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Excess Returns

Excess Returns

A Investing and Business podcast

#38 in Investing · 🇸🇬 #41 in Investing · 🇧🇷
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About the show

Excess Returns is dedicated to making you a better long-term investor and making complex investing topics understandable. Join Jack Forehand, Justin Carbonneau and Matt Zeigler as they sit down with some of the most interesting names in finance to discuss topics like macroeconomics, value investing, factor investing, and more. Subscribe to learn along with us.

Newest episodes

Stock Investors Fear an AI Bubble. Bond Investors Fear Inflation. How Can You Diversify Without Selling Them?

56 min

Corey Hoffstein and Adam Butler explore why diversification is hard to stick with and how return stacking changes what investors can hold alongside stocks and bonds. When stocks keep climbing, a strategy that trails them for years can feel like a mistake. When inflation pushes stocks and bonds down together, the reason for owning something different gets easier to see. Drawing on their Return Stacked symposium, the two join Matt Zeigler to discuss which risks are worth adding to a portfolio. Corey explains why even a strategy with little connection to the stock market can lose money on the day stocks fall. Adam revisits 2008, when some hedge funds suspended withdrawals just as investors needed cash to rebalance. They use managed futures to show how return stacking works. An investor can keep the stock and bond exposure of a 60/40 portfolio and use futures to add another strategy. That introduces leverage and makes two questions especially important. What will the portfolio need to hold as collateral, and can the investor stay with the strategy through a long drawdown? Topics covered: - What Corey Hoffstein took from Cliff Asness’s early experience running AQR - Why an inflation shock can hurt stocks and bonds at the same time - How Adam Butler adds managed futures while keeping a portfolio’s stock and bond exposure - Why the same leverage can produce very different outcomes depending on the strategy added - The difference between low correlation and protection during a stock market crash - What went wrong when institutions paired liquid futures with illiquid hedge funds in 2008 - How holding both exposures in one fund changes collateral management and rebalancing - Why managed futures can fit alongside stocks, bonds or gold - How long a diversifier can disappoint before an investor gives up on it Return Stacked research https://www.returnstacked.com/ Return Stacked ETFs https://www.returnstackedetfs.com/ Seven Thoughts on Running Big Money for the Long-Term |...

Tech Is the Cheapest Since 2022. Walmart Is 46 Times Earnings. Where Is the Bubble?

1 hr 6 min

Chris Mayer and Robert Hagstrom explain how they decide whether a falling stock price has exposed a mistake or given them a chance to buy a business they already know well. Subscribe to the 100 Year Thinkers of Spotify⁠⁠⁠ ⁠⁠⁠Subscribe to the 100 Year Thinkers of Apple On 100 Year Thinkers, Matt Zeigler and Bogumil Baranowski ask both investors to put that judgment to work during a Nasdaq selloff. Robert starts with an unlikely pair: Nvidia and Walmart. What assumptions about growth and returns on capital would justify paying a higher earnings multiple for the retailer? Chris starts with free cash flow per share. He explains what he wants to know about a business before its stock drops 30% and he has to decide whether to buy more, hold on or sell. They give their winners the same scrutiny. Chris admits that a run of strong quarters can tempt him to spend all his research time on the companies that are struggling. Robert borrows a habit from Sherlock Holmes: look for the evidence that could overturn your favorite explanation. The conversation closes with a question for AI executives trying to win over a town that would host a data center. What does the community get in return for the power and water the facility will use? Topics covered: - Robert Hagstrom on why volatility rises when different investors start making the same trade - What the valuations of Nvidia and Walmart imply about their future earnings - Chris Mayer on free cash flow per share and Ben Graham’s voting machine and weighing machine - What readers of The Warren Buffett Way and 100 Baggers sometimes miss about their authors - How Robert Hagstrom uses detective work to test an investment thesis - Why Chris Mayer revisits companies that keep delivering strong results - What a concentrated portfolio asks of an investor and where indexing fits - How a watchlist helps both investors put a sharp price decline in context - When share buybacks make sense and what AI companies need to explain to local reside...

This $1.5 Trillion Manager Expects More Fed Hikes. So Why Is He Still Bullish?

1 hr 0 min

Mike Hunstad, president of Northern Trust Asset Management, estimates that AI accounts for more than half the risk in the S&P 500. For an investor who sees real promise in AI, that poses a practical question. How much of the portfolio should depend on being right about it? Hunstad joins Jack Forehand and Justin Carbonneau to explain where he expects the payoff from AI to show up first. A company that uses AI to do the same work at a lower cost could see its margins rise well before the gains show up in GDP. He also explains how the stock market can move the economy in the other direction. If wealthy households have been spending some of their stock gains, a 20% equity decline could change what they buy. The conversation turns to what investors actually own. Hunstad uses the changing makeup of the Russell 1000 Value Index to show how a value fund can carry more technology exposure than its name suggests. He also shares the question he would ask an active manager after hearing their best stock picks. Which stocks did you underweight to pay for those bets, and do you have just as much conviction in those decisions? Topics covered: - What Treasury yields tell Mike Hunstad about inflation and the Fed’s choices - Why profit margins are his first test of whether AI spending is paying off - How the spending habits of wealthy households can turn a stock market decline into an economic slowdown - Where quality, value and low-volatility stocks fit in a portfolio with a large AI exposure - How much stock actually becomes available to investors when a large private company goes public - Why price-to-book can miss value in businesses built on intangible assets - How tracking a company’s suppliers, customers and peers changes the way investors measure momentum - When a factor looks cheap and why timing a shift into it is difficult - How the stocks a manager leaves out can overwhelm the gains from the ones they pick Chapters: 00:00 What stock prices and economic headlines are sa...

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All episodes

The newest 50 of 593 episodes

Stock Investors Fear an AI Bubble. Bond Investors Fear Inflation. How Can You Diversify Without Selling Them?

56 min

Corey Hoffstein and Adam Butler explore why diversification is hard to stick with and how return stacking changes what investors can hold alongside stocks and bonds. When stocks keep climbing, a strategy that trails them for years can feel like a mistake. When inflation pushes stocks and bonds down together, the reason for owning something different gets easier to see. Drawing on their Return Stacked symposium, the two join Matt Zeigler to discuss which risks are worth adding to a portfolio. Corey explains why even a strategy with little connection to the stock market can lose money on the day stocks fall. Adam revisits 2008, when some hedge funds suspended withdrawals just as investors needed cash to rebalance. They use managed futures to show how return stacking works. An investor can keep the stock and bond exposure of a 60/40 portfolio and use futures to add another strategy. That introduces leverage and makes two questions especially important. What will the portfolio need to hold as collateral, and can the investor stay with the strategy through a long drawdown? Topics covered: - What Corey Hoffstein took from Cliff Asness’s early experience running AQR - Why an inflation shock can hurt stocks and bonds at the same time - How Adam Butler adds managed futures while keeping a portfolio’s stock and bond exposure - Why the same leverage can produce very different outcomes depending on the strategy added - The difference between low correlation and protection during a stock market crash - What went wrong when institutions paired liquid futures with illiquid hedge funds in 2008 - How holding both exposures in one fund changes collateral management and rebalancing - Why managed futures can fit alongside stocks, bonds or gold - How long a diversifier can disappoint before an investor gives up on it Return Stacked research https://www.returnstacked.com/ Return Stacked ETFs https://www.returnstackedetfs.com/ Seven Thoughts on Running Big Money for the Long-Term |...

Tech Is the Cheapest Since 2022. Walmart Is 46 Times Earnings. Where Is the Bubble?

1 hr 6 min

Chris Mayer and Robert Hagstrom explain how they decide whether a falling stock price has exposed a mistake or given them a chance to buy a business they already know well. Subscribe to the 100 Year Thinkers of Spotify⁠⁠⁠ ⁠⁠⁠Subscribe to the 100 Year Thinkers of Apple On 100 Year Thinkers, Matt Zeigler and Bogumil Baranowski ask both investors to put that judgment to work during a Nasdaq selloff. Robert starts with an unlikely pair: Nvidia and Walmart. What assumptions about growth and returns on capital would justify paying a higher earnings multiple for the retailer? Chris starts with free cash flow per share. He explains what he wants to know about a business before its stock drops 30% and he has to decide whether to buy more, hold on or sell. They give their winners the same scrutiny. Chris admits that a run of strong quarters can tempt him to spend all his research time on the companies that are struggling. Robert borrows a habit from Sherlock Holmes: look for the evidence that could overturn your favorite explanation. The conversation closes with a question for AI executives trying to win over a town that would host a data center. What does the community get in return for the power and water the facility will use? Topics covered: - Robert Hagstrom on why volatility rises when different investors start making the same trade - What the valuations of Nvidia and Walmart imply about their future earnings - Chris Mayer on free cash flow per share and Ben Graham’s voting machine and weighing machine - What readers of The Warren Buffett Way and 100 Baggers sometimes miss about their authors - How Robert Hagstrom uses detective work to test an investment thesis - Why Chris Mayer revisits companies that keep delivering strong results - What a concentrated portfolio asks of an investor and where indexing fits - How a watchlist helps both investors put a sharp price decline in context - When share buybacks make sense and what AI companies need to explain to local reside...

This $1.5 Trillion Manager Expects More Fed Hikes. So Why Is He Still Bullish?

1 hr 0 min

Mike Hunstad, president of Northern Trust Asset Management, estimates that AI accounts for more than half the risk in the S&P 500. For an investor who sees real promise in AI, that poses a practical question. How much of the portfolio should depend on being right about it? Hunstad joins Jack Forehand and Justin Carbonneau to explain where he expects the payoff from AI to show up first. A company that uses AI to do the same work at a lower cost could see its margins rise well before the gains show up in GDP. He also explains how the stock market can move the economy in the other direction. If wealthy households have been spending some of their stock gains, a 20% equity decline could change what they buy. The conversation turns to what investors actually own. Hunstad uses the changing makeup of the Russell 1000 Value Index to show how a value fund can carry more technology exposure than its name suggests. He also shares the question he would ask an active manager after hearing their best stock picks. Which stocks did you underweight to pay for those bets, and do you have just as much conviction in those decisions? Topics covered: - What Treasury yields tell Mike Hunstad about inflation and the Fed’s choices - Why profit margins are his first test of whether AI spending is paying off - How the spending habits of wealthy households can turn a stock market decline into an economic slowdown - Where quality, value and low-volatility stocks fit in a portfolio with a large AI exposure - How much stock actually becomes available to investors when a large private company goes public - Why price-to-book can miss value in businesses built on intangible assets - How tracking a company’s suppliers, customers and peers changes the way investors measure momentum - When a factor looks cheap and why timing a shift into it is difficult - How the stocks a manager leaves out can overwhelm the gains from the ones they pick Chapters: 00:00 What stock prices and economic headlines are sa...

Peter Boockvar on AI, the Wealth Effect and the Two-Speed Economy

1 hr 1 min

Peter Boockvar of OnePoint BFG Wealth Partners explains how AI demand can keep growing while the companies building data centers struggle to earn a return. CoreWeave has committed to years of lease payments. What happens if the price it can charge customers for computing power falls before those leases run out? The author of The Boock Report joins Matt Zeigler to trace who bears that risk. A lender, a chipmaker and an electrician building a data center all depend on the same project, but a slowdown reaches each of them differently. Boockvar draws on the history of the memory chip business to explain why a stock can look cheapest just as its earnings are peaking. They also look at the economy beyond AI. Boockvar compares what concert venues and hotel operators are hearing from customers, explains why reopening the Strait of Hormuz would still leave oil inventories to rebuild, and shares where he sees value in overseas stocks, healthcare and consumer staples. Topics covered: - How much hiring a data center supports during construction and after it opens - Why new memory chip supply matters to Micron shareholders even if demand keeps rising - How CoreWeave’s lease commitments and borrowing costs compare with IREN’s approach - Who could keep an existing data center running in a restructuring, and who loses orders if the next one never gets built - Why Peter Boockvar sees the Fed making smaller policy adjustments and watches the cost of financing AI projects - What sold-out concerts, travel bookings and hiring by industry reveal about the consumer - How depleted oil inventories could sustain demand for crude after shipping resumes - Where Peter Boockvar finds overlooked businesses outside the U.S. and in healthcare and consumer staples - What gold prices mean for miners’ margins and why refinancing matters for private credit Chapters: 00:00 How much of the economy depends on the AI buildout? 06:25 The workers who build data centers and the jobs that last 11:14 Micron...

