it something that I plan on being in for a year? Okay, that, that changes things considerably. Am I gonna be in this 10 years or multi decades? I, I think that part of it has a lot to do with it.

Because you see, the way that people act in their brokerage accounts is far different than they act in their 401(k) accounts, right? Most people are willing to leave their 401(k) accounts alone more or less, and there’s way more churn, and way more... And if you look at the numbers from a place like Schwab or Fidelity or Vanguard, and the average cash balances in, like, a brokerage account, it’s like 20%. It’s way higher. So back to the market timing thing, people are way more apt to market time in a brokerage account than they are in a tax-deferred retirement account.

And so I think maybe it, it comes down to, like, that sort of bucketing or segmentation — having your long-term assets in these certain accounts, and if you wanna, whatever, speculate or do more short-term stuff in the brokerage account, but then sizing it correctly as well, right? Having the position sizing. So if you’re gonna do the market timing and you’re gonna try all this other stuff that we know is very hard, you’re not doing it with your entire portfolio.

Jack: You did a really good job in the book focusing on some really important periods we need to learn from in history. Justin talked about the ‘70s. We’re gonna talk about Japan in a little bit. And you wrote this chapter, “The Worst Crash of All Time,” about the ‘30s. But first I just wanted to ask you in general — how do you think people should handle this type of stuff in terms of thinking history is repeating? Because where we are right now, a lot of people think a lot of these periods are repeating. You’ve got people who think the ‘70s is coming, the late ‘90s is coming, we’re gonna have a bubble as big as Japan, and you’ve even got the doom YouTube channels probably out there talking about the worst crash of all time. How do you think people should learn from history and maybe apply it to today?

Ben: It is funny. If you assume the modern markets are 100 years old or so, which is kind of the time period I cover in this book — the last 100 years, essentially, where we have really good data, and it’s really when things started forming as a modern functioning market.

Most of these big events have, like, an N equals 1 or N equals 2 or 3, right? It’s not like we can point to history. We have 10,000 years of history that we can look at and say, on a probabilistic basis, this can happen or this. So it’s really hard to point to these things and say, “Well, if you just follow this script, you’re gonna be fine.”

I do think things are a lot different today than they were in the Great Depression. Obviously, there’s just much more infrastructure. The stock market matters a lot more. But I do think it’s just important to recognize the human element that can cause these things to change, both from a policy error perspective, right? A lot of the Great Depression was human beings who made things worse. The government made that whole thing worse, and they tried to sweep it under the rug and pretend like it didn’t happen. And, and a lot of the policy prescriptions were, were huge, you know, own goals essentially.

But the way that people reacted to it — and how the emotions can swing from this glorious euphoria in the 1920s to, like, the worst thing you’ve ever seen in the 1930s — At the end of the ‘20s and the 1930s, I think that’s the thing you try to latch onto — that human nature is the thing that is constant across market environments.

Jack: Do you think having studied that — obviously none of us are gonna predict that this would ever happen — but do you think it could even happen? Like, it seems unlikely, right? Given we’ve learned so much about policy and how to respond to these things. We’ve modernized so many things. It would seem unlikely. But do you think that’s right?

Ben: Yeah. I, I read Andrew Ross Sorkin’s book, 1929. I thought it was great, and that was my takeaway — I think it’d be really hard for it to happen again. The, the Fed really wasn’t the Fed back then. They weren’t acting as a lender of last resort. Like, they were raising rates. They were trying to balance the budget. They put on these tariffs. So I do think that we learned from that. Like, the reason that 2008 didn’t turn into the Great Depression, I think, is because Ben Bernanke had studied it. And I also think the reason 2020 didn’t turn into 2008 is because Powell had studied what happened in 2008. They were much quicker to get there.

Now, I think what you could say is that because we’re learning from these past time series and these past events, could we be setting ourselves up for different types of risks down the line where there’s more complacency — and sometimes these rescues aren’t gonna work, or they’re going to work but they’re gonna lead to other risks?

I think that’s something to consider. I don’t really know what it could be. But because the stock market is so much more important now — I talk about in the book, it was something like 1% to 2% of households owned stocks in the 1920s. No one had enough money back then to invest in the stock market. Whereas today it’s 60%, 65% of households. The stock market is so much more important. It’s hard to see the government letting it fall 85% and not causing riots in the streets, because it’s so much more important as a barometer of so many things in our economy.

