Episode 26- What Just Happened? Why October Surprised Everyone

What if everything you thought you knew about October in the markets was wrong? In this episode, Wheeler and Colin dig into the so-called “October Effect” — why history says it’s a bad month for investors, and why this year flipped that narrative on its head. From the 1907 panic to 2008’s crash, they trace how superstition and seasonality shape investor psychology far more than we realize.

Then, the conversation pivots to what’s really driving today’s markets: a record $7.4 trillion sitting in money market accounts, historic highs in the NASDAQ, and why volatility isn’t always the enemy. The hosts unpack why risk is back on, what breadth expansion means for the health of the bull market, and how professional managers are scrambling to catch up before year-end.

Finally, Wheeler and Colin explore the deeper ripple effects beyond Wall Street — from sweeping layoffs to the shrinking value of a college degree, the rise of AI in white-collar work, and how Americans are redefining what “work” even means. It’s a conversation that moves from macroeconomics to mindset — and might just change how you look at your own career path.

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Credits:
Created By: Wheeler Crowley and Colin Walker
Production Assistance: Tori Rothwell
Editing and Post-Production: Steven Sims

Transcript

Wheeler Crowley (00:00)
All right, so I'm at my favorite coffee shop yesterday morning and ⁓ no, Wild Valentine, the one in Portsmouth. Shout out Wild Valentine, great place. And the one that charges me more for the same coffee you get at La Molina down the street, I'm pretty sure it's the same coffee. but they do, Wild Valentine does the coffee ice cubes, so I like that, right?

Colin  (00:03)
Which one? The one in Hampton?

⁓ got it, got it, got it, okay, yeah.

Right, and it's the same beans, and they supply the beans. Right, yeah, makes sense.

Mmm, it's worth it.

Wheeler Crowley (00:25)
Yeah, I feel like that helps me, especially if I get a cold brew in the morning and I don't drink it all day, the ice just melts into the cold brew, which is coffee in a coffee. that's like hot tip, pro tip, cold tip, cold tip. So I'm sitting there at the counter. It was busy. It was a really extra busy morning. So I had to sit at the coffee bar to do my work. And that's how I've started my day now that my workday started to 7.45 now. So go to the coffee shop.

Colin  (00:36)
Cold tip, actually, yes.

Wheeler Crowley (00:50)
I pull out the laptop, I sit down, I have my backpack that you got me for Christmas like a year ago. And this guy who was at the counter comments in the backpack. He's like, that's a really cool backpack. What is it? And he looks at the brand and what is it? Peak design, right? That's the peak. So I'm like, yeah, it's a great brand. But depending on your point of view, you might find it a little controversial. And he's like, why? I'm like, well,

Colin  (00:54)
Mm-hmm. Yep.

Peek ya!

Wheeler Crowley (01:17)
I didn't know this

Colin  (01:17)
no.

Wheeler Crowley (01:18)
when Colin got me this backpack, but it was the backpack that the guy who assassinated the UNH assassination use. He's like, wait, what happened? Yeah, United healthcare. I'm like, not yet. And then I had to say not UNH down the street, but like United healthcare. He's like, wait, what happened? And I'm like, well, you know, the assassination. He's like, what? Like I'm like the shooting that happened in like on the streets of New York city. He's like, was it, was it like just.

Colin  (01:26)
Yeah, UnitedHealthcare, yeah.

What the?

Wheeler Crowley (01:44)
intentional or was it? I'm like, well, did. Yeah. I'm like, no, yeah, it was a, it was a mental health issue. This guy like Luigi something or other, you know, use this backpack and yeah. And he had, he went after the CEO. I'm like, you must've heard of this. He's like, no. That was like, how, where does, I mean, I looked at him, right? I'm like, is this

Colin  (01:46)
Most assassinations are typically intentional.

Shot the guy and yeah.

⁓ my god.

Wheeler Crowley (02:08)
Who is this? What kind of person is this that they don't know this massive current event? I feel like this was in all the news at that time. yeah, it just makes me think about how some people are able to avoid certain things. And I feel like since the election, you've dialed down your news flow, which is probably better for your mental health.

Colin  (02:18)
It was everywhere. Yeah, it was huge.

Yes.

I was gonna say, it's mostly for my own mental health. But yes, I don't know what news this person is watching or not watching. Like I wonder what his social media feed is where you're just not pushed any of this.

Wheeler Crowley (02:39)
We don't. Yeah.

Not watching.

Well, you know, he's probably his social media feed, he's older. So let's say mid to late fifties. he's probably, maybe he's just not, that's not that old. He's like 10 years older than me, Colin. But whatever his feed is, like if he even has a feed, somehow he missed this major current event.

Colin  (02:59)
Okay. World War II history,

Yeah.

Well, the way I look at it is once you turn 30 as a man, you have one of three directions that you can go. Okay, okay. You can either go into smoking meats as your hobby, you can go into World War II history, or you can go down the craft beer route.

Wheeler Crowley (03:19)
Okay.

I see. Did you find that last one just for me where you're like, gotta find one? Yeah, okay. Yeah.

