Excess Returns

Cameron Dawson and Dave Nadig join Matt Zeigler to examine what could break the market's resilience, from AI earnings expectations to the wealth effect supporting consumer spending. A healthy economy and continued data center investment may not be enough to keep stock prices rising if profit margins and investor expectations reset. In this episode of Click Beta, Matt, Cameron and Dave debate what the two-year Treasury yield is signaling, how the AI buildout is changing demand for capital, and why semiconductor stocks can look cheap just as earnings approach a peak. They also discuss the possibility of a prolonged sideways market, practical approaches to rebalancing, and separating near-term cash needs from long-term investments. Then the surprise topics take a Halloween turn, with homemade costumes, strange family heirlooms, horror movies, and a very specific Creed halftime-show tribute. Topics covered: - Cameron Dawson's question: what would have to break for the Fed to deliver fewer hikes than markets expect? - The wealth effect, consumer spending, and the divide between the top and bottom of the K-shaped economy - Dave Nadig's concerns about AI financing, IPO supply, and who will absorb new stock issuance - Why a low semiconductor P/E ratio can reflect concerns about peak earnings - Micron, margin normalization, and the risk of extrapolating unusually strong profitability - How a resilient economy could coexist with falling technology stocks or a sideways index - Market rotation, defensive leadership, and the challenge of countertrend rallies - Rebalancing rules, timing luck, and planning for cash needs over the next 12 months - Distinguishing long-term legacy assets from money needed soon - Halloween costumes, family traditions, Rocky Horror, and cult-film recommendations Chapters: 00:00 Welcome to Click Beta: Limp Bizkit meets the Fed 05:30 What would have to break for the Fed to change course? 11:18 The K-shaped consumer and AI's demand for capital 16:44 More expensive capital and semiconductor earnings risk 22:30 Can chip margins stay this high? 26:56 Market rotation and the risk of going sideways 32:51 Diversification, rebalancing, and near-term cash needs 37:40 Halloween costumes and family stories 42:02 Holiday heirlooms and a Creed costume deep cut 46:32 Halloween movies, music, and where to find the panel Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Jay Hatfield of Infrastructure Capital Advisors makes the case for an AI "reverse bubble" and explains how earnings growth, interest rates, and valuation shape his market outlook. Rather than treating AI spending as proof of excess, he looks at contracts, financing costs, and the returns companies can earn on their investments. In this episode of Excess Returns, Jay joins Jack Forehand and Justin Carbonneau to discuss his S&P 500 scenarios, the debate over CoreWeave and AI infrastructure debt, and why he believes some technology stocks offer better value than perceived safe havens. He also challenges the Fed's inflation framework and explains how he combines earnings growth, dividend yield, catalysts, and individual-stock covered calls in his investment process. Topics covered: - How Jay Hatfield builds S&P 500 targets from earnings estimates and valuation multiples - Why Treasury yields matter to discounted cash flow valuations - CoreWeave, project financing, and the distinction between contracted demand and speculative construction - What compute prices and long-term contracts could reveal about AI bubble risk - Jay Hatfield's "reverse bubble" thesis and his comparisons of growth-adjusted stock valuations - His framework linking the 10-year Treasury yield to expected terminal Fed policy - Why he challenges the Fed's inflation target, shelter data, and use of PCE - Evaluating dividend payers with PEGY: price relative to earnings growth plus dividend yield - How reinvestment, corporate taxes, and returns on capital affect long-term compounding - Combining stock selection and catalysts with actively managed covered calls Infrastructure Capital Advisors: https://www.infracapfunds.com/ Jay Hatfield / InfraCap on X: https://x.com/JDHatfield_ICAP InfraCap's CPI-R analysis: https://www.infracapfunds.com/consumer-price-index-cpi-r Chapters: 00:00 Jay Hatfield's S&P 500 outlook and market scenarios 06:43 Treasury yields, growth assumptions, and valuation multiples 13:03 Technology stocks, CoreWeave, and project financing 18:38 AI debt, vendor financing, and contracted demand 26:09 The AI "reverse bubble" and growth-adjusted valuations 31:09 Fed expectations and the 10-year Treasury yield 38:14 Jay Hatfield's critique of the Fed and inflation data 43:12 Could the Fed change its inflation target? 47:48 Dividend yield, PEGY, and corporate reinvestment 55:23 Stock selection, catalysts, and individual covered calls 01:00:23 The long-term investing lesson: valuation and compounding Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Kai Wu of Sparkline Capital shows how to uncover hidden AI exposure, overlapping ETF holdings, and unintended factor bets in your portfolio. Owning several funds can still leave you dependent on the same companies and the same AI spending cycle. In this episode of Excess Returns, Kai joins Matt Zeigler and Justin Carbonneau for a walkthrough of Sparkline Analytics. Using examples from the S&P 500, Nasdaq, emerging markets, and active funds, they examine what investors actually own beneath the fund labels. Kai explains his distinction between AI infrastructure, early adopters, and laggards, then demonstrates how factor analysis, intangible asset data, and a portfolio builder can help investors ask better questions about diversification and manager performance. Explore Sparkline Analytics: https://app.sparklinecapital.com/ Topics