Jack: Yeah, that point’s so interesting because it kind of has two sides to it. The fact that the market is so important to the economy means maybe the economy’s at more risk because of the market, but it also means they’re gonna step in and deal with that risk. So it might not be the risk many people think, because that means the government’s gonna have much more incentive not to let the market go down.

Ben: Yeah. And there are a lot of people who just hate this, right? They’re like, “If the government didn’t step in and save Silicon Valley Bank, or if it didn’t spend trillions of dollars during COVID, the system would’ve gone under.” And the point is most people are incentivized to keep the systems going, right? And keep the number going up. And I, I think a lot of people have been banging their heads against the wall for the past 15 years going, “Yeah, but if the Fed wouldn’t have done this or if the government would’ve done this...” You, you probably do have to assume that most of the time, just from a careerist perspective, the government is going to step in.

But again, what does that mean for other risks down the line? Could it mean more flash crashes in the future, and more violent moves up and down? I think that if you called the Great Depression the left tail event, I think we have taken that off the table by all intents and purposes. I say maybe unless there’s an alien invasion, but even then, if there’s an alien invasion, there’s gonna be a lot of infrastructure spending, right? And I think it’s gonna be a booming economy. So go long those space stocks.

Justin: Go long those space stocks.

Ben: Yeah. But yeah. So I, I do wonder — if we’ve taken the left tail off because we know the Fed can step in and send their bazooka, is it a policy error? Where we have the wrong person leading these organizations? Or it’s an overreaction or an under-reaction... So that’s kind of the thing to think through — I, I don’t really know what it could be. But the point of that, you know, I wrote about normal accidents in the book — how any time you deal with these complex adaptive systems, trying to make them safer always adds a risk somewhere else. Like you’re trying to seal a hole in a boat and then another one pops out. And that’s the kind of thing I wonder about. What risks are we actually morphing into by stepping in every time there’s a crisis?

Jack: Yeah, it goes back to the quote Justin mentioned at the beginning, right? It’s always these risks you don’t see that are the ones that become a problem, and it’s hard to know what they are because you don’t see them.

Ben: Right. Yeah. Which is every risk, you know, that history has seen. It’s very rare that people see what’s coming next.

Jack: I want to put up this chart — Figure 8.1 in the book — the S&P’s 30-year rolling returns. I just think this is really important for people to put things in context in terms of all this other stuff we go through. What do you think the biggest lesson is from these 30-year rolling return charts of the S&P?

Ben: Yeah, one of my favorite return charts, and it’s total returns going back to the 1920s, and it shows the rolling numbers. And the worst starting period ever was September 1929, of course, which was the start of the Great Depression. If you were to put your money in then, you would’ve had an 86% crash almost immediately over the next three years. And then many crashes in the late ‘30s and into the ‘40s because of World War II. And despite all that bad stuff, you would’ve still had a total return of around 850%. Good enough for almost 8% per year annually.

Again, that’s the worst 30-year return over the last — pick any starting monthly date. And I just think it’s kinda fascinating when you think that, you know, as far as modern history goes, it’s hard to pick a worse time than the Great Depression, which had 20% unemployment for essentially a decade. It wasn’t until the end of World War II that we really got out of that fog — a decade and a half later, because of the war spending. And yeah, the worst times possible, and you still got almost 8% per year for 30 years. It’s kind of hard to believe.

It’s also funny that the best 30-year return is starting from the bottom in 1932. So the worst 30-year return and the best 30-year return are essentially three years apart.

Jack: Yeah, what’s great about this is the gap is not that big. The worst return is eight-something percent a year. When you put it out to 30 years, it just helps to put long-term investing in perspective. Yeah, it takes—

Ben: The volatility out of it, right?

Jack: Yeah, exactly. Which is great because I think it’s good for — I thought about using this chart with clients. It’s a good chart for people to see to understand that when we’re all wrapped up in, you know, the Iran war and all this stuff, there were a lot of wars that happened, and a lot of other things that happened that were very bad during those periods where those 30-year returns are calculated.

Ben: Yeah.

Jack: You had a chapter on bear markets, and you distinguish between recessionary and non-recessionary bear markets. Why did you want to break them up that way?

Ben: I think it’s important, and probably more important than ever today to think about it like this. Because if you think about it, we really haven’t had a real recession since the great financial crisis. The one in COVID — as far as I’m concerned, yes, the unemployment rate spiked, but everyone was getting paid. Many unemployed people were earning more money because we had the premiums on the unemployment insurance, and businesses were being paid even if they shut down. And we threw so much money at it that it was over in the blink of an eye. Technically I think it was a two-month recession, but it didn’t really count.

