Excess Returns

Ritavan joins Excess Returns to explain The System Gambit, a new framework for understanding competitive advantage, business strategy, AI disruption and long-term compounding. We discuss why traditional moat checklists can miss the real source of value, how companies can build systems competitors cannot copy, and what investors should look for when AI changes the game.The System Gambithttps://amzn.to/4b0J32IMain topics coveredWhy the traditional moat checklist can fail investorsThe three requirements for a true System GambitHow investors can evaluate business strategy from the outsideWhy code is not always the moat in the age of AIWhat history can teach investors about asymmetry and leverageWhy AI adoption is not the same as AI value creationThe difference between moving fast and understanding the gameLessons from Nokia, ASML, Amazon and WalmartHow intangible investment and J curves can hide long-term valueWhy the best companies build compounding systems competitors cannot copyHow investors can identify companies changing the game rather than optimizing the old oneTimestamps00:00 Opening preview and introduction04:00 The three ingredients of a System Gambit08:49 Why code is not the moat in AI software13:00 Skanderbeg and changing the rules of the game17:00 Good moats, good narratives and asymmetric advantage22:31 Microscope vs telescope as a lesson for AI28:35 AI winners, losers and high dispersion markets32:08 Signal quality, bottlenecks and why AI adoption is not enough36:00 Nokia, agility and the failure to build a causal model40:15 Why understanding the game beats speed44:00 Intangible investment, the J curve and ASML's hidden edge49:54 The contrarian AI thesis behind The System Gambit54:00 How to recognize a real System Gambit58:27 Amazon, Walmart and multi-paradigm compounding1:03:00 Prime, FBA and platform leverage1:07:00 Walmart's answer to Amazon1:11:06 Closing thoughts and where to find Ritavan

On this episode of the 100 Year Thinkers, Chris Mayer and Matt Zeigler discuss long-term investing, 100-baggers, AI stocks, SpaceX valuation, founder-led companies, and why the best investments often come with brutal drawdowns. We also cover his new book The Investor's Odyssey, the danger of letting labels like AI do too much work, how to think about TAM and capital allocation, and why patience may be the biggest edge for investors trying to own great businesses for decades.⁠Subscribe to the 100 Year Thinkers on Spotify⁠⁠⁠⁠Subscribe to the 100 Year Thinkers on Apple⁠The Investor's Odyssey: Resisting the Sirens and Playing the Long Game⁠https://amzn.to/44BMXeJ⁠Main topics coveredWhy SpaceX, AI and trillion-dollar IPOs are testing investor disciplineHow Chris Mayer thinks about valuation after watching Google become a huge winnerWhy great businesses can still be terrible investments at the wrong priceThe danger of letting labels like AI, quality and TAM replace real analysisWhy many AI features may not create real customer valueWhat the dot-com bubble can teach investors about AI adoption and shakeoutsWhy investors do not need to be early if a company is truly exceptionalHow to separate AI anecdotes from real financial impactWhy capital allocation and return on invested capital matter more as companies scaleHow to evaluate founder control, governance, incentives and trustWhy the best long-term stocks can still fall 50 percent or more along the wayWhat rational exuberance might look like for long-term investorsTimestamps00:00 Intro: Chris Mayer on AI, SpaceX and long-term investing04:00 SpaceX valuation vs Google and the risk of paying too much08:01 Why labels like AI and quality can do too much work12:05 The AI pause, the dot-com analogy and where real value may emerge16:06 Why investors do not need to be early when a business is real21:00 Becoming a great company versus already being mature25:10 Thinking about TAM, market share and realistic growth expectations29:43 Corporate governance, free float and shareholder rights34:27 How to judge founder trust, incentives and compensation38:57 Employee ownership, culture and building enduring companies43:02 Investor frustration in a lopsided AI-driven market47:02 Why even a perfect stock picker would face brutal drawdowns52:17 The rise of trillion-dollar IPOs and the question of rational exuberance56:29 The Investor's Odyssey and playing the long game

Ben Inker of GMO joins Excess Returns to break down whether the AI boom is an investment bubble, how it compares to 2000, 2007 and 2021, and why today’s risk may be more about earnings than valuations. We also discuss AI capital spending, market supply from IPOs, GMO’s seven-year asset class forecasts, international stocks, benchmark-free allocation and what private equity investors may be missing.7 YEAR ASSET CLASS FORECASThttps://www.gmo.com/americas/research-library/gmo-7-year-asset-class-forecast-may-2026_gmo7yearassetclassforecast/WHAT BARBARIANS LIKE TO TAKE PRIVATEhttps://www.gmo.com/americas/research-library/part-1-what-barbarians-like-to-take-private_gmoquarterlyletter/THE CASE FOR LIQUID ALTERNATIVEShttps://www.gmo.com/americas/research-library/the-case-for-liquid-alternatives-in-todays-environment_insights/Main topics coveredWhy GMO sees the AI boom as a bubble investors may be able to navigateThe difference between easy bubbles and hard bubbles in portfolio constructionLessons from the internet bubble, the global financial crisis and the 2021 duration bubbleWhy today’s market may be an earnings bubble, not just a valuation bubbleHow AI data center spending affects corporate profits before depreciation shows upWhy transformational technologies do not always reward the companies building themThe risk of circular financing, debt-funded AI spending and increasingly creative deal structuresHow IPOs, share issuance and market supply can pressure stock returnsGMO’s seven-year asset class forecasts and why international stocks look more attractive than U.S. stocksWhy private equity portfolios may contain large hidden bets on small, lower-quality companiesTimestamps00:00 AI, earnings bubbles and market supply00:58 Why Ben Inker thinks the AI bubble may be easier to navigate02:43 What makes a bubble easy or hard for investors08:12 Comparing risk and return in 2000, 2007, 2021 and today14:42 Why optimizers and real clients see risk differently17:02 What GMO learned from managing through past bubbles19:08 How today compares to the 2000 internet bubble20:00 Why this may be an earnings bubble23:34 Semiconductors, memory makers and the capital cycle25:00 How AI CapEx compares to railroads, electricity and fiber optics29:33 Debt, circular financing and strange AI deals34:32 Why massive stock issuance could challenge the market40:00 How GMO builds seven-year asset class return forecasts41:40 Why interest rates change fair value for stocks and bonds45:32 Why international, value and small-cap stocks look more attractive49:06 The case for a benchmark-free portfolio55:21 What 700 leveraged buyouts reveal about private equity01:02:00 How public portfolios can offset private equity risks01:03:37 Why investors need to understand what they are paid for01:08:27 Closing thoughts

Ian Smith, portfolio manager at William Blair, joins Excess Returns to break down emerging markets, global diversification, and why EM may offer a very different opportunity set than US stocks. We discuss AI capex, the role of Korea, Taiwan, China and India, the impact of the dollar, quality investing, valuation, and how active investors can think about opportunity in a world shaped by AI disruption and geopolitical change.William Blair Investment Managementhttps://im.williamblair.com/The Problem With Qualityhttps://im.williamblair.com/insights/articles/the-problem-with-qualityTopics covered:Why emerging markets are not one single tradeHow AI capex is reshaping EM indexes and performanceWhy Korea, Taiwan and China are central to the AI supply chainThe role of the US dollar in emerging market returnsWhy EM index concentration is higher than many investors realizeWhat past innovation cycles can teach us about the AI buildoutHow AI is changing the definition of quality investingWhy China’s manufacturing strength creates both opportunity and riskThe long-term case for India despite high valuationsHow William Blair evaluates quality, trajectory and underappreciationWhy valuation in emerging markets requires more than simple multiplesThe one investing lesson Ian Smith would teach the average investorTimestamps:00:00 Intro04:10 Why emerging markets are not one market08:37 Why EM is underrepresented in global indexes13:16 How the dollar impacts emerging market returns18:37 AI capex, picks and shovels, and EM supply chains24:17 How William Blair is using AI in the investment process28:30 Why quality and growth have decoupled in emerging markets33:19 Why AI disruption creates opportunity for active managers37:30 China’s overcapacity, competition and global manufacturing edge42:00 India’s long-term growth drivers and valuation challenge47:00 Finding underappreciated quality in EM stocks52:01 Deglobalization, China and the future of global trade56:09 The one lesson Ian Smith would teach investors

Tobias Carlisle joins Excess Returns to discuss why today’s market may be setting up a major opportunity in value stocks, small caps and micro caps. We cover stretched market valuations, AI capex, SpaceX and other massive IPOs, the risk of speculative growth assumptions, and how Tobias builds systematic deep value portfolios in ZIG and DEEP.Tobias Carlisle on Xhttps://x.com/GreenbackdAcquirers Fundshttps://acquirersfunds.com/Topics covered:Why elevated market valuations point to lower forward returns, not necessarily an immediate exit from stocksThe case for small value, micro-cap value and mid-cap value after a long large-cap growth cycleWhy equal-weight indexes and small caps may be signaling a market leadership shiftWhether AI capex will create lasting profits or mostly benefit consumersThe parallels and differences between AI, the dot-com boom, railroads and fiber optic buildoutsHow AI spending is being financed and why the stock market may be demanding more compute investmentWhat the SpaceX IPO, OpenAI and Anthropic could mean for market supply and investor psychologyWhy base rates are being challenged by the growth of major technology platformsHow disruption can create value traps and why traditional valuation metrics can struggle in disrupted industriesThe energy demand implications of AI data centers and why nuclear and natural gas could matterHow Tobias combines valuation, quality, financial statements and portfolio construction in ZIG and DEEPWhy quarterly rebalancing may be a practical balance between timing luck, momentum and trading costsTimestamps:00:00 Why AI value may accrue to consumers04:00 What extreme market valuations say about future returns08:22 Small caps, equal weight and the Mag Seven reversal14:15 AI capex and lessons from past technology booms19:47 Who gets the profits from AI?23:00 Cash flow, debt and the AI spending race28:06 SpaceX, giant IPOs and market supply31:00 OpenAI, Anthropic and Mauboussin’s base rates35:17 Is buying the S&P 500 more speculative than investors realize?36:57 Value investing during disruptive technology cycles41:07 War, energy prices and the broadening trade45:32 Semiconductor valuations and aggressive growth assumptions47:30 How Tobias builds the ZIG and DEEP portfolios54:17 ETF rebalancing, timing luck and systematic value investing

Professor Aswath Damodaran joins Kai Wu on The Intangible Economy to break down how to value SpaceX, AI companies, intangible assets, and the future of value investing.We discuss why big markets do not automatically create big value, how AI CapEx is changing the character of major technology companies, and why the best investment stories still have to connect to the numbers.Subscribe on Spotify⁠⁠⁠⁠Subscribe on AppleTopics covered:Valuing SpaceX after its IPO and why price matters even for great companiesHow Starlink, space launch, and xAI fit into SpaceX’s valuation storyWhy total addressable market can mislead investors in AI and other disruptive industriesThe problem with AI unit economics, data centers, power, water, and reinvestment needsWhy growth can destroy value when margins and returns on capital are weakHow intangible assets, R&D, future growth, and narratives should show up in valuationThe Big Market Delusion and how overconfidence drives boom and bust cyclesWhy AI CapEx is different from the dot-com boom and could create broader risksHow AI is changing the character of the Magnificent Seven and semiconductor companiesWhy value investing became rigid, ritualistic, and righteous, and how it can evolveTimestamps:00:00 Why great companies can still be bad investments01:03 Introducing Aswath Damodaran and The Intangible Economy01:49 SpaceX IPO, Starlink, xAI, and the challenge of valuing uncertainty05:31 Why Starlink became the core of SpaceX’s current revenue10:31 How Damodaran valued SpaceX across launch, connectivity, and AI14:07 Why AI’s huge market may still have difficult unit economics17:10 The tension between SpaceX competing in AI and renting data centers to competitors20:00 Why valuation should use distributions instead of false precision22:39 How stories and numbers work together in valuation26:45 Why investors confuse promises, potential, and businesses30:49 The Big Market Delusion and overconfidence in AI investing33:02 Why the AI CapEx boom is different from the dot-com bubble35:17 How AI infrastructure is changing the Magnificent Seven38:36 Nvidia, Micron, semiconductors, and the risk of peak cycle earnings41:00 Why the biggest AI market stories could be scary for society43:37 AI disruption, labor markets, and the speed of technological change46:30 Measuring which jobs and companies are most exposed to AI automation49:00 Why AI cost structure may look more like Spotify than software51:13 The unresolved business model questions for LLMs and AI agents52:29 Why traditional value investing lost its edge56:03 Passive investing, book value, and the blame game in value investing58:13 Why rigid value investing is vulnerable to AI disruption01:00:58 How value investing can adapt to intangible assets and uncertainty01:02:21 Why any company can be a good investment at the right price01:04:57 Why investing mistakes and track records are harder to judge than they look

In the third episode of First Principles with Andy Constan, Andy breaks down the changing structure of markets as the IPO window reopens, AI CapEx accelerates, and corporate buybacks shift toward new equity supply. We discuss what the SpaceX IPO says about capital markets, whether AI spending can create disinflationary growth, why the consumer is still holding up, and what could challenge the current market bubble.Follow First Principles on SpotifyFollow First Principles of Apple PodcastsTopics covered:Why IPOs are central to the purpose of public marketsHow Andy evaluates whether the SpaceX IPO workedWhy issuers may want IPOs to trade higher after pricingThe shift from stock buybacks to new equity issuanceWhy AI CapEx is changing the supply and demand for sharesHow hyperscaler spending is being funded through cash, bonds, and stockThe economic test for whether AI investment pays offDisinflationary productivity growth versus labor displacementWhy the current economy is still supported by consumptionThe role of wealth effects and consumer dissavingWhy falling oil prices may not eliminate inflation pressureWhat Andy is watching in Fed policy, tariffs, AI CapEx, and equity issuanceHow Kevin Warsh could approach rates, QT, and the Fed balance sheetTimestamps:00:00 Intro and key themes04:18 How Andy reads the SpaceX IPO08:27 Why underwriters and regulators want IPOs to work13:00 Why issuers may want IPOs to trade higher17:05 From stock buybacks to new equity supply21:06 The 600 to 700 billion dollar shift in share supply26:42 The economic test for AI tokens32:09 Can AI create disinflationary productivity growth?38:10 Is AI CapEx holding up the economy?41:00 Wealth effects, dissaving, and the consumer45:52 Oil prices, war, and inflation49:07 Jalen Brunson, incentives, and long-term value52:00 Fed policy, tariffs, and what matters this summer55:36 Kevin Warsh, QT, and the Fed balance sheet58:42 Closing thoughtsNo information on this podcast should be construed as investment advice. Securities discussed in the podcast may be holdings of the firms of the hosts or their clients.