Last Call | Breaking Down the Post Election Decline

1 hr 16 min

Brent Kochuba, Ben Hunt, Aahan Menon and Eric Pachman join Matt Zeigler and Jack Forehand on November’s Last Call to make sense of the post-election selloff and the pressures facing businesses and households. Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠ Brent Kochuba explains why the weakest AI cloud stocks caught his eye even while the Nasdaq was rallying. Ben Hunt argues the midterms changed what investors could take for granted about presidential power, with governors gaining a bigger say in where data centers get built. Aahan Menon traces how a decline in AI shares could reach the dinner table as households that grew wealthier on paper rethink their spending. Eric Pachman follows a different cost all the way to the grocery aisle. When diesel gets more expensive, a grocer has to decide how much of the freight bill to absorb and how much to pass on to shoppers. Topics covered: - Why Brent Kochuba watched the weakest AI cloud stocks for confirmation of the rally - How negative dealer gamma can amplify selling and why November options expiration matters - What Ben Hunt means by an election making the limits of presidential power “common knowledge” - Why governors, electricity bills and local jobs matter to the next data center permit - Why Aahan Menon sees little immediate change in federal spending after the midterms - How stock gains support consumer spending and data center investment feeds corporate profits - How Eric Pachman uses the Producer Price Index to see how many industries face unusual cost increases - Who borrowed oil from the Strategic Petroleum Reserve and what it will take to return those barrels Guest research and links: Brent Kochuba | SpotGamma https://spotgamma.com/ SpotGamma on X https://x.com/spotgamma Ben Hunt | Perscient https://www.perscient.com/ Epsilon Theory on X https://x.com/EpsilonTheory Aahan Menon | Prometheus Research https://www.prometheus-macro.com/ Aahan Menon on X https://x.com/Aaha...

Mike Green on Passive Flows, Market Concentration and What Could Change the Cycle

55 min

Mike Green explains how passive investing is reshaping stock prices, market concentration, and the way investors build portfolios. His argument: understanding which funds receive money—and how they allocate it—is increasingly essential to understanding the stocks those funds own. The founder of Tier1 Alpha Asset Management joins Matt Zeigler and Justin Carbonneau to connect retirement contributions, target-date funds, and index construction to the buying pressure behind the market's largest companies. He explains why he believes giant IPOs benefit from index mechanics, why liquidity does not keep pace with market capitalization, and how fund flows may help explain the behavior of value, size, and momentum. Green also walks through the investment framework he is building at Tier1: tracking thousands of funds, estimating their impact on individual securities, and making small portfolio tilts to account for those flows. The conversation explores what could interrupt retirement-driven buying, where fundamental analysis still matters, and how his planned strategies incorporate managed futures for diversification. Topics covered: - Why Mike Green thinks fund selection is increasingly shaping security prices - Why low-float index inclusions can create demand for giant IPOs - Why giant IPOs and smaller offerings can face very different sources of demand - Retirement contributions, target-date allocations, and the employment catalyst that could change flows - How passive flows may help explain value, size, and momentum-factor behavior - Why liquidity does not grow in proportion to market capitalization - Tier1's approach to tracking fund flows and making small portfolio tilts - Where discounted cash flow analysis fits in a market shaped by mechanical buying - Tracking error, managed futures, and Tier1's planned portfolio strategies - What employment trends could mean for the retirement contributions supporting passive flows Chapters: 00:00 Mike Green on the election and...

Spending Is Up 7%. Paychecks Are Up 3%. What Happens When Stocks Stop Paying the Difference?

55 min

Bob Elliott and Aahan Menon examine how stock-market wealth is helping consumers spend faster than their paychecks grow—and what that means for corporate profits if stocks stop rising. Elliott, co-founder of Unlimited, and Menon, founder of Prometheus Research, join Matt Zeigler to connect household spending, AI investment, and the earnings expectations built into markets. They discuss where their growth outlooks differ, why persistent inflation complicates the Fed's choices, and how bonds can look attractive against stocks while still looking unattractive against cash. The conversation also explores whether AI is producing the economy-wide gains needed to justify its investment boom, how forward spending commitments could reverse, and why both guests distinguish those risks from a repeat of the 2008 credit crisis. Topics covered: - What the midterm election could change for fiscal policy and data-center construction - Oil and AI as the competing forces behind inflation and growth expectations - Bob Elliott's distinction between peak growth and peak pricing of growth - How household wealth and drawing down savings support consumer spending - Aahan Menon on wages, workforce participation, immigration, and demographics - Why both guests think central banks are reluctant to deliver tighter policy - Bonds versus stocks, bonds versus cash, and Aahan Menon's inflation-nowcast rule - Bob Elliott's test for AI: accelerating productivity and revenue beyond the technology sector - How business investment and household spending feed corporate profits - Why AI commitments could weaken spending and earnings without a systemic credit crisis Chapters: 00:00 Bob Elliott and Aahan Menon on the election 04:25 Oil, AI, and the market's growth expectations 09:25 Peak growth pricing and the consumer spending gap 15:45 Household wealth, wages, and the labor market 20:08 The Fed's response to persistent inflation 24:12 Bonds versus stocks and bonds versus cash 30:28 Inflation nowcasts and...

The Liquidity Cycle Has Turned | Michael Howell on What It Means for Investors

1 hr 0 min

Michael Howell of CrossBorder Capital explains why slowing global liquidity could challenge stocks even as AI earnings remain strong. His concern is a growing competition for funding: money is flowing into real-world investment just as a huge wave of existing debt needs refinancing. With Jack Forehand and Justin Carbonneau, Howell walks through his liquidity cycle, the role of collateral and repo markets, and why he believes government bonds deserve another look. He also discusses the difference between declining liquidity growth and an outright contraction, the risks of financing the AI buildout, and how China's debt problems could shape the longer-term outlook for gold. Topics covered: - How Michael Howell measures global liquidity as the financial system's capacity to provide funding - Why a strong real economy can compete with financial markets for money - The four phases of the liquidity cycle and the shift from speculation toward turbulence - Why bank reserves, Treasury issuance, and collateral volatility matter beyond the Fed's policy rate - How AI earnings have given technology stocks an unusual second wind late in the cycle - The debt maturity wall and why Michael Howell watches debt relative to liquidity - How refinancing stress can spread through interconnected balance sheets - The case for government bonds as liquidity tightens and economic growth slows - Why Michael Howell distinguishes US Treasury yields from Europe's fiscal pressures - China's debt burden, potential monetary expansion, and the implications for gold and Bitcoin Chapters: 00:00 Michael Howell on slowing global liquidity 04:29 Why Main Street competes with Wall Street for funding 09:12 The four phases of the liquidity cycle 14:03 Repo markets, collateral, and the role of central banks 18:15 Private credit creation and Fed-Treasury coordination 22:25 Asset allocation through the liquidity cycle 29:28 AI cyclicality and comparisons with past booms 33:35 The debt maturity wall and refina...

Seven Stocks Are 41% of the S&P | John Davi on Building Portfolios Beyond the Mag 7 Bet

57 min

John Davi of Astoria Investment Management explains how he builds diversified portfolios in a tech dominated market. With Jack Forehand and Justin Carbonneau, Davi walks through an alternative approach. He also explains why he sees echoes of the 1970s in today's inflation, what he watches in credit markets for signs of stress in the AI buildout, and where real assets fit alongside stocks and bonds. Topics covered: - Why John Davi trimmed Astoria's equity overweight without trying to call a market top - What the 10-year Treasury yield looks like relative to nominal economic growth - How SPY and QQQ overlap, and what a conventional equal-weight index changes besides stock weights - The question facing the Magnificent Seven: can earnings grow fast enough to justify AI spending? - Where John Davi agrees with the passive investing feedback-loop argument and where it falls short - What goes in the 20% when a 60/40 portfolio becomes 50% stocks, 30% bonds, and 20% diversifiers - Why John Davi favors AI adopters and watches credit default swaps on the companies funding the buildout - How Astoria screens for quality at a reasonable price using profitability, dividends, and valuation - What trading floors taught John Davi about hedging before a drawdown Chapters: 00:00 John Davi on earnings, rates, and trimming equity risk 05:05 Is the 10-year Treasury yield high relative to growth? 10:16 Seven stocks and the changing risk inside the S&P 500 14:33 Diversifying around SPY and QQQ 20:02 Equal stock weights without a big tech underweight 24:46 Passive flows, prices, and buying the dip 30:04 Higher rates, the 60/40 portfolio, and real assets 37:08 From AI builders to companies using AI 42:40 Credit spreads and cracks in the AI trade 47:34 Adding a quality screen to growth stocks 55:12 Why John Davi hedges and resists chasing past winners Research discussed: Rates Hit Multi-Decade Highs. Will Growth and Earnings Keep the Rally Going? https://www.astoriaim.com/single-post/rates-h...

Chip Stocks Look Cheap. AI Spending Is Surging. So Why Is Cameron Dawson Watching for Peak Earnings?

51 min

Cameron Dawson and Dave Nadig join Matt Zeigler to examine what could break the market's resilience, from AI earnings expectations to the wealth effect supporting consumer spending. A healthy economy and continued data center investment may not be enough to keep stock prices rising if profit margins and investor expectations reset. In this episode of Click Beta, Matt, Cameron and Dave debate what the two-year Treasury yield is signaling, how the AI buildout is changing demand for capital, and why semiconductor stocks can look cheap just as earnings approach a peak. They also discuss the possibility of a prolonged sideways market, practical approaches to rebalancing, and separating near-term cash needs from long-term investments. Then the surprise topics take a Halloween turn, with homemade costumes, strange family heirlooms, horror movies, and a very specific Creed halftime-show tribute. Topics covered: - Cameron Dawson's question: what would have to break for the Fed to deliver fewer hikes than markets expect? - The wealth effect, consumer spending, and the divide between the top and bottom of the K-shaped economy - Dave Nadig's concerns about AI financing, IPO supply, and who will absorb new stock issuance - Why a low semiconductor P/E ratio can reflect concerns about peak earnings - Micron, margin normalization, and the risk of extrapolating unusually strong profitability - How a resilient economy could coexist with falling technology stocks or a sideways index - Market rotation, defensive leadership, and the challenge of countertrend rallies - Rebalancing rules, timing luck, and planning for cash needs over the next 12 months - Distinguishing long-term legacy assets from money needed soon - Halloween costumes, family traditions, Rocky Horror, and cult-film recommendations Chapters: 00:00 Welcome to Click Beta: Limp Bizkit meets the Fed 05:30 What would have to break for the Fed to change course? 11:18 The K-shaped consumer and AI's demand for capital 16:44 Mor...

Tech is Selling Off. AI Debt Fears Are Rising. So Why Does a $4B Manager See a Reverse Bubble?