Colin  (03:30)
You've gone craft beer. Yes. No, but that's, that's

a thing. Like I have a whole group of friends who are guys that are just so into craft beers. You're into craft beers. That's like your thing. I'm into World War II history. Then I have my own group of friends that are in a World War II history. And then there's like this whole other group that just concerns themselves with smoking meats. And those are your three courses. Like those are the three paths that you're given as a 30 year old man to go down. I mean,

Is there anything else? So he's probably down the smoking meat path, and we're just not familiar with that path because neither you or I are into that.

Wheeler Crowley (03:57)
Could you?

know that, well what category falls into, like the person who doesn't know about the United Health assassination, what category do they fall into? The World War II? The Smoky Mates? I see.

Colin  (04:13)
Smoking meats. Smoking meats because I'm World War II so I get pushed all that stuff. But I don't

know what a smoking meat person gets pushed because I'm not in that group. So maybe they didn't get pushed that because smoking meats category isn't concerned with assassinations. I don't know. next time you see him ask him if you like smoked meats.

Wheeler Crowley (04:31)
I really.

I don't know if I'll ever see this person again, but if I do, I'm probably gonna ask more pointed questions like, how did you not know about this? I'm really curious, I have to understand. And he was also, he actually struck me as an NPR guy, and I'm sure that was an NPR thing, but I personally feel like you can have smoked meats and a nice craft beer paired very nice, very well together while watching a World War II documentary. Like these three paths can intersect.

Colin  (04:44)
You gotta know.

Hmm.

Well, this is the thing, guys typically get along. It's just if you have hobbies, I'm not saying you can't all hang out together, but you tend to gravitate towards one area or another. But speaking of current events, I'm gonna transition here. Do you know what the October effect is?

Wheeler Crowley (06:25)
Yeah.

Ooh, he's the transition guy today.

I do know what the October effect is, Colin, but I want you to explain it for our audience.

Colin  (06:45)
Historically speaking, bad things in the market happen in October. So if we look through history, you had major stock market crashes, basically the 1907 panic, you had the Great Depression get kicked off in October, you had Black Mondays and Thursdays, you had the 2008 financial crisis, all of those things started in October. So one of my questions to you is can a month's reputation

affect influencers or people who are investors, their decisions when it comes to money management. And it's an interesting behavioral question because if people have a negative perception over a month or a negative perception over something, it will impact ultimately their decision making in theory. Now granted this month was a fantastic month, so the October effect didn't really play out this month. In fact, it all time highs this month.

Wheeler Crowley (07:40)
Yeah, so I feel like the October, first of all, that October, it's funny we call it the 2008 financial crisis, the October you are referring to is 2007. But I feel like there are people, I remember when I first started as an advisor at Wells Fargo, and I'd never heard of any type of seasonality. And this guy called, he wanted to buy a stock, it was like a natural gas stock or something like that. And he's like, well, know, yeah, this ⁓ is a client. This is like a nobody wants this account.

Colin  (08:00)
This is a client. Yeah.

Wheeler Crowley (08:06)
And here's why, because they're going to call you. Yeah, this is like, hey, rookie, take this account. And it's, you know, it's this guy who calls and he's like, I want to buy this natural gas stock because like, if it's going to go up, will be for now. And I'm like, okay, why? He's like, well, because it's, you know, it's getting cold. So it's time to buy natural gas stocks. And I was like, this is.

Colin  (08:07)
Got it. Wheeler, take this. Yeah.

That's like when people

try to buy like lint chocolate around Halloween and Easter and all those different holidays and like it's already baked into the earnings.

Wheeler Crowley (08:34)
Yeah.

Yeah, yeah, you're right. It's funny that seasonality can play. I think it plays like mind games. I think it's smart to be like they used to say, sell in May and go away. Right. And then that was a time where Wall Street went to the Hamptons for the summer. And then they would come back in September. And then based on the vibes, essentially, like what happened over the summer, they would have an investment thesis for the rest of the year. And then

You're right. always had like October because of all of these big events that you just mentioned has historically an average down month, right? Like it's just on average is like our weakest month, one of the weakest months. But that's because some of these things are huge. It's like the denominator that influences everything else, right?

Colin  (09:12)
Right.

Well also, you know, the 2008, which really kicked off in 2007, financial crisis and the Great Depression, all of these things didn't just happen in October. It's not because of October. And also they lasted a very long time and it didn't just occur in a 30 day period. So long story short, it is an interesting conundrum that seemingly all of these negative things in theory kicked off in October.

Wheeler Crowley (09:29)
It's not because of October.

Yeah.

Colin  (09:46)
how they prolonged you know after that with that being said this october was fantastic and thank god you know you didn't sell and walk away in may because the last few months have been amazing where we at right now.

Wheeler Crowley (09:56)
Mm.

Yes,

yeah, so let's talk about that. yeah, causation and correlation are not the same thing, right?

So here's what we're looking at right now. We have the high beta versus low volatility tracking indexes from 2021 until where we are right now. The reason I'm pointing this out is that as you've noticed or mentioned already, the S &P 500 all time highs, right?

Colin  (10:05)
what are we looking at here?

Wheeler Crowley (10:25)
When we're looking at a chart like this, there's two areas of the market that we think about, beta and alpha, beta versus low volatility.