In this episode of The OPEX Effect, Jack Forehand and Brent Kochuba break down the market structure impact of the SpaceX IPO, options expiration, dealer gamma, volatility, and the next major setup for the S&P 500 and Nasdaq. They discuss why SpaceX may trade more on flows than fundamentals, how call buying could create a gamma squeeze, and why June OPEX, VIX expiration, FOMC, oil, Iran headlines, and index inclusion could all collide at once.Subscribe to the OPEX Effect on Spotify⁠⁠⁠⁠Subscribe to the OPEX Effect on Apple PodcastsTopics covered:Why SpaceX is a flows game at the start of tradingHow the SpaceX IPO could affect liquidity across mega cap tech stocksWhy fundamentals may not matter when index flows and forced buying dominateThe role of Nasdaq, Russell, and S&P 500 index decisions in SpaceX tradingHow options could create a gamma squeeze in SpaceXWhy dealer hedging flows can push stocks higher or lowerWhat June options expiration could mean for the S&P 500Why VIX expiration and FOMC create a key market windowHow Core1M signaled the recent volatility spasmWhy expensive calls, not put buying, drove the recent market stressThe key S&P 500 levels Brent is watching into OPEXHow oil, rates, inflation, and Fed policy could affect market volatilityWhy Nasdaq options pricing is diverging from the S&P 500How SpaceX index inclusion could widen the gap between Nasdaq and the S&PWhat would make Brent add protection or look for another short-term market correctionTimestamps:00:00 Opening clips and the SpaceX flow setup05:27 Elon Musk net worth after the SpaceX IPO07:13 SpaceX, liquidity, Mag Seven selling, and index demand12:48 Why SpaceX may trade on flows before fundamentals17:59 What options trading could change for SpaceX22:05 How call buying can create a gamma squeeze28:24 Why June OPEX matters more than a normal expiration33:55 VIX expiration, FOMC, and market path dependency37:20 The Core1M signal and the recent volatility spasm41:22 The S&P 500 gamma map and key risk levels46:25 Why expensive calls drove the market stress50:14 Oil, rates, inflation, and the Fed setup57:03 The JPMorgan collar and the 6900 to 7000 support zone58:32 Nasdaq versus S&P 500 after the SpaceX IPO01:03:14 Brent’s summary, SpaceX gamma squeeze risk, and the next market setup

Mike Green joins Excess Returns to explain why passive investing, index construction, SpaceX, AI IPOs and mega-cap concentration may be changing how the stock market actually works. We discuss how passive flows can affect prices, why AI earnings may be more circular than investors think, what could break the current market narrative, and why the economy feels much weaker for many households than the headline data suggests.Michael Green Twitterhttps://x.com/profplum99Simplify Asset Managementhttps://www.simplify.us/Topics covered:Why the SpaceX IPO has turned passive investing into a mainstream market structure debateHow index committees and passive flows can influence individual stocksWhy low float, Nasdaq demand and passive buying could create unusual IPO dynamicsHow new AI-related equity issuance could change the supply-demand balance in the stock marketThe research behind passive flows, market impact and cap-weight concentrationWhy Mike thinks passive buying explains more of mega-cap outperformance than AI fundamentalsThe circular financing risk in AI, including Nvidia, CoreWeave, Google and AnthropicWhy buy-the-dip flows, ETFs, CTAs and vol control funds matter for market directionHow headline economic data can miss household stress, second jobs and lost purchasing powerWhat Mike is watching to see whether the AI trade and market narrative are starting to breakWhy AI may be hugely valuable to consumers before it creates major business productivity gainsHow companies may eventually redesign business models around AI rather than simply automate tasksWhy SpaceX wealth creation could seed the next generation of competitorsHow inflation, gasoline prices, low savings and a K-shaped economy are affecting consumersTimestamps:00:00 Passive indices, AI profits and why this market feels different04:07 Why SpaceX changed the passive investing debate08:01 The research behind passive flows and market impact12:16 Why Mike thinks passive flows explain mega-cap strength16:18 ETF flows, buy-the-dip behavior and bubble dynamics20:28 Why economic data can miss household stress25:13 Bubble warnings, CAPE and what investors may be ignoring29:17 AI as a consumer advice engine versus a productivity revolution33:29 How businesses may redesign themselves around AI37:51 Why IPO wealth may create the next generation of competitors42:06 Mike Green’s upcoming book on passive investing and market structure

AI could become the next general purpose technology, reshaping economic growth, inflation, interest rates and portfolio construction. Vanguard Global Chief Economist Joe Davis joins Excess Returns to explain why AI, demographics, fiscal deficits and globalization may define the next decade for investors, and why the biggest market winners may eventually come from outside the technology sector.Coming into View: How AI and Other Megatrends Will Shape Your Investmentshttps://amzn.to/4v8L7OfVanguard Megatrends Research Hubhttps://explore.vanguard.com/megatrends.htmlTopics Covered:AI as a potential general purpose technologyWhy long-term megatrends can affect short-term market returnsThe four forces shaping the next decade: technology, demographics, deficits and globalizationWhy Vanguard believes AI could lift U.S. growth above consensusHow AI could offset aging demographics and rising debtWhy great technology cycles often include major stock market drawdownsThe difference between AI automation, augmentation and new industry creationWhy the next AI winners may be in healthcare, financial services and other service industriesThe risk that AI disappoints and fiscal deficits dominate the outlookHow tariffs, oil prices and AI investment interact in the macro outlookWhat AI could mean for 60/40 portfolios, value stocks, fixed income and international marketsJoe Davis’ lesson for average investors: the power of compoundingTimestamps:00:00 Why every great technology eventually faces a market drawdown04:28 The four megatrends shaping the economy08:56 How megatrends explain short-term S&P 500 moves13:22 Why AI may be in the 1996 or 1997 stage18:29 Where the next AI winners could emerge21:44 AI, fiscal deficits and the danger of kicking the can26:17 Why 2% growth and 2% inflation may be unlikely30:31 How to tell if AI augmentation is really working33:19 AI, globalization and which countries could benefit38:14 Why investors need a multi-factor macro scorecard41:23 What AI means for the 60/40 portfolio44:12 Joe Davis on investing, compounding and Vanguard’s megatrends research

On the latest Click Beta, Matt Zeigler, Dave Nadig and Cameron Dawson discuss what could happen when SpaceX goes public and why this IPO may be as much a market structure problem as a valuation problem.They break down the potential impact of a $1.75 trillion IPO, 100 times sales, a small free float, forced index buying, passive fund flows, options trading, bubble dynamics and what advisors should tell clients who want SpaceX exposure.Subscribe to Click Beta on Spotify⁠⁠Subscribe to Click Beta on Apple PodcastsDave Nadighttps://x.com/davenadigCameron Dawsonhttps://x.com/CameronDawsonTopics Covered:Why the SpaceX IPO could create a chaotic first 30 days of tradingHow 100 times sales, no earnings and a $1.75 trillion valuation change the discussionWhy pre-IPO access, lockups, fees and vehicle structure matter for investorsHow Palantir and Tesla frame the debate over extreme growth stock valuationsWhy SpaceX could create unusual supply and demand pressure in the public marketHow options trading, Nasdaq 100 inclusion and accelerated index rules could affect price discoveryWhy free float matters and how a 4 percent float could become a 12 percent index adjustmentHow much passive demand might chase SpaceX shares after the IPOWhat the bubble triangle says about technology, speculation, money and creditWhy real earnings do not disprove a technology-driven bubbleHow liquidity, private credit gates, IPO supply and buybacks could shape the next phase of the marketWhy advisors need to help clients think through sizing, exit plans and safe accessPeak season travel, TikTok monoculture, Ocean City, Coheed and Cambria, and the lost art of CDs and mixtapesTimestamps:00:00 Why the first 30 days could be chaotic04:00 Why everyone is talking about the SpaceX IPO09:23 The market structure problem behind SpaceX13:00 Options trading, small indexes and forced buying17:18 How much passive demand could chase SpaceX21:27 Why real earnings do not disprove a bubble25:43 Liquidity, IPO supply and why bubbles can keep going29:13 What advisors tell clients who want SpaceX33:17 Fake SPVs, scams and safe access37:39 Ocean City, peak season and Jersey Shore memories41:39 Coheed and Cambria opening for Shinedown45:44 Summer concerts, Bikini Kill, Weezer and The Shins46:25 Cleaning out old cars and rediscovering CDs50:10 Old iPods, underwater MP3 players and forgotten playlists53:20 Mixtapes, liner notes and physical music culture55:08 Where to find Dave Nadig and Cameron Dawson

Jim Paulsen returns to Excess Returns to discuss why he is increasingly concerned about a meaningful stock market pullback, even though he does not expect a bear market. We cover the extreme divide between AI-driven “new era” stocks and the rest of the market, what oil and inflation could mean for the Fed, why tech earnings and market leadership have become so concentrated, and what investors should watch as the economy potentially shifts from inflation fears to growth fears.Subscribe to the Jim Paulsen Show on Spotify⁠⁠⁠⁠Subscribe to the Jim Paulsen Show on Apple PodcastsJim Paulsen on Xhttps://x.com/jimwpaulsenPaulsen Perspectiveshttps://paulsenperspectives.substack.com/Topics CoveredWhy Jim thinks the economy could weaken into the summer and fallThe risk of a sharp stock market pullback without a full bear marketHow inflation, oil prices and geopolitical conflict are affecting the marketWhy the Fed may face a difficult decision under Kevin WarshThe extreme divide between new era tech stocks and old era stocksWhy AI and innovation need to benefit the broader economy to be sustainableHow tech earnings have become concentrated in only two S&P 500 sectorsWhy small-cap tech and unprofitable tech leadership may be a warning signWhat past oil price peaks suggest about stock market correctionsWhy investor focus may shift from inflation risk to growth riskHow this bull market has been driven by a series of booms in Mag 7, Bitcoin, gold, oil and AITimestamps00:00 Why AI has to benefit more than the tech sector05:18 Inflation, oil prices and the impact of geopolitical conflict10:54 New era stocks versus old era stocks15:43 Corporate cash, AI spending and pressure on tech investment20:17 Policy tightening and why economic momentum may slow25:31 Why AI must spread beyond the companies building it31:42 Why this tech boom is different from the 1990s36:51 Why market breadth keeps fading back into large-cap growth42:06 Small-cap tech and unprofitable tech start leading46:15 Why the damage from oil shocks often comes after oil peaks50:15 How the market could shift from inflation fear to growth fear54:40 The bull market of booms in Mag 7, Bitcoin, gold, oil and AI59:46 Jim’s main takeaway for investors nowFollow the Excess Returns podcasts:https://excessreturnspod.com/Contact us:[email protected]/No information on this podcast should be construed as investment advice. Securities discussed in the podcast may be holdings of the firms of the hosts or their clients.

Kai Wu of Sparkline Capital joins Excess Returns to break down his latest research on AI disruption, software stocks, value traps, and intangible moats. We discuss why software valuations have collapsed, why traditional value investing can fail during technological disruption, and how investors can separate potential AI winners from companies whose business models may be permanently impaired.AI Disruption: Moats and Value Trapshttps://www.sparklinecapital.com/post/ai-disruptionKai Wu on Xhttps://x.com/ckaiwuSparkline Capitalhttps://www.sparklinecapital.com/Topics Covered:Why software stocks are trading at a historically unusual discount to the marketHow AI disruption can create both real opportunities and dangerous value trapsWhy Blockbuster, Borders, RadioShack and newspapers offer lessons for today’s software selloffHow patent data and natural language processing can measure technological disruptionWhy disruption has helped explain the poor performance of traditional value investingWhy value investing may still work in sectors insulated from technological changeHow intangible assets like brand, human capital, intellectual property and network effects can protect companiesWhy Walmart and The New York Times survived disruption while other incumbents did notHow David Teece’s complementary assets framework applies to AI, software and moatsWhy AI adoption and intangible value together may help identify software survivorsWhy high dispersion in disruption-scare stocks creates a potential opportunity for stock pickersTimestamps:00:00 Software stocks now trade at a historic discount04:26 What makes a cheap stock a value trap08:25 Measuring disruption using patents, filings and natural language processing13:23 Is AI the biggest disruptive wave in history?14:55 Why disruption keeps stacking on retailers17:10 How technological change disrupted traditional value investing21:20 Why value investors need to know when not to apply old metrics25:06 Why more of the market is exposed to innovation than ever before27:07 What Walmart and The New York Times teach about surviving disruption32:40 The four intangible moats that can protect companies35:02 Why intangible value works better in disrupted industries38:50 Apple, Amazon, Macy’s and the difference between disruptors and value traps42:58 Applying intangible value to beaten-down software stocks47:05 Why AI adoption alone is not enough48:23 How AI could improve margins for surviving software companies50:09 Which industries are adopting AI fastest52:14 The software sweet spot: AI adoption plus intangible moats53:53 Why disruption-scare stocks have extreme return dispersion57:40 What happens when intangible value is applied to high-disruption stocks01:01:42 Why “code is not the moat” for many software companies

In this episode of Last Call, we break down one of the most confusing market backdrops in years: AI-driven earnings optimism, rising oil and inflation risk, stretched options positioning, and the market impact of a potential SpaceX IPO. Jack Forehand and Matt Zeigler are joined by Aahan Menon, Ben Hunt, and Brent Kochuba to examine what macro data, political narratives, options flows, and index mechanics are saying about where markets could go next.Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠Topics Covered:Why markets are looking through war, oil shocks and valuation concernsHow earnings estimates are driving sector performance in the AI tradeAahan Menon on growth, inflation, oil prices and macro regime signalsWhy demand destruction from higher energy prices can take longer than investors expectWhat a rising growth and rising inflation regime can mean for stocks, commodities and bondsBen Hunt on World War AI and the collision between AI market optimism and political backlashWhy opposition to AI data centers could become a major market and election issueBrent Kochuba on call buying, implied volatility and signs of options market frothWhy CORE 1M and skew signals may be warning of a downside spasmHow the SpaceX IPO could affect index flows, active managers and mega-cap stocksTimestamps:00:00 Intro: AI, inflation and options risk in one market05:40 Earnings estimates, AI optimism and why fundamentals still matter10:31 Aahan Menon on a difficult macro backdrop15:29 Why energy shocks and demand destruction take time20:24 Why inflation can persist even if the oil shock eases24:47 Ben Hunt on World War AI and the AI resource build-out30:00 AI CapEx as the pillar holding up market optimism34:00 The political backlash against AI data centers38:00 Why data center opposition matters for markets42:09 Why price action can distort the AI narrative47:48 CORE 1M, stretched call prices and downside spasm risk52:00 Why Nasdaq options are priced for upside crashes56:11 Index rules, human judgment and the SpaceX IPO01:00:34 The free float problem and rebalancing pressure01:05:22 Space data centers, valuation and the size of the AI opportunity