We haven’t had an actual economic cycle, a credit cycle, since, you know, the end of 2009. And if you think about it, 2022 was a bear market, but it was a completely run-of-the-mill, non-recessionary bear market. The average return decline in a non-recessionary bear market is, like, 25, 26%. It lasts peak to trough roughly 200 days. And 2022 was pretty darn close to that.

But if you look at the recessionary ones, that’s when there is more of a financial crisis situation — we’re talking more like a 40% decline, and then we’re talking almost a year and a half, two years from peak to trough. And of course, coming back out of it is much harder too. And that’s the kind of thing that we just haven’t experienced.

And these cycles, as they get longer and longer — what is interesting to me is the sentiment when that does happen. I mentioned before that the psychology of inflation was really hard because it caught so many people off guard. We have so many investors now who haven’t really lived through a credit crisis. And these things obviously don’t happen all the time, right? It’s more like every 20 to 30 year event. But I’m just curious what, what the reaction function is going to be when we have one of these.

Because the sentiment is already really low when the unemployment rate hasn’t risen a lot, and people are still having their jobs, and wages are still rising. What happens when we have an actual event that is recessionary, and the stock market has a nasty tumble — not just a V-shaped bear market that everyone just puts their money back into?

Jack: How do you think — having studied history — about this idea that we’re having fewer recessions? It kind of gets to what you were just saying in terms of, like, when we do get one, is it gonna be really bad or something? But we’ve gotten better at managing the business cycle, so we have a lot fewer recessions than we used to. Or at least, you can correct me if I’m wrong about that. How do you think about that idea and sort of what it means?

Ben: No, in the 1800s and the early 1900s there was a recession like every two to three years, and they were really, really nasty too. The GDP declines were, like, always double digits almost. And yeah, you’re right. I, I think part of that is we just used to be, like, an emerging market here, and now we’re just a more mature, diversified, dynamic economy. And I think that’s what we’ve seen for this whole cycle.

If you think about all the different places in the last 10 or 15 years that have had what people call rolling recessions — there was an energy recession in the mid-2010s, tech went through a recession essentially in the 2021-2022 period, housing has been in a recession because mortgage rates were so high — but the economy has been able to absorb these things. And I think that’s the interesting thing about how resilient it’s been.

And if you look at the long-term averages, maybe you have to start rethinking how often these things do happen. And the question is, does it make the crashes worse when they do? I don’t know. But I do think seeing how long we have in between recessions — the gap keeps getting wider every time it happens, right?

Jack: Yeah, and it’s interesting. You just made the point that Liz Ann Sonders made when she was on as well — this idea that you can say we haven’t had recessions, but we’ve had recessions in all kinds of different sectors of the economy. So she was thinking this rolling recession thing in different parts of the economy may be the way we go going forward. Maybe we won’t have official recessions as much, but that doesn’t mean we’re not having all this tumult behind the surface.

Ben: And maybe the AI people would argue with me here, but it probably means we just have lower growth. If growth was 3% in the past and it’s probably 2% now — and maybe AI helps change that. You could also say maybe AI is coming around at the perfect time, and we really need it to just keep on the same trend line that we’ve been on, right? But I think that would be a pretty common sense thing to assume — okay, we’ve taken the left tail away, we’re more dynamic, we’re bigger, it’s just not gonna grow as fast as it did in the past.

Justin: The one thing I wanna say — going back to the recession, non-recession bear markets — is I remember you and Michael talking about this. And I don’t think the idea is original to you guys, but the first time I heard it was on Animal Spirits. And it has really always stuck with me since. I think you probably wrote about this on your blog as well, which is where it would’ve originated from, with you guys talking about it.

But I really do ask myself every time we’re in correction territory — a little light bulb goes off and I ask myself, “Is this just a non-recessionary correction-ish thing, or are we going to a recession? Because if we are, I better buckle up.” I don’t know the answer. I just ask myself. But that has always stuck with me, and I think it’s important for investors to think about, and I think about it a lot.

Ben: Yeah. And the thing is, it’s hard to tell, because a lot of times the recession comes later, right? Or you don’t know it until after the fact, like when they actually date it. Which is funny — the COVID one, I wrote about in the book, everyone knew that was happening immediately. But usually it’s not like that. Sometimes there’s a bit of a lag when you actually know it.