1 hr 2 min

Jay Hatfield of Infrastructure Capital Advisors makes the case for an AI "reverse bubble" and explains how earnings growth, interest rates, and valuation shape his market outlook. Rather than treating AI spending as proof of excess, he looks at contracts, financing costs, and the returns companies can earn on their investments. In this episode of Excess Returns, Jay joins Jack Forehand and Justin Carbonneau to discuss his S&P 500 scenarios, the debate over CoreWeave and AI infrastructure debt, and why he believes some technology stocks offer better value than perceived safe havens. He also challenges the Fed's inflation framework and explains how he combines earnings growth, dividend yield, catalysts, and individual-stock covered calls in his investment process. Topics covered: - How Jay Hatfield builds S&P 500 targets from earnings estimates and valuation multiples - Why Treasury yields matter to discounted cash flow valuations - CoreWeave, project financing, and the distinction between contracted demand and speculative construction - What compute prices and long-term contracts could reveal about AI bubble risk - Jay Hatfield's "reverse bubble" thesis and his comparisons of growth-adjusted stock valuations - His framework linking the 10-year Treasury yield to expected terminal Fed policy - Why he challenges the Fed's inflation target, shelter data, and use of PCE - Evaluating dividend payers with PEGY: price relative to earnings growth plus dividend yield - How reinvestment, corporate taxes, and returns on capital affect long-term compounding - Combining stock selection and catalysts with actively managed covered calls Infrastructure Capital Advisors: https://www.infracapfunds.com/ Jay Hatfield / InfraCap on X: https://x.com/JDHatfield_ICAP InfraCap's CPI-R analysis: https://www.infracapfunds.com/consumer-price-index-cpi-r Chapters: 00:00 Jay Hatfield's S&P 500 outlook and market scenarios 06:43 Treasury yields, growth assumptions, and valuation multiples 13:...

The S&P 500 Is Just 50 Stocks. The Nasdaq Is a 67% AI Bet. Kai Wu on What Else Is Hiding in Your Funds

1 hr 11 min

Kai Wu of Sparkline Capital shows how to uncover hidden AI exposure, overlapping ETF holdings, and unintended factor bets in your portfolio. Owning several funds can still leave you dependent on the same companies and the same AI spending cycle. In this episode of Excess Returns, Kai joins Matt Zeigler and Justin Carbonneau for a walkthrough of Sparkline Analytics. Using examples from the S&P 500, Nasdaq, emerging markets, and active funds, they examine what investors actually own beneath the fund labels. Kai explains his distinction between AI infrastructure, early adopters, and laggards, then demonstrates how factor analysis, intangible asset data, and a portfolio builder can help investors ask better questions about diversification and manager performance. Explore Sparkline Analytics: https://app.sparklinecapital.com/ Topics covered: How AI infrastructure exposure can overlap across the S&P 500, Nasdaq, and thematic AI fundsWhy Kai Wu distinguishes AI early adopters from infrastructure builders and laggardsHow rising capital expenditures can change the economics of formerly asset-light businessesWhy a fund's number of holdings can overstate its diversificationHow semiconductor exposure can connect emerging markets to the same AI tradeThe trade-off between reducing AI infrastructure exposure and increasing exposure to laggardsWhat ARKK illustrates about separating stock selection from factor headwindsWhy dividend, value, and low-volatility funds can have similar underlying exposuresHow patents, R&D, and human capital reveal assets traditional value metrics can missUsing fund comparisons and portfolio look-through tools to identify overlapping positionsChapters: 00:00 Sparkline Analytics and hidden AI exposure in the S&P 500 08:05 AI adopters, laggards, and multinational businesses 12:47 How index exposure changes as the AI cycle evolves 20:41 Does adding an AI fund diversify your portfolio? 25:44 Capital spending and effective portfolio concentration 30:14 Capital...

Dr. Daniel Crosby on Behaviorally Optimal Portfolios, Risk Composure and the Casino Myth

50 min

Daniel Crosby explains why investors can lose money in winning funds and how to build a portfolio they can actually hold. Picking the right investment is only part of the challenge; staying with it through discomfort is where behavior can overwhelm the plan. In this episode of Excess Returns, psychologist and Orion Chief Behavioral Officer Daniel Crosby joins Matt Zeigler to discuss the new paperback edition of The Behavioral Investor. Daniel shares the story of a fund that returned over 18% annually for a decade while its average investor lost money, then explains how safety, stability, and success portfolios can help align investment decisions with human psychology. They also explore gambling apps, the limits of risk questionnaires, social media feedback loops, and the human side of financial advice in an AI-driven world. Topics covered: - Why a fund's returns can look very different from the returns its investors earn - Building safety, stability, and success buckets around different financial needs - The differences between risk tolerance, risk capacity, and risk composure - Why knowing what to do does not guarantee doing it during a drawdown - Daniel Crosby's case for rules, diversification, and meaningful benchmark differences - How sports betting and prediction markets blur the distinction between investing and gambling - Why recent market experience can create unrealistic expectations about future returns - Education, environment, and encouragement as tools for changing investor behavior - How algorithms reinforce market biases and why excitement can signal a blind spot - Where AI can free financial advisors to spend more time on human relationships The Behavioral Investor - paperback edition:https://link.amazon/B00hgkHGG Daniel Crosby on X: https://x.com/danielcrosby Orion Behavioral Finance: https://orion.com/behavioral-finance Research discussed: The heat of the moment: the effect of sexual arousal on sexual decision making https://onlinelibrary.wiley...

Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip?

1 hr 4 min

Ted Mortonson of Baird explains why conviction in the AI boom doesn't mean buying every dip in tech stocks. He joins Jack Forehand and Justin Carbonneau to explain what experienced technology investors watch before putting money back to work—and why he still sees AI as the most powerful technology cycle of his career. The discussion moves from lessons of the dot-com bust to the companies Ted believes can capture AI's profits. They explore the importance of free cash flow, the financing demands of the data center buildout, and how large IPOs could force portfolio managers to sell existing holdings. Ted also shares his views on Apple, Meta, Nvidia, Tesla, and SpaceX, before closing with lessons from his service as a naval aviator. Topics covered: - Why Ted Mortonson's institutional clients aren't rushing to buy the semiconductor dip - What past tech cycles teach about taking profits, preserving capital, and waiting for selling to settle - Why Ted Mortonson sees a stronger long-term AI opportunity than the dot-com cycle - How geopolitics, energy costs, regulation, and investor sentiment shape technology investing - Why free cash flow, engineering resources, and manufacturing scale matter for AI beneficiaries - Financing the infrastructure buildout before enterprise adoption delivers returns - How large IPOs and circular financing can create risks for existing shareholders - Ted Mortonson's concerns about Apple and his outlook for Meta, Tesla, and SpaceX - Optical networking, advanced chip architectures, and high-bandwidth memory - Navy lessons on decisions under uncertainty, teamwork, and integrity Chapters: 00:00 Ted Mortonson on the risks facing tech investors 05:42 Market sentiment and why his clients aren't buying yet 12:00 Dot-com lessons and the danger of buying every dip 16:17 Why Ted sees a different AI cycle 23:06 Which companies could capture AI's profits? 27:38 Regulation and financing the AI buildout 35:10 Can the market absorb massive AI IPOs? 39:30 Ci...

He Asked 25 Finance Pros How They Invest Their Own Money: Brian Portnoy on What the Models Get Wrong

57 min

Brian Portnoy of Shaping Wealth explores why experienced investors build very different portfolios—and what that means for your own money. In How I Invest My Money Volume Two, 25 new contributors explain how they invest their personal wealth. Brian joins Matt Zeigler to discuss what those stories reveal about the gap between an optimal portfolio on paper and one you can actually live with. From large cash reserves and paid-off mortgages to investments in their own businesses, their choices reflect family needs, career risk, and priorities that a model can struggle to capture. The conversation also explores why low-cost index funds don't settle every investing question, how financial professionals think about bonds and alternatives, and what it means to compound relationships, knowledge, and opportunities alongside money. How I Invest My Money Volume Two: https://link.amazon/B0aVpNlfS Topics covered: Why knowing how markets work doesn't produce one right portfolio for everyoneWhat Ben Hunt and other contributors reveal about investing beyond a brokerage accountConnecting personal goals to asset allocation and risk toleranceWhy business ownership and household needs change the role of stocks and bondsWhy financial professionals may deliberately hold substantial cash reservesThe difference between spreadsheet optimization and a portfolio you can stick withPaying off a mortgage, feeling secure, and accepting the opportunity costThe complexity and illiquidity that can come with alternative investmentsMatt Zeigler's approach to compounding human, intellectual, social, and financial capitalBrian Portnoy's experience editing the book with his son Zach and sharing opportunities across generationsChapters: 00:00 How finance professionals invest their own money 05:35 Why investing extends beyond index funds 12:20 Connecting financial goals to portfolio choices 18:32 Why investors choose different stock and bond allocations 25:05 Cash reserves, career risk, and peace of mind 34...

Rob Arnott on the Hidden Costs of Passive Investing and the Real Winners From AI

1 hr 9 min

Rob Arnott, founder of Research Affiliates and chairman of Syzygy Asset Management, examines S&P 500 concentration and who could benefit most from AI. Owning today’s market leaders is not necessarily the same as owning tomorrow’s biggest investment winners. Subscribe on Spotify⁠⁠⁠⁠ ⁠⁠⁠⁠Subscribe on Apple In this episode of The Intangible Economy, Rob joins Kai Wu to explore how index construction shapes what investors own, why index additions can create hidden costs, and why he would consider buying a richly valued IPO before index funds have to buy it. The conversation also covers AI’s shift toward capital-intensive business models, GPU depreciation, intangible assets, and the importance of testing investment ideas rather than chasing impressive backtests. Topics covered: Why Rob Arnott sees a real AI revolution alongside risks in the prices of its leading stocksHow AI customers could capture value beyond the infrastructure buildersValuation changes versus fundamental growth in large and smaller companiesTesla, SpaceX, and the price pressures surrounding index inclusionHidden implementation costs that do not appear in an index fund’s expense ratioSelecting index members by business size rather than market valueAI financing, customer economics, and the risk of rapid hardware obsolescenceR&D, intangible assets, and what conventional book value can missCompetitive moats, leadership, and creating value for customersUsing AI in research while resisting overfitting and performance chasingResearch discussed: ⁠The Active Side of Indexing⁠ ⁠Fundamental Growth⁠ Learn more about ⁠Syzygy Asset Management⁠. Timestamps: 00:00 Rob Arnott on index concentration and AI’s future winners 12:13 What S&P 500 investors own and pay for 20:35 Why Rob Arnott would buy before index inclusion 25:41 Hidden index costs and fundamental membership rules30:37 Passive investing’s embedded decisions 36:40 Big Tech’s shift from asset light to capital intensive 42:41 GPU depreciation and economic obs...

The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen?

1 hr 3 min

Paisley Nardini of Tema ETFs explores AI investing, S&P 500 concentration, and how to build a portfolio around changing market risks. How can investors participate in powerful growth trends without making every holding a bet on the same outcome? In this episode of Excess Returns, Paisley joins Jack Forehand and Justin Carbonneau to discuss the risks beneath a resilient stock market, why tomorrow’s AI winners may differ from today’s leaders, and where she sees opportunities in power and infrastructure. They also explore private-company exposure inside ETFs, the role of thematic funds alongside a passive core, and why knowing what you own matters more than the number of holdings in your portfolio. Topics covered: What weak market breadth reveals beneath the headline indexesInterest rates, midterm elections, and the limits of historical market patternsPrediction markets as a source of information for investorsAI earnings expectations, debt financing, and the risk of slowing growthWhy bonds can provide income without reliably offsetting equity riskSmall-cap profitability and the importance of quality screensAI bottlenecks, photonics, power demand, and infrastructure investmentPrivate-company exposure in ETFs: liquidity, fees, and investment rationaleUsing thematic strategies as satellite positions around a passive corePortfolio concentration, investment humility, and staying flexibleLearn more about Tema ETFs. Follow Paisley Nardini on X. Timestamps: 00:00 Introduction and the risks beneath the market 04:37 Higher rates and the midterm election outlook 09:17 What investors can learn from prediction markets 13:36 AI growth expectations and changing market leadership 19:50 Portfolio risk, bonds, and faster market drawdowns 26:09 The AI bubble debate and small-cap quality 33:45 Who benefits from AI beyond the hyperscalers? 39:29 Energy infrastructure and putting AI to work 45:54 Private-company exposure inside ETFs 52:01 Where thematic investing fits in a portfolio 58:32 C...