Adam Parker returns to Excess Returns to explain why the market may be trading more on future fundamentals than investors think, how AI is reshaping stock selection, and why traditional valuation signals may be less useful than they once were.We discuss AI revenue exposure, software vs. semiconductors, Mag Seven positioning, gross margins, estimate achievability, spinoffs, and Adam’s highest-conviction contrarian sector idea.Adam Parker on Xhttps://x.com/Adam_Parker_TriTrivariate Researchhttps://trivariateresearch.com/Trivector Researchhttps://www.trivectorresearch.comTopics covered:Why “sell in May” and other calendar-based market rules often lack statistical supportWhy Adam thinks the stock market leads the economy, not the other way aroundHow to think about whether today’s AI market is a bubbleWhy the market may be trading on 2030 or 2031 fundamentalsWhen investors may start demanding returns on AI capital spendingWhy AI could create new jobs rather than simply destroy existing onesHow large AI-related IPOs like SpaceX could affect index mechanics and portfolio flowsWhy gross margin expansion is one of Adam’s most important stock selection factorsWhy Adam remains cautious on software and prefers semiconductors over softwareHow valuation, quality, and other traditional factors may have changed since COVIDWhy estimate achievability and incremental margins matter more than simple beats and missesHow to think about the Mag Seven, Nvidia, and market concentrationWhy spinoffs may become more important in an AI-driven marketWhy healthcare is Adam’s highest-conviction contrarian sector ideaTimestamps:00:00 Why the market may be trading on future fundamentals04:37 Is today’s stock market an AI bubble?08:45 When AI capex needs to show real returns13:00 How trillion-dollar IPOs could reshape index mechanics19:00 Why gross margin expansion is such a powerful factor23:00 Why software companies face AI-driven margin pressure27:21 Where AI semiconductor exposure goes next31:54 Why valuation does not work for stock picking35:03 What has changed in markets since COVID39:22 Estimate achievability and incremental margins43:06 How to think about the Mag Seven and Nvidia47:55 Why healthcare could be the biggest AI opportunity

Eric Crittenden joins Matt Zeigler and Jason Buck for a deep dive into trend following and managed futures.They discuss why systematic macro trend investing works, how risk transfer creates a return premium, and how trend can fit inside a diversified all-weather portfolio.Standpoint Fundshttps://www.standpointfunds.com/Topics covered:Why trend following can struggle during fast reversals and thrive after regime shiftsHow systematic investors manage whipsaws, drawdowns, and emotional pressureThe trade-offs between short-term, medium-term, and long-term trend signalsWhy Eric prefers simple, durable systems over complex models and constant tinkeringWhen it makes sense to remove a futures market from a systematic portfolioWhy trend following may earn a risk transfer premium from hedgers and commercial usersHow copper producers, options markets, and insurance help explain trend following returnsWhy rising interest rates and short bond positions can benefit managed futuresHow trend following can pair with global equities in an all-weather portfolioWhy smoothing a trend strategy can reduce its value when investors need convexity mostThe behavioral challenge of holding diversifiers that look wrong at the wrong timeWhy investors and advisors often want alternatives but struggle to stick with themTimestamps:00:00 Why trend following opportunities appear under pressure04:39 Pro-growth positioning before the whipsaw09:32 Short-term vs long-term trend signals13:46 The danger of tinkering with systematic strategies18:43 What actually changes in a durable process23:27 Rising rates, short bonds, and collateral yield28:00 Copper hedging and why trend followers buy rising prices32:00 Options, insurance, and risk transfer through time36:28 Regime shifts and supply-demand imbalances41:00 What investors choose when asset classes are anonymized45:11 Building a portfolio for 30-year terminal wealth50:06 Why portfolio construction is different than judging individual strategies56:15 Why trend following and value investing require faith01:00:42 Reducing errors vs chasing highlight-reel winners01:05:36 Where to follow Eric and Standpoint

Cliff Asness returns to Excess Returns for a greatest hits tour through some of his most important and entertaining investing ideas.We discuss bubble logic, today’s AI market comparisons, why volatility still matters as a risk measure, private equity “volatility laundering,” international diversification, market timing myths, pulling the goalie, and how machine learning is changing quantitative investing.Cliff Asness on Xhttps://x.com/CliffordAsnessAQR Capital Managementhttps://www.aqr.com/Papers DiscussedBubble Logic: Or, How to Learn to Stop Worrying and Love the Bullhttps://www.aqr.com/Insights/Research/Working-Paper/Bubble-Logic-Or-How-to-Learn-to-Stop-Worrying-and-Love-the-BullRubble Logic: What Did We Learn From the Great Stock Market Bubble?https://www.aqr.com/Insights/Research/Journal-Article/Rubble-LogicMy Top 10 Peeveshttps://www.aqr.com/-/media/AQR/Documents/Insights/Journal-Article/My-Top-10-Peeves.pdfVolatility Launderinghttps://www.aqr.com/Insights/Perspectives/Volatility-LaunderingI Did Not Predict What Is Going on in Privateshttps://www.aqr.com/Insights/Perspectives/I-Did-Not-Predict-What-is-Going-on-in-Privates(So) What If You Miss the Market's N Best Days?https://www.aqr.com/Insights/Perspectives/So-What-If-You-Miss-the-Markets-N-Best-DaysInternational Diversification Works (Eventually)https://www.aqr.com/Insights/Research/Journal-Article/International-Diversification-Works-EventuallyInternational Diversification - Still Not Crazy after All These Yearshttps://www.aqr.com/Insights/Research/Journal-Article/International-Diversification-Still-Not-Crazy-after-All-These-YearsPerhaps the Most Important Essay I Will Ever Co Authorhttps://www.aqr.com/Insights/Perspectives/Perhaps-the-Most-Important-Essay-I-Will-Ever-Co-AuthorMain topics covered:How the dot-com bubble created its own internal logicWhy Dow 36,000 and Cisco message boards captured bubble thinkingWhat investors learned, and failed to learn, from the tech bubbleHow today’s AI market compares with the dot-com eraWhy long periods of underperformance make even good strategies hard to stick withWhy Cliff still defends volatility as a useful risk measureWhy “cash on the sidelines” is a misleading market narrativeHow private equity smoothing can make risk look lower than it really isWhy the private markets debate is not a short-term predictionWhy the “missing the best 10 days” argument against market timing is incompleteWhy international diversification can still matter after decades of US outperformanceWhat pulling the goalie can teach investors about risk, incentives and career riskHow machine learning changes quant investing without eliminating economic intuitionTimestamps:00:00 Why certainty is dangerous in investing04:58 Why Bubble Logic never became a book10:18 Cisco, Yahoo message boards and bubble psychology14:16 Rubble Logic and the lessons investors failed to learn18:04 What today’s AI market has in common with the dot-com bubble22:23 Why the long run can lie to investors26:02 Volatility, permanent loss of capital and real risk control30:19 Why there is no cash on the sidelines34:00 Private equity, smoothing and volatility laundering39:47 Why Cliff did not call the private markets downturn43:19 The flaw in the missing the best 10 days argument49:00 Why international diversification still works eventually53:35 Why crashes are global but lost decades are local57:30 Pulling the goalie and asymmetric risk01:01:00 Why coaches and investors avoid optimal decisions01:07:36 Machine learning, overfitting and economic intuition01:10:50 Leverage, short selling and derivatives in quant portfolios01:16:26 Where to follow Cliff Asness

Ben Carlson joins Excess Returns to discuss his new book Risk and Reward and the biggest lessons investors can learn from market history. We cover how to think about risk, inflation, market timing, bear markets, lost decades, diversification, compounding and why surviving volatility is the key to building long-term wealth.Ben's Bookhttps://amzn.to/4dFHsQzBen Carlson on Xhttps://x.com/awealthofcsBen's Bloghttps://awealthofcommonsense.com/Main topics covered:Why risk is hard to define and always involves trade-offsHow vivid risks like sharks and headlines distort investor decision-makingWhy doing nothing can be one of the hardest parts of investingHow inflation should be viewed through personal finance, human capital and long-term investingWhy stocks can be an inflation hedge even if they struggle during inflation spikesWhy waiting for the market coast to clear often failsWhat the world’s worst market timer teaches about saving and staying investedHow loss aversion shapes investor behaviorWhat the Great Depression, bear markets and 30-year returns teach about long-term investingWhy there is no perfect portfolio and the best strategy is one you can actually stick withTimestamps:00:00 Ben Carlson on why risk and reward are attached06:35 Doing nothing, action bias and better investing behavior11:51 Inflation psychology and lessons from the 1970s16:55 Why stocks can hedge inflation over the long run21:07 Why waiting for the coast to clear is a market timing trap26:30 Time horizons, loss aversion and portfolio behavior31:49 Government rescue, left-tail risk and unintended consequences35:54 Recessionary vs non-recessionary bear markets42:09 Why the stock market and economy can diverge47:24 Why compounding is about holding, not trading51:37 Starting valuations, lost decades and future returns55:40 Risk, reward and the biggest lesson for investors

AI is moving from hype to real enterprise adoption, and Gene Munster and Doug Clinton join Excess Returns to explain what that means for investors, technology stocks, energy demand, jobs and the next phase of the AI trade. We discuss why AI may still be early in its bubble cycle, how frontier models like GPT, Claude, Gemini and Grok compare, why AI-powered investing is becoming more practical, and where the biggest second-order opportunities may emerge.Gene Munster on Xhttps://x.com/munster_geneDoug Clinton on Xhttps://x.com/dougclintonDeepwater Asset Managementhttps://www.deepwatermgmt.com/Intelligent Alphahttps://www.intelligentalpha.co/Main topics covered:• Why Doug Clinton still thinks AI could become a bigger bubble than dot-com• How Claude Code, Codex and frontier AI models are changing enterprise productivity• The job disruption risk for knowledge workers and why AI adoption may become a survival skill• Why the AI model race may not be winner-take-all• How Intelligent Alpha uses large language models to evaluate stocks and earnings expectations• Why GPT, Claude and DeepSeek perform differently across investing tasks• The AI infrastructure boom and why energy may be one of the most underappreciated bottlenecks• Hyperscaler CapEx, data centers and the investment case for continued AI spending• How major AI IPOs like SpaceX, Anthropic and OpenAI could affect public markets• Why space, orbital data centers and zero-gravity manufacturing could become real investment themesTimestamps:00:00 AI, electricity and intelligence04:33 Why new AI models changed the semiconductor trade09:14 What AI means for knowledge worker jobs14:03 Codex, Claude Code and Google’s AI challenge18:50 OpenAI, Apple and the model capacity race23:03 How many frontier AI models can survive?27:18 Intelligent Alpha’s AI earnings benchmark31:34 Why AI investors avoid emotional bias35:33 Where to invest in the AI stack39:00 Why AI energy demand is still underappreciated43:43 How markets are judging hyperscaler AI spending48:00 The investment opportunity in space52:20 Final thoughts and closing

Jeremy Grantham joins Excess Returns to discuss The Making of a Permabear, mean reversion, market bubbles, AI, the Magnificent 7, and the long-term lessons investors can take from his career at GMO. We cover why he rejects the simple “permabear” label, how he thinks about valuation and bubbles, why AI may be both transformative and dangerous for investors, and why long-term thinking is so hard but so essential.The Making of a Permabear: The Perils of Long-term Investing in a Short-term Worldhttps://groveatlantic.com/book/the-making-of-a-permabear/GMOhttps://www.gmo.com/americas/Grantham Foundationhttps://granthamfoundation.org/Topics covered:Why Jeremy Grantham thinks the “permabear” label misses the pointThe difference between being generally bearish and making a true “abandon ship” callMean reversion, valuation cycles, and why history still matters for investorsWhy monopoly power helped reshape U.S. profit margins and market concentrationHow AI could turn today’s monopoly winners into brutal competitorsWhy new technology often becomes a cost of doing business rather than a permanent profit boostHow Grantham defines bubbles using two-sigma market eventsLessons from Japan, the dot-com bubble, the housing bubble, and the 2021 speculative peakWhy institutional investors struggle to stick with value strategies during bubblesThe role of purpose, climate risk, toxicity, and long-term thinking in Grantham’s later careerThe one lesson Grantham would teach ordinary investors about pessimism, realism, and time horizonsTimestamps:00:00 Jeremy Grantham on unpleasant news and long-term investing04:18 Reinvesting when terrified in 200908:43 Why Grantham told investors to abandon ship in 200810:28 Mean reversion and why history matters14:00 Monopoly power, the Mag 7, and rising market concentration17:14 Why AI is important but impossible to forecast20:21 AI as a cost of doing business21:24 From monopoly profits to brutal AI competition24:05 How investors should think about valuation mean reversion27:00 Why high returns on capital should eventually attract competition29:47 How Grantham defines a market bubble33:00 Japan’s extreme bubble and GMO’s zero weight decision34:19 The dot-com bubble and the pain of being early38:00 Grantham’s bubble warning signal in 202141:35 Whether today’s market is showing classic bubble behavior43:00 QuantumScape, meme stocks, and speculative excess46:35 How ChatGPT interrupted the 2022 bear market49:12 Investor behavior and the cost of underperforming in a bubble55:00 Purpose, philanthropy, climate risk, and useful work01:01:03 The one lesson Grantham would teach average investors