covered: How AI infrastructure exposure can overlap across the S&P 500, Nasdaq, and thematic AI funds Why Kai Wu distinguishes AI early adopters from infrastructure builders and laggards How rising capital expenditures can change the economics of formerly asset-light businesses Why a fund's number of holdings can overstate its diversification How semiconductor exposure can connect emerging markets to the same AI trade The trade-off between reducing AI infrastructure exposure and increasing exposure to laggards What ARKK illustrates about separating stock selection from factor headwinds Why dividend, value, and low-volatility funds can have similar underlying exposures How patents, R&D, and human capital reveal assets traditional value metrics can miss Using fund comparisons and portfolio look-through tools to identify overlapping positions Chapters: 00:00 Sparkline Analytics and hidden AI exposure in the S&P 500 08:05 AI adopters, laggards, and multinational businesses 12:47 How index exposure changes as the AI cycle evolves 20:41 Does adding an AI fund diversify your portfolio? 25:44 Capital spending and effective portfolio concentration 30:14 Capital intensity and AI exposure beyond Big Tech 35:44 Diversifying without retreating into AI laggards 40:48 Screening funds and looking inside ARKK 46:11 Separating stock-picking alpha from factor exposure 52:35 Dividend, value, and low-volatility fund overlap 57:52 Intangible value and a fund-diligence checklist 01:05:39 Building a portfolio and looking through its holdings 01:10:39 Where to find Sparkline Analytics Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Daniel Crosby explains why investors can lose money in winning funds and how to build a portfolio they can actually hold. Picking the right investment is only part of the challenge; staying with it through discomfort is where behavior can overwhelm the plan. In this episode of Excess Returns, psychologist and Orion Chief Behavioral Officer Daniel Crosby joins Matt Zeigler to discuss the new paperback edition of The Behavioral Investor. Daniel shares the story of a fund that returned over 18% annually for a decade while its average investor lost money, then explains how safety, stability, and success portfolios can help align investment decisions with human psychology. They also explore gambling apps, the limits of risk questionnaires, social media feedback loops, and the human side of financial advice in an AI-driven world. Topics covered: - Why a fund's returns can look very different from the returns its investors earn - Building safety, stability, and success buckets around different financial needs - The differences between risk tolerance, risk capacity, and risk composure - Why knowing what to do does not guarantee doing it during a drawdown - Daniel Crosby's case for rules, diversification, and meaningful benchmark differences - How sports betting and prediction markets blur the distinction between investing and gambling - Why recent market experience can create unrealistic expectations about future returns - Education, environment, and encouragement as tools for changing investor behavior - How algorithms reinforce market biases and why excitement can signal a blind spot - Where AI can free financial advisors to spend more time on human relationships The Behavioral Investor - paperback edition:https://link.amazon/B00hgkHGG Daniel Crosby on X: https://x.com/danielcrosby Orion Behavioral Finance: https://orion.com/behavioral-finance Research discussed: The heat of the moment: the effect of sexual arousal on sexual decision making https://onlinelibrary.wiley.com/doi/abs/10.1002/bdm.501 Chapters: 00:00 Daniel Crosby and The Behavioral Investor 04:51 Why winning funds can have losing investors 11:46 Risk tolerance, capacity, and composure 17:38 Stability portfolios and rules-based stock selection 23:06 Investing, gambling, and prediction markets 27:27 Recency bias and unrealistic return expectations 31:30 Addictive apps and changing investor behavior 35:48 Investor distractions and the media diet 40:51 Investment excitement, humility, and AI 45:00 What music reveals about consistency and experimentation 49:29 Where to find Daniel Crosby and the book Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Ted Mortonson of Baird explains why conviction in the AI boom doesn't mean buying every dip in tech stocks. He joins Jack Forehand and Justin Carbonneau to explain what experienced technology investors watch before putting money back to work—and why he still sees AI as the most powerful technology cycle of his career. The discussion moves from lessons of the dot-com bust to the companies Ted believes can capture AI's profits. They explore the importance of free cash flow, the financing demands of the data center buildout, and how large IPOs could force portfolio managers to sell existing holdings. Ted also shares his views on Apple, Meta, Nvidia, Tesla, and SpaceX, before closing with lessons from his service as a naval aviator. Topics covered: - Why Ted Mortonson's institutional clients aren't rushing to buy the semiconductor dip - What past tech cycles teach about taking profits, preserving capital, and waiting for selling to settle - Why Ted Mortonson sees a stronger long-term AI opportunity than the dot-com cycle - How geopolitics, energy costs, regulation, and investor sentiment shape technology investing - Why free cash flow, engineering resources, and manufacturing scale matter for AI beneficiaries - Financing the infrastructure buildout before enterprise adoption delivers returns - How large IPOs and circular financing can create risks for existing shareholders - Ted Mortonson's concerns about Apple and his outlook for Meta, Tesla, and SpaceX - Optical networking, advanced chip architectures, and high-bandwidth memory - Navy lessons on decisions under uncertainty, teamwork, and integrity Chapters: 00:00 Ted Mortonson on the risks facing tech investors 05:42 Market sentiment and why his clients aren't buying yet 12:00 Dot-com lessons and the danger of buying every dip 16:17 Why Ted sees a different AI cycle 23:06 Which companies could capture AI's profits? 