But essentially, when you have a market where the big stocks are outperforming, that tends to be a very small concentrated market. We talk about concentration in the stock market a lot. But at the same time, you want to have a spread out market where a lot of different things are working. Think about rising tide lifts all ships.

Colin  (10:57)
Yep.

Wheeler Crowley (10:58)
We're in a situation right now where beta, the stocks that, you know, the small minnows and the, you know, the sharks, et cetera, are outperforming the whales. And that is a sign of a healthy bull market. When everybody's conservative, they go into the things that they are more certain are going to work, right? They'll go to the mag seven, they'll go to Apple or Microsoft, or maybe Nvidia. When we are more, I would guess, optimistic,

or risk on, we'll spread our bets a little bit. We might give another company a shot and maybe look at it as less risky because the market is a strong market. And when that happens, it's a good sign for things to come, historically speaking.

Colin  (11:41)
Right, so basically what you're saying is that people are spreading out their investments into other categories that hasn't necessarily been the case over the last few months, meaning that I don't want to say consumer sentiment is getting better, but maybe people are taking a more risk-on approach.

Wheeler Crowley (11:58)
Yeah, it's a breadth expansion. It's basically just more things are working than not. when you have a shrunk market, like we had this, I think it was like 2017 was the year where it was, you know, it was a good year, but it was a good year mostly because of these big stocks. And we've talked about like the impact these big stocks have on the market because they have a bigger concentration or bigger weighting in the market. They're going to have a bigger impact. But

We can still find opportunities elsewhere, right, beyond those names in a market that's a healthy market.

Colin  (12:27)
Have you taken a look at the VEX lately?

Wheeler Crowley (12:28)
I haven't, where is the VIXX right now?

Colin  (12:30)
So the VIX is actually at one of its lowest points of the year. So the lowest volatility, basically for those who don't know what the VIX is, it's basically a volatility index and it measures the amount of volatility within the market. So earlier this year, when the tariffs were announced, the VIX was trading anywhere from like 40 to 60, which was like 2008 levels of volatility. It was a huge swing in a very short period of time. We saw the same kind of levels back in COVID.

You know when the VIX is trading, I'll say like kind of in the low teens, that means the line in terms of the volatility of the overall market is relatively smooth. And what we've seen is volatility go down pretty dramatically in the VIX index over the last few months. And I believe October was actually the record low for the year. With that being said, when you do have extremely low volatility, you often see following spikes of volatility.

if something was to happen. But to your point, volatility has dropped pretty significantly over the last few months. People are starting to take a more risk on approach, which does indicate potentially a bullish market.

Wheeler Crowley (13:36)
Yeah, you what's interesting is that you're right. Usually the low volatility, when there's a lot of volatility, that's a lot of opportunity. When it's a low volatility like this, it could be a long prolonged period, but then it is followed by that volatility because nothing just kind of stays just lucid forever. Yeah, exactly. I've got one more chart that I think is really interesting and it's coming from Ben Carlson over at Ritholtz Wealth Management.

Colin  (13:53)
Low forever.

Wheeler Crowley (14:04)
All right, so this is actually a LinkedIn post because my only remaining social media is LinkedIn. ⁓ So what we're looking at here are the year to date total returns as of April 8th versus today. April 8th, world was coming to an end. Stock market was crashing. Everybody was panicking, et cetera, et cetera, et cetera. That was when we were getting a lot of volatility and a lot of high volume in our client calls that, you know, we're expressing concern about.

kind of the state of the world, but the very least the impact of tariffs, right? Like we don't like tariffs. The stock market obviously doesn't like tariffs and everything was going down. You had the S &P down 15%. It's actually down 20 % from the high, because we started the year a little bit higher, but down 15 % year to date as of April 8th. And obviously the Russell was down even worse, 21%. Now look where we are. S &P back to all time highs.

Colin  (14:35)
Sure.

Wheeler Crowley (15:00)
This is 18 % as of Monday is actually higher than that now NASDAQ up 23 % you and I both know when the NASDAQ starts down 18 % and then is up 23 % later that year then it's more than a 23 % run from the bottom to the top and Did you know Colin that this the NASDAQ is the one I'm gonna focus on here. This is the fourth

Colin  (15:22)
Right.

Wheeler Crowley (15:28)
best six month return for the tech sector in history.

Colin  (15:32)
I did not know that, but that's not surprising to me, given the way the market's looking right now. I mean, to have call it as near as makes no difference, a 40 % swing in the NASDAQ from peak to trough is pretty remarkable in terms of volatility in any given year. But with that being said, what's the average volatility I think it is in the S &P 500 in any given year, it's like 14 and a half percent, ⁓ basically to go down from the bottom. So if you look at the S &P 500,

The average amount it goes down in any given year is 14 and a half percent. This year it went down according to this 15%. So actually the volatility isn't that unusual and most of the time when the market's up, I can't remember the average historical kind of up years, but it's right around kind of that 16 to 18 % mark if I recall. Am I right on that?

Wheeler Crowley (16:22)
Yeah, mean, think the, honestly, I don't have that data right in my head.

Colin  (16:24)
Is it really rarely ever actually

returns yeah i mean it really actually ever returns the seven to ten percent that everybody ever quotes granted the last fifteen years the market return has been on average thirteen and a half percent.