We Asked T. Rowe Price's $17B International Manager Why Value is Winning Again — and What the S&P 500 Leaves Out

1 hr 2 min

Colin McQueen of T. Rowe Price explains what is changing for international value stocks and how he separates cheap businesses from opportunities that can improve. Higher interest rates, industrial investment, and corporate reform are reshaping the opportunity set, but his process still starts with free cash flow and the price investors pay for it. Colin joins Justin Carbonneau and Jack Forehand to discuss his evolution from deep value investing to a broader approach that includes quality businesses and restructuring opportunities. We explore why value struggled in the 2010s, what has changed outside the US, and how he uses valuation signals and diversification to manage risk. The conversation also covers AI suppliers and disruption, governance changes in Japan and Korea, opportunities and risks in China, and the case for financial stocks. Colin shares examples involving Samsung, Hitachi, and Rolls-Royce, along with his experiments using AI to challenge investment theses and recognize when conviction has become stubbornness. Topics covered: The lessons Colin McQueen learned from deep value, quality investing, and a difficult decade for valueHow higher rates and spending on infrastructure, defense, and power can change the opportunity setAI supply-chain opportunities and the uncertainty around future winners and losersValuing tangible and intangible businesses through normalized free cash flowUsing AI as an alternative voice when deciding whether an investment thesis is brokenThe US-international valuation gap, earnings growth, and diversification beyond techJapan's corporate reforms, Korea's value-up effort, and the importance of what is already priced inChina's contrarian appeal and the governance risks that accompany itHow restructuring, management changes, and better capital allocation can unlock valueBuilding a diversified portfolio and looking beyond quarterly earnings and market narratives T. Rowe Price International Value Fund https://www.troweprice.com/finan...

Tech Is Rolling Over. Yields Are Falling. Why Jim Paulsen is Watching the Walmart Recession Signal

1 hr 3 min

Jim Paulsen sees a risk of a stock market correction as financial conditions tighten and investors grow comfortable with tech's long run of leadership. But his warning does not require a recession or the end of the bull market. In this month's Jim Paulsen Show, Jim joins Justin Carbonneau and Jack Forehand to walk through the charts behind his cautious outlook. He explains how rising yields, oil prices, and a firmer dollar can affect the economy with a lag, why favorable seasonality may offer less support than investors expect, and how a slowdown in technology spending could challenge market leadership. We also explore the signals Jim sees in retail, housing, employment, and Walmart's relative performance. He closes with a possible path through a correction: slowing growth, lower inflation and yields, and a recovery that could give the bull market another run. His seven lagging sectors, the "Modest Seven," are central to that case. Topics covered: Why Jim Paulsen is cautious without making a recession or full bear-market callHis financial-conditions gauge and the risks of tightening into an already pressured economyHow restrictive conditions can weaken the November-to-April seasonal advantageThe delayed effects of bond yields, oil prices, and the dollar on economic surprisesTechnology spending relative to GDP and why slower growth could matter for tech stocksAI adoption, pricing, and the challenge of turning investment into profitsHow two decades of tech leadership may encourage complacency and crowded positioningThe divide between AI, inflation-assisted sectors, and the "Modest Seven"What sector performance, bond yields, and the Walmart Recession Signal suggest about growthWhy rate cuts may initially accompany falling stocks, and how a correction could set up another advanceFollow Jim Paulsen: Paulsen PerspectivesJim Paulsen on X Timestamps: 00:00 Jim Paulsen's outlook: correction risk without a bear-market call07:41 Restrictive conditions and the seasonal buying p...

AI Productivity Is Real. 83% of Stocks Are 10% Off Highs. Why Does Barry Ritholtz Like Bonds Again?

1 hr 6 min

Barry Ritholtz, Dave Nadig and Matt Zeigler explore why AI's real productivity gains don't automatically translate into an investing edge. From stock picking and market concentration to the financing behind the AI buildout, they separate enthusiasm for the technology from the economics of owning it. Subscribe to Click Beta on Spotify⁠⁠⁠ ⁠⁠⁠Subscribe to Click Beta on Apple Podcasts In this episode of Click Beta, Barry Ritholtz and Dave Nadig join Matt Zeigler for a conversation about where AI is already changing their work and where investors should ask harder questions. Barry shares how his team uses AI to analyze portfolio drift and identify clients who may need a rebalance. The discussion also covers client relationships, consumer pricing, creative side projects, and why Barry is increasingly enthusiastic about bonds without calling an end to the equity bull market. Topics covered: Why widely available AI tools may improve research without creating a lasting stock-picking advantageMarket breadth, mega-cap concentration, and the potential impact of large tech IPOsData center financing, credit quality, and the risk of rapid technological changeBarry Ritholtz's use of AI to analyze allocation drift, taxes, and household circumstancesHow better meeting records can strengthen the human side of financial adviceLearning to collaborate with AI and asking better questionsThe debate over dynamic pricing, consumer data, and whose interests AI agents serveBaseball tools, astronomy dashboards, music discovery, and the joy of experimentingDeciding which tasks to automate and which activities are worth doing yourselfBarry Ritholtz's case for bonds, municipal income, and avoiding the reach for yieldFind our guests: Barry Ritholtz — The Big Picture - https://ritholtz.com Ritholtz Wealth Management - https://www.ritholtzwealth.com Barry Ritholtz on X - https://x.com/Ritholtz Dave Nadig's work at etf.com - https://www.etf.com Dave Nadig on X - https://x.com/DaveNadig Timestamps: 00:...

The Winners That Get Away | Chris Davis and Robert Hagstrom on Holding Great Businesses

1 hr 14 min

Chris Davis and Robert Hagstrom explore the tension between holding great businesses and keeping a winning stock from becoming too much portfolio risk. Why do two investors who believe in letting winners compound also use 10% position limits? On this episode of 100 Year Thinkers, Chris Davis of Davis Funds and Robert Hagstrom of EquityCompass join Matt Zeigler and Bogumil Baranowski to discuss position sizing, selling mistakes, index concentration and the cost of growth. From Chris Davis’s experience selling Costco to the debate over who will capture AI’s economic benefits, they examine what it takes to hold a business through uncertainty without ignoring risk. Stay for Matt and Bogumil’s closing discussion of the lessons for investors. Subscribe to the 100 Year Thinkers of Spotify⁠⁠ ⁠⁠Subscribe to the 100 Year Thinkers of Apple Topics covered: Why selling a genuinely great business can be an investor’s most expensive mistakeHow client behavior and fund constraints influence 10% position limitsChris Davis’s concerns about index concentration, momentum and future IPO incentivesRobert Hagstrom on trimming positions as the margin of safety shrinksThe bull-case pre-mortem: asking what could make selling today a mistakeWhat Chris Davis missed about Costco’s growth and ability to adaptWhy identical earnings growth can produce different shareholder returnsWhether AI spending builds durable pricing power or delivers more value to usersHow customer trust and restraint on margins can strengthen competitive advantagesBalance sheets, circular financing and the humility required to size a position⁠Chris Davis / Davis Funds⁠ ⁠Robert Hagstrom / EquityCompass⁠ Chapters: 00:00 Holding great businesses and the case for position limits 06:47 Robert Hagstrom on concentration and client risk 12:40 Index concentration, momentum and IPO incentives 19:03 Trimming winners, margin of safety and the Costco lesson 30:09 Valuation, return on capital and the cost of growth36:01 Is AI’s capital...

Katie Stockton Still Sees a Bull Market. So Why Is Her ETF Only 50% in Stocks?

41 min

Katie Stockton of Fairlead Strategies explains why the S&P 500 can reach record highs while many individual stocks struggle. She sees the bull market as intact, but weaker participation raises an important question for diversified investors: is the pullback creating opportunity, or signaling a more lasting change? In this episode of Excess Returns, Katie Stockton joins Matt Zeigler and Justin Carbonneau to examine market breadth, rising Treasury yields, sector leadership and the signals that would change her outlook. She also explains why the Fairlead Tactical Sector ETF holds roughly half its assets in equities at the time of the conversation, and walks through the charts for gold, oil and Bitcoin. Topics covered: Why narrow leadership can sustain the index while diversified portfolios lagThe difference between an overbought market and a downturn in momentumWhy weak breadth alone is not a reliable market-timing signalSmall-cap support levels and the difference between a relief rally and a lasting recoveryThe Treasury-yield breakout and credit spreads as a longer-term risk gaugeSector relative strength, technology leadership and international market concentrationHow the TACK ETF's rules-based approach produces more defensive positioningGold's role as a potential hedge despite a weakening price trendCrude oil's support and resistance levels and Katie Stockton's Bitcoin outlookThe BNAV ETF's tactical Bitcoin strategy and the risk signals to watch into year-endLearn more about Fairlead Strategies. Follow Katie Stockton on X. Chapters: 00:00 The bull market and weakening breadth 06:02 Narrow leadership and small-cap weakness 13:43 Treasury yields, breakouts and resistance 18:56 Credit spreads and sector leadership 24:53 TACK positioning, semiconductors and international stocks 30:22 Gold, oil and Bitcoin: reading the trends 35:30 Bitcoin indicators and the BNAV strategy 39:47 Credit, volatility and tech: the year-end risk watch Learn more about the Excess Returns podca...

Tom Maher on Small-Cap Investing, AI Infrastructure and Opportunities Beyond Big Tech

1 hr 5 min

Tom Maher of Hilton Capital Management explains what is changing for small-cap stocks as earnings improve and AI spending reaches beyond big tech. After years of justified large-cap leadership, he sees reasons to revisit smaller companies while remaining selective about business quality, financing needs and valuation. In this episode of Excess Returns, we explore the physical infrastructure behind AI, the case for diversifying beyond the largest stocks, and how Tom Maher finds businesses with improving fundamentals. We also discuss the effects of passive investing, opportunities in reshoring, and why knowing more about a company does not always lead to a better investment decision. Topics covered: Why stronger earnings helped justify large-cap leadership and what could change that balanceHow AI construction and equipment spending can benefit smaller industrial companiesWhy some small companies grow into large caps while others remain smallSelf-funding businesses versus companies that depend on outside capitalUnprofitable index constituents, private equity and the changing IPO marketHow interest rates affect financing costs, valuations and portfolio decisionsWhy ETF flows can move a stock independently of its business fundamentalsFinding improving businesses without mistaking a low valuation for an opportunityEvaluating management incentives, consistency and acquisition decisionsTom Maher's lessons on taking partial profits and reading unexpected stock-price reactionsLearn more about Hilton Capital Management. Chapters: 00:00 Tom Maher's outlook: earnings, valuations and risk 05:26 Small-cap earnings and AI infrastructure spending 11:41 Defining small caps and why some companies stay small 16:45 Active management and business quality 22:03 Small-cap index quality and companies staying private 27:15 Combining stock selection with a macro view 32:58 Higher interest rates and portfolio decisions 37:04 Passive investing and ETF-driven stock moves 41:33 Finding stocks wit...

Ed Yardeni Still Sees S&P 10,000 by 2029. So Why Is He Getting More Cautious?