27:38 Regulation and financing the AI buildout 35:10 Can the market absorb massive AI IPOs? 39:30 Circular financing and the Tesla-SpaceX thesis 46:06 Apple, Meta, and competing AI strategies 54:19 SpaceX, advanced chips, and memory technology 58:26 Lessons from serving as a naval aviator 01:03:35 Closing thoughts Ted Mortonson at Baird: https://www.rwbaird.com/corporations-and-institutions/institutional-equities-research/team/ted-mortonson/ Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Brian Portnoy of Shaping Wealth explores why experienced investors build very different portfolios—and what that means for your own money. In How I Invest My Money Volume Two, 25 new contributors explain how they invest their personal wealth. Brian joins Matt Zeigler to discuss what those stories reveal about the gap between an optimal portfolio on paper and one you can actually live with. From large cash reserves and paid-off mortgages to investments in their own businesses, their choices reflect family needs, career risk, and priorities that a model can struggle to capture. The conversation also explores why low-cost index funds don't settle every investing question, how financial professionals think about bonds and alternatives, and what it means to compound relationships, knowledge, and opportunities alongside money. How I Invest My Money Volume Two: https://link.amazon/B0aVpNlfS Topics covered: Why knowing how markets work doesn't produce one right portfolio for everyone What Ben Hunt and other contributors reveal about investing beyond a brokerage account Connecting personal goals to asset allocation and risk tolerance Why business ownership and household needs change the role of stocks and bonds Why financial professionals may deliberately hold substantial cash reserves The difference between spreadsheet optimization and a portfolio you can stick with Paying off a mortgage, feeling secure, and accepting the opportunity cost The complexity and illiquidity that can come with alternative investments Matt Zeigler's approach to compounding human, intellectual, social, and financial capital Brian Portnoy's experience editing the book with his son Zach and sharing opportunities across generations Chapters: 00:00 How finance professionals invest their own money 05:35 Why investing extends beyond index funds 12:20 Connecting financial goals to portfolio choices 18:32 Why investors choose different stock and bond allocations 25:05 Cash reserves, career risk, and peace of mind 34:55 Paying off a mortgage: security versus opportunity cost 40:11 Alternatives, complexity, and the investment industry 44:40 Matt Zeigler on investing in more than money 52:22 Brian Portnoy on family, opportunity, and working with his son Shaping Wealth: https://www.shapingwealth.com Follow Brian Portnoy on X: https://x.com/bportnoy _ Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Rob Arnott, founder of Research Affiliates and chairman of Syzygy Asset Management, examines S&P 500 concentration and who could benefit most from AI. Owning today’s market leaders is not necessarily the same as owning tomorrow’s biggest investment winners. Subscribe on Spotify⁠⁠⁠⁠ ⁠⁠⁠⁠Subscribe on Apple In this episode of The Intangible Economy, Rob joins Kai Wu to explore how index construction shapes what investors own, why index additions can create hidden costs, and why he would consider buying a richly valued IPO before index funds have to buy it. The conversation also covers AI’s shift toward capital-intensive business models, GPU depreciation, intangible assets, and the importance of testing investment ideas rather than chasing impressive backtests. Topics covered: Why Rob Arnott sees a real AI revolution alongside risks in the prices of its leading stocks How AI customers could capture value beyond the infrastructure builders Valuation changes versus fundamental growth in large and smaller companies Tesla, SpaceX, and the price pressures surrounding index inclusion Hidden implementation costs that do not appear in an index fund’s expense ratio Selecting index members by business size rather than market value AI financing, customer economics, and the risk of rapid hardware obsolescence R&D, intangible assets, and what conventional book value can miss Competitive moats, leadership, and creating value for customers Using AI in research while resisting overfitting and performance chasing Research discussed: ⁠The Active Side of Indexing⁠ ⁠Fundamental Growth⁠ Learn more about ⁠Syzygy Asset Management⁠ . Timestamps: 00:00 Rob Arnott on index concentration and AI’s future winners 12:13 What S&P 500 investors own and pay for 20:35 Why Rob Arnott would buy before index inclusion 25:41 Hidden index costs and fundamental membership rules30:37 Passive investing’s embedded decisions 36:40 Big Tech’s shift from asset light to capital intensive 42:41 GPU depreciation and economic obsolescence 47:03 R&D, intangible assets, and value investing 51:04 How durable are competitive moats? 