Marc Rubinstein joins Excess Returns to explain what private credit, bank earnings, insurance balance sheets, fintech growth, and arbitrage firms reveal about the modern financial system. The conversation covers why private credit risks may not be systemic in the traditional banking-crisis sense, but still matter for investors because of redemption gates, hidden leverage, opaque structures, incentive conflicts, and correlations that can spike when markets are under stress.Marc Rubinstein on Xhttps://x.com/MarcRubyNet Interesthttps://www.netinterest.co/In this episode, we discuss:Why the Fed says private credit redemption risks are limited and manageableWhat Blue Owl’s redemption gates reveal about private credit liquidityHow post-2008 bank regulation pushed risk into private credit, hedge funds, trading firms, and exchangesWhy banks and private credit firms are both competitors and collaboratorsThe “layer cake” of leverage connecting banks, private credit, and borrowersHow HSBC’s loss tied to Atlas and MFS highlights hidden credit risksWhy insurance companies have become increasingly tied to private creditWhy rapid growth can be dangerous in financial businessesWhat bank earnings show about the gap between weak consumer confidence and resilient spendingWhy post-mortem reports from SVB, Credit Suisse, and other failures reveal what investors could not see in real timeHow Revolut became one of the most interesting fintech stories in global bankingWhy Marc calls this a potential golden age of arbitrageWhat Jane Street, public BDC discounts, private asset valuations, and geopolitical fragmentation tell us about market structureWhy investors may still be too anchored to the 2008 banking playbookWhere Marc sees risk and opportunity in financials, banks, Europe, and non-bank financial institutionsTimestamps:00:00 Private credit, hidden risks, and correlation spikes05:03 Why Blue Owl became a private credit warning sign10:20 How private credit grew after the 2008 financial crisis15:30 Banks and private credit as financial “frenemies”19:44 HSBC, Atlas, MFS, and the layer cake of leverage24:11 Apollo, Athene, insurance assets, and private credit incentives29:20 Why higher rates have not broken more of the financial system33:40 Bank earnings, consumer confidence, and resilient spending37:20 Why “I don’t know” can be a powerful signal from bank CEOs41:46 Revolut and the ambition to build a truly global bank47:38 Why growth can be dangerous in finance52:19 Private assets, public BDC discounts, and arbitrage opportunities56:34 What investors misunderstand about banks today59:31 How Marc would think about financials as a long-short investor

First Principles with Andy Constan launches with a deep dive into market bubbles, AI, semiconductor stocks, and the financial conditions that can turn powerful technological change into a dangerous investment regime. Andy explains how bubbles form, why they are almost impossible to time, how today’s AI boom compares to past episodes like 1987, the dot-com bubble, housing, and the bond bubble, and what investors should watch as expectations, financing, and FOMO build.Andy Constan on Xhttps://x.com/dampedspringDamped Spring Advisorshttps://dampedspring.com/Topics covered:Why bubbles are easy to identify in hindsight but nearly impossible to define in real timeThe difference between an expensive market and a true bubble regimeHow new technologies, easy money, regulation, and exogenous shocks can create bubble conditionsWhy AI may rhyme with the internet boom without being an exact repeatThe role of ChatGPT, Microsoft’s OpenAI investment, and semiconductor earnings expectationsWhat the 1987 crash, Japan, housing, bonds, and dot-com bubble can teach investors todayWhy human nature, FOMO, and “keeping up with the Joneses” make bubbles so powerfulHow the late-1990s Fed response to Long-Term Capital Management helped fuel the final phase of the tech bubbleWhy tech’s current size in the economy and market may limit how far the AI boom can growHow AI capex, hyperscaler spending, buybacks, debt issuance, and IPO supply could determine what happens nextTimestamps:00:00 Intro and the challenge of identifying bubbles04:32 Expensive markets vs true bubble regimes09:57 The five bubble episodes Andy compares to today14:35 Root conditions, escalation events, and the peaking phase19:20 Why the 1987 crash may also have been a bubble24:25 The late-1990s setup and the Netscape Navigator moment28:00 Crisis analogs, easy financial conditions, and today’s AI parallels32:20 Long-Term Capital Management and rocket fuel for the tech bubble36:11 Why tech’s market share matters more today than in the 1990s43:18 Policy mistakes, subsidies, and how governments feed bubbles47:42 Semiconductor earnings expectations and valuation risk53:45 The AI capex chain and where the money has to come from58:42 IPOs, corporate debt, and the financing risk behind the AI boom01:02:27 What investors should do differently in a bubble regime

Edward Chancellor joins Kai Wu on the latest episode of the Intangible Economy to discuss what financial history and capital cycle theory can teach investors about today’s AI boom. They explore why transformative technologies can still produce terrible investor returns, how overinvestment develops, where anti-bubbles may be forming, and what past episodes like the railway mania, the dot-com bubble, China’s investment boom and the post-2008 interest rate regime suggest about the risks and opportunities today.Subscribe on Spotify⁠⁠Subscribe on AppleTopics covered:How capital cycle theory applies to the AI data center boomWhy railway mania, autos, aircraft and the dot-com bubble offer lessons for todayWhy markets often fund major technology transitions but fail to identify the winnersThe prisoner’s dilemma driving hyperscaler AI spendingWhether AI demand can justify the supply being builtHow GPU depreciation and AI capital spending may affect reported earningsWhy hallucinations and reliability may limit the total addressable market for large language modelsThe case for looking at AI anti-bubbles instead of shorting the bubble directlyWhy China shows that strong GDP growth does not guarantee strong shareholder returnsHow intangible capital, SaaS valuations and human capital fit into capital cycle analysisWhether bubbles can be good for society while still being bad for investorsWhy the long-term interest rate cycle may have changedThe role of gold in a world of expensive stocks, rising debt and vulnerable bondsTimestamps:00:00 Edward Chancellor on capital cycles, bubbles and AI04:42 Why the railway mania became a classic overinvestment cycle09:00 Why markets fund technology booms but often miss the winners13:19 The prisoner’s dilemma behind AI spending17:30 Will AI demand justify the supply being built20:00 How capital spending can inflate profits before the bust25:08 The AI Hindenburg moment and the limits of large language models30:55 Why AI hype may exceed the proven technology35:55 Why the anti-bubble may matter more than shorting AI40:00 The energy transition bubble and the opportunity in overlooked assets45:08 China’s lesson on GDP growth and shareholder returns49:27 Big Booze, GLP-1s and the Lindy effect54:23 Can intangible capital have its own capital cycle59:54 SaaS valuations and the index creation warning signal01:04:10 Why bubbles can help society but hurt investors01:09:09 Why long-term rates may be in a new multi-decade cycle01:14:07 Why Edward Chancellor still sees a role for gold

Brent Kochuba of SpotGamma joins Jack Forehand for the May 2026 OPEX Effect to break down what options positioning is saying after a massive AI and semiconductor-led market rally. They discuss SPX call volume, zero DTE options, dealer gamma, VIX expiration, NVIDIA earnings, oil risk, AI CapEx, and why options flows may help explain both the market’s recent melt-up and the potential for a volatility shift after OPEX.Guest LinksBrent Kochuba on Xhttps://x.com/spotgammaSpotGammahttps://spotgamma.com/Topics CoveredWhy the market has ignored oil shocks and geopolitical risk while AI earnings dominate investor attentionHow AI CapEx, semiconductors and mega-cap tech have driven a powerful melt-up in stocksWhy options volume and zero DTE trading are increasingly important for all investorsHow dealer hedging, delta and gamma can affect stock market movesWhy options expiration can create short-term turning points in markets and volatilityWhat the May OPEX setup says about call-heavy positioning in the S&P 500Why single-stock options activity in NVIDIA, Tesla, Apple, Amazon and AI-related names mattersHow record SPX call volume is being driven by short-dated options flowsWhy Brent is watching VIX expiration, NVIDIA earnings and May 19 to May 20 for volatility expansionWhat oil, VIX, correlation and dispersion are signaling about market riskTimestamps00:00 Intro: SPX call volume, call-heavy positioning and transient options flows00:57 Are we in melt-up mode?05:29 AI, UFOs and how fast market narratives are changing09:00 Why options flows matter more for everyday investors13:39 Could SpaceX become the next huge options market?16:00 How dealer hedging, delta and gamma move through the market20:44 Why OPEX can become a turning point for stocks and volatility23:22 Why May OPEX is so call heavy28:07 The market rally into May expiration33:00 AI rebranding, meme behavior and downside headline risk36:07 Reviewing last month’s oil and volatility setup40:17 How the war flipped market leadership back to tech44:13 Dealer gamma support in the S&P 50049:19 Single-stock gamma in NVIDIA, Tesla, Apple and Amazon51:06 Record SPX call volume and the role of zero DTE54:55 Semiconductor, AI and memory call volume57:50 From bearish positioning to peak-bull dispersion59:22 Oil, the S&P 500 and changing correlations01:03:06 COR1M, dispersion risk and when Brent considers hedging01:04:57 Brent’s key takeaways for May OPEX and volatility expansion

Elena Khoziaeva, Co-Chief Investment Officer and Portfolio Manager at Bridgeway Capital Management, joins Excess Returns to discuss factor investing, small caps, value investing, market concentration, intangibles, passive investing, market neutral strategies, and the role of AI in quantitative investment research.We cover how Bridgeway combines disciplined quantitative models with human judgment, why the S&P 500 may be less diversified than investors think, and how investors can think about diversification when mega-cap growth stocks dominate market returns.Bridgeway Capital Managementhttps://bridgeway.com/I Know What You Did Last Summerhttps://bridgeway.com/perspectives/i-know-what-you-did-last-summer/How Many Stocks Are Effectively in the S&P 500?https://bridgeway.com/perspectives/how-many-stocks-are-effectively-in-the-sp500/Topics CoveredWhy quantitative investing still needs human judgment and skepticismThe difference between smart beta and true multi-factor portfolio constructionHow Bridgeway combines value, quality, sentiment and risk controlsWhy the size premium may depend on how small-cap stocks are definedWhy recently fallen large caps and IPOs can distort small-cap researchHow the small-cap universe has changed as companies stay private longerHow intangible assets affect traditional value and quality metricsWhy value can work in bursts and why timing factor rotations is so difficultHow concentrated the S&P 500 has become using the HHI frameworkWhy passive investing may create opportunities for active small-cap managersHow market neutral strategies can help investors manage equity market volatilityHow AI can help with data, text analysis and trading without replacing investment judgmentTimestamps00:00 Why fewer than 50 stocks are driving S&P 500 returns01:04 Bridgeway’s evidence-based investing approach02:59 Why quantitative models need human judgment07:52 Smart beta vs multi-factor investing11:32 How Bridgeway builds multi-factor portfolios16:08 Rethinking the size premium20:31 Has the small-cap universe gotten worse?23:49 How intangibles change value investing28:05 Does value still work?30:09 Why value returns can be episodic33:11 Why factor investors need patience35:22 How concentrated is the S&P 500?40:29 Factor strategies as portfolio diversifiers41:41 Passive investing and market structure44:27 Managing volatility with market neutral strategies49:40 How systematic managers update their models55:02 How Bridgeway is using AI01:00:03 Elena’s biggest lesson for investors

This episode of our new showThe 100 Year Thinkers brings together Chris Mayer and Ian Cassel for a deep discussion on long-term stock picking, microcap investing, business quality, AI disruption, management teams, and the behavioral skills that separate great investors from great analysts.They explore why the edge in investing may increasingly come from judgment, presence, relationships, patience, and the ability to hold the right businesses through uncertainty.Subscribe to the 100 Year Thinkers on Spotify⁠⁠⁠⁠Subscribe to the 100 Year Thinkers on AppleTopics CoveredWhy being present with management teams may still be an investor edge in the age of AIHow microcap investing differs from small-cap, mid-cap and large-cap investingWhy talking to management can build conviction but also create biasHow Chris Mayer thinks about vertical market software, mission-critical systems and AI disruptionWhy AI may become table stakes rather than a durable competitive advantageHow small companies can use AI to improve workflows, sales, inventory and productivityWhy many microcaps have short shelf lives and rarely become true long-term compoundersThe role of intelligent fanatics, owner-operators and repeat winners in great investmentsWhy management transitions can create powerful microcap opportunitiesThe difference between being a great analyst and being a great investorWhy execution, position sizing, selling losers and holding winners matter more than hit rateHow Matt and Bogumil apply the lessons to AI, business quality and the limits of small business scalabilityTimestamps00:49 Introducing Chris Mayer, Ian Cassel and 100 Year Thinkers04:59 Ian Cassel’s first management meeting and XM Satellite Radio09:00 Why management meetings deepen understanding but can also mislead14:32 Chris Mayer on the real edge in long-term investing18:40 Mission-critical software, systems of record and AI disruption22:45 How microcap companies are using AI in real businesses27:02 AI as table stakes and when disruption creates opportunity31:29 Why most microcaps have short shelf lives35:51 Finding Tom Brady before the market knows he is Tom Brady40:53 Why owner-operators and intelligent fanatics matter45:03 Second-in-command leaders, repeat winners and chips on shoulders49:27 Analyst vs investor and the missing skills of stock picking54:00 Using data to identify investor strengths, weaknesses and decision errors58:14 Position sizing and letting small positions earn the right to grow01:03:00 Peter Lynch, stocks as businesses and learning to think like an owner01:07:00 AI, human judgment and the limits of automation01:11:00 Why not every small business can become the next Facebook01:15:00 Where to follow Bogumil and the 100 Year Thinkers series

This week’s Excess Returns Weekly Wrap examines what Chris Davis and Rich Bernstein can teach investors about letting winners run, inflation risk, market concentration, dividends, AI, and the difference between economic stories and investment returns. Jack Forehand and Matt Zeigler break down clips on portfolio concentration, the 1960s vs. the 1970s, investor complacency, the Fed’s inflation target, durable businesses, and where the next market opportunity may be hiding.Subscribe on SpotifySubscribe on AppleTopics CoveredWhy letting winners run can be so powerful, but so hard for professional investorsChris Davis on how his mother outperformed by never selling great companiesThe tradeoff between concentration, diversification and real-world portfolio riskWhy Rich Bernstein thinks today may look more like the 1960s than the 1970sHow oil prices affect consumer behavior when measured against wagesChris Davis on why perceived risk can be very different from actual riskWhat cars, insurance and investor behavior reveal about market complacencyWhy the Fed’s 2% inflation target may not reflect the world investors are living inThe relationship between valuation, durability and software stocksWhy higher inflation could increase demand for dividends and near-term cash flowChris Davis on why exceptional people and management teams matter in investingWhy AI may be a great economic story but not necessarily a great investment storyTimestamps00:00 Letting winners run, 1960s inflation and investor risk perception02:18 Chris Davis on how his mother outperformed by never selling08:32 Reinvestment risk and the limits of active management12:45 Why oil shocks may matter less when gasoline is low relative to wages20:25 Chris Davis on why feeling safe can make investors take more risk29:20 Rich Bernstein on whether the Fed’s 2% inflation target is outdated34:08 Chris Davis on durability, valuation and software stocks39:39 Why cash flow gives durable companies room to adapt43:16 Rich Bernstein on dividends, inflation and the need for cash today51:55 Chris Davis on why people matter more than investors think56:07 The risk and value of investing with exceptional leaders1:01:30 Rich Bernstein on AI as an economic story vs. an investment story1:05:13 Why AI productivity may not translate into obvious stock market winners