59 min

Ed Yardeni of Yardeni Research explains why he still sees the S&P 500 reaching 10,000 by 2029, even as higher oil prices and bond yields make him more cautious near term. His destination hasn't changed, but the timetable has: he has pushed his 8,400 target to mid-2027 while retaining his Roaring 2020s outlook. In this conversation with Justin Carbonneau and Jack Forehand, Ed distinguishes an earnings-led bull market from a speculative melt-up, explains why retiring baby boomers keep spending, and makes the case for AI's benefits spreading beyond the Magnificent Seven. He also weighs the return of the bond vigilantes, diesel's inflation impact, global diversification and the risks that could challenge his optimistic base case. Topics covered: Ed Yardeni's FEMO: fabulous earnings momentum versus fear of missing outWhy strong earnings can support stocks even as valuation multiples fallThe assumptions behind Ed Yardeni's S&P 500 target of 10,000 by 2029Retiree wealth, consumer spending and Ed Yardeni's G-shaped economyAI, productivity and data as a fourth factor of productionWhy Ed Yardeni favors the “impressive 493” as potential AI beneficiariesCloud revenue, compute demand and the returns on AI capital spendingBond vigilantes, fiscal deficits and the difference between growth-driven yields and a debt crisisHow diesel costs could feed into core inflationGlobal diversification and the bond market's role in guiding Fed policy Chapters: 00:00 Ed Yardeni's bull case and near-term caution 04:26 The Roaring 2020s and retiree spending 08:53 Technology and the productivity thesis 13:06 AI, economic growth and data as a resource 18:22 Why the economy is more than AI spending 24:10 AI returns and the impressive 493 29:48 Valuations, S&P 10,000 and rising bond yields 38:42 Government debt and demand for Treasuries 43:34 Diesel inflation and global diversification 47:41 Fed policy and signals from the bond market 51:55 Yardeni Research's process and tools 56:19 Why Ed Yardeni fav...

The 10-Year Hit a 24-Year High. Nobody Is Buying Puts. Are You Watching the Wrong Market?

56 min

Andy Constan, Brent Kochuba and Eric Pachman examine rising bond yields, options positioning and the inflation risks facing stocks. What happens if the rate relief traders are betting on never arrives? On this month's Last Call, Jack Forehand and Matt Zeigler connect three perspectives on the market. Andy Constan explains why stronger growth and debt supply can push yields higher without signaling a bond crisis. Brent Kochuba examines options flows that suggest traders are still leaning toward a rebound. Eric Pachman traces the path from refinery constraints and diesel shortages to freight costs and consumer inflation. Jack and Matt close with the investment implications of AI spending, efficiency and adoption. Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠ Topics covered: Andy Constan on growth, AI capital spending and the supply of debtWhy Andy Constan sees more attractive bonds without calling for a recessionHow higher yields can constrain stock returns even when growth remains strongBrent Kochuba on bond volatility, calm equities and bets on falling yieldsWhy Brent Kochuba is watching both upside surprises and downside riskEric Pachman on crack spreads and why cheaper crude may not mean cheaper fuelHow diesel prices can flow through freight bills into CPIEric Pachman on wage inequality and what national averages missAI spending, productivity and the difference between slower growth and contractionThe practical obstacles to bringing AI agents into everyday lifeChapters:00:00 Rising yields and the outlook for stocks05:26 Andy Constan: Growth, debt supply and higher yields12:01 Why bonds look more attractive after the selloff18:33 Brent Kochuba: Options flows and bets on rate relief23:21 Equity complacency and risks in both directions31:12 Eric Pachman: Diesel shortages, crack spreads and inflation40:06 Wage inequality and the limits of average inflation44:40 AI capital spending, productivity and investment returns50:34 AI adopti...

They Beat All US Stock Funds Since 2003 | Michael Baron on the AI Winners Investors Miss

1 hr 2 min

Michael Baron of Baron Capital explains his case for AI beneficiaries beyond the biggest tech stocks, including software companies the market fears will be disrupted. He joins Matt Zeigler and Justin Carbonneau to discuss how competitive advantages, management quality, and a long investment horizon shape the firm's growth portfolios. Baron Capital's co-president and portfolio manager walks through the firm's investments in Tesla and SpaceX, from vertical integration and autonomous driving to reusable rockets, Starlink, and the potential for AI infrastructure in space. He also explains why proprietary data may strengthen some software businesses, how the firm manages positions as winners grow, and what would make him sell. The conversation closes with lessons from Ron Baron on curiosity, primary research, and building conviction. Topics covered: Finding growth opportunities across technology, financial services, real estate, and consumer businessesWhy Michael Baron believes some apparent AI losers could become beneficiariesProprietary data and the investment cases for Shopify, Guidewire, FactSet, MSCI, and GartnerTesla's evolution, energy business, and the potential economics of autonomy and softwareSpaceX's reusable rockets, Starlink, and Michael Baron's vision for AI infrastructure in spaceValuing businesses over a long horizon and assessing reliance on key leadersLessons from Ron Baron and the importance of management relationships during market stressLetting winners run while managing concentration, leverage, and portfolio correlationsDistinguishing portfolio trims from selling when a competitive advantage deterioratesWhy Michael Baron believes AI will increase the importance of investment judgmentLearn more about Baron Capital: https://www.baroncapitalgroup.com/ Chapters: 00:00 Michael Baron on finding growth beyond technology 04:16 AI disruption and the opportunity in software 10:54 Tesla, Elon Musk, and vertical integration 18:33 Long-term valuation and key-pe...

The Game Was Rigged in Their Favor. 28% Went Bust Anyway | Kris Abdelmessih on How to Size Bets

50 min

How much of your portfolio does a good investment idea deserve? Kris Abdelmessih of Moontower joins Matt Zeigler to explain why having an edge is only part of the decision: position size can determine whether favorable odds translate into long-term growth or damaging losses. Through a coin-flipping experiment and everyday examples, Kris makes the Kelly Criterion accessible without a complicated derivation. The conversation explores the difference between expected returns and compounded wealth, why growth-maximizing bets can still be uncomfortable, and how uncertain probabilities make a case for betting less. From portfolio decisions to insurance and extended warranties, the goal is to build better intuition about how much risk to take. Topics covered: How a favorable coin-flipping game exposed costly mistakes in bet sizingWhy maximizing the expected payoff of one bet differs from maximizing long-term compounded growthHow oversized bets can undermine an otherwise profitable opportunityThe Kelly Criterion's three inputs: probability of winning, probability of losing, and payoffWhy a constant percentage of your bankroll means changing the dollar amount after wins and lossesHow different payoffs change the appropriate size of a betApplying the framework to hypothetical self-insurance and extended-warranty decisionsWhy full Kelly can involve substantial drawdowns, and the tradeoffs of fractional KellyWorking backward from a position size to the odds needed to justify itAllowing for uncertainty in your estimates and preserving capital for future opportunitiesThe essay behind this conversation: After this post you will be sizing bets in your head https://www.panoptica.com/after-this-post-you-will-be-sizing-bets-in-your-head/ Research discussed: Rational Decision-Making Under Uncertainty: Observed Betting Patterns on a Biased Coin https://arxiv.org/abs/1701.01427 Kris Abdelmessih's Moontower newsletter: https://moontower.substack.com/ Moontower: https://moontower.ai/ Kris A...

We Asked the Data Journalist Who Rebuilt the Jobs Report What the Headline Number Hides

1 hr 13 min

What are headline jobs and inflation numbers missing about the economy investors actually face? Eric Pachman of Data 4 The People joins Matt Zeigler to examine how a changing workforce, rising fuel costs, and differences in household spending could affect inflation, consumer demand, and corporate margins. Using interactive data tools, Eric looks beneath monthly payroll reports, maps changes in America's labor force, and traces how diesel prices can work their way into retail prices. He also shares a grocery-price study that challenged his own assumptions about CPI and explains how he is using AI to make rigorous data journalism more accessible. Topics covered: Why monthly jobs reports need context, including survey uncertainty and revisionsHow to spot unusual industry-level payroll changes and assess the quality of jobs addedWhat county-level labor force trends reveal about aging and rural AmericaEric Pachman's research on foreign-born workers and the limits of replacement assumptionsHow a shrinking supply of workers could create pressure on service pricesHow diesel costs flow through freight surcharges, retailer margins, and consumer pricesWhat to watch for in retailer earnings calls as companies weigh price increasesWhy household income, driving habits, and spending patterns change the experience of inflationWhat Eric Pachman's Kroger study found about CPI, the Thrifty Food Plan, and store brandsUsing AI to test assumptions and expand access to data journalismExplore Eric Pachman's research and interactive tools: https://www.data4thepeople.com/ The Men Who Vanished: Testing Labor Market Displacement https://www.data4thepeople.com/p/the-men-who-vanished How do the government's grocery prices stack up against the real ones? https://www.data4thepeople.com/p/kroger-shelf-vs-cpi-thrifty-food-plan/ Chapters: 00:00 Introduction and Data 4 The People's mission 09:20 Spotting unusual changes in the jobs data 18:27 Mapping America's changing labor force 27:00 Foreign-born w...

He Lost $157,000 in 3 Minutes | Jack Raines on the Lesson Winning Never Taught Him

59 min

Jack Raines turned $6,000 into roughly $400,000 trading SPACs, then lost $157,000 in three minutes after taking a very different bet. The author of Young Money joins Matt Zeigler to discuss what that experience taught him about investing risk, the urge to chase more, and the time a growing portfolio can cost you. The conversation follows Jack Raines from SPAC warrants and market narratives to a broader question: how do you allocate money, time, and risk to build a life you actually want? They explore the limits of a trading edge, why cheap stocks can get cheaper, and how debt, career choices, and status shape the decisions investors make beyond their portfolios. Young Money: A Field Guide to Wealth and Purpose in Your Twenties https://amzn.to/4AtUsDoJack Raines' Young Money newsletter https://www.youngmoney.co/ Jack Raines on X https://twitter.com/Jack_Raines Topics covered: How Jack Raines grew his Roth IRA through SPAC warrants and pre-merger common shares, and why those positions carried different risks.Why an edge in one corner of the market did not translate into a successful concentrated earnings bet.How a million-dollar target and constant account checking changed Jack Raines' relationship with money and time.What SEC filings, Discord research, and market narratives contributed to his trading process.Why Jack Raines bought Figma after questioning the market's AI narrative and speaking with designers.Applying portfolio thinking to careers, creative projects, and opportunities that change with each stage of life.Weighing retirement saving against other opportunities, and why Jack Raines treats expensive debt as a constraint on taking risks.Escaping the "someday" trap while giving long-term venture investments time to develop.Combining steady income and index funds with independent bets, while treating status as a tool rather than a goal.Why Jack Raines believes investors learn about risk through experience, with stakes they can afford to recover from.Timestamps...

The AI Gap Is Closing | Jason Hsu on China, Momentum Crashes and the S&P’s Seven-Stock Bet

55 min

Jason Hsu, founder and CIO of Rayliant Global Advisors and co-founder of Research Affiliates, joins Excess Returns to discuss the US-China AI race, the economics of AI spending, and what market concentration means for investors. We explore China's energy and open source advantages, opportunities in Chinese stocks, and how factor investing and machine learning can help build more diversified portfolios. Rayliant Global Advisors https://rayliant.com Rayliant on X https://twitter.com/rayliant Topics covered: Why Jason believes AI safety requires cooperation between the US and China How Chinese AI models are closing the gap with US developers China's electricity infrastructure and the competitive threat from open source AI Where AI profits could accrue across hardware, energy, models and applications How chip restrictions are encouraging China to develop domestic capabilities Why retail trading creates opportunities and challenges for factor investors in China Chinese technology companies, dividend-paying state enterprises and US-China trade The AI spending arms race and the concentration risk facing S&P 500 investors Momentum crashes, value cycles and how Rayliant uses machine learning to combine factors Why advisors' greatest contribution may be helping clients find meaning in their wealth Timestamps: 00:00 Jason Hsu on AI competition and safety 04:00 How close are Chinese AI models to the US? 08:25 China's energy advantage and open source economics 14:12 Who captures AI profits, and can China catch up in chips? 18:41 Chinese stocks, retail trading and speculation 24:01 China's overlooked opportunities and dividend stocks 28:05 US-China interdependence and the AI spending arms race 33:24 The AI concentration hiding in the S&P 500 37:25 Momentum crashes, value cycles and factor performance 41:54 Machine learning and building multifactor portfolios 48:46 Financial advisors, Jack Bogle and having enough 53:23 Why inefficient markets do not make alpha easy Learn more abou...