And it’s funny, I, I wrote too that in the Great Depression, the recession had started a month before the stock market crashed, and no one knew it yet. No one knew the economy was already faltering because they didn’t have data like we have today. And so I think that’s the hard part — sometimes to get that confirmation, oh my gosh, the economy really is slowing, it takes a little bit of time because those trends don’t happen in real time.

Jack: Yeah, to your point, I would bet the market is probably down 10% plus for the most part by the time they declare a recession. So a lot of times these recessionary bear markets, you find out that they were recessionary bear markets after the fact rather than before.

Ben: Right. Yes. Which makes it even harder.

Jack: How do you think people should think about the relationship between the stock market and the economy? Because that’s something you see investors get wrong a lot. They kind of expect them to just track each other over time. You wrote about it in the book, so I’ll put up this chart — Table 10.2, the stock market and the economy. How do you think people should think about the relationship between those two things?

Ben: Yeah. It is funny. If you just look at the actual GDP declines, it’s — the GDP growth versus the stock market, it shows how different they are. And over the very long term, of course, we need economic growth to have the stock market go up. You can’t have the economy go nowhere and the stock market do well. But they are kind of completely different things, right? The economy is 70% made up of consumer spending. The stock market is mostly, you know, businesses that are making and doing things. And, and so they are kind of different things.

And, and I think it does annoy people when you see a divergence between the economy and the stock market. But even more so today than ever, with how much the technology companies sort of control the stock market, it’s harder than ever to look at the macro and say, “I’m gonna predict what’s gonna happen in the stock market,” because they can become detached, too, right? With the non-recessionary bear markets, there have been plenty of times where the stock market rolls over for reasons other than an economy slowing.

Justin: So the next chapter — “Volatility Is a Feature, Not a Bug.” You kinda gave this example of Roger Federer, and you showed that he kinda had almost like a 50/50 in terms of points and sets that he won and lost. It was 52% win sets versus 46% that he lost. But he barely lost overall — he was obviously one of the greatest tennis players of all time, and that little edge gave him the ability to win as much as he did. How do you think that kind of applies to investing?

Ben: Well, it’s funny. So he gave the commencement speech at Dartmouth a couple years ago. Yeah, he said he’d won more than 1,500 matches in his career, and he’d only won 54% of all points in his tennis matches, but he won 80% of the matches. And to me, that was, like, a perfect analogy for the stock market — it’s up like 54% of all days. Since 1950, the stock market is up 80% of all years.

You’re right. It’s like the small edges that compound over time. And it’s interesting because a lot of people compare the stock market to a casino as a derogatory term. But I always say that if the stock market is a casino, it’s the best one in the world, because the longer you stay in the casino, the higher your odds of walking away a winner — which is the complete opposite of an actual casino, where the house has the odds. So it’s one of those weird things where you and the investor have better odds the longer you stay in it. Now, the gain that you get is not guaranteed by any means.

But just hearing that and him talking about it. His whole thing was, “Listen, when I lost a point — because I lost a lot of points, right? 46% of all points I lost — I couldn’t just give up.” And that was, again, a good analogy for the stock market. When you do have those downturns, and they’re going to come, that’s just part of the game. That’s the price of admission.

Justin: Now, I have to admit, this next chart which shows the S&P calendar year returns is something that I have used in presentations, Ben. I’ve always given you credit, by the way. But it’s something that I — I find it, like, you know, seeing it visually is just so powerful. People think you get this 10% return from the market, but this chart shows just how wide those annual dispersions actually are.

Ben: Yeah. So I actually created this one, and it was funny — I got an email from another investment author after I did this. He goes, “How do you do that chart?” Because it’s kind of hard to do with this scatter plot thing. And yeah, it just shows the annual returns by year, and they’re all over the place. There’s no rhyme or reason to it, right? There are times where you have multiple down years in a row. Sometimes you have multiple up years in a row. Sometimes it’s a yo-yo, up and down and up and down. And I think that’s the sort of ride you have to expect in the stock market, that from any one year to the next, you’re just not gonna be able to predict what’s gonna happen.

It’s possible if things continue to go well with the stock market that we could see a situation where we have, like, four out of five years where the stock market’s up 20% or more, or close to it, at least, in this environment — which seems kind of crazy to think after what happened in 2022 and in 2020. But those are the kinds of runs that can happen, and I think you just have to open up your imagination a little bit sometimes to what can happen in the stock market, because the patterns are hard to find.