This episode of Last Call breaks down one of the most confusing market environments in recent memory: why stocks continue to rise despite war, oil shocks, and growing macro risks. Through conversations with Jim Paulsen, Ben Hunt, Kevin Muir, and Brent Kochuba, we explore the tension between strong earnings, hidden risks in private credit and global growth, and the powerful role of flows and positioning in driving markets higher.Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠Topics CoveredWhy markets are ignoring war, oil shocks, and geopolitical riskThe “supernova” risk in private credit and why it hasn’t hit markets yetHow supply-driven inflation differs from 1970s-style demand inflationWhy pessimistic sentiment may actually be supporting marketsThe role of earnings growth and valuation resets in fueling the rallyBull vs bear case for markets based on macro, earnings, and positioningWhy free cash flow trends may be more concerning than earningsHow options flows and dealer positioning are suppressing volatilityThe AI capex boom and its impact on market leadership and breadthThe growing divide between Mag 7 earnings and the rest of the marketTimestamps00:00 Intro and market overview01:37 Why markets are not falling despite negative news03:00 Buy-the-dip behavior and earnings resilience06:11 Ben Hunt on “supernova” risks in private credit08:00 Hidden credit crunch in middle market companies10:24 Why private credit matters for economic growth14:10 Oil supply shocks and global growth risks17:00 Why markets can ignore risks before they appear18:48 Jim Paulsen on market resilience and sentiment20:00 Why pessimism may reduce downside risk22:24 Inflation vs labor force growth framework24:00 Why current inflation is supply-driven, not demand-driven26:00 Potential shift from inflation focus to growth focus29:11 Kevin Muir on bull vs bear market setup31:00 War impact on rates, oil, and positioning33:00 Fed reaction and shifting rate expectations35:00 Why earnings remain the dominant market driver37:00 Why geopolitics often doesn’t move markets40:00 Bear case: weak free cash flow and employment risk44:26 Brent Kochuba on options flows and positioning47:00 Why markets ignore rising rates and oil49:00 Call buying, dispersion, and tech leadership51:00 Energy as both hedge and AI-driven opportunity54:00 Correlation, volatility, and market structure56:00 Dealer positioning and suppressed volatility58:00 Earnings strength and narrow market leadership01:01:00 Free cash flow vs earnings debate01:01:55 AI capex and long-term market implications

This episode explores one of the most important debates in markets today: whether investors are underestimating the risk of higher inflation and overconcentrating in a narrow group of growth stocks.Richard Bernstein of Janus Henderson Investors joins Excess Returns to explain why today’s environment may look more like the inflationary 1960s than the 1970s, what that means for portfolios, and why many investors may be disappointed with passive index returns over the next decade.Richard walks through the implications of rising import prices, global conflict, and deglobalization, and how these forces could drive a structural shift toward higher inflation and shorter-duration investing. He also explains why market concentration, AI enthusiasm, and capital flows may be setting up a broadening opportunity across overlooked areas of the market.Follow Rich on Twitter:https://twitter.com/RBAdvisorsCompany Website:https://www.rbadvisors.comWhy investors in S&P 500 index funds may face disappointing long-term returnsThe shift from exporting disinflation to importing inflation through global tradeHow war and geopolitical conflict are influencing inflation expectations and marketsWhy today’s environment resembles the 1960s “guns and butter” period more than the 1970sThe case for structurally higher inflation and a potential shift in Fed targetsWhy shorter-duration assets, dividends, and cash flow matter more in inflationary regimesThe risks of overconcentration in AI and mega-cap growth stocksHow capital flows and valuation distortions create opportunities outside the Mag 7The case for international equities and why investors are significantly underweightWhere Bernstein sees the most compelling long-term opportunities across sectors and regions00:00 Intro and why index investors could be disappointed00:01:13 War, inflation, and the impact of rising gasoline prices00:02:40 Importing inflation and the role of global trade dynamics00:03:33 1970s oil shock vs 1960s guns and butter comparison00:05:00 Why today’s inflation environment may be less severe than the 1970s00:06:30 Defense spending, tax cuts, and inflation expectations00:08:54 Why Bernstein is taking the “over” on inflation and deficits00:10:00 The case for a higher long-term inflation target00:11:00 Why the Fed may resist changing its 2% inflation target00:12:00 Deglobalization and the rise of global conflict00:14:00 Global inflation dynamics and divergence across countries00:15:21 Why cash and short-duration assets may outperform00:17:00 Asset-liability mismatches and the endowment model stress00:18:23 Market concentration and parallels to the dot-com bubble00:20:00 AI as an economic story vs an investment story00:21:00 Capital flows, valuation excess, and future return expectations00:22:39 Why market broadening opportunities may emerge00:24:19 Passive flows, ETFs, and market distortions00:25:40 Where Bernstein sees sector opportunities today00:27:34 The case for dividends in an inflationary environment00:31:00 Why near-term cash flow matters more than long-term growth00:33:07 Corporate behavior, capital allocation, and rising hurdle rates00:36:02 Profit cycle strength and why the market should broaden00:41:36 Evaluating IPOs and speculative investments00:47:09 The risk of a lost decade for index investors00:50:21 Gold, commodities, and portfolio diversification00:53:48 Most attractive overlooked opportunities today00:58:06 Biggest long-term risks and what keeps Bernstein up at night

This episode with Chris Davis of Davis Advisors explores how investors should think about risk, valuation, and opportunity in a market defined by high valuations, technological disruption, and major macro shifts. Davis lays out a framework for navigating uncertainty, explains why durability matters more than ever, and shares hard-earned lessons on selling great companies too early.Davis Advisorshttps://www.davisadvisors.comTopics CoveredWhy high valuations signal complacency even in an uncertain macro environmentThe three major forces reshaping markets: higher cost of capital, deglobalization, and AIHow to identify durable and resilient businesses in a fragile worldWhy growth and value are not opposites and how expectations drive opportunityLessons from past bubbles and why today may resemble 1999 in market structureThe hidden risks in passive investing and index concentrationChris Davis’ five-part framework for investing in AI (winners, enablers, users, protected, disrupted)Why most investors lose money by overpaying for growth and underestimating competitionThe importance of management quality and “great people” in long-term investing successWhy the biggest investing mistakes are often the great companies you sell too earlyTimestamps00:00 Intro and key investing paradox on risk perception02:45 Why today’s market reflects complacency despite uncertainty05:20 Valuations, concentration, and optimism in current markets08:52 Lessons from 1999 and how value investing can outperform in downturns12:00 Durability, resilience, and why balance sheets matter more now15:21 Kodak, disruption, and risks of passive investing18:00 Perception vs reality of risk and behavioral mistakes21:51 Market structure, moral hazard, and the “buy the dip” mindset26:34 How investors should think about AI as a long-term technology shift29:30 Why picking early AI winners is dangerous33:00 The role of enablers like semiconductors, energy, and infrastructure36:00 AI users and which companies benefit most from adoption38:00 Businesses protected from disruption vs “walking dead” companies42:00 The biggest investing mistake: selling great companies too early46:00 Portfolio concentration and lessons from real-world experience50:00 Berkshire Hathaway, long-term culture, and durable business models54:00 Learning from mistakes: Costco case study57:00 The importance of management and why people matter more than investors think

This episode explores how massive structural shifts—AI, deglobalization, and the rise of passive investing—are reshaping markets and what that means for investors. Informed Momentum Company CIO Travis Prentice breaks down why 52 week highs don't mean what you think, the extreme dispersion beneath the surface of the market, why traditional definitions of risk may be flawed, and how investors should think about momentum, quality, and diversification in a rapidly changing environment.Papers and Resources Discussed:Risks Hiding in Plain Sighthttps://www.informedmomentum.com/risks-hiding-in-plain-sight-how-the-dominance-of-passive-investing-is-reshaping-market-risk/Is Quality Broken?https://www.informedmomentum.com/is-quality-broken-ai-driven-disruption-is-testing-standard-definitions-of-quality/Buy High, Sell Higherhttps://www.informedmomentum.com/buy-high-sell-higher/Topics Covered:The hidden divergence beneath index performance and why the market isn’t as stable as it looksWhy value and momentum are working together—and what that signals about market broadeningHow AI and deglobalization are driving a major regime shift in marketsWhy momentum investors ignore narratives and focus purely on what’s workingThe structural risks created by the rise of passive investing and index concentrationHow tracking error replaced real risk—and why that may be dangerousWhy quality stocks (especially software) are under pressure in the AI eraThe key insight behind 52-week highs as a powerful momentum signalWhy buying stocks near highs works despite investor intuitionHow momentum strategies adapt to changing leadership and market regimesThe importance of combining factors like value, momentum, and quality for long-term successTimestamps:00:00 Intro and major market shifts01:32 Market divergence beneath the surface03:00 Factor performance and broadening market trends05:13 Why market concentration hurts factor investing06:48 AI and deglobalization as structural drivers08:14 Does this environment change how you invest?11:02 Has the market sped up? Momentum implications14:00 Passive investing and hidden structural risks17:00 Tracking error vs real risk in portfolios19:00 AI as a potential change agent for markets21:09 How passive flows impact factor investing24:00 What defines “quality” in factor investing27:04 Why software and quality are under pressure29:13 AI disruption and changing expectations32:20 How to evaluate factor underperformance34:35 Comparing today’s market to the 1990s37:38 Buy high, sell higher: 52-week highs41:00 52-week highs vs traditional momentum43:20 Combining signals for better outcomes46:00 Why 52-week highs improve downside protection48:17 What momentum is picking up today50:21 Misconceptions about momentum and growth52:12 Timing and implementation of momentum54:18 Momentum reversals and market behavior57:17 Future research and improving momentum signals

This episode features Chris Bloomstran of Semper Augustus discussing market concentration, AI capital spending, Berkshire Hathaway, and the risks facing today’s equity investors. The conversation explores whether we are at a secular valuation plateau, how AI investment may reshape returns, and why passive investors may face more risk than they realize.Semper Augustus Investmentshttps://www.semperaugustus.comTopics covered:Why extreme market concentration in the Mag 7 may create long-term risksThe concept of a “secular plateau” vs a market peakHow AI capex could become a classic capital cycle with poor returnsWhy hyperscaler spending may not translate into shareholder profitsThe hidden risks of leverage both on and off balance sheetsWhy buy-and-hold investing is harder than it seems in practiceHow valuation discipline drives long-term investment outcomesBerkshire Hathaway’s cash position and what it signals about opportunityWhy capital allocation matters more than growth narrativesLessons from past bubbles including railroads, fiber, and the Nifty FiftyThe fragility of life and how it shapes investing prioritiesThe importance of independent thinking in the age of AITimestamps:00:00 Intro05:12 The “Both Sides Now” framework and AI theme09:03 Secular peak vs secular plateau in markets13:08 Leverage risks and balance sheet quality17:42 Why passive investors are more concentrated than they think21:12 The limits of long-term compounding and disruption risk25:06 Why valuation matters more than “forever stocks”29:10 Portfolio construction and return on capital differences33:18 AI capex boom and capital cycle parallels37:05 Why hyperscaler spending may not generate adequate returns41:12 The math problem behind AI investment returns45:10 Competition, redundancy, and pricing pressure in AI49:02 Is AI an existential risk for big tech?52:06 Berkshire Hathaway’s cash and Apple sales56:08 Capital allocation lessons from Coca-Cola vs Apple59:20 What Berkshire’s cash signals about future opportunities01:02:10 The fragility of life and investing priorities01:05:28 Final lessons for investors: reading, skepticism, and independent thinking

This episode features David Rosenberg, founder of Rosenberg Research, breaking down why today’s market may be driven more by valuation excess and investor behavior than fundamentals. He explains why the biggest risks right now are not obvious in headline data, and why the probability distribution for markets may be far more fragile than investors assume.Rosenberg walks through his framework for thinking in probabilities, how AI-driven productivity is distorting economic signals, why the equity market is now driving the economy, and what a “silent contraction” beneath the surface could mean for growth, inflation, and returns. He also outlines how he is positioning portfolios in response to these risks.Rosenberg Researchhttps://www.rosenbergresearch.comTopics CoveredWhy markets may be a “bubble in behavior,” not technologyThe equity risk premium at zero and what that implies for future returnsCAPE valuations and why long-term returns could be flat to negativeThe shift from economy driving markets to markets driving the economyThe “silent contraction” beneath strong GDP headlinesAI-driven productivity vs weakening labor marketsThe K-shaped economy across consumers, jobs, and capital spendingWhy the savings rate is the most important overlooked economic variableInflation outlook: why this shock may be disinflationary, not persistentPortfolio construction in a low-return, high-uncertainty environmentTimestamps00:00 Intro04:42 Cycle thinking vs “perma bear” label09:58 Learning probabilistic thinking and Plan B15:52 The “sixth mega bubble” and investor behavior20:36 Why valuations imply poor forward returns25:08 The “silent contraction” beneath headline data29:14 The savings rate and equity wealth effect33:12 Fiscal deficits and artificial economic support38:28 2027 outlook and shifting probabilities43:02 Why expectations matter more than recession calls45:40 Inflation shock vs wage-driven inflation49:22 Productivity boom and disinflation forces53:10 Why inflation may fall faster than expected55:04 Portfolio positioning and diversification strategy01:00:12 Tactical vs thematic investing framework01:03:10 Final thoughts on risk, probabilities, and markets