David Rosenberg on Why He Wants the Bonds Everyone Hates — and Where He's Hiding in Stocks

1 hr 1 min

David Rosenberg returns to Excess Returns to explain his bullish case for Treasury bonds, why he expects inflation and economic growth to slow, and the risks he sees in an AI-driven stock market. The Rosenberg Research founder joins Matt Zeigler to discuss consumer spending, Federal Reserve policy, gold, international stocks, and how he translates his economic outlook into a diversified portfolio. Recorded September 16, 2026, before the Federal Reserve's policy announcement. David Rosenberg on Twitter https://twitter.com/EconguyRosie Rosenberg Research https://www.rosenbergresearch.com/ Topics covered: Why Rosenberg believes markets have priced in too much Fed tightening and Treasury bonds offer an opportunity Why he views higher oil prices as a tax on consumers rather than evidence of sustained, broad-based inflation How slowing wage growth, falling savings, and the stock market wealth effect shape consumer spending How Treasury issuance changes and potential post-election fiscal gridlock could support bonds Why AI exposure extends beyond technology stocks into utilities, industrials, and other sectors Where he sees opportunities in healthcare, consumer staples, pipelines, European stocks, and Asia His model portfolio's allocation to equities, bonds, cash, and commodities How gold, central bank buying, and a bearish dollar outlook fit his investment thesis Why he is positioning for slower growth without making recession his base case What working with portfolio managers taught him about cutting losses and separating conviction from stubbornness Timestamps: 00:00 Rosenberg's portfolio approach and the Treasury opportunity 05:58 Why an oil shock can weaken consumer spending 10:52 Jobs, wages, and the stock market wealth effect 17:35 Fiscal stimulus, Treasury issuance, and the bond outlook 22:53 AI concentration risk beyond technology stocks 27:10 Why he owns European and Asian equities 31:16 Inside his 50% stocks, 30% bonds model portfolio 36:43 Betting against the i...

Franklin Templeton CEO Jenny Johnson on AI, Private Markets, and the Hidden Risks in Index Funds

55 min

Franklin Templeton CEO Jenny Johnson joins Matt Zeigler to explore how AI, blockchain tokenization, and private markets are reshaping investing and asset management. They discuss what these changes mean for individual investors, from personalized portfolios and access to private companies to the concentration risks hiding in passive index funds. Jenny also shares lessons from her journey from intern to CEO, why financial advisors still matter, and why starting early remains her most important investing lesson. Franklin Templeton https://www.franklintempleton.com Topics covered: Why AI could create new industries and why learning to use it matters for young professionals How Franklin Templeton uses AI agents and why investment decisions still require human judgment Building personalized portfolios around retirement, college savings, and other financial goals How blockchain, smart contracts, and instant settlement could reduce financial transaction costs Tokenized money market funds, digital wallets, and the obstacles to bringing ETFs on-chain Why companies stay private longer and what investors miss when they only own public stocks Private credit, illiquidity, and the trade-offs involved in expanding access to private markets How mega IPOs, AI spending, and changing index composition can increase portfolio concentration Balancing shareholders, employees, and clients while investing in a company's long-term future The value of financial advisors, staying invested, and giving compounding time to work Timestamps: 00:00 Jenny Johnson's leadership lessons and path from intern to CEO 06:41 AI job disruption and lessons from earlier technology revolutions 10:42 How young analysts use AI and where personalized investing is heading 15:44 Human judgment, AI agents, and the future of asset management 20:17 How tokenization could lower costs and expand financial access 24:39 Why blockchain adoption is slow and how tokenized ETFs work 29:58 Private company growth, investor access...

Jim Paulsen on the Weakening Economy, Tech Bear Market Risk and the Bull Market Built on Fear

1 hr 1 min

Jim Paulsen joins Jack Forehand and Matt Zeigler on the latest Jim Paulsen Show to explore why booming AI earnings may be masking a weakening U.S. economy, and what that means for stocks, bonds, and Federal Reserve policy. Using 27 charts, he examines stalled job creation, rising oil prices, growing reliance on debt to finance AI investment, and why he expects a sharper correction in technology than in the broader S&P 500. ⁠Subscribe to the Jim Paulsen Show on Spotify⁠⁠⁠⁠ ⁠⁠⁠⁠Subscribe to the Jim Paulsen Show on Apple Podcasts Topics covered: Why strong S&P 500 earnings hide a widening divide between technology, energy, and the remaining seven sectors. Why low unemployment claims may offer false comfort when job creation has stalled. Jim's job market misery index and what it suggests about the case for Fed easing. How business investment and employment have broken their historical relationship. Why weak real disposable income, low savings, and higher oil prices threaten consumer spending. How fading economic momentum could push Treasury yields lower despite renewed inflation fears. Why a shrinking wall of worry could remove an important source of support for stocks. What growth stock leadership, household purchasing power, and ISM services data reveal about market risk. How debt-funded AI spending and widening credit spreads change the risks facing technology companies. Why extreme stock outperformance versus bonds could matter for portfolio allocation. The difference between rising profits per worker and sustainable economic productivity. Why Jim expects a tech bear market but a more moderate correction in the broader S&P 500. Timestamps: 00:00 Why oil, rates, and tight policy worry Jim05:43 The three-way split hiding beneath strong earnings09:58 Why low jobless claims may be misleading16:18 When business investment stops creating jobs20:48 Can consumer spending outrun real income?26:01 How the wall of worry has supported stocks31:44 Investor complacency and a sh...

We Asked Fidelity's Ex-President What Made Peter Lynch Great — and Where Private Credit Risk Hides

1 hr 0 min

Former Fidelity president and MFS chairman Bob Pozen joins Excess Returns to discuss retirement investing, the risks in private credit, and why he favors a 90% stock and 10% cash portfolio for investors who can cover their living expenses without selling stocks. Drawing on decades in asset management, he shares lessons from Peter Lynch and Warren Buffett, explains why index funds are difficult to beat, and challenges conventional thinking about bonds, Social Security, and corporate earnings reporting. Bob Pozen's website https://www.bobpozen.com Follow Bob Pozen on Twitter https://x.com/Pozen Research discussed: Consequences of Mandatory Quarterly Reporting: The U.K. Experience https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2817120 Rating Without Market Discipline https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6859158 Giving Life to Private (Rated) Credit https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6857958 Topics covered: What investors misunderstand about Peter Lynch and how fund liquidity shaped his approach versus Warren Buffett's. Lessons from leading Fidelity and rebuilding investor trust at MFS after its trading scandal. Why fees, fund size, and market efficiency make large-cap index funds difficult to beat. Private equity in 401(k) plans, liquidity constraints, and the problem with instant valuation markups. How private credit ratings and affiliated investments can obscure risks on insurance company balance sheets. Pozen's proposals for Social Security reform and the consequences of postponing difficult decisions. How automatic IRA enrollment could expand retirement savings access for workers without employer plans. Why Pozen favors a 90/10 portfolio for certain investors and how spending needs and inheritance goals affect allocation. Why quarterly financial reporting and quarterly earnings guidance deserve different treatment. The behavioral cost of chasing rallies and selling downturns, plus Pozen's work on AI and personal productivity. Ti...

Everyone Hates Bonds. Why Two Bond Managers Say You're Hating the Wrong Ones

1 hr 5 min

John Kerschner and Michael Contopoulos of Janus Henderson join Matt Zeigler to explain why persistent inflation and higher interest rates call for a different approach to bond investing. They explore short-duration bonds, AAA CLOs, mortgage-backed securities and how investors can rethink the fixed income allocation in a 60/40 portfolio. The conversation covers why traditional bond benchmarks may deliver too much interest rate risk for their yield, how ETFs expand access to securitized credit, and why the AI buildout could add to inflation rather than solve it. High-Conviction Views: The time for short-duration bonds https://www.janushenderson.com/en-us/advisor/article/high-conviction-views-the-time-for-short-duration-bonds/ Janus Henderson Investors https://www.janushenderson.com/en-us/advisor/ Topics covered: Why deglobalization, fiscal spending and labor constraints could keep inflation and interest rates elevated How the Bloomberg US Aggregate Bond Index concentrates interest rate risk and leaves out large parts of the bond market How AAA CLOs work, why their coupons float, and why they are different from cash Why tight corporate credit spreads may offer insufficient compensation for the risks investors take The three jobs of fixed income: safety, income and insurance How duration determines whether rising rates can wipe out a bond portfolio's income Why bond ETF discounts can reflect price discovery when underlying bonds are not trading How Treasury borrowing and AI hyperscaler debt issuance affect bond supply and relative value Why AI capital spending, electricity demand, labor shortages and wealth effects can create inflation How to rebuild the bond allocation around securitized credit, agency mortgages and the risks in your equity portfolio Timestamps: 00:00 Rethinking bonds after years of disappointing returns 04:28 Why the forces behind the bond bull market have changed 10:09 The hidden interest rate risk in the Aggregate Bond Index 14:53 AAA CLO ETFs: Floa...

All-In on the S&P 500 Worked for 18 Years | Jared Dillian on Why It's Still Wrong

56 min

Jared Dillian joins Matt Zeigler to discuss The Awesome Portfolio, his approach to asset allocation built around 20% each in stocks, bonds, gold, cash, and real estate. They explore how diversification, annual rebalancing, and managing volatility can help investors reduce financial stress and build a portfolio they can stick with through bear markets. Jared explains his "life hedge" concept, challenges conventional wisdom about stock market drawdowns, and shares how losing half his net worth during the financial crisis shaped his investing philosophy. Buy The Awesome Portfolio Book https://amzn.to/3Tf3of7 Topics covered: Why Jared questions putting your entire life savings in the S&P 500 How the Awesome Portfolio differs from Harry Browne's Permanent Portfolio Including home equity when measuring your overall asset allocation Why volatility and frequent portfolio checking can lead to costly decisions The life hedge: protecting against your job and investments declining together Why Jared disagrees with Charlie Munger about tolerating large drawdowns Index concentration, changing correlations, and the limits of diversification The portfolio's historical backtests, including its losses in 2008 and 2022 Annual rebalancing, cash reserves, inflation protection, and cryptocurrency Managing FOMO and taking practical steps toward a less stressful retirement portfolio Timestamps: 00:00 Jared Dillian's case against an all-stock portfolio 06:33 The five equal allocations in the Awesome Portfolio 11:07 Why "never sell" can become a behavioral trap 15:26 The life hedge: when your paycheck and portfolio fall together 20:38 Risk-adjusted returns and S&P 500 concentration 24:49 Why rising interest rates hurt diversification in 2022 28:51 Backtested losses in 2008 and 2022 34:26 Combining home equity, retirement accounts, and savings 38:58 Cryptocurrency, portfolio distractions, and FOMO 44:31 The Death of Equities and lessons from past crashes 48:44 How diversification could have c...

Nvidia Is Betting on Its Customers. Gen Z Is Betting on Sports. Will It All End the Same Way?

55 min

Cameron Dawson and Dave Nadig join Matt Zeigler on Click Beta to explore how sports betting, leveraged ETFs and speculative behavior are blurring the line between gambling and investing. They also examine AI circular financing, hyperscaler cash flow and corporate disclosure, asking what investors might be missing beneath headline earnings. The conversation closes with baseball, music fandom and the challenge of learning from imperfect role models. Subscribe to Click Beta on Spotify⁠⁠ ⁠⁠Subscribe to Click Beta on Apple Podcasts Topics covered: Why sports betting is becoming a financial planning issue for Gen Z and wealthy families How overconfidence and confusion between skill and luck encourage speculative behavior Why rapid market recoveries may reinforce risk-taking instead of teaching caution How recurring gambling losses can quietly undermine savings and wealth accumulation The risks of placing gambling products alongside investments in brokerage apps Leveraged ETF innovation, hourly resets and competing approaches to investor protection AI circular financing, payment terms, leases and opaque special purpose vehicles How one-time investment gains can distort headline earnings and future growth comparisons Why less frequent corporate reporting could favor investors with greater resources Baseball, emo music, Nirvana merchandise and what makes a meaningful role model Timestamps: 00:00 Sports betting, ETFs and the gambling economy05:24 Financial planning after crypto and gambling wins10:57 Why slow gambling losses can be harder to recognize16:55 Betting inside brokerage apps and regulatory backlash21:03 Gambling budgets and the next wave of leveraged ETFs25:04 AI financial shenanigans and hyperscaler cash flow29:25 Who benefits from less corporate disclosure?34:24 Discovering new passions in adulthood: Westerns and baseball38:30 Hot Topic, Nirvana sweatpants and cultural gatekeeping43:17 Can band merchandise introduce a new generation to music?47:26 Keith Morris an...

