AI Summary
5 min readBen Carlson’s new book Risk and Reward came out today, and he describes it as the distillation of twelve years of writing and thinking into a single volume. The core argument is that investors cannot get the long-term rewards of markets without accepting the short-term risks, and the book is structured as alternating chapters—one on risk, the next on reward—to make that pairing explicit. Carlson wanted to put all the worst things that have happened in the past century on the table upfront, then show how to think about them, survive them, and understand what they actually mean for an investor.
The Most Logical Melt-Up in History
The conversation quickly turns to the current stock market rally, which Carlson and co-host Michael Batnick describe as a genuine melt-up. The S&P 500 gained 16% in six weeks, the most since the Global Financial Crisis. But Carlson argues this is “the melt-up that makes the most sense in history” because the fundamentals are actually supporting the price action. The forward P/E for the S&P 500 is at 21 times, which is below where it was trading in January 2025, even though the market is up 30% since then. Earnings have outpaced price gains. NVIDIA has gotten cheaper on a forward P/E basis. Micron is up 800% over the past year yet trades at 9.7 times 2026 earnings and an estimated 7 times 2027 earnings. The stocks that look most extreme on a pri
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What you'll learn
- 1 (01:56) **Book Launch & Core Thesis** - Ben Carlson introduces his new book *Risk and Reward*, explaining its structure and purpose
- 2 (07:00) **Who the Book Is For** - Ben identifies the two investor types the book targets: the too-conservative and the too-aggressive
- 3 (09:10) **The Melt-Up That Makes the Most Sense** - Michael argues the current rally is the most logical melt-up in history, driven by fundamentals not speculation
- 4 (11:54) **Historic Run in Semiconductors** - The conversation shifts to the semiconductor stocks driving the rally, with stunning fundamental data
- 5 (13:15) **Micron's Wild Ride** - A detailed look at how Micron's stock swung 30% in days despite record results
- 6 (16:20) **Why This Isn't a Bubble** - Michael defines what a bubble really means and argues current conditions don't meet the definition
- 7 (19:40) **Two Different Markets, Two Different Pulses** - Data shows retail investors are split between cautious and aggressive
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
On episode 464 of Animal Spirits, Michael Batnick and Ben Carlson discuss: Ben's new book Risk & Reward, an epic melt-up in the stock market, semiconductor stocks going berserk, why this isn't a bubble (yet), South Korean stocks, AI portfolios & advisors, why young people are so angry, soccer dads & crypto, longevity risk and more.
This episode is sponsored by: Nasdaq Global Index Solutions and Janus Henderson Investors.
- To learn more about Nasdaq Global Index Solutions and their Blueprint of Tomorrow series visit https://www.nasdaq.com/campaign/global-indexes/blueprint-of-tomorrow/
- Visit https://www.janushenderson.com/securitizedmarkets to learn more.
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Find complete show notes on our blogs:
Ben Carlson’s A Wealth of Common Sense
Michael Batnick’s The Irrelevant Investor
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Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.
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