Brent Donnelly returns to Excess Returns to break down one of the most confusing market environments in years, where policy shocks, volatility, and positioning matter more than traditional fundamentals. He explains why markets can keep rising despite constant bad news, how traders should think about regime shifts, and what actually drives moves across equities, bonds, FX, and gold today.Brent also shares practical insights from his trading process, including risk management, journaling, and how to think about positioning and asymmetric opportunities. The conversation spans macro frameworks, behavioral pitfalls, and the evolving nature of market edges, offering a detailed look at how a professional trader navigates uncertainty.Spectra Marketshttps://www.spectramarkets.comTopics covered:Why stocks need a steady stream of bad news to go down and what drives ralliesThe impact of constant policy shocks on volatility, positioning, and mean reversionHow to distinguish structural trends from short-term trading opportunitiesThe “wall of worry” and why markets can ignore negative headlinesThe importance of Mag 7 earnings and concentration in today’s marketHow traders use reassessment triggers like the 200-day moving averageThe complexity of central bank reactions to oil shocks and inflationWhy bonds still matter as a recession hedge despite recent correlation breakdownsHow positioning—not fundamentals—drives moves in the U.S. dollarGold, silver, and Bitcoin through the lens of flows, retail behavior, and debasementThe role of overconfidence and risk management in trading successBrent’s journaling process and how writing clarifies thinkingHow to identify asymmetric trades using potential headline scenariosWhy edges in markets are temporary and require constant adaptationTimestamps:00:00 Intro02:05 Government policy shocks and market impact05:10 Volatility, shocks, and trading frameworks09:05 Why the economy remains resilient despite rate hikes13:05 Market concentration and the importance of big tech earnings16:05 The “steady stream of bad news” framework for stocks18:30 Using the 200-day moving average and pattern recognition22:10 Central banks, oil shocks, and inflation dynamics24:35 Stocks vs bonds and the 60/40 portfolio outlook26:05 Why dollar moves depend on positioning, not narratives30:55 Gold, silver, and the retail-driven momentum cycle34:05 The debasement trade and long-term gold thesis38:10 Rationality vs overconfidence in trading41:05 Risk management, journaling, and avoiding blowups46:00 Thinking in probabilities, positioning, and market expectations50:55 Journaling as a tool for clarity and discipline55:00 Why traders lose discipline when over-earning59:10 Brent’s new book and evolving trading frameworks01:03:30 Where to find Brent and closing thoughts

Liz Ann Sonders of Schwab joins Excess Returns to break down how war, an oil shock, and shifting market dynamics are reshaping the investing landscape. She explains why the surface-level strength in markets is misleading, what’s really happening beneath the index, and how investors should think about inflation, the Fed, AI, and the evolving role of retail traders.Follow Liz Ann on Twitterhttps://twitter.com/LizAnnSondersLiz Ann's Research and Commentaryhttps://www.schwab.com/learn/author/liz-ann-sondersTopics CoveredHow war and oil shocks are impacting markets, inflation, and Fed policyWhy the US being a “net energy exporter” doesn’t protect investorsThe hidden bear market beneath index-level resilienceRotation vs. correction and what it means for portfoliosThe rise of retail traders and the shift away from “dumb money”Why better or worse data matters more than good or bad dataThe K-shaped economy and its impact on consumption and marketsAI’s three phases and its real impact on jobs and productivityWhy this earnings season may be more important than usualThe shifting role of the Mag 7 and broader market participationWhy the bond market may be the true driver of equitiesRisks in credit markets and what investors should watchLabor market dynamics and challenges for younger workersHow investors and young professionals should think about AITimestamps00:00 Intro and current market environment04:05 Why the US isn’t immune to oil price shocks05:35 Lessons from past oil shocks and inflation07:22 Why markets seem resilient despite macro risks08:00 The hidden drawdowns beneath the index surface10:13 Rolling recessions and sector-level weakness10:37 Are investors conditioned to buy every dip12:58 What happens when the dip doesn’t get bought14:36 Valuations, corrections, and market structure15:12 Sentiment analysis in a new market regime18:50 Retail investors outperforming institutions20:08 Better or worse vs good or bad economic data23:00 How markets anticipate economic turning points25:22 Understanding the K-shaped economy28:00 Wealth effects and risks from equity declines29:09 AI as a transformative force vs macro risks30:00 The three phases of AI development33:04 Why this earnings season matters more34:00 Earnings revisions and sector concentration36:00 The future of Mag 7 leadership vs the rest of the market38:00 Contribution vs performance in index returns40:00 Sector sensitivity to inflation and supply chains42:00 Fundamentals vs speculation in small caps44:21 The Fed’s dilemma in an oil shock environment48:00 Why the bond market is driving equities50:05 Credit markets and systemic risk signals53:26 Lessons from past bond market dislocations54:19 Labor market challenges and younger workers57:00 Career advice in the age of AI59:26 How Liz Ann uses AI in her research process01:01:00 Closing thoughts and where to follow Liz Ann

This episode features Jim Grant of Grant’s Interest Rate Observer on inflation, war, monetary policy, and the long arc of credit cycles. Grant explains why inflation is ultimately driven by monetary debasement and why war, fiscal policy, and central bank actions may be setting the stage for a more persistent inflationary regime than markets expect.We explore how today’s environment compares to past inflationary periods, the hidden risks in credit markets and public debt, and what history teaches us about AI investment booms, oil shocks, and monetary disruption. Grant also discusses trust in financial systems, the role of gold, and why markets are always harder in real time than they appear in hindsight.Grant’s Interest Rate Observerhttps://www.grantspub.com/Topics Covered:Why war is inherently inflationary and how it strains the productive economyThe difference between measured economic stability and underlying systemic risksHow inflation shifted from a wartime phenomenon to a permanent feature of modern monetary policyThe Fed’s 2% inflation target as a structural form of currency debasementLessons from the 1970s inflation and oil shocks vs. today’s environmentWhy inflation is a ratchet that erodes purchasing power over timeThe importance of trust in credit markets and growing risks in private credit structuresPublic debt, Treasury market dynamics, and early signs of strain in government financingHistorical parallels between AI investment and past technological booms like the internetThe role of gold as a hedge against (and investment in) monetary instabilityThe durability of the US dollar despite long-term structural concernsWhy investing is always difficult in the present—even when it looks obvious in hindsightTimestamps:00:00 Intro and Jim Grant on the true causes of inflation04:04 Why war drives sustained inflation and current geopolitical risks08:00 Historical perspective on inflation before the 1970s12:00 Oil shocks, Volcker, and lessons from past inflation cycles16:00 Why inflation never reverses and purchasing power declines20:00 Trust in markets and the foundation of credit systems24:00 Private credit risks and the modern credit cycle28:00 Public debt, Treasury markets, and fiscal sustainability concerns32:00 Treasury auctions, yields, and early warning signs in bonds35:25 AI capex boom and lessons from past technological bubbles38:17 Air conditioning, internet bubbles, and delayed economic payoffs40:00 The Fed, Treasury, and hidden financial interdependence44:14 Asset allocation, gold, and monetary disruption48:44 The dollar’s strength and global dominance53:41 Why investing is always difficult in real time59:00 Advice on markets, newsletters, and enduring uncertainty

Subscribe to the OPEX Effect on Spotify⁠⁠⁠⁠Subscribe to the OPEX Effect on Apple PodcastsThis episode of The Opex Effect breaks down why markets have remained surprisingly resilient despite geopolitical chaos, an oil shock, and extreme headline risk. Brent Kochuba joins Jack Forehand to analyze what’s really driving the market beneath the surface—from options flows and gamma positioning to the collapse in volatility and what it signals for the next move.They explore how the options market is shaping price action in ways most investors miss, why the VIX collapsed despite elevated risk, and what positioning tells us about the path forward as we head into earnings and the next major options expiration.Topics covered:Why markets have stayed near highs despite war, oil spikes, and macro uncertaintyThe “taco trade” and why investors expect bad news to reverse quicklyHow options flows and dealer hedging are influencing stock pricesWhy call options are historically cheap heading into earningsThe mechanics of gamma, delta hedging, and market maker positioningWhy options expiration (OpEx) can act as a turning point for marketsThe divergence between oil prices and equity volatilityWhat the collapse in the VIX reveals about investor positioningThe role of zero-DTE options in reinforcing short-term market rangesKey resistance levels forming from call selling and what they mean for upsideTimestamps:00:00 Why markets aren’t reacting to geopolitical chaos04:18 The “taco trade” and shifting market expectations07:30 How options flows influence stock market movements11:10 Why OpEx can drive market turning points13:05 Volatility compression and the gamma-volatility relationship15:30 How large options positioning shapes market behavior18:05 Why positioning has shifted toward calls20:00 Why this OpEx may be less impactful than prior ones22:00 Market positioning into earnings and key drivers ahead24:10 Using gamma maps to identify support and resistance27:00 Revisiting the JP Morgan collar trade and March lows30:00 Correlation spikes and the oil-volatility relationship33:00 Why oil has stopped driving equity volatility34:30 The breakdown between oil and VIX correlation36:00 Why volatility may reprice higher after OpEx37:05 The oil curve and expectations for a short-term shock39:40 One of the largest VIX collapses ever41:00 How options positioning drove the volatility unwind43:00 Why selling volatility has become a dominant strategy45:00 The feedback loop between rising markets and falling volatilityFor more information on SpotGamma and Brent’s work:https://spotgamma.comFollow Brent on Twitter:https://twitter.com/spotgamma

This episode of Excess Returns features GMO’s Tom Hancock on how to think about AI as an investment opportunity and what truly defines “quality” in today’s market. The conversation breaks down the AI value chain, challenges common assumptions about where value will accrue, and ties it all back to building durable portfolios in a rapidly changing technological landscape.Tom walks through his “Hype vs High Conviction” framework, explaining why identifying the right layer of the AI ecosystem may matter more than simply betting on the theme itself, and why balance sheets, durability, and capital allocation remain critical even in the most exciting growth environments.Hype vs High Convictionhttps://www.gmo.com/americas/research-library/hype-vs-high-conviction_insights/Topics Covered:Why AI may be the most important investment decision todayThe four-layer AI stack: applications, LLMs, hyperscalers, and infrastructureWhy investors confuse secular trends with investable opportunitiesFollowing the money through the AI value chainThe hidden risks of investing lower in the stackWhy today’s tech leaders differ from the dot-com eraGrowth vs maintenance capex and what it means for AI economicsWhy software may be more resilient than markets thinkHow GMO defines “quality” and why it matters in volatile marketsPortfolio construction: where GMO is investing (and avoiding) in AITimestamps:00:00 Intro and framing the AI investment debate00:00:55 Tom Hancock background and focus on quality investing00:02:00 What investors are getting wrong about AI00:03:23 Breaking down the four layers of the AI ecosystem00:06:45 Applications vs infrastructure: where value may accrue00:08:45 Why predicting AI winners is still difficult00:11:00 Following the cash flows through the AI stack00:13:00 Why AI funding is more stable than past tech bubbles00:16:00 Big Tech strategy differences and capital allocation decisions00:17:34 Are today’s tech companies higher quality than in 1999?00:19:00 Growth vs maintenance capex and implications for Nvidia and others00:22:00 Depreciation, chip lifecycles, and hidden risks in capex assumptions00:24:00 Capital intensity vs quality: when heavy investment is a feature00:27:00 Why incumbents may benefit most from AI00:28:30 Risks in the LLM layer and potential commoditization00:30:10 Software disruption fears: overdone or justified?00:34:06 Defining “quality” in investing00:36:00 Balance sheets vs return on capital00:38:32 Why GMO sold Oracle and the risks of leverage00:40:18 What happens if AI spending slows down00:41:35 Where the biggest risks are in the AI stack00:44:26 Where GMO is positioned vs the S&P 50000:48:00 How new ideas enter a quality portfolio00:51:00 Sell discipline and portfolio turnover00:53:00 International vs US quality investing

This episode of Excess Returns features Jim Paulsen breaking down the current macro environment through a series of powerful indicators, including oil, interest rates, consumer behavior, and market sentiment. The discussion explores whether today’s environment signals a slowing economy—or the early stages of a new bull market hidden beneath the surface.Subscribe to the Jim Paulsen Show on Spotify⁠⁠Subscribe to the Jim Paulsen Show on Apple PodcastsJim walks through a wide range of charts and frameworks, from the Walmart vs. luxury retail signal to private credit stress, productivity trends, and policy uncertainty, offering a data-driven perspective on where markets and the economy may be headed next.Paulsen Perspectives Substackhttps://paulsenperspectives.substack.comTopics CoveredWhy the recent oil spike hasn’t impacted inflation and interest rates as expectedSlowing economic growth vs. recession risk and what the Fed might do nextThe Walmart vs luxury retail indicator and what it signals about the economyPrivate credit risks and how they differ from traditional credit crisesWhy many indicators point to a new bull market rather than a bearThe role of sentiment, volatility, and uncertainty in driving market returnsMarket rotation from mega-cap “new era” stocks to broader market leadershipCorporate profits divergence and the opportunity in the rest of the economyLiquidity, cash levels, and positioning as potential fuel for marketsProductivity trends and whether AI-driven gains are real or overstatedTimestamps00:00 Intro and current macro backdrop01:05 Oil spike and limited impact on yields and inflation04:45 Growth outlook and why recession may still be avoided07:10 Fed policy and the stagflation question10:15 Walmart vs luxury retail indicator explained13:40 Private credit stress vs traditional credit cycles17:00 Why this isn’t 2008 and how balance sheets differ19:50 Private credit risks and market spillover effects22:15 Bear market fears vs signs of a new bull23:45 Consumer confidence and its impact on returns25:05 Oil spikes historically as buy signals26:15 VIX, volatility, and market bottoms27:05 Yield curve steepening and market implications28:05 Sentiment indicators and what they really reflect30:00 Market rotation and broadening beyond mega caps32:45 Passing the baton from tech to broader markets35:15 Corporate profits divergence and future potential37:00 Policy uncertainty and why it can be bullish42:05 Liquidity, cash levels, and risk allocation43:20 Options positioning and put-call signals44:05 Gold vs commodities and risk appetite45:10 Consumer credit contraction and market signals46:20 Polymarket recession probabilities as sentiment47:30 Economic sentiment collapse and contrarian signals48:10 Interest rate expectations and positioning49:05 Unemployment trends and historical market bottoms50:25 Productivity trends and AI impact on the economy

