In this episode of Excess Returns, Jack Forehand and Matt Zeigler dig into forecast season by reviewing and synthesizing insights from 22 major Wall Street and institutional market outlooks. Rather than treating year-end forecasts as precise predictions, the conversation uses them as a framework for understanding consensus views, hidden assumptions, and where the real risks and surprises for 2026 may lie. The discussion spans macroeconomic conditions, AI-driven growth, earnings expectations, valuation risks, and the growing divergence beneath headline market performance, helping investors think more clearly about the range of outcomes ahead.
Main topics covered
• Why year-end market forecasts are still useful despite being consistently wrong on exact targets
• What consensus forecasts reveal about expectations for economic growth in 2026
• The role of artificial intelligence in driving earnings, productivity, and capital spending
• Reacceleration versus late-cycle slowdown and how forecasters are split on the outlook
• Inflation expectations, interest rates, and the likelihood of fewer Fed cuts than expected
• Fiscal policy, deficits, and the growing role of government stimulus
• Energy constraints, data centers, and the physical limits of the AI buildout
• Profit margin expansion versus revenue growth and why this matters for valuations
• S&P 500 price targets, earnings assumptions, and where optimism and caution diverge
• The dominance of the Magnificent Seven and the debate over market and earnings broadening
• Risks beneath the surface, including margin compression, valuation resets, and sector rotation
• What investors can learn by comparing the most bullish and most bearish forecasts
Timestamps
00:00 Forecast season and why reading outlooks still matters
03:00 Why precise market targets are misleading but informative
05:30 Using consensus forecasts to identify risks and surprises
08:30 AI, economic reacceleration, and productivity expectations
13:00 Recession risks, stagflation fears, and late-cycle dynamics
17:00 Inflation outlook and why it may reemerge later in the year
22:00 Fed policy, rate cuts, and rising internal dissent
26:00 Fiscal stimulus, deficits, and long-term consequences
28:00 AI infrastructure, energy constraints, and data centers
35:00 AI diffusion and real-world productivity gains
39:00 S&P 500 targets, earnings growth, and valuation assumptions
43:00 Profit margins, mean reversion, and long-term risks
47:00 Magnificent Seven earnings versus the rest of the market
52:00 Market broadening, international stocks, and diversification
56:00 Key takeaways for investors heading into 2026
In this special compilation episode of Excess Returns, we ask one revealing question to some of the most respected investors, strategists, and market thinkers in the industry:
What is one belief you hold about investing that most of your peers would disagree with?
The answers challenge conventional wisdom across macro, valuation, diversification, options, forecasting, AI, and investor behavior.
Rather than consensus, this episode highlights how great investors think differently about risk, uncertainty, and long-term outcomes.
00:06 Jim Grant – Why gold has been, is, and will remain money
02:14 Andy Constan – Why quantitative easing is always pro-growth and inflationary
03:36 Liz Ann Sonders – Why year-end market price targets are a useless exercise
04:56 Richard Bernstein – Why the stock market is ownership, not a horse race
06:33 David Giroux – Why macro investing does not create long-term alpha
08:00 Meb Faber – Why dividend investing narratives are often misunderstood
11:44 Sam Ro – When valuations actually matter and when they don’t
13:27 Jason Buck – Why belief systems in investing are often built on insecurity
15:16 Mike Green – Why markets change when metrics become targets
17:16 Jerry Parker – Why the Sharpe ratio fails for asymmetric return strategies
19:15 Chris Mayer – Why trimming great businesses often hurts long-term returns
21:14 Joseph Shaposhnik – Why a stock that has doubled may still be early
24:27 Warren Pies – Why price and technicals are essential for managing risk
25:33 Katie Stockton – Why technical analysis can stand on its own
27:17 Jim Paulsen – Why policy makers matter less than cultural and economic forces
28:41 Adam Parker – Why differentiated thinking is the only real edge versus