Justin: I know that Ritholtz has a nasty, like, charts guy now, and you guys are developing that into like a product. But I was always pretty — you’re right. Like, those charts, I’m like, “Damn, how...” It must have spent, back in the days of Excel, those weren’t quick like AI, you know? It definitely took some work.

Ben: Yes, easier with the ChatGPT age for young people. They didn’t know the struggle.

Justin: What about the chapter on compounding where you opened with the Munger quote — “The big money is not in the buying or the selling, but in the waiting”? Why do you think waiting is so much harder than it sounds?

Ben: I do think that — I think Howard Marks has talked about this too. Like, the hardest thing to do as an investor is to hold, right? It’s easy to, to buy, because there’s always reasons to buy. If you’re a momentum investor, you’re buying when stocks are up. If you’re a value investor, you’re buying when stocks are down. If you’re just a regular 401(k) investor, you’re buying all the time, right? You’re buying every time you get paid or whatever. So I, I think that part is easy. I also think it’s pretty easy to sell — if you sell because you have a stock that’s down, you sell because you have a stock that’s up and you’re locking in a profit. There’s always a good reason to buy and sell.

I think holding is hard because there’s a very fine line as an investor between discipline and being, like, totally inflexible and delusional, right? You’re being so delusional that you’re following a process that just doesn’t work anymore, or are you being disciplined and you’re sticking with a process that’s just out of favor?

And I think that’s one of the hardest questions to answer as an investor. And one of the reasons that I think having a simpler approach makes more sense for most investors is because if you have a really complex strategy, it’s much harder to lean into the pain. So I, I came up in the nonprofit world working with institutions with endowments and foundations and such, and they’d have their quarterly board meetings and, you know, the managers would be... They’d have, you know, their actively managed stocks and bonds and then hedge funds and private equity, and they’d have, like, these systems where it’s like red light, green light, yellow light, right? Green light, it’s like, “Hey, performance is good. We’re sticking with them.” Yellow light: “Well, performance is starting to teeter a little bit. We’re gonna put them on a watchlist.” And red was, “They stink. We’re getting rid of them.”

But I always thought, like, if you really truly believed in the process here, it would be the opposite. You’d be giving the green light to the worst performing managers, because you’d wanna lean into the pain. But a lot of times it was way easier to hit the eject button with these strategies, and a lot of it was because it was more complex and harder to understand. And because they didn’t necessarily know if that discretionary manager was gonna come back and do better, they decided to just punt on him instead and pick a new one.

And, and so I think that’s the hard part of, of, like, the holding — can you stick with something when it’s not working? Because everyone has a time period when something doesn’t work well.

Justin: One of the last chapters is where you’re talking about these lost decades. They don’t come around very often. And to your point, a lot of investors that are new to the market in the past 10 or 15 years — they may know it, but they didn’t experience it. You know, from ‘99-2000 to the end of ‘09, if you would’ve just bought the S&P 500, you would’ve been basically — well, you have it in the chart — flat, which isn’t consistent with, you know, most 10-year periods. But what do you think is like the lesson there that you’d like to sort of point out to investors? All I know is that when I retire, whenever that is, I better not hit a lost decade. Better not be my watch.

Ben: Well, I don’t know if it’s right or wrong, but that period from 2000 to 2009 is ingrained in my memory because that’s when I first started in the investment business, and the S&P 500 went nowhere. There were two — it was bookended by two huge crashes. The S&P had a total return that was down, like, 10%. It lost about 1% per year or something. But if you had a more diversified portfolio and you owned other geographies, other strategies — if you owned value stocks or small caps or mid caps or REITs or bonds or emerging markets — all these different asset classes performed better. Foreign stocks actually did pretty good that decade despite the financial crisis, and that was really eye-opening to me in terms of the power of diversification.

It doesn’t — obviously it doesn’t always work like that. But I think that’s the thing — diversification is seen often as a risk management strategy, and I believe it is. Spreading your bets. You’re kind of taking away the ability to hit a home run, but you’re getting rid of the ability to strike out.

But it’s also this thing where you can cast a wider net, so you open yourself up to the ability to have winners in places that you didn’t consider. And I think that’s what that taught me. And I think the last 10 years, a lot of people have decided to just give up on diversification altogether. “Why wouldn’t I just have all my money in the S&P 500 or the Nasdaq 100 or just the Mag Seven?” And, you know, I — there’ve been many cycles here and there, but I think there’s gonna come a time where it’s gonna matter again, and that’s what diversification is for. It’s not like the bad days or the bad months or even the bad years — it’s the bad cycles, essentially.