59:01 Using AI in business and investment research 01:05:11 Performance chasing and the backtest trap Learn more about the Excess Returns podcast network: ⁠excessreturns.co⁠ No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Paisley Nardini of Tema ETFs explores AI investing, S&P 500 concentration, and how to build a portfolio around changing market risks. How can investors participate in powerful growth trends without making every holding a bet on the same outcome? In this episode of Excess Returns, Paisley joins Jack Forehand and Justin Carbonneau to discuss the risks beneath a resilient stock market, why tomorrow’s AI winners may differ from today’s leaders, and where she sees opportunities in power and infrastructure. They also explore private-company exposure inside ETFs, the role of thematic funds alongside a passive core, and why knowing what you own matters more than the number of holdings in your portfolio. Topics covered: What weak market breadth reveals beneath the headline indexes Interest rates, midterm elections, and the limits of historical market patterns Prediction markets as a source of information for investors AI earnings expectations, debt financing, and the risk of slowing growth Why bonds can provide income without reliably offsetting equity risk Small-cap profitability and the importance of quality screens AI bottlenecks, photonics, power demand, and infrastructure investment Private-company exposure in ETFs: liquidity, fees, and investment rationale Using thematic strategies as satellite positions around a passive core Portfolio concentration, investment humility, and staying flexible Learn more about Tema ETFs . Follow Paisley Nardini on X . Timestamps: 00:00 Introduction and the risks beneath the market 04:37 Higher rates and the midterm election outlook 09:17 What investors can learn from prediction markets 13:36 AI growth expectations and changing market leadership 19:50 Portfolio risk, bonds, and faster market drawdowns 26:09 The AI bubble debate and small-cap quality 33:45 Who benefits from AI beyond the hyperscalers? 39:29 Energy infrastructure and putting AI to work 45:54 Private-company exposure inside ETFs 52:01 Where thematic investing fits in a portfolio 58:32 Commodities, S&P 500 concentration, and humility Learn more about the Excess Returns podcast network: excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Colin McQueen of T. Rowe Price explains what is changing for international value stocks and how he separates cheap businesses from opportunities that can improve. Higher interest rates, industrial investment, and corporate reform are reshaping the opportunity set, but his process still starts with free cash flow and the price investors pay for it. Colin joins Justin Carbonneau and Jack Forehand to discuss his evolution from deep value investing to a broader approach that includes quality businesses and restructuring opportunities. We explore why value struggled in the 2010s, what has changed outside the US, and how he uses valuation signals and diversification to manage risk. The conversation also covers AI suppliers and disruption, governance changes in Japan and Korea, opportunities and risks in China, and the case for financial stocks. Colin shares examples involving Samsung, Hitachi, and Rolls-Royce, along with his experiments using AI to challenge investment theses and recognize when conviction has become stubbornness. Topics covered: The lessons Colin McQueen learned from deep value, quality investing, and a difficult decade for value How higher rates and spending on infrastructure, defense, and power can change the opportunity set AI supply-chain opportunities and the uncertainty around future winners and losers Valuing tangible and intangible businesses through normalized free cash flow Using AI as an alternative voice when deciding whether an investment thesis is broken The US-international valuation gap, earnings growth, and diversification beyond tech Japan's corporate reforms, Korea's value-up effort, and the importance of what is already priced in China's contrarian appeal and the governance risks that accompany it How restructuring, management changes, and better capital allocation can unlock value Building a diversified portfolio and looking beyond quarterly earnings and market narratives T. Rowe Price International Value Fund https://www.troweprice.com/financial-intermediary/us/en/investments/mutual-funds/us-products/international-value-equity-fund/advisor-class.html Timestamps: 00:00 Colin McQueen's evolution as a value investor 07:04 Why deep value struggled in the 2010s 11:20 Higher rates and a more balanced opportunity set 16:20 International value, financials, and AI suppliers 21:20 AI versus the dot-com era and managing valuation risk 25:27 Free cash flow, restructuring, and AI-assisted research 29:56 Comparing US and international valuations 35:39 The risk dashboard and changing European markets 40:00 Corporate reform and opportunities in Japan and Korea 44:57 China, Asia ex Japan, and financial stocks 49:31 Global connections and why a stock market isn't an economy 54:55 Diversification and researching corporate turnarounds 59:57 Looking beyond quarterly earnings and extreme narratives Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Jim Paulsen sees a risk of a stock market correction as financial conditions tighten and investors grow comfortable with tech's long run of leadership. But his warning does not require a recession or the end of the bull market. In this month's Jim Paulsen Show, Jim joins Justin Carbonneau and Jack Forehand to walk through the charts behind his cautious outlook. He explains how rising yields, oil prices, and a firmer dollar can affect the economy with a lag, why favorable seasonality may offer less support than investors expect, and how a slowdown in technology spending could challenge market leadership. We also explore the signals Jim sees in retail, housing, employment, and Walmart's relative performance. He closes with a possible path through a correction: slowing growth, lower inflation and yields, and a recovery that could give the bull market another run. His seven lagging sectors, the "Modest Seven," are central to that case. Topics covered: Why Jim Paulsen is cautious without making