Wheeler Crowley (16:32)
Yeah.

Yeah. But I think what we're seeing more and more is, know, this has been the case, well, I guess since maybe 2018, we see a lot of V-shaped corrections. And 2022 was a little bit more elongated, you know, it's so quickly the darkest before the dawn, right? And the dawn comes, you know, in this case, just the president telling you to buy the stock market. But, you know, it could be vaccinations, you know, coming out or it can be anything that

Colin  (16:47)
Totally.

Wheeler Crowley (17:05)
quickly flips the switch. And I think the best way to think about this is a bunch of people on a boat, somebody says, the boat's leaking, we're gonna sink. And everybody jumps out of the boat. And then while they're swimming there, they see the boat's not actually leaking and it's not sinking. And then they all have to climb back into the boat. And that is where we were on April, I guess April 8th, April 9th, wherever it was that the president said to go buy the stock market. And I think that's where we still are at this point in the year.

Colin  (17:20)
Right.

Wheeler Crowley (17:33)
And this is where we think about kind of like the catch up trade. You have a lot of professional managers that may have been cautious at one point or another throughout the year. And now the year is coming to a close and they have employment risk on the line. If they continue to underperform, they can't just say, well, the market's wrong. I'm right. Over and over and over again. They need to get some performance and they need to look better by the end of the year. So in the final months of this year and historically any year,

Colin  (17:44)
you

Wheeler Crowley (18:02)
where there's been volatility, there's been a wall of worry to climb, and at the same time, we're up 19, 20%, now you get that performance-chasing. And that tends to lead to a better drift up in November and December of that year.

Colin  (18:16)
I think what's making me bullish at the moment, in addition to everything that you just said, is one simple stat, which is $7.4 trillion. $7.4 trillion set aside in U.S. money market accounts at the moment, which is a record high. We're at 14 % in the amount of money of cash on hand in U.S. money market accounts right now. With the Fed continuing to cut, which they have a meeting today, so we won't talk about it.

But long story short, if the Fed does continue to cut and if yields go down on money market accounts, that money essentially has to go somewhere. And if you're not getting the same yields in money market accounts and short-term bonds now, it's probably gonna go to the stock market. And as we know, as money floods into the stock market, that tends to make prices go up. In addition to that, 86 % of S &P 500 companies have reported earnings and the earnings for Q3 have been extremely strong.

So certainly I would say without any of this being investment advice, the market is looking really good right now and there's some really strong arguments to say that it might continue to go in this direction.

Wheeler Crowley (19:23)
Yeah, it's funny. It's a lot of money in the sidelines and it continues to be a lot of money in the sidelines. I guess I wonder, first of all, that's a lot of concentration, right? Of that $7 trillion, like how much of it falls into the top 1 % of wealth. But I think, you

Colin  (19:32)
ton.

Well, I

assume most of it's also corporations.

Wheeler Crowley (19:41)
Well, I don't know, does that count? Do corporations impact the money market like values, cash on the sidelines, et cetera?

Colin  (19:48)
I don't know. It's a good question because I mean you just look at Apple in general the amount of cash that they have that's got to be parked in a money market account somewhere but I don't know if that actually counts towards the 7.4 trillion number but that's actually a great question.

Wheeler Crowley (19:58)
Yeah.

Yeah, we can find the answer to that question. But I think that in general, like, why is it sitting on the sidelines? I thought for a while when money markets were giving in like 5%, that, you know, when rates came down and you were only getting four and a quarter and then four and then maybe 3.75 or whatever it is at the end of the year, I thought that that would mean that some of that money would come into the market or go to alternatives. Maybe it's going to fixed income and

Maybe it's going into private credit. I don't know. But it doesn't seem to go down. Like that amount of money just keeps going up. And is it because there's not enough opportunity to get a better return? Or are they waiting for something bigger? Like why? Why? Is there so much money on the sidelines?

Colin  (20:42)
I mean, this just goes back to client conversations. Why take risk to try to get 4.3 % in a short-term bond that has volatility when you can leave it in a money market account at 4.0 or 4.1, depending on which account you're in, and take literally hardly any risk at all? So that, I think, to me is the question is if rates do go down.

Is that going to benefit alts? Is that going to benefit stocks? Is that going to mean that people are taking on more duration? It's probably a combination of everything. And I just looked it up and the 7.4 trillion does include institutional investors.

Wheeler Crowley (21:21)
Okay, well, so I guess corporate institutional, because institutional can be like hedge funds and okay, yeah. Well.

Colin  (21:25)
Yeah, including corporations. Yeah, yeah. So pension

funds, governments, not just individuals.

Wheeler Crowley (21:32)
I mean, the numbers just keep getting bigger. Nvidia hit $5 trillion in market cap today. ⁓ Apple hit $4 trillion the other day. yeah, we've, these numbers, they get to be ridiculous. And it's funny when, like I was watching CNBC for a few minutes at lunch yesterday and there's some guy was on there talking about like the increase in market cap for Microsoft that day. And I was like, who cares?

Colin  (21:34)
They do.

It's absurd.

No one.

Wheeler Crowley (21:58)
I don't, you know,

it's like somebody who still speaks in Dow points. Like I don't care how many, right?