Justin: What are your thoughts on the starting valuation of the market during or around these periods? Like, you know, I think a lot of investors that know market history think back to the late ‘90s and say, “Back then the market was trading at a PE of whatever it was, or a Shiller PE of this, and, like, look at those returns, you know, for the next ten years.” And, and, you know, that argument has largely been very wrong over the last 10 or 15 years, because the market’s been mostly above average valuation. So how do you think about starting valuation when you think about forward returns? Or do you think about it?

Ben: I think it’s harder than ever to use historical valuations, and I think that you could’ve said for the last 10 years — and I probably did — that you should temper your expectations for forward returns because valuations are much higher than in the past. And anyone who said that would’ve been wrong, because returns have continued to be high. It’s, it’s kind of crazy that annualized returns in the 2020s are higher than they were in the 2010s right now, which is kind of crazy to think about. And valuations were elevated for much of that decade too, right? They didn’t stay low very long after the great financial crisis.

And I think what’s so hard is that the companies are just so much different. They’re so much less capital intensive. They have higher margins. They’re more efficient. And AI is obviously going to probably supercharge that trend if it does half of what people think it’s going to do.

And so I think from that perspective, it’s really hard. Peter Bernstein, who wrote Against the Gods, had a whole chapter on mean reversion. And he said the hardest part about mean reversion is when the mean is a moving target. And I think for valuations, a lot of the time it is. Now, it would be crazy to look at valuations today and say stocks are cheap, right? But after such a long bull market, it would be kind of crazy if stocks weren’t a little expensive, because they’ve been doing so well.

But I think it’s a lot harder to pound the table and say, “Oh my gosh, stocks are ridiculously overvalued,” just because of the way the companies are these days and the potential for technology to supercharge things. I have this chart that looks at average margins by decade, and every decade since the ‘70s, it’s a stair step higher — margins keep going higher and keep hitting new all-time highs as these tech companies need fewer employees and fewer fixed assets and are more intangible and all these things. So I have a hard time pounding the table one way or another when it comes to valuations.

Justin: Towards the end of the book, you talk about this idea that there really is no perfect portfolio, and that sometimes the best portfolio for someone — while it may not be perfect — may be the one that they can best stick with over time. Do you wanna just flesh that idea out?

Ben: Yeah. I do think perfect is often the enemy of good for a lot of investors. The good strategy you can stick with is far superior to the perfect strategy that you can’t stick with. And I think sometimes investment professionals do tend to try to make things too over-optimized and try to make things too perfect for their clients, and they worry about, you know, the...

I think it’s horseshoes and hand grenades a lot of times — close enough is good enough. Where, you know, if you’re arguing over whether to have two percent more in this asset class versus that asset class, you’re probably gonna be doing okay and it’s not gonna move the needle very much.

And so I do think there is something to be said for the ability to stick with whatever strategy you pick, come hell or high water. Because again, I think it’s harder than ever to do that these days, and it’s easier than ever to hit the eject button and change your portfolio. “I’m gonna add this and I’m gonna change this,” and it’s like a buffet where you’re constantly picking up something new. So I think the ability to stick with that — that’s one of the, I think probably one of the most impressive things about Buffett over the years. He just kinda stuck with his strategy no matter what was going on. And, and obviously Berkshire didn’t always outperform every single year, and his strategy was often out of favor. But he just stuck to his guns. And I think that’s the hardest thing for most investors.

Justin: Good stuff, Ben. We really appreciate it. If you were to try to bottle up what you think the biggest lesson is that investors should take away from the book, how would you summarize that?

Ben: Yeah. I, I think for every investor there’s, there’s like a different angel and demon on their shoulder. And for some people they are too conservative because they’re, they’re constantly worried about risk. We all know these people in our lives. And other people are, are too aggressive, and they just hope that risk will never rear its ugly head.

And I think the point I wanted to show here is that risk and reward are attached at the hip, and it’s, it’s always a trade-off. If you want higher returns, you’re gonna have to accept the potential for higher losses and higher volatility. And if you want, you know, less volatility and lower drawdowns, you’re probably gonna have to accept lower returns.

And I think that that sort of trade-off is what I’m trying to, you know, help you understand. And also understand that, you know, history is full of really bad things that have happened to the financial markets, and the long term has still been pretty darn good, even if you include all those things.

Justin: Good stuff. Thank you, Ben. Really appreciate it.

Ben: Thanks for having me, guys.