a recession or full bear-market call His financial-conditions gauge and the risks of tightening into an already pressured economy How restrictive conditions can weaken the November-to-April seasonal advantage The delayed effects of bond yields, oil prices, and the dollar on economic surprises Technology spending relative to GDP and why slower growth could matter for tech stocks AI adoption, pricing, and the challenge of turning investment into profits How two decades of tech leadership may encourage complacency and crowded positioning The divide between AI, inflation-assisted sectors, and the "Modest Seven" What sector performance, bond yields, and the Walmart Recession Signal suggest about growth Why rate cuts may initially accompany falling stocks, and how a correction could set up another advance Follow Jim Paulsen: Paulsen Perspectives Jim Paulsen on X Timestamps: 00:00 Jim Paulsen's outlook: correction risk without a bear-market call 07:41 Restrictive conditions and the seasonal buying period 14:12 Why the Fed and investors interpret conditions differently 20:28 Oil, yields, the dollar, and their lagged effects 26:00 Technology spending relative to the economy 30:18 Can AI break the historical pattern? 35:00 Tech's long leadership cycle and investor complacency 42:00 AI, inflation-assisted sectors, and the Modest Seven 47:06 Market signals ahead of economic reports and bond pressure 53:00 Bond competition and the Walmart Recession Signal 58:11 How a correction could lead to another bull-market run Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Barry Ritholtz, Dave Nadig and Matt Zeigler explore why AI's real productivity gains don't automatically translate into an investing edge. From stock picking and market concentration to the financing behind the AI buildout, they separate enthusiasm for the technology from the economics of owning it. Subscribe to Click Beta on Spotify⁠⁠⁠ ⁠⁠⁠Subscribe to Click Beta on Apple Podcasts In this episode of Click Beta, Barry Ritholtz and Dave Nadig join Matt Zeigler for a conversation about where AI is already changing their work and where investors should ask harder questions. Barry shares how his team uses AI to analyze portfolio drift and identify clients who may need a rebalance. The discussion also covers client relationships, consumer pricing, creative side projects, and why Barry is increasingly enthusiastic about bonds without calling an end to the equity bull market. Topics covered: Why widely available AI tools may improve research without creating a lasting stock-picking advantage Market breadth, mega-cap concentration, and the potential impact of large tech IPOs Data center financing, credit quality, and the risk of rapid technological change Barry Ritholtz's use of AI to analyze allocation drift, taxes, and household circumstances How better meeting records can strengthen the human side of financial advice Learning to collaborate with AI and asking better questions The debate over dynamic pricing, consumer data, and whose interests AI agents serve Baseball tools, astronomy dashboards, music discovery, and the joy of experimenting Deciding which tasks to automate and which activities are worth doing yourself Barry Ritholtz's case for bonds, municipal income, and avoiding the reach for yield Find our guests: Barry Ritholtz — The Big Picture - https://ritholtz.com Ritholtz Wealth Management - https://www.ritholtzwealth.com Barry Ritholtz on X - https://x.com/Ritholtz Dave Nadig's work at etf.com - https://www.etf.com Dave Nadig on X - https://x.com/DaveNadig Timestamps: 00:00 Meet Click Beta: AI and the stock-picking question 05:14 AI concentration and market breadth 10:08 Tech IPO valuations and data center financing 15:22 Barry Ritholtz: AI and portfolio rebalancing analysis 20:58 Can AI improve the human side of financial advice? 25:49 Better client questions and better prompts 30:13 The AI imagination gap: collaboration versus search 36:48 Dynamic pricing and the consumer-retailer arms race 41:26 Consumer data and the incentives behind AI agents 45:54 Astronomy, music, and testing your assumptions 51:18 Automating busywork to make room for curiosity 55:39 Creative experiments and choosing what to automate 01:00:11 Why Barry Ritholtz is excited about bonds 01:04:37 Bonds versus equity income and closing thoughts Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Chris Davis and Robert Hagstrom explore the tension between holding great businesses and keeping a winning stock from becoming too much portfolio risk. Why do two investors who believe in letting winners compound also use 10% position limits? On this episode of 100 Year Thinkers, Chris Davis of Davis Funds and Robert Hagstrom of EquityCompass join Matt Zeigler and Bogumil Baranowski to discuss position sizing, selling mistakes, index concentration and the cost of growth. From Chris Davis’s experience selling Costco to the debate over who will capture AI’s economic benefits, they examine what it takes to hold a business through uncertainty without ignoring risk. Stay for Matt and Bogumil’s closing discussion of the lessons for investors. Subscribe to the 100 Year Thinkers of Spotify⁠⁠ ⁠⁠Subscribe to the 100 Year Thinkers of Apple Topics covered: Why selling a genuinely great business can be an investor’s most expensive mistake How client behavior and fund constraints influence 10% position limits Chris Davis’s concerns about index concentration, momentum and future IPO incentives Robert Hagstrom on trimming positions as the margin of safety shrinks The bull-case pre-mortem: asking what could make selling today a mistake What Chris Davis missed about Costco’s growth and ability to adapt Why identical earnings growth can produce different shareholder returns Whether AI spending builds durable pricing power or delivers more value to users How customer trust and restraint on margins can strengthen competitive advantages Balance sheets, circular financing and the humility required to size a position ⁠Chris Davis / Davis Funds⁠ ⁠Robert Hagstrom / EquityCompass⁠ Chapters: 00:00 Holding great businesses and the case for position limits 06:47 Robert Hagstrom on concentration and client risk 12:40 Index concentration, momentum and IPO incentives 19:03 Trimming winners, margin of safety and the Costco lesson 30:09 Valuation, return on capital and the cost of growth36:01 Is AI’s capital spending cycle temporary? 