Colin  (22:01)
I was just gonna say that. How many

points is the Dow up today? It's a percentage base now because when you're talking about such big numbers, the amount of points is borderline irrelevant. It's just a percentage base off of the amount you have invested. So the points, no. I think it's at 47,000 right now if I had to take a guess. Is that right? Somewhere around there? I haven't looked at points in forever. Yeah.

Wheeler Crowley (22:06)
Yeah.

No, no, and.

I maybe I whatever like it's it's just

you know it I just don't care right ⁓ I think one thing that we do need to we're very optimistic so far and I think that's great and I want to stay optimistic ⁓ but we

Colin  (22:28)
haha

Yeah.

Well, with companies

going up in market cap, that doesn't necessarily mean more jobs.

Wheeler Crowley (22:42)
Right. Well, it definitely doesn't mean more jobs because we're seeing fewer jobs. ⁓ And I know I had in our doc that we were going to talk about some of the job cuts that have been announced as of the last couple of weeks here. And October was not a great number or great month for job cuts. had UPS announcing that they had cut thirty four thousand jobs so far this year. Apparently they'd had twenty thousand initially planned Paramount Skydance cut some of the smaller companies like Charter Communication.

Colin  (22:45)
Right.

Wheeler Crowley (23:08)
your boys at Rivian, they cut. ⁓ What I think is the most interesting is the Amazon announcement that they had 14,000 corporate layoffs. And that means they're saying basically, look, we over hired as we expanded post COVID and now we don't need these employees anymore. And I think there's something to that to a degree, but I also think it's a bellwether for what we should expect in the job market for white collar jobs. And I have

Colin  (23:10)
Yep.

Wheeler Crowley (23:37)
like a bigger kind of blossoming issue here, our blooming issue here that this morning before we came in, I was hearing about Airbnb, JP Morgan, Goldman Sachs talking about how they're not necessarily cutting jobs, but they're not hiring. They don't feel like they need as many people anymore. And we might need more and more. Like I've got electricians at my house today and they're really busy. We need more and more electricians.

Colin  (23:52)
Right. right.

Wheeler Crowley (24:04)
I have concerns about the white collar job market and I think we're starting to see, or maybe we've already been seeing the cracks, we're seeing bigger cracks. And what a thought exercise might look like here is if white collar jobs become less valuable, then how valuable is a college degree?

Colin  (24:24)
gosh, Kaylee and I talk about this constantly. I'm gonna hit you with one more fact though, and it's not a very cheerful one. To echo your point, do you know how many jobs have been cut this year? Just in total.

Wheeler Crowley (24:26)
You

In total,

I don't.

Colin  (24:36)
946,000 jobs year to date have been cut, which is the highest amount since 2020. And then before that, it's the fifth largest annual layoff ever recorded ⁓ in any year. The number one sector, actually four layoffs, everybody thinks is tech, but it's actually government, which probably isn't that surprising given everything that happened earlier this year. To your point though,

Wheeler Crowley (24:48)
Hmm.

Mm-hmm.

Yeah.

Colin  (25:00)
The, and you showed a chart a few months back that I thought was very interesting. If you have a college degree, the jobs that you're competing for are the most difficult to get. And you getting a college degree doesn't help you get a job because the jobs you're competing for, you're competing against with everybody else that has a college degree versus the blue collar kind of jobs, the trade school jobs.

those aren't nearly as competitive and actually the compensation is quite similar in a lot of ways. And then in addition to that, there is one sector that is constantly adding hires right now and cannot hire enough people and is having the highest amount of hires ever recorded in history, which is healthcare. I'm not saying you should go into healthcare, but there's a huge shortage of healthcare workers at the moment and they're trying to hire for it.

It is an interesting point though that is a college degree actually helping you or is it hurting you in some ways?

Wheeler Crowley (25:57)
I I think I saw your note about the healthcare jobs and you know, it's funny because I'm in a situation where I've been looking at some facilities for my mom and there's a striking difference in the quality of care that is offered at some of these facilities and the quality of the people who are providing that care in terms of their ability and knowledge and

Colin  (26:17)
Yep.

Wheeler Crowley (26:19)
I guess their personalities, right? Their bedside manner. I'm concerned because that aspect, feel like it's a very, it's not a thankless job, but it can be really challenging. And it doesn't seem like that's, if all these jobs that are available are in that area of healthcare, I mean, are people going to go there because they need to go there?

Colin  (26:34)
Extremely.

Wheeler Crowley (26:46)
Or maybe we're gonna be able to find more icky guy and taking care of the elders, right? Like maybe that's something that's gonna be more rewarding in some

Colin  (26:56)
I guess it depends on who falls into the job and where. And that's kind of the tough part. Ultimately, there have always been sectors that have expanded and contracted. I think tech and AI are the biggest adopters. Well, tech is the biggest adopter of AI. So ultimately, that's probably the market that's gonna be shaken up the most. And if you look at these major layoffs, it's certainly the companies that are employing AI the most in their day-to-day work.