Bearish Into November. Room to Run After: Why Dan Niles Is Watching Hyperscaler Credit Default Swaps

1 hr 0 min

Dan Niles joins Excess Returns to explain why he believes AI is a genuine industrial revolution and a bubble at the same time, with significant opportunity still ahead but growing risks in semiconductors, software, AI CapEx and credit markets. We discuss NVIDIA, OpenAI, Anthropic, China’s semiconductor push, data center politics, AI debt issuance, Fed policy and the downside protection framework Dan uses to navigate technology cycles. Dan Niles on X https://x.com/DanielTNiles Niles Investment Management https://www.nilesinvestmentmanagement.com Topics covered: Why AI can be both a transformational technology and an investment bubble The AI metrics Dan watches: token pricing, token growth, cloud revenue and operating margins What the Situational Awareness unwind showed about leverage, forced selling and semiconductor volatility Why hyperscaler AI revenue can accelerate even as free cash flow deteriorates How data center opposition, electricity constraints and politics could slow the AI buildout Where value may accrue across the AI stack and why Anthropic and Google could pressure OpenAI Why China’s memory chip expansion could bring semiconductor cyclicality back faster than investors expect How AI is reshaping software, including security, systems of record, gaming and usage-based pricing Why the shift from free cash flow to debt financing matters for AI CapEx, Treasury yields and credit markets Dan’s long-short investment process, Fed outlook, market risk framework and emphasis on downside protection Timestamps: 00:00 Intro 04:00 The signals Dan watches to know when the AI bubble is peaking 09:12 AI ROI, hyperscaler profits and the problem with negative free cash flow 14:19 Why data center politics could become a major risk to AI growth 21:28 Why semiconductors are still cyclical and China could change the supply picture 25:47 Why smart companies still get bubbles wrong and agentic AI could extend the cycle 30:43 Is software the next major casualty of AI disruption?...

The Fed Credibility Narrative Has Turned | Ben Hunt on AI, the Consumer and Financial Repression

51 min

Ben Hunt joins Matt Zeigler to explain why damaged Fed and Treasury credibility could matter just as four major risks converge across private credit, AI financing, oil and the consumer. They discuss financial repression, rising long-term rates, shadow banking and insurance risk, the AI CapEx growth engine, and why Hunt believes gold may benefit if policymakers keep trying to suppress the price of money. Subscribe on Spotify⁠ ⁠Subscribe on Apple Topics covered Why credibility is a teacup and why policy reputation is difficult to repair once it breaks How the Fed's July rate decision changed the market narrative around inflation credibility The Four Horsemen: insurance and shadow banking losses, capital crowding out, the Iran war and oil inflation, and a stretched consumer Why insurer-funded private credit could become a systemic risk if fraud and losses reach major institutions How government borrowing and AI data center financing could push long-term interest rates higher Why fading fiscal stimulus, depleted savings and higher energy costs leave the consumer vulnerable What financial repression means and how the Fed and Treasury could try to cap rates and prevent major losses Why AI investment may be the key source of US economic growth if consumer activity stalls How Perscient tracks narrative regimes, virality and shifts in common knowledge across markets Why gold can act as an inverse measure of trust in central banks and how Ben is positioning around the risks Timestamps 00:00 Intro: Credibility is a Teacup04:00 How the July Fed decision damaged inflation credibility08:21 The Four Horsemen that could threaten the financial system14:00 Oil inflation, the Iran war and a stretched consumer18:39 What financial repression means23:20 How the Fed and Treasury could try to prevent a systemic crisis28:21 Why AI CapEx may be the only major source of GDP growth35:00 When lost Fed credibility became a confirmed market narrative39:34 Narrative stock versus flow and how burst...

Sticky Inflation. Cheap Volatility. A Less Predictable Fed. Why Aren’t Markets More Worried?

1 hr 2 min

This month on Last Call, Kevin Muir, Aahan Menon, Ben Hunt and Brent Kochuba break down the market through four lenses: macro, inflation data, narrative and options positioning. They examine whether midterm election volatility is underpriced, why inflation may be more demand-driven and persistent than headline data suggests, how the Fed's credibility has shifted under Kevin Warsh, and why options markets still look remarkably complacent. Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠ Topics covered Why ending Fed forward guidance could create more uncertainty around interest rate decisions Kevin Muir's case that midterm election volatility is unusually cheap Why seasonal volatility, low implied correlation and election risk may favor owning protection Aahan Menon on inflation breadth and why 70 to 80 percent of PCE components are above the Fed's 2 percent target Why demand-driven inflation may be stickier than supply-driven inflation How oil shocks can feed into core inflation and increase pressure on the Fed to hike Ben Hunt on the sudden collapse in the Fed credibility narrative and why gold has responded The four risks facing the Fed and Treasury: oil, fading fiscal stimulus, insurance and private credit stress, and the long end of the Treasury curve Brent Kochuba on why implied volatility and put positioning show a market with very little fear Nvidia options positioning, potential resistance near 250 to 275, and what dealer gamma says about the stock Stanley Druckenmiller's AI-written Wall Street Journal op-ed and what AI-assisted writing means for investment thinking Timestamps 00:00 Midterms, inflation, Fed credibility and options complacency 07:45 Kevin Muir on why midterm volatility may be underpriced 11:55 Why this midterm could be more volatile than the options market expects 16:36 Cheap volatility and how election risk could get repriced 20:39 Inflation breadth and why the headline numbers miss the bigger problem 25:43 Why...

The Profits Come Now. The Costs Come Later. Kevin Muir on Whether AI Earnings Are the Bubble

1 hr 4 min

Kevin Muir of The MacroTourist joins Matt Zeigler to break down the bond market, Scott Bessent's Treasury buybacks, the Treasury General Account, AI-driven earnings growth, leveraged ETF risk, gold and the U.S.-Canada trade fight. Kevin explains why rising long-term yields may be less surprising than investors think, how the AI capex boom can inflate earnings before costs show up, and why leveraged ETFs and policy uncertainty could make markets more fragile. Kevin Muir on X https://x.com/kevinmuir The MacroTourist https://themacrotourist.com Topics covered Why stronger nominal GDP, large fiscal deficits and record corporate issuance are pressuring long-term Treasury yields How Scott Bessent's Treasury liquidity buybacks work and why investors are comparing them with QE and Operation Twist How replacing long-dated Treasuries with T-bills could ultimately force reserve management purchases by the Federal Reserve Why the Treasury General Account matters for liquidity and why attempts to manage the yield curve can distort market signals Jim Chanos's "earnings bubble" argument and how massive AI data-center capex can boost current earnings while costs are amortized Why stock prices can fall before forward earnings estimates roll over, and why retail investors may have an advantage over institutions How daily-reset leveraged ETFs create reflexive buying and selling and could amplify a semiconductor or single-stock selloff Why Kevin is bullish on gold again, the role of People's Bank of China demand, and how he combines fundamentals with technical signals Why platinum below production cost caught his attention and what rolling mini-bubbles in gold, silver and AI say about investor psychology What 2025 U.S.-Canada trade data says about autos, oil and gas, manufacturing, tariffs and the economic cost of policy uncertainty Timestamps 00:00 Intro 06:31 Scott Bessent's Treasury buybacks and the bond market 10:39 How T-bill issuance could lead to debt monetization 18:25 The AI c...

Private Equity Chased Software. Big Tech Is Chasing AI. Dan Rasmussen on If They Are Making the Same Mistake Twice

57 min

Dan Rasmussen, founder and managing partner of Verdad Advisers and author of The Humble Investor, joins Kai Wu to examine the unraveling of private equity, the rise of private credit, and how AI is reshaping software, labor, and the economics of technology investing. They also explore the massive AI CapEx boom, why value investing has struggled in the intangible-heavy U.S. market, the unusual opportunity in Japanese small caps, and how investors can quantify intangible value in biotech. Subscribe on Spotify⁠⁠⁠ ⁠⁠⁠Subscribe on Apple Topics covered: Why private equity became a consensus trade and why exits are now clogged How leverage and high debt costs threaten private equity returns What publicly traded private equity funds reveal about true volatility and NAV discounts How private equity shifted from old-economy buyouts into software and healthcare technology Why AI may have erased code as a software moat while strengthening other intangible advantages How ARR lending helped private credit finance software buyouts and created an obsolescence mismatch What AI is doing to hiring, junior roles, productivity and the composition of work Why the AI CapEx boom may be a crowded, path-dependent overinvestment cycle Why traditional value metrics work better in Japan than in the intangible-heavy U.S. How Tokyo Stock Exchange reforms, buybacks and dividends can unlock value in Japanese small caps How R&D spend, specialist ownership and short interest can help quantify biotech value Timestamps:00:00 Intro04:03 Why private equity's debt burden changes the equity math09:24 How private equity became a software momentum trade13:29 Why code may no longer be a durable software moat17:48 How private credit enabled software buyouts through ARR lending23:56 AI productivity, jobs and why displacement is slower than expected30:23 Why the AI CapEx boom may be the market's most crowded risk34:29 Rational overinvestment, leverage and the timing risk in AI38:46 Why consumers may capture mor...

Only 2.7% Beat the S&P for 20 Years | Ian Cassel on What Elite Stock Pickers Do Differently

1 hr 0 min

Ian Cassel, founder of MicroCapClub and author of Stock Picker, joins Matt Zeigler to break down the mindset, temperament and core skills required to outperform as an active stock picker. They discuss microcap investing, position sizing, active patience, valuation, management quality, portfolio survival, benchmarking against the S&P 500 and how great investors evolve their edge over decades. Stock Picker: How to Develop the Mindset, Temperament, and Strategy to Outperform Wall Street https://amzn.to/4hU28ImTopics covered How an investor's motivations change as ambition gives way to family, legacy and the scarcity of time How Ian turned $20,000 into $120,000, then watched it fall to $8,000, and why that early win permanently shaped his risk tolerance Ian's four-part survival framework: recession-resistant growth, strong balance sheets, conservative valuation and signs of intelligent fanaticism Why balance-sheet strength is not just defensive and can let great companies act aggressively when competitors are forced to retreat Why Ian targets roughly a 25 percent CAGR without relying on multiple expansion The Judas goat lesson, talking your book on social media and why investors still have to do their own work Why comparing short-term returns can corrupt an investing process and why Ian measures himself against the S&P 500 over a 10-year horizon The five core stock-picking skills: identifying, analyzing, buying, selling and holding, plus why selling matters especially in microcaps Why position sizing should account for initial excitement, and why Ian now starts much smaller than he did earlier in his career Active patience, expanding your circle of competence and the difference between good, great and GOAT stock pickers Why temperament evolves with experience, why leverage can destroy otherwise good investing, and why the best investors keep sharpening their edge Why Ian is willing to back repeat-winner management teams before every piece of the business is fully in pla...