This episode of Excess Returns features Tony Wang of T. Rowe Price discussing how investors can identify “inevitabilities” in technology and position portfolios to benefit from long-term innovation trends. The conversation explores AI, semiconductors, and the evolving investment landscape, while also breaking down Tony’s portfolio construction process and how he navigates cycles, valuation, and disruption risk.Tony explains why AI is fundamentally changing the cost of intelligence, how agentic systems could reshape software and labor markets, and why the current AI buildout may differ from past tech cycles. The discussion also dives into where we are in the AI cycle, how to think about the Mag 7, and what investors may be missing across the tech stack.T. Rowe Price Science and Technology Fundhttps://www.troweprice.com/financial-intermediary/us/en/investments/mutual-funds/us-products/science-and-technology-fund.htmlTopics CoveredWhat it means to invest in “inevitabilities” and separating signal from noise in marketsWhy AI and compute demand represent a structural shift similar to past tech wavesThe rise of agentic AI and how it could transform software and productivityWhether AI is underappreciated or already priced into marketsThe “multiple moons” idea and why AI may not be a winner-take-all marketHow AI could reshape the labor market, productivity, and economic growthThe AI CapEx debate and why this cycle may differ from the dot-com buildoutWhere we are in the AI cycle: training vs inferencing and deployment phaseThe impact of AI on software companies and the innovator’s dilemmaHow semiconductors, memory, and infrastructure remain key bottlenecksThe changing nature of the Mag 7 and capital intensity in AITony’s portfolio construction framework across compounders, emerging tech, and valueHow he generates ideas using S-curve adoption and economic bottlenecksPosition sizing, risk management, and balancing growth with drawdown controlSell discipline: valuation, fundamentals, and market signalsTimestamps00:00 Introduction and Tony Wang overview01:05 Investing in inevitabilities and long-term thinking03:00 Differentiating inevitability from hype and consensus04:45 AI inevitability and the rise of agentic systems07:00 Cost of intelligence and productivity implications08:00 Real-world examples of AI adoption (customer service, agents)09:00 Is AI underappreciated by markets?11:15 AI as a “space race with multiple moons”13:30 AI as the dominant driver of markets today15:00 AI’s impact on jobs, productivity, and the economy18:30 Creativity, judgment, and the future of work20:45 Physical AI and robotics opportunity set22:30 AI CapEx debate vs the dot-com era25:30 Semiconductors vs software in the AI stack28:15 AI disruption risk for software companies31:00 Cyclicality in semiconductors and how AI changes it33:30 The evolving role of the Mag 7 in AI36:30 Competition, startups, and AI democratization38:00 Where we are in the AI cycle today40:00 Idea generation and S-curve adoption framework42:30 Case study: memory and AI bottlenecks44:45 Example position: optical networking and infrastructure46:40 Portfolio construction and position sizing49:00 Sell discipline and managing valuation risk

This episode explores the growing signs of a shift beneath the surface of the market, as technical indicators point to weakening momentum in equities and a potential change in leadership. Katie Stockton joins the show to break down what recent signals in the S&P 500, oil, gold, and sector rotation are telling us about where markets may be headed next.We cover the implications of a new monthly MACD sell signal, the importance of market breadth and leadership, and how investors can interpret shifting trends across asset classes using a disciplined technical framework.More on Katie's Strategieshttps://www.fairleadstrategies.com/Topics Covered:Why a new monthly MACD sell signal may signal a longer, choppier market phaseThe difference between fast corrections and slow grind bear phasesKey S&P 500 support levels and what a breakdown could mean for downside riskHow technical indicators help filter noise in headline-driven marketsThe breakout in crude oil and what it signals about a potential new cycleWhether sharp price moves are sustainable or likely to reverseUnderstanding overbought and oversold conditions across different timeframesWhy mega-cap weakness is critical to overall market directionThe shift from growth to value and what it means for investorsSector rotation trends and where leadership is emerging in 2025What gold’s recent run and emerging weakness signal for safe haven assetsHow a systematic, technical approach can help manage drawdowns and re-entry timingTimestamps:00:00 Intro04:18 S&P 500 momentum deterioration and MACD sell signal08:09 Key support levels and downside scenarios for equities12:53 Crude oil breakout and implications for a new cycle16:01 What overbought and oversold really mean in practice20:04 Mega-cap weakness and shifting market leadership24:41 Concentration risk in investor portfolios27:52 Value vs growth rotation and cycle dynamics32:13 Market breadth and confirmation signals36:19 Moving averages, death cross, and trend interpretation39:56 Inside the TAC ETF and sector rotation strategy44:04 Gold trends and why consolidation may be next47:00 Key signals to watch going forward

In this inaugural episode of our new show, The Intangible Economy with Kai Wu, we explore how AI, intangible assets, and unprecedented capital investment are reshaping the future of markets. Michael Mauboussin joins Kai to break down why today’s AI expectations may be historically unmatched—and what that means for investors trying to assess risk, returns, and who ultimately captures value.Subscribe on SpotifySubscribe on AppleThe conversation moves from base rates and AI growth expectations to competitive dynamics, capital cycles, and the fundamental shift toward intangible-driven business models that are changing how we think about valuation, moats, and market structure.Papers and Resources Discussed:Bayes and Base Rates: How History Can Guide Our Assessment of the Futurehttps://www.morganstanley.com/im/en-us/institutional-investor/insights/consilient-observer/bayes-and-base-rates.htmlThe Impact of Intangibles on Base Rateshttps://www.morganstanley.com/im/publication/insights/articles/article_theimpactofintangiblesonbaserates.pdfMeasuring the Moat: Assessing the Magnitude and Sustainability of Value Creationhttps://www.morganstanley.com/im/publication/insights/articles/article_measuringthemoat.pdfOne Job: Expectations and the Role of Intangible Investmentshttps://www.morganstanley.com/im/publication/insights/articles/article_onejob.pdfCapitalism Without Capital: The Rise of the Intangible Economyhttps://books.google.com/books/about/Capitalism_without_Capital.html?id=J3SYDwAAQBAJA Better Estimate of Internally Generated Intangible Capitalhttps://pubsonline.informs.org/doi/10.1287/mnsc.2022.01703Underestimating the Red Queen: Measuring Growth and Maintenance Investmentshttps://www.morganstanley.com/im/publication/insights/articles/article_underestimatingtheredqueen.pdfExplaining the Recent Failure of Value Investinghttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=3442539Guest Links:Michael Mauboussin TwitterTopics Covered:Why OpenAI’s projected growth would be unprecedented in market historyHow base rates provide a reality check on AI expectationsThe role of diffusion models and adoption curves in forecasting technologyWhy massive capital investment in AI may follow past boom-bust cyclesLessons from large-scale infrastructure projects and why timelines breakHow intangible assets change the distribution of business outcomesThe rise of “fat tails” and why more companies now massively win or failWho captures value in AI across the stack from chips to applicationsWhy competition may drive AI profits toward consumers, not producersHow accounting distorts intangible investment and misleads investorsTimestamps:00:00 Intro and OpenAI growth expectations vs historical base rates04:32 Why no company has ever achieved 100%+ sustained growth at scale08:47 Lessons from megaprojects and AI infrastructure buildouts13:18 Intangible assets and why outcomes now have fatter tails18:36 Why big tech is growing faster than historical precedents23:52 Where value accrues in AI and why consumers may benefit most28:21 Barriers to entry in AI including capital, talent, and scale32:47 The risk of overinvestment and historical parallels to past bubbles37:26 Game theory and competitive signaling in AI capital spending41:58 Why investment returns—not “asset light” narratives—drive value46:12 How accounting fails to capture intangible investment properly50:44 Breaking down SG&A into maintenance vs investment spending55:03 Why understanding reinvestment and ROI is the core investing skill59:18 Final thoughts on uncertainty, expectations, and base rates in AI

This episode of Excess Returns features Aahan Menon of Prometheus Research breaking down the growing risk of an inflation shock driven by energy markets and what it means for investors. The discussion explores how a potential shift toward stagflation could challenge traditional stock and bond portfolios and why commodities, trend following, and systematic frameworks may be better suited for the current environment.Prometheus Researchhttps://www.prometheus-research.comAahan Menon Twitterhttps://x.com/@AahanPrometheusWhy the current inflation shock may be one of the most significant in recent historyHow oil prices and geopolitical conflict are reshaping macro expectationsThe growing risk of a stagflationary environment and what it means for portfoliosWhy traditional 60/40 portfolios may struggle in sustained inflation regimesHow expected returns differ across equities, bonds, commodities, and FXWhy commodities and energy markets offer the most attractive opportunities todayThe role of backwardation and supply shocks in driving commodity returnsWhy consensus earnings expectations may be too optimistic relative to macro realityHow inflation flows through the economy from energy to consumer demandThe Fed’s dilemma between inflation control and economic slowdownA simple rule for when to own treasuries based on inflation trendsWhy correlations across asset classes are breaking down in crisis environmentsHow systematic investors manage risk when markets are driven by news and geopoliticsThe case for trend following as a core portfolio strategyHow Aahan’s free trend system works across stocks, bonds, gold, and BitcoinThe behavioral advantages of systematic investing during volatile marketsRisks of trend following including whipsaws and false signalsHow portfolio construction is evolving to include crisis protection and energy overlays00:00 Inflation shock and why equities and bonds may struggle01:03 Setting up the macro backdrop before the oil shock03:12 Labor market slowdown vs strong GDP divergence04:45 Consumer spending driven by de-saving05:35 Oil-driven inflation shock as a recession catalyst07:32 Preparing for stagflation vs disinflationary growth09:18 Why commodities outperform in inflation regimes10:45 Expected returns framework across asset classes12:05 Why commodities and FX offer the best opportunities14:05 How commodity carry and backwardation work16:42 Trend following and commodities as pro-cyclical exposures17:43 Ranking expected returns: energy, FX, bonds, equities18:51 Challenges of systematic investing in news-driven markets20:15 Extreme correlations and oil dominating asset pricing23:47 Earnings expectations vs macro reality gap28:30 Why the Fed faces an impossible policy tradeoff30:00 Real-time CPI estimates and inflation pressure32:00 A rule for when to own treasuries based on CPI37:30 Stock-bond correlation regime shifts39:34 How the trend following system works45:10 Benefits and limitations of trend strategies

This episode explores Harris “Kuppy” Kupperman’s framework for “inflection investing” and how he identifies asymmetric opportunities across global markets. The conversation dives into why he believes U.S. equities are structurally challenged, where he sees better opportunities globally, and how macro, politics, and capital flows drive major investing inflections.Inflection investing and identifying asymmetric opportunitiesHow macro and politics create winners and losers in marketsThe Argentina case study and why the stock exchange may outperform the countryHow to structure trades with limited downside and multi-bagger upsideTime horizon advantages versus short-term Wall Street thinkingPortfolio construction, capital allocation, and when to sell positionsManaging risk, leverage, and liquidity during crises and warsBuilding a “shopping list” during market dislocationsCountry ETFs vs individual securities in global investingWhy Kuppy prefers international markets over the U.S.The structural imbalances in the U.S. economy and stock marketWhy AI may lead to profitless growth and economic disruptionThe impact of AI on jobs, margins, and economic demandHow inflation distorts economic data and investor perceptionFinding opportunities in “left for dead” markets like BrazilThe role of elections and policy shifts in market inflectionsHow to think probabilistically about investmentsAvoiding unforced errors and emotional decision-makingThe importance of long-term thinking in volatile marketsPsychology and discipline in global macro investingHarris Kupperman Twitterhttps://twitter.com/HedgeyeKuppyPraetorian Capital Websitehttps://praetorian-capital.comTimestamps00:00 Why the U.S. stock market is structurally overvalued01:14 What “inflection investing” means02:54 Top-down vs bottom-up investing framework04:31 Using politics to identify winning trades05:00 Argentina trade setup and execution06:20 Why the Argentine stock exchange is the best play08:00 Earnings inflection and multiple expansion potential10:37 Time horizon and holding period strategy13:00 When to exit positions and recycle capital18:41 How and when to raise cash19:41 De-grossing the portfolio during crises23:14 Real-time decision making during war scenarios27:00 Building a shopping list during dislocations29:32 ETF vs individual stock decision process33:22 Why the U.S. is less attractive than global markets38:17 The problem with AI-driven “growth”43:31 Monitoring vs acting across global opportunities48:14 The psychology of long-term investing and edge

This episode of our new market wrap show Last Call breaks down the biggest market drivers right now through three distinct lenses: macro, narrative, and flows. With an oil shock driven by geopolitical conflict, rising volatility, and conflicting economic signals, the discussion focuses on what actually matters beneath the surface and how investors should think about positioning in an environment where nothing is clearly priced in.Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠Jack and Matt bring together Andy Constan, Ben Hunt, Brent Kochuba, and Eric Pachman to analyze the ripple effects of higher oil prices, the “common knowledge” shift in markets, the role of options flows in driving short-term moves, and why traditional economic indicators like unemployment may be telling a misleading story.Andy Constan Twitterhttps://x.com/dampedspringBen Hunt Twitterhttps://x.com/EpsilonTheoryBrent Kochuba Twitterhttps://x.com/spotgammaEric Pachman Twitterhttps://x.com/epachmanTopics covered:How oil supply shocks impact GDP, inflation, and consumer spendingWhy higher oil prices act as a tax on the economy and shift growth dynamicsThe difference between supply shocks and demand shocks in energy marketsWhy central banks may be unable to respond to an oil-driven slowdownThe “common knowledge” framework and how narratives reshape marketsWhy the Strait of Hormuz has become the key global economic bottleneckOil exporters vs importers and how that divide is driving asset performanceWhy energy equities may outperform in a prolonged geopolitical conflictHow volatility is being driven by oil prices and geopolitical riskThe relationship between VIX and oil during crisis periodsWhy $100 oil could trigger a major volatility spike and equity selloffThe JP Morgan collar trade and how options positioning can pin marketsHow dealer hedging flows influence short-term price actionWhy markets may appear disconnected from negative newsThe limits of predicting what is “priced in” during uncertain environmentsWhy diversification matters more when macro visibility is lowHow unemployment data can mislead by excluding people leaving the workforceThe difference between unemployment rate and labor force participationStructural decline in rural economies and the migration to urban centersHow labor force trends explain the divergence in economic experiences across the USTimestamps:00:00 Oil shock as a GDP tax on consumers00:16 Strait of Hormuz as global economic chokepoint00:29 Why $100 oil could send VIX to 5000:39 Why unemployment rate may be misleading01:07 What Last Call is and how the episode is structured02:28 Macro, narrative, and flows framework for markets03:44 How oil supply shocks impact growth and inflation06:00 Why higher oil prices reduce discretionary spending07:00 Oil’s impact on inflation and central bank policy09:39 Scenario analysis for oil prices and market outcomes12:28 Is the oil shock priced into markets?16:00 Why oil vs assets may be mispriced20:00 Ben Hunt on the “common knowledge” market shift25:00 Why the Strait of Hormuz changes everything29:00 Portfolio implications: long energy vs global equities33:00 Brent Kochuba on oil, VIX, and market volatility linkage36:00 Why $100 oil is the key risk threshold for equities40:00 JP Morgan collar trade and market pinning dynamics44:00 Why options flows can override macro narratives short term52:00 Eric Pachman on unemployment vs labor force reality59:00 Structural decline in labor force across US counties