You i'm sure they'll expand in other areas of their company in the future but it's an interesting question of a whether or not the education is actually going to play a massive role in getting you a great job moving forward in the future and then be how ⁓ is going to impact a lot of the roles we see right now and whether or not those are gonna go away or where people are going to go and i think it's gonna be a big shake up over the next few years.

And certainly some sectors will benefit from it in terms of hiring and others will probably contract because of it. You see the major companies that are the quickest to adopt tech to say it's efficient or the major, you know, magnificent seven. But then on top of that too, you have a lot of other companies that just like what you said earlier, who overstaffed after COVID and are now saying we're having to pare that back. It's tough to say because I think everyone's a little bit different.

in terms of why they're letting people go, but it does seem to be the trend.

Wheeler Crowley (28:17)
If these companies overstaffed, maybe that means, and look, I know the unemployment data is not something we can really put a lot of stock behind, if these companies overstaffed, maybe the market without that would have been the job market, mean, would have been weaker, would have been messier. And maybe we're kind of pulling off that.

that veil, we're unveiling a bigger issue there. I think that this has, this is going to be the long-term topic, right? This is what we're all going to be coming back to is like the impact, I think, of AI on the job market and all of the second derivatives and unintended consequences that you and I like to point out. We've been talking about AI since the very beginning of this podcast and how it might dislocate some of these jobs. And now we're seeing that

play out. And I think it's going to have a bigger impact on some areas of the workforce that have traditionally and historically struggled. feel like we were, I was listening back to our conversation with Jess with a 996 and you'd brought up that Charlie Kirk quote. And Jess felt, I think rightly so, like that was a traditionalist point of view, basically saying, don't rush to get to have a career, start a family first.

Colin  (29:22)
Mm-hmm.

Wheeler Crowley (29:31)
We all know that after you start a family, if you're a woman, it's harder to break into that workforce and achieve those goals and climb that mountain. And I think that we might, if you're gonna see fewer jobs available, I feel like it's gonna impact women and minorities more than it will be the middle-class white guys like us, even if we are bald, although you can maybe grow your hair back. That's an advantage for you.

Colin  (29:51)
I'm gonna try.

That's a topic for another conversation. Yeah, no, I mean, that's certainly true. What I was going to just kind of talk about was the fact that the majority of the workforce is older at the moment and they are aging out and there's less people coming into the workforce. So there is that side of it too. A lot of the people that are getting laid off are older, so to speak, and they are getting some packages. know all like the...

Wheeler Crowley (30:05)
Mm-hmm, yeah.

Colin  (30:17)
A few clients that we have who are working for the government right now, the ones who got laid off, late 50s, early 60s, they got great packages and they're done. They were planning on retiring. They got their pensions and it's all well and good. So I do think that that's a big majority of it too. And I don't know the stats off the top of my head, but I'm fairly certain there's probably less people entering the workforce as there is exiting with the baby boomer population. And that is something that will probably play out over the next few years too.

is the sense that, if we have less people coming into the workforce than are there existing, we'll need AI and we'll need some sort of efficiencies to make sure that companies are still able to grow and run with less options for employees as well. So that was one of my thoughts in regards to that too.

Wheeler Crowley (31:00)
Well, I mean, yes, we have an aging population and yes, some of them are choosing to retire early. And they've been supported by a pretty healthy stock market that has bolstered their savings that they can live off of, which is great. Assuming they have savings. I think there are other people like my brother-in-law who work in the government and in his case, continue to work and not get paid and hopefully get back pay, but

Colin  (31:13)
assuming they have savings.

Wheeler Crowley (31:25)
Certainly no guarantees of that at this point. And I think, why would you ever work for the government, in a role that can just be like, yeah, we're not going to pay. Like, imagine if we just said, hey, Tory, you know, I don't know if we are going to pay you for the next couple of weeks. You'll still come in though.

Colin  (31:31)
you

We're

just gonna close for a month. we're not gonna pay you because we're off. I would second guess working for the government if that was the arrangement. So yeah, man, ⁓ it's messed up. I don't really know what's gonna happen with the job market, obviously moving forward in the future.

Wheeler Crowley (31:42)
Yeah, no, no, we're gonna work. You need to come in and do your job, but we're not gonna pay you

Colin  (32:03)
I do think we'll probably see continued layoffs moving forward. Certainly all signs point to that because companies seem pretty keen to cut expenses. A lot of them are saying that they're overstaffed as it is. You have more efficiencies coming in with AI. So we'll see how it all shakes up. But, you know, so far this year, you know, there have been some good things that have happened for people like the markets going up.

You do have rates starting to come down. Your mortgage rate right now dropped to 6.19. We have clients getting mortgages in the high fives now, which is good. It's finally starting to turn into a buyer's market, so that's helping people get housing. So there are good things happening, but the job market is one that is a little concerning.

Wheeler Crowley (32:42)
Yeah, and we shouldn't go without pointing out that inflation has cooled, right? And that is a positive. It's cooled month over month. It's cooled year over year. I think the job market, essentially, my hope is that things morph, you know, and how we want to spend our time and how we get rewarded for how we spend that time can be improved.