The Rally is Broadening. The Earnings Growth Isn't. Liz Ann Sonders on Which Breaks First

1 hr 1 min

Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, joins us to explain why today's economy and stock market are increasingly defined by rotation, instability and a changing stock-bond relationship. We discuss AI capital spending and earnings concentration, Treasury yields and the deficit, immigration and labor supply, investor sentiment, market breadth, portfolio rebalancing, IPOs and the growing economic importance of the stock market wealth effect. Topics covered: Why the post-pandemic economy is moving through sector-level recessions and expansions instead of a traditional linear cycle The return of a more temperamental market regime, inflation volatility and the changing correlation between stocks and bonds Why volatility-based rebalancing may matter more than calendar-based rebalancing and why market leadership is broadening Immigration, labor shortages and why slower population growth changes how investors should interpret payroll data Federal deficits, entitlement spending, rising 30-year Treasury yields and why Treasury intervention cannot solve the underlying fundamentals How the AI spending boom, imports and hyperscaler capital expenditures are affecting GDP, bond issuance and capital markets Corporate profits versus labor compensation and why Liz Ann does not see an obvious near-term catalyst for convergence Kevin Warsh, reduced Fed guidance and why less communication could create more market uncertainty Attitudinal versus behavioral investor sentiment, the vibe session and why sentiment is becoming harder to use as a timing signal The AI cascade beyond mega-cap tech, the Neural Nine, small caps and why rotation may be the new momentum trade Margin debt, record household equity exposure and the risk that a future stock market decline feeds back into the economy S&P 500 earnings concentration, sell-side versus buy-side expectations, AI depreciation risk and the return of a major IPO cycle Timestamps: 00:00 Liz Ann Sonders on the unusual 2026 m...

We Asked Andy Constan What Happens If AI Funding Breaks Before the Thesis — And if Warsh Blinks

1 hr 0 min

Andy Constan is back on First Principles to explain why record stock prices, rising long-term Treasury yields and sticky inflation can all coexist, and why the next major market risk may come from the financing behind the AI CapEx boom rather than the eventual return on that investment. We discuss Kevin Warsh and Fed balance sheet policy, Treasury issuance and the quarterly refunding announcement, corporate bond and equity supply, Nvidia's $500 billion financing structure, and Andy's "not enough pie" framework for comparing AI earnings expectations with GDP and productivity growth. Follow First Principles on Spotify⁠ ⁠Follow First Principles of Apple Podcasts Topics covered Why rising long-term interest rates can be consistent with strong economic growth and record stock prices Why Andy does not see higher government interest costs creating an imminent U.S. debt crisis The "script to kill inflation" and why reducing the wealth effect may require lower stock, bond and asset prices How the Fed, Treasury and other policymakers have suppressed long-term interest rates and risk premiums Why Kevin Warsh's comments about the Fed balance sheet and letting the bond market "do the work" could signal a policy shift How Treasury bill issuance, coupon issuance and the quarterly refunding announcement can affect stocks, bonds and financial conditions Why the AI CapEx boom is shifting from cash flow funding toward massive corporate debt and equity issuance Andy's "hamburger thesis" and why the ability to finance AI infrastructure may matter before anyone knows the ultimate AI ROI Why capital markets can suddenly close after issuance booms and what that could mean for the AI investment cycle How Nvidia's $500 billion financing structure expands the pool of capital available to data center projects The "not enough pie" problem: why projected corporate earnings may require extraordinary GDP growth, productivity gains or a larger corporate share of the economy What Andy watches in new...

We Asked Value Legend Bob Robotti Why the Real AI Trade Isn't AI — And Why Passive Helps Stock Pickers

1 hr 7 min

Bob Robotti, founder and CIO of Robotti & Company, joins Matt Zeigler and Bogumil Baranowski to explain why bottom-up value investing may be entering one of its best opportunity sets in decades. They discuss AI and reindustrialization, inflation and interest rates, passive investing, capital cycles, private equity, long-term ownership, and why today's neglected industrial businesses may offer opportunities that the market is missing. Bob Robotti on X https://x.com/BobRobotti Robotti & Company https://www.robotti.com Topics covered How Bob finds misunderstood businesses with latent earnings power Why his "grassroots macro" process starts with company-level supply and demand How AI spending is increasing demand for energy, copper, aluminum, cement and other physical assets Why North America's natural gas advantage could support a long-term reindustrialization cycle Why persistent inflation could force higher interest rates and lower valuation multiples Why no competitive moat is permanent, even for today's dominant technology companies How passive investing and shorter time horizons can create opportunities for fundamental stock pickers Why prolonged downturns can improve industry economics through consolidation and reduced capacity Why Bob views himself as an active owner rather than an activist investor Why he is skeptical of today's private equity model and its expansion into retirement portfolios The NewMarket investment that taught him the cost of selling a great business too early Why he thinks individual company research can outperform indexing over the next decade Timestamps 00:00 Intro 04:02 Grassroots macro and the search for latent earnings power 08:37 Why Bob started his own investment firm 13:00 How AI creates demand for the physical economy 17:59 Why Bob avoids the mega-cap technology companies 22:00 Inflation, interest rates and the valuation risk investors may be missing 26:07 Why no competitive moat is permanent 31:36 How passive investing creates opp...

Jim Paulsen Sees a Growth Scare Coming | The 34 Charts That Make Him Cautious

1 hr 0 min

In this episode of The Jim Paulsen Show, Jim explains why weakening labor data, softening inflation, and lagged policy tightening could shift markets from inflation fears toward growth and recession fears. He also breaks down why the AI productivity boom may be overstated, how AI capital spending is supporting the economy, why Treasury yields look too high, and why investors may want to rebalance from new era technology stocks toward old era stocks and bonds. Subscribe to the Jim Paulsen Show on Spotify⁠⁠⁠ ⁠⁠⁠Subscribe to the Jim Paulsen Show on Apple Podcasts Topics Covered Why weak jobs data and benign inflation have changed the outlook for the Federal Reserve Labor force contraction, stalled job growth, and the risks facing consumer spending Housing affordability, services activity, real income, savings, and signs of economic weakness How the stock-bond correlation can reveal a shift from inflation fears to growth and recession fears Why Jim expects Fed rate cuts before year-end and sees downside risk for Treasury yields How higher oil prices, bond yields, and the dollar can hit stocks and the economy with a lag Why today's AI productivity boom may be a mirage rather than a repeat of the 1960s or 1990s How AI CapEx, core capital goods orders, and technology stocks are linked Why the 10-year Treasury yield may be mispriced relative to growth and inflation The widening divide between new era and old era stocks and what it could mean for portfolio allocation Timestamps 00:00 Jim's outlook: weak jobs, benign inflation, and growth fears04:11 Labor force rollover and consumer warning signs09:06 Real income collapse and economic surprise data13:06 Why bond yields could fall below 4 percent17:45 Why Jim expects Fed cuts instead of hikes22:07 How policy tightening hits the economy with a lag26:16 Why productivity gains can be a recession mirage30:20 What a true productivity boom looks like34:38 AI stocks as a leading signal for capital spending39:08 Why Treasury yields m...

We Asked T. Rowe's $8 Billion Tech Manager Why We Are in 1998 — And Why Software Is in Trouble

1 hr 0 min

T. Rowe Price technology portfolio manager Dom Rizzo joins Jack Forehand and Kai Wu to break down the AI investment cycle, hyperscaler capital spending, semiconductor demand, and why the recent tech selloff may look more like 1998 than the end of the boom. They discuss AI return on investment, OpenAI and Anthropic, open versus closed models, financing the data center buildout, the future of software, labor productivity, and how to construct a global technology portfolio. Topics covered Why Dom sees similarities between the 2026 semiconductor correction and the 1998 selloff Why hyperscaler AI CapEx could accelerate from already historic levels What cloud revenue growth and operating margins say about AI return on invested capital Why end-user productivity is the key test for sustainable AI demand Open-weight models versus frontier labs and where AI economic value may accrue Why chips, memory, logic semiconductors, TSMC and ASML sit at critical points in the AI value chain How equity, debt and operating cash flow could finance the next stage of the data center buildout Why semiconductors remain cyclical even in a structurally capital-intensive AI boom Why AI agents could turn traditional enterprise software into data pipes AI productivity, labor displacement and the case for faster GDP growth How Dom thinks about technology portfolio construction, risk factors and global stock selection Timestamps 00:00 AI, the tech correction and the 1998 comparison 04:07 Why the AI capital spending cycle may only be halfway 12:33 The real test for AI demand: end-user ROI 17:00 Why frontier models may capture most of the economic value 21:23 Where the biggest AI moats and profit pools could emerge 28:12 Financing the AI buildout with equity and debt 36:03 Are semiconductors in a supercycle or still cyclical? 41:43 What AI agents mean for traditional software companies 46:03 AI productivity versus labor displacement 51:01 Building a portfolio for a technology revolution 56:06 Global t...

David Rosenberg and Rich Bernstein on What Ends the AI Trade — And What They Own Instead

1 hr 3 min

Richard Bernstein and David Rosenberg reunite to debate the Federal Reserve, inflation, the AI investment boom, market bubbles, gold and the case for international diversification. The former Merrill Lynch colleagues examine whether the Fed should raise rates, how AI CapEx is reshaping the U.S. economy, why credit markets may lead the AI trade, what is driving gold, and where investors may find opportunities outside the mega-cap U.S. market. Topics covered Why the Taylor Rule points toward higher rates and why Rosenberg thinks the Fed should not hike What slowing GDP growth, productivity and labor costs suggest about underlying inflation How AI CapEx and data center spending may be misallocating capital away from housing and the broader economy Why the current AI boom differs from the late-1990s technology bubble How credit spreads, CDS markets and financing costs could signal trouble in the AI trade before equities do What real interest rates, the U.S. dollar and central bank demand mean for gold Why Bernstein views gold as a portfolio spare tire rather than a short-term trade Why non-U.S. stocks and international markets may offer a better valuation and growth opportunity How AI exposure extends beyond the Mag Seven into financials, industrials and utilities Why CAPE valuations, leverage, sentiment and market positioning point to a highly speculative U.S. market Why diversification becomes most unpopular when investors may need it most What Bob Farrell's market rules say about crowded positioning and consensus forecasts Timestamps 00:00 Introduction 08:31 Why Rosenberg thinks the Fed should not hike 16:02 AI, data centers and capital misallocation 25:08 What is driving gold: real rates, the dollar and central banks 36:11 Why Bernstein sees a secular shift toward non-U.S. stocks 41:41 How AI concentration extends beyond the technology sector 48:31 International diversification as protection from AI concentration 54:06 Bob Farrell's Rule 9 and the danger of consensu...

4% Inflation. Stretched Valuations. Why Is the Market Still Risk-On? | Tian Yang

59 min

Tian Yang, head of research at Variant Perception and portfolio manager of the VPX ETF, explains how investors can use adaptive leading indicators, capital cycle analysis and behavioral signals to navigate a market shaped by AI spending, inflation and government intervention. He breaks down why the macro backdrop remains risk-on, what would signal a true market top, why a Federal Reserve rate hike may still be unlikely and how AI could reshape profits, jobs and portfolio construction. Variant Perception https://www.variantperception.com/ Variant Perception Cycle Aware US Equity ETF https://etf.variantperception.com/ Topics covered How first-principles thinking separates causal signals from noisy data Why static recession indicators and consumer sentiment have become less reliable How Variant Perception combines growth, inflation, policy and liquidity into a Macro Risk Indicator Why AI capital spending and low savings rates are supporting economic resilience How AI profits could broaden from hardware bottlenecks to adopters and complementary assets Why the sovereign technology race may extend the AI investment cycle What savings rates, liquidity, leverage and cash settlement reveal about recessions and market tops How potential SpaceX, Anthropic and OpenAI supply could affect public equity markets What capital cycle and crowding signals say about semiconductors and hyperscalers Why headline inflation may stay high without creating persistent core inflation How the K-shaped consumer, labor market and Federal Reserve reform shape the policy outlook How AI could widen economic inequality, compress wages and change investment research How the VPX ETF uses adaptive sector tilts, stock selection and active risk Timestamps 00:00 First principles, causal data and leading indicators 04:48 Why traditional recession indicators stopped working 09:00 Building the Macro Risk Indicator 13:02 How AI CapEx is keeping the economy resilient 17:18 Is the AI boom different from past bubb...

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