In this episode of Excess Returns, we sit down with Larry Swedroe to break down one of the most debated topics in markets today: private credit. Larry walks through what private credit actually is, why it has grown so rapidly since 2008, and where he believes the biggest misconceptions and risks are for investors.We dig into the structure of the market, how liquidity and credit risk really work beneath the surface, and why the media narrative around private credit may be overstating systemic risks. We also explore how investors should think about diversification, illiquidity premiums, and the potential impact of AI on credit markets and software lending.Larry Swedroe Twitterhttps://twitter.com/larryswedroeLarry Swedroe Substackhttps://larryswedroe.substack.comTopics coveredWhat private credit is and how it evolved after the 2008 financial crisisWhy private credit is not a single asset class and how risk varies across structuresThe three key risks in private credit: credit risk, liquidity risk, and concentration riskHow illiquidity premiums work and why they can be a major source of returnDifferences between private credit funds, BDCs, and open architecture platformsWhy diversification is critical and how concentration risk can be hiddenHow rising interest rates are impacting defaults and underwriting standardsMedia misconceptions around defaults, losses, and valuation marks in private creditThe real systemic risk of private credit vs the banking systemHow liquidity actually works in interval funds and stress scenariosWhat happens in a recession and how private credit compares to equities and high yield bondsThe role of software lending and how AI disruption could impact credit portfoliosHow to evaluate private credit managers including scale, underwriting, and leverageThe importance of credit culture and avoiding “reach for yield” behaviorWhether private credit should be accessible to retail investors and the risks involvedThe concept of earning “beta” in private credit vs trying to pick winning managersAI’s growing role in investment research and the risks of overfitting and false signalsTimestamps00:00 Why private credit is less risky than banks for systemic stability01:12 Introduction and episode overview03:00 What private credit is and how it grew after 200805:21 Who provides capital to private credit funds07:11 Why private credit is not a monolithic asset class08:00 The three key risks in private credit09:00 Illiquidity premium and why it can be a “near free lunch”12:00 Credit risk and importance of senior secured lending16:00 Concentration risk and why diversification matters18:11 Are defaults rising and what the data actually shows21:00 Media narratives vs actual credit losses23:50 Could private credit cause a financial crisis25:50 How to analyze portfolios and why most investors can’t28:44 Should investors think about indexing private credit30:12 Can private credit work for retail investors32:26 Mass redemption risk and liquidity stress scenarios36:00 Sources of liquidity inside private credit funds41:37 Software lending and AI disruption risk47:00 Private equity valuations and spillover into credit risk49:43 Key checklist for evaluating private credit investments56:30 How AI is changing financial research and investing

This episode of Excess Returns features Bob Elliott discussing the growing fragility in the global economy as an oil shock collides with a shift from an income-driven to a savings-driven system.The conversation explores why markets may be mispricing the economic impact of higher oil prices, how inflation and growth dynamics could unfold, and what this means for investors navigating an increasingly volatile macro environment.Bob also breaks down how to think about global macro investing today, including why traditional portfolios may be poorly positioned for a wider range of outcomes, how macro managers are adapting to shifting conditions, and how AI-driven productivity gains could impact economic growth, labor, and markets.Bob Elliott on Twitterhttps://twitter.com/BobEUnlimitedUnlimited Funds websitehttps://www.unlimitedfunds.comTopics coveredThe shift from an income-driven economy to a savings-driven economy and why it creates fragilityWhy an oil shock acts as both an inflation driver and a tax on real consumer spendingHow higher gas prices mechanically reduce discretionary spending and economic growthWhy markets may be underpricing the economic impact of the current oil shockThe link between oil prices, inflation expectations, and real demand destructionHow global markets respond to shocks through deleveraging and volatility spikesWhy gold and other winning trades can fall during risk-off environmentsThe sequencing of inflation first and growth slowdown later in shock-driven cyclesHow central banks are likely to respond to a stagflationary shockLessons from 2022 and 2008 for understanding today’s macro environmentWhy stocks and bonds may both be mispriced in the current regimeThe difference between consumer surplus and true productivity gains from AIWhy AI-driven job losses and economic growth cannot coexist without major dissavingThe most likely path for AI as a productivity enhancer rather than a job destroyerHow to think about measuring productivity in a technology-driven economyThe role of second- and third-order effects in macro investingHow global macro strategies identify mispricings across asset classesThe concept of using the “wisdom of the crowd” from hedge fund positioningWhy macro strategies can perform in both rising and falling marketsHow macro fits into a portfolio as a diversifier versus long-only assetsWhy the future investment environment may require broader strategy diversificationTimestamps00:00 Oil shock meets a savings-driven economy01:00 Framing the macro environment: oil, inflation, and growth02:12 What a savings-driven economy means for market fragility04:46 Why household income vs spending divergence matters07:00 First principles of an oil shock and demand inelasticity08:00 How oil price spikes flow through to inflation13:00 Global market reactions and emerging market dynamics14:00 Deleveraging and volatility driving asset price reversals15:44 Why gold declines during macro stress events17:17 Institutional positioning and ETF flows in gold17:34 Inflation first, growth slowdown later: sequencing the impact19:24 Is the economic damage already done22:00 How macro investors operate in low-conviction environments29:19 What the Fed should do versus what it will do31:00 Comparing today’s environment to 2022 inflation dynamics33:00 Why markets are pricing in almost nothing34:00 AI and the link between labor, income, and spending37:11 Productivity vs consumer surplus in AI adoption40:00 Why better tools don’t necessarily mean higher productivitys46:00 How global macro strategies are constructed48:00 Using hedge fund positioning as a signal56:00 Why the opportunity set for macro may be expanding

Subscribe to the 100 Year Thinkers of Spotify⁠⁠Subscribe to the 100 Year Thinkers of AppleIn this episode of our new show, 100 Year Thinkers, Robert Hagstrom and Chris Mayer explore how investors should think about base rates, extreme outcomes, and the realities of long-term wealth creation in markets. Applying the work of Michael Mauboussin, the conversation challenges conventional ideas like mean reversion and highlights why a small number of companies drive most stock market returns—and what that means for portfolio construction.This episode brings together Robert Hagstrom and Chris Mayer to explore how investors should think about base rates, extreme outcomes, and the realities of long-term wealth creation in markets. The conversation challenges conventional ideas like mean reversion and highlights why a small number of companies drive most stock market returns—and what that means for portfolio construction.Topics covered• Why markets are driven by extreme outcomes and power laws, not averages• The Best & Bessembinder research showing a handful of stocks create most wealth• Base rates vs outliers and when to trust historical probabilities• Why the 100 bagger framework focuses on studying winners, not predicting them• Portfolio construction as a way to capture asymmetric upside• Buffett’s approach to consistency, durability, and long-term operating history• Inside view vs outside view and how narratives distort investing decisions• Why AI may be breaking traditional base rate assumptions in software and tech• The limits of mean reversion and why it can lead investors astray• Return on invested capital and how competition erodes excess returns over time• Identifying durable moats and why most advantages eventually get attacked• Winner-take-all dynamics and how they shape long-term investing outcomes• The twin engines of returns: earnings growth and multiple expansion• Return on incremental capital as a key driver of long-term compounding• Intangible assets and why accounting understates true business value• Amazon as a case study in misunderstood profitability and reinvestment• AI CapEx cycle and why current spending may not be sustainable long term• Why great businesses matter more than great management in long-term investingTimestamps00:00 Why extreme outcomes drive stock market returns01:00 Base rates vs studying 100 baggers03:00 Power laws and why markets are a game of outliers05:00 Just 46 companies created half of all market wealth07:00 Buffett on consistency and long-term operating history10:00 How to think about base rates in AI, energy, and macro cycles12:00 Does AI invalidate historical base rates?15:00 Inside view vs outside view in investment decision making19:00 Buffett’s “certainty at a discount” framework23:00 How often investors should evaluate businesses vs prices29:00 Mean reversion myths and where it breaks down33:00 Return on invested capital and competitive pressure36:00 Moats, winner-take-all markets, and long-term dominance41:00 Twin engines of compounding: growth plus multiple expansion43:00 Return on incremental capital and forecasting future returns47:00 Intangibles and why accounting distorts real business value50:00 Amazon, CapEx cycles, and hidden profitability53:00 AI infrastructure buildout and the future of returns

Subscribe to the OPEX Effect on Spotify⁠⁠Subscribe to the OPEX Effect on Apple PodcastsThis episode breaks down the growing tension beneath the surface of today’s markets, where volatility signals, options positioning, and macro risks like war and inflation are increasingly misaligned. Brent Kochuba and Jack Forehand explain why markets appear calm despite heavy hedging, and what that disconnect could mean for a potential volatility spike and downside move ahead.Brent Kochuba on Twitterhttps://twitter.com/SpotGammaSpotGamma Websitehttps://spotgamma.comTopics covered in this episode• Why volatility looks elevated beneath the surface even as markets remain relatively calm• The growing gap between implied volatility VIX and realized volatility and what it signals• How options expiration OPEX can create turning points in both price and volatility• Why current positioning is unusually put-heavy and what that means for downside risk• The role of market makers and hedging flows in driving market moves• How geopolitical risks like the Iran conflict are changing options behavior and hedging demand• Why correlation is spiking and what it says about investors moving from stock picking to asset allocation• The breakdown of traditional diversification including the 60/40 portfolio• How credit markets and liquidity risks could amplify equity volatility• The impact of zero DTE options and why traders are shifting to longer-duration hedges• The significance of the JP Morgan collar trade and key levels to watch into month-end• Why volatility spikes often follow periods of suppressed market movement• The potential for a sharp upside rally if geopolitical risks suddenly resolve• How options positioning can help both traders and long-term investors with timing decisionsTimestamps00:00 Volatility premium vs low market movement disconnect01:00 Why markets feel calm despite rising risks05:20 Explosion in options volume and impact of Monday Wednesday Friday expirations07:00 How market maker hedging flows drive price movements08:40 Dynamic hedging and why options impact evolves over time09:20 Why OPEX can trigger market turning points10:30 VIX expiration effects and short-term volatility suppression13:00 Negative gamma and how it amplifies market volatility14:10 Why hedging demand remains high despite OPEX clearing16:00 Jump risk scenario and potential VIX spike to 4017:10 Shift from zero DTE trading to longer-term hedging18:00 Put-heavy positioning across equities and indices20:40 Size and significance of the current OPEX event22:20 VIX spike dynamics around expiration23:40 JP Morgan collar trade and key SPX levels25:00 Why OPEX often marks short-term market lows or highs28:30 Review of prior OPEX signals and market setup30:00 Rising correlation and shift to asset allocation mindset32:00 Dispersion breakdown and implications for equities34:00 Software sector volatility and AI disruption narrative36:30 Using options signals for better timing decisions39:00 Correlation spike and risk-off behavior across markets41:30 Why investors are avoiding calls and piling into puts44:30 Cross-asset correlation breakdown and bond hedge failure48:00 Credit market risks and spillover into equities49:00 Extreme VIX vs realized volatility spread50:50 Why realized volatility remains unusually low52:30 Oil, inflation, and macro feedback loops

In this episode, Jared Dillian joins Excess Returns to break down why markets consistently misprice major regime shifts, geopolitical risks, and inflation shocks—and what that means for investors today. The conversation explores how changing correlations, Fed policy constraints, commodities, and portfolio construction are reshaping the investing playbook in 2026.Jared Dillian Twitterhttps://twitter.com/DailyDirtNapDaily Dirt Naphttps://www.dailydirtnap.comTopics CoveredWhy markets fail to price low-frequency, high-impact events like war and geopolitical shocksThe concept of regime change and why investors struggle to adapt to new market environmentsThe breakdown of the 60/40 portfolio and stock-bond correlation in an inflationary regimeCommodities bull market dynamics and why energy, agriculture, and hard assets may outperformThe role of options and “long gamma” positioning in uncertain macro environmentsBitcoin as a liquidity trade vs. store of value and how sentiment drives crypto cyclesFed policy, oil prices, and why central banks follow the “path of least embarrassment”Inflation psychology, consumer behavior, and risks of 1970s-style market conditionsPolitical bias in investing and how ideology shapes portfolio decisionsRisks in private equity and private credit, including valuation marks and liquidity issuesThe Awesome Portfolio framework and why diversification across asset classes reduces drawdownsAI, productivity shifts, and how technological change impacts markets and labor trendsTimestamps00:00 Why markets misprice geopolitical risk and regime change02:00 Ukraine, Iran, and delayed market reactions to obvious risks05:00 Overreaction cycles and the Peloton example06:00 What it means to be long gamma in investing09:00 Oil volatility and asymmetric risk opportunities10:00 Regime change explained through stock-bond correlation breakdown12:00 Non-stationarity and why investing rules constantly change14:00 Why most investors fail to adapt to new regimes17:00 Position sizing, risk management, and staying “small”19:00 Commodities bull market and broad participation across assets20:30 Bitcoin as a liquidity sponge and sentiment-driven asset22:00 Fed policy, inflation, and the path of least embarrassment25:00 Oil-driven inflation vs demand destruction dynamics27:00 Inflation psychology and real-time indicators29:00 Are we entering a 1970s-style macro regime31:00 How political views shape investment strategies35:00 Learning from past mistakes and adapting to new trends37:00 Private equity and private credit valuation risks40:00 Liquidity cycles and refinancing risk in credit markets43:00 The Awesome Portfolio explained46:00 Behavior, drawdowns, and why diversification works49:00 Real estate allocation and portfolio construction51:00 Labor trends, productivity, and changing work dynamics54:00 AI productivity boom vs social media drag57:00 The dangers of consensus thinking and unpopular views