And maybe that person to person connectivity that we've talked about, maybe that's something that does play out as something that gets more, I don't know, respect is the right word, but more of a positive point of view applied to it. But I do think that we have to, at this point in the year, recognize the stock market for what it is. there are some clients, I was talking to a client yesterday and I said, here's where we are.

pretty good for the next couple of months. You have some required minimum distributions to take out next year because they're starting, they're hitting that point now where they have RMDs. And I was talking to somebody else, I'm like, you know, when I first started this job, your RMD age was like 72 and then 75. then it's 70, like it's, where's it? Yeah, it used to be 70, right? But, you know, I said, we can either look at this and say, hey, it's been a great year. We can take off some risk or.

Colin  (33:44)
Yeah. Well, it used to be 70. Yeah, like way, way back.

Wheeler Crowley (33:57)
because of probability, we could continue to it out a little bit further and expect that we're more than likely to go higher from here. Doesn't mean that we will, or we can kinda just cash out like some of our other clients wanna do and say, oh, we're good. We're done. And I don't know what the right answer is.

Colin  (34:12)
Made it. Yeah, it's

you don't know what the right answer is. mean, timing the markets, never the right thing. Timing the markets, the right thing. So, you know, with that being said, you're typically always going to benefit from a longer time horizon. Morgan Housel was talking about this the other day. I loved this quote. I it was so good. He said, do you know what success means as an investor? And the guy who was interviewing him was like,

Wheeler Crowley (34:23)
Mm-hmm.

Colin  (34:38)
No, what does that mean? He goes, it's losing your password to your account and forgetting about it. And he was just like, if you don't need money, and if you're not so concerned about it, where you can forget about your password, because you know the market's gonna take care of itself for an extended period of time, he was like, if you have duration, that's success. And I thought that was a very interesting quote. To go back quick on the AI thing and the jobs and all of that other stuff, to echo what...

your hopes were, my hopes were that ultimately people are leaving the workforce. Hopefully they're doing it on their own accord and they have the ability to retire versus obviously getting laid off. That's not great. But you know, if we go back and you've brought this up before too, you know, the average work week in the 1920s was 50 hours for your average person. And then, you know, basically post-World War II, it dropped to a 40 hour work week.

And then the early 2000s, it was mid 30s. And now in the late 20 mid to late 2020s, know, the average work week is less than 33 hours for the average person. So our hope is hopefully that AI can improve quality of life, whether or not it will. We'll see. Bye. It's been an interesting year.

Wheeler Crowley (35:44)
I

don't believe that data. What is that data? No, I cannot believe that the average work week, I never said it was 33 hours for a work week. ⁓

Colin  (35:51)
You brought this up earlier.

Average

work week for the, I actually do believe this. I do believe that the average work week for most of the people that I know and talk to who are in tech sales, med sales, who are in coding, who are like any sort of, well certainly any government job right now is probably not going in for a lot of them unless you're a needed employee. But with that being said, I do think the amount of actual work someone has, not the amount of time in the office, but the amount of actual work they have in the office now is certainly a lot less than what it used to be.

Wheeler Crowley (36:25)
I see what you're saying. So you're saying time wasted in the office basically. Like, hey, right now I'm just like on Amazon on Prime Day or I'm checking Twitter or whatever it might be that somebody's, I guess they're probably not taking Instagram. Is that what you youngins use? ⁓ I think if you're saying that in terms of productivity or like time actually working, maybe that's gone down. I can see that. But I think that ⁓

Colin  (36:40)
I guess so.

Wheeler Crowley (36:50)
You know, there might be some aspect of this that is at a peak. And if you feel like you're in tech sales and, you know, you are working 30 hours a week of real work and getting paid pretty well for that, I think those are the jobs that are going to be replaced first. AI is working on the other side of it. Like, you know, there's parts of this country or not this country necessarily, but other countries.

Colin  (36:56)
Okay. Okay.

Wheeler Crowley (37:18)
where AI just monitors people all day and reminds them to work or prompts them to get back to work if they take a break, et cetera. And those are the people like in India that are getting paid very poorly. So it can certainly hurt the, I guess that's blue collar work, right? I don't know, man. I feel like we've got to change our stance on what work is. And I think like when I look at my 11 year old, I feel like she's got time to figure this out.

I feel like we have some years ahead of us where we're gonna see this AI transition and transformation and figure out what her life is going to be. And Jess is already talking about this. Actually, she's talking about this at our daughter's school, designing your life, not your career. Did you ever have this thing where it's like, hey, you take this survey and it tells you what you're gonna be when you grow up?

Colin  (38:04)
No but i've been talking about this with caley for like ten years like designing this is a whole reason why she went to pay schools cuz i was just like why do wanna be a doctor. I was just like is that the life you actually wanna have like don't choose your career based off of income choose your career based off of what you actually want your life to look like.

Wheeler Crowley (38:13)
Right.

Yeah, I think when you start young and you know, 10 years ago, Kaylee was pretty young, but I think if you start doing that young and like our daughter, for example, you have room to make choices that aren't based on a different thought pattern, right? I feel like what's really tough are people who are maybe in their, you know, early thirties, for example, and they're facing this evolving workplace.

and they've made some decisions on their housing or their lifestyle or whatever that are gonna be hard to reverse. Yeah, exactly. I was listening to Morgan Housel the other day as well. He said something that I thought was interesting and made me think of you. He and his wife, they have two young kids and they were traveling and their travels was just, it was just miserable, right? They're like fitting into hotel rooms and like the kids are not good travelers and they get cranky and whatever.