40:10 AI pricing power: builders versus users 45:35 Competitive advantage, margins and customer trust51:45 Balance sheets and circular AI financing 55:53 Evaluating the AI investment cycle 01:00:23 Matt and Bogumil’s takeaways: position sizing and AI 01:10:25 Being an AI user versus an AI investor Learn more about the ⁠Excess Returns podcast network⁠ . No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Katie Stockton of Fairlead Strategies explains why the S&P 500 can reach record highs while many individual stocks struggle. She sees the bull market as intact, but weaker participation raises an important question for diversified investors: is the pullback creating opportunity, or signaling a more lasting change? In this episode of Excess Returns, Katie Stockton joins Matt Zeigler and Justin Carbonneau to examine market breadth, rising Treasury yields, sector leadership and the signals that would change her outlook. She also explains why the Fairlead Tactical Sector ETF holds roughly half its assets in equities at the time of the conversation, and walks through the charts for gold, oil and Bitcoin. Topics covered: Why narrow leadership can sustain the index while diversified portfolios lag The difference between an overbought market and a downturn in momentum Why weak breadth alone is not a reliable market-timing signal Small-cap support levels and the difference between a relief rally and a lasting recovery The Treasury-yield breakout and credit spreads as a longer-term risk gauge Sector relative strength, technology leadership and international market concentration How the TACK ETF's rules-based approach produces more defensive positioning Gold's role as a potential hedge despite a weakening price trend Crude oil's support and resistance levels and Katie Stockton's Bitcoin outlook The BNAV ETF's tactical Bitcoin strategy and the risk signals to watch into year-end Learn more about Fairlead Strategies . Follow Katie Stockton on X . Chapters: 00:00 The bull market and weakening breadth 06:02 Narrow leadership and small-cap weakness 13:43 Treasury yields, breakouts and resistance 18:56 Credit spreads and sector leadership 24:53 TACK positioning, semiconductors and international stocks 30:22 Gold, oil and Bitcoin: reading the trends 35:30 Bitcoin indicators and the BNAV strategy 39:47 Credit, volatility and tech: the year-end risk watch Learn more about the Excess Returns podcast network . No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Tom Maher of Hilton Capital Management explains what is changing for small-cap stocks as earnings improve and AI spending reaches beyond big tech. After years of justified large-cap leadership, he sees reasons to revisit smaller companies while remaining selective about business quality, financing needs and valuation. In this episode of Excess Returns, we explore the physical infrastructure behind AI, the case for diversifying beyond the largest stocks, and how Tom Maher finds businesses with improving fundamentals. We also discuss the effects of passive investing, opportunities in reshoring, and why knowing more about a company does not always lead to a better investment decision. Topics covered: Why stronger earnings helped justify large-cap leadership and what could change that balance How AI construction and equipment spending can benefit smaller industrial companies Why some small companies grow into large caps while others remain small Self-funding businesses versus companies that depend on outside capital Unprofitable index constituents, private equity and the changing IPO market How interest rates affect financing costs, valuations and portfolio decisions Why ETF flows can move a stock independently of its business fundamentals Finding improving businesses without mistaking a low valuation for an opportunity Evaluating management incentives, consistency and acquisition decisions Tom Maher's lessons on taking partial profits and reading unexpected stock-price reactions Learn more about Hilton Capital Management . Chapters: 00:00 Tom Maher's outlook: earnings, valuations and risk 05:26 Small-cap earnings and AI infrastructure spending 11:41 Defining small caps and why some companies stay small 16:45 Active management and business quality 22:03 Small-cap index quality and companies staying private 27:15 Combining stock selection with a macro view 32:58 Higher interest rates and portfolio decisions 37:04 Passive investing and ETF-driven stock moves 41:33 Finding stocks with improving fundamentals 51:13 Valuation, consistency and management quality 56:39 Reshoring and the industrial recovery 01:01:14 Research, profit-taking and investor expectations Learn more about the Excess Returns podcast network . No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

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

Andy Constan, Brent Kochuba and Eric Pachman examine rising bond yields, options positioning and the inflation risks facing stocks. What happens if the rate relief traders are betting on never arrives? On this month's Last Call, Jack Forehand and Matt Zeigler connect three perspectives on the market. Andy Constan explains why stronger growth and debt supply can push yields higher without signaling a bond crisis. Brent Kochuba examines options flows that suggest traders are still leaning toward a rebound. Eric Pachman traces the path from refinery constraints and diesel shortages to freight costs and consumer inflation. Jack and Matt close with the investment implications of AI spending, efficiency and adoption. Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠ Topics covered: Andy Constan on growth, AI capital spending and the supply of debt Why Andy Constan sees more attractive bonds without calling for a recession How higher yields can constrain stock returns even when growth remains strong Brent Kochuba on bond volatility, calm equities and bets on falling yields Why Brent Kochuba is watching both upside surprises and downside risk Eric Pachman on crack spreads and why cheaper crude may not mean cheaper fuel How diesel prices can flow through freight bills into CPI Eric Pachman on wage inequality and what national averages miss AI spending, productivity and the difference between slower growth and contraction The practical obstacles to bringing AI agents into everyday life Chapters:00:00 Rising yields and the outlook for stocks05:26 Andy Constan: Growth, debt supply and higher yields12:01 Why bonds look more attractive after the selloff18:33 Brent Kochuba: Options flows and bets on rate relief23:21 Equity complacency and risks in both directions31:12 Eric Pachman: Diesel shortages, crack spreads and inflation40:06 Wage inequality and the limits of average inflation44:40 AI capital spending, productivity and investment returns50:34 AI adoption, automation and everyday obstacles Learn more about the Excess Returns podcast network: ⁠https://excessreturns.co⁠ No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Michael Baron of Baron Capital explains his case for AI beneficiaries beyond the biggest tech stocks, including software companies the market fears will be disrupted. He joins Matt Zeigler and Justin Carbonneau to discuss how competitive advantages, management quality, and a long investment horizon shape the firm's growth portfolios. Baron Capital's co-president and portfolio manager walks through the firm's investments in Tesla and SpaceX, from vertical integration and autonomous driving to reusable rockets, Starlink, and the potential for AI infrastructure in space. He also explains why proprietary data may strengthen some software businesses, how the firm manages positions as winners grow, and what would make him sell. The conversation closes with lessons from Ron Baron on curiosity, primary research, and building conviction. Topics covered: Finding growth opportunities across technology, financial services, real estate, and consumer businesses Why Michael Baron believes some apparent AI losers could become beneficiaries Proprietary data and the investment cases for Shopify, Guidewire, FactSet, MSCI, and Gartner Tesla's evolution, energy business, and the potential economics of autonomy and software SpaceX's reusable rockets, Starlink, and Michael Baron's vision for AI infrastructure in space Valuing businesses over a long horizon and assessing reliance on key leaders Lessons from Ron Baron and the importance of management relationships during market stress Letting winners run while managing concentration, leverage, and portfolio correlations Distinguishing portfolio trims from selling when a competitive advantage deteriorates Why Michael Baron believes AI will increase the importance of investment judgment Learn more about Baron Capital: https://www.baroncapitalgroup.com/ Chapters: 00:00 Michael Baron on finding growth beyond technology 04:16 AI disruption and the opportunity in software 10:54 Tesla, Elon Musk, and vertical integration 18:33 Long-term valuation and key-person risk 23:28 SpaceX, Starlink, and AI infrastructure in space 34:11 Lessons from Ron Baron and the firm's future 40:08 Evaluating management and competitive advantages 47:11 Time as an edge and managing growing positions 54:11 When to trim a position and when to sell 58:11 Curiosity, primary research, and conviction Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

How much of your portfolio does a good investment idea deserve? Kris Abdelmessih of Moontower joins Matt Zeigler to explain why having an edge is only part of the decision: position size can determine whether favorable odds translate into long-term growth or damaging losses. Through a coin-flipping experiment and everyday examples, Kris makes the Kelly Criterion accessible without a complicated derivation. The conversation explores the difference between expected returns and compounded wealth, why growth-maximizing bets can still be uncomfortable, and how uncertain probabilities make a case for betting less. From portfolio decisions to insurance and extended warranties, the goal is to build better intuition about how much risk to take. Topics covered: How a favorable coin-flipping game exposed costly mistakes in bet sizing Why maximizing the expected payoff of one bet differs from maximizing long-term compounded growth How oversized bets can undermine an otherwise profitable opportunity The Kelly Criterion's three inputs: probability of winning, probability of losing, and payoff Why a constant percentage of your bankroll means changing the dollar amount after wins and losses How different payoffs change the appropriate size of a bet Applying the framework to hypothetical self-insurance and extended-warranty decisions Why full Kelly can involve substantial drawdowns, and the tradeoffs of fractional Kelly Working backward from a position size to the odds needed to justify it Allowing for uncertainty in your estimates and preserving capital for future opportunities The essay behind this conversation: After this post you will be sizing bets in your head https://www.panoptica.com/after-this-post-you-will-be-sizing-bets-in-your-head/ Research discussed: Rational Decision-Making Under Uncertainty: Observed Betting Patterns on a Biased Coin https://arxiv.org/abs/1701.01427 Kris Abdelmessih's Moontower newsletter: https://moontower.substack.com/ Moontower: https://moontower.ai/ Kris Abdelmessih on X: https://x.com/KrisAbdelmessih Chapters: 00:00 Position sizing and the favorable coin-flip experiment 04:45 Why a good bet can produce bad outcomes 13:49 The Kelly Criterion formula explained 18:10 Adjusting your bankroll and accounting for the payoff 23:03 Applying Kelly to a self-insurance decision 30:25 Full Kelly, drawdowns, and reasons to bet less 34:59 Working backward from bet size and evaluating warranties 41:09 Volatility drag, uncertain odds, and the experiment's results 46:09 How much capital does your edge deserve? Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

What are headline jobs and inflation numbers missing about the economy investors actually face? Eric Pachman of Data 4 The People joins Matt Zeigler to examine how a changing workforce, rising fuel costs, and differences in household spending could affect inflation, consumer demand, and corporate margins. Using interactive data tools, Eric looks beneath monthly payroll reports, maps changes in America's labor force, and traces how diesel prices can work their way into retail prices. He also shares a grocery-price study that challenged his own assumptions about CPI and explains how he is using AI to make rigorous data journalism more accessible. Topics covered: Why monthly jobs reports need context, including survey uncertainty and revisions How to spot unusual industry-level payroll changes and assess the quality of jobs added What county-level labor force trends reveal about aging and rural America Eric Pachman's research on foreign-born workers and the limits of replacement assumptions How a shrinking supply of workers could create pressure on service prices How diesel costs flow through freight surcharges, retailer margins, and consumer prices What to watch for in retailer earnings calls as companies weigh price increases Why household income, driving habits, and spending patterns change the experience of inflation What Eric Pachman's Kroger study found about CPI, the Thrifty Food Plan, and store brands Using AI to test assumptions and expand access to data journalism Explore Eric Pachman's research and interactive tools: https://www.data4thepeople.com/ The Men Who Vanished: Testing Labor Market Displacement https://www.data4thepeople.com/p/the-men-who-vanished How do the government's grocery prices stack up against the real ones? https://www.data4thepeople.com/p/kroger-shelf-vs-cpi-thrifty-food-plan/ Chapters: 00:00 Introduction and Data 4 The People's mission 09:20 Spotting unusual changes in the jobs data 18:27 Mapping America's changing labor force 27:00 Foreign-born workers, aging, and labor supply 34:51 Energy costs and the path to consumer inflation 47:49 Why your inflation experience differs from CPI 56:12 Personal inflation tools and testing grocery prices 1:02:36 AI, data journalism, and challenging your own bias 1:11:17 Where to find Eric Pachman's work and tools Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Jack Raines turned $6,000 into roughly $400,000 trading SPACs, then lost $157,000 in three minutes after taking a very different bet. The author of Young Money joins Matt Zeigler to discuss what that experience taught him about investing risk, the urge to chase more, and the time a growing portfolio can cost you. The conversation follows Jack Raines from SPAC warrants and market narratives to a broader question: how do you allocate money, time, and risk to build a life you actually want? They explore the limits of a trading edge, why cheap stocks can get cheaper, and how debt, career choices, and status shape the decisions investors make beyond their portfolios. Young Money: A Field Guide to Wealth and Purpose in Your Twenties https://amzn.to/4AtUsDo Jack Raines' Young Money newsletter https://www.youngmoney.co/ Jack Raines on X https://twitter.com/Jack_Raines Topics covered: How Jack Raines grew his Roth IRA through SPAC warrants and pre-merger common shares, and why those positions carried different risks. Why an edge in one corner of the market did not translate into a successful concentrated earnings bet. How a million-dollar target and constant account checking changed Jack Raines' relationship with money and time. What SEC filings, Discord research, and market narratives contributed to his trading process. Why Jack Raines bought Figma after questioning the market's AI narrative and speaking with designers. Applying portfolio thinking to careers, creative projects, and opportunities that change with each stage of life. Weighing retirement saving against other opportunities, and why Jack Raines treats expensive debt as a constraint on taking risks. Escaping the "someday" trap while giving long-term venture investments time to develop. Combining steady income and index funds with independent bets, while treating status as a tool rather than a goal. Why Jack Raines believes investors learn about risk through experience, with stakes they can afford to recover from. Timestamps: 00:00 Jack Raines on the lessons of losing money 04:57 Inside the SPAC trades and the $157,000 loss 15:16 Separating market hype from downside math 22:18 Building a life with portfolio principles 29:45 Retirement saving, trading obsession, and the cost of time 36:56 Debt, freedom, and the trap of waiting for someday 44:33 Venture investing: acting quickly and waiting patiently 51:03 Using status without making it the goal 56:08 The investing lesson experience has to teach Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.