Colin  (38:52)
Adjust.

Wheeler Crowley (39:13)
And Morgan's like, maybe this is just not the stage of our life where we travel. And I think when you can look at that and say, okay, we thought we were gonna do this, we can readjust, we can pivot, we can do something else, that ability to pivot's really important. And I wanna make sure that people develop that ability to pivot and not get stuck emotionally or maybe socially in different avenues and different paths.

Colin  (39:37)
I was talking to a mutual friend of ours yesterday and we were having coffee and his wife is in the healthcare sector and she's in a really tough sector of healthcare where she's an oncology and it's I'll say a really tough field in terms of sustainability consistently giving poor news all the time and you're having to basically be an emotional support system extremely stoic.

Wheeler Crowley (39:56)
Mm.

Colin  (40:00)
And my sister's in the same sector and it's very, very difficult and it really drains on you mentally. And she was saying that basically she would like to pivot into another area, but she's sunk so much time, energy and money into getting into this field. And I look at my sister, right? Like she's been doing this for 14 years. You know, she's given up her whole life to become a surgeon and do all this stuff and not to mention move around the entire country. So with that being said,

Wheeler Crowley (40:06)
Yeah.

Colin  (40:28)
She's now thinking about doing a career pivot and just the thought of doing something else is exciting her and just because you spent so much time doing one thing for so long doesn't mean that you can't do something else later on. And I think people underestimate how much time they sometimes have to do something. I know certainly no one knows when they're going to hit the bus, but if you think about retirement, right?

If you are a wealthy individual with money set aside to basically afford decent healthcare, which I would say is the majority of our listeners, then your odds of getting to 90 are very high in a developed country, certainly the US. So with that being said, if you're retiring at 60, you have 30 years of retirement.

And if you're in your thirties now and are doing a career pivot, you're not even halfway through your career. You probably broke into your career in your early twenties. You're actually basically a third of the way through it. So you still have two thirds of your career left to do something else. but it's a good point.

Wheeler Crowley (41:27)
think it's really good to look at that type of job and think about how AI could augment it. That draining aspect of delivering bad news all day, maybe there's a technology that could deliver the bad news for you. Or maybe that would be dehumanizing the experience and we need people to be there to...

Colin  (41:45)
Yeah.

Wheeler Crowley (41:50)
to deliver the bad news. don't know. mother-in-law was a social worker and the stories that she shared, it was just exhausting to listen to. can't even imagine what it was to live through. I think if you had some robot or some AI doing her job, it would have been worse.

I think you needed somebody like her with her ability to empathize and care and do the right thing and keep a good head on her shoulders. I know that AI is supposedly good at empathy and caring, but I don't want an AI hug. I just want a real world hug.

Colin  (42:31)
Did you ever see the movie Elysium with Matt Damon?

Wheeler Crowley (42:34)
yeah, is that the one where he got like, had like augmented skeletons or something like that?

Colin  (42:38)
Yes, yeah,

he's in this like the world basically, the world has become a giant factory and all of the super wealthy people have moved off of the earth into this like planetary system that's beautiful, completely relevant, not a particularly great movie, but there is this one sector where basically he was exposed to too much radiation and he's gonna die in like two weeks. And he ends up going to the hospital and in the hospital there's a robot and it's like an AI robot.

Wheeler Crowley (42:47)
Right? Yeah.

All right, yeah.

Colin  (43:04)
And he's just like, what's going on? And the robot was like, you are exposed to too much radiation. You have two weeks to die. Here are your pills. Goodbye. And just like, and that's it. That is like the exact opposite of what you want from your healthcare experience. So I think people know that. But you know, anyway, yeah, it was just an example.

Wheeler Crowley (43:10)
Yeah

Yeah. Yeah.

I do think that there are some things that AI can't do. When I was doing some of the podcast work yesterday, was doing the interview feature with ChatGPT and having to ask me questions. And every time I answered a question, they're like, that's a really thoughtful approach, or that's a great idea. And I'm like, am I this great? Yeah, exactly. Am I this wonderful, or are you just buttering me up?

Colin  (43:36)
Mm-hmm.

Talking to you like you're five.

It talks

to me like how I talk to my dog when he like when he like goes to the bathroom outside. Good job. You're such a good boy. Yeah, that's how it talks to you.

Wheeler Crowley (43:53)
yeah.

Good job. It's true. When

our cats like scratch the scratch pad, we're like, good boy, Mr. Marshmallow. And it's like, it's so dumb. It's true. Way, man, we all need a little pat on the head, Colin. And if you were here, I'd give you a pat on the head, but ⁓ I'll do a virtual pat on the head. Good job today. We'll catch up with everybody again soon.

Colin  (44:05)
Yeah, that's that's how they treat you. That's probably a good place to end it.

We do. Thank you. Likewise. Yes.

Likewise, likewise. And

we got November coming up, so stay tuned for that and like, subscribe and share with a friend.

Wheeler Crowley (44:29)
All right, thanks, Kong.

Colin  (44:30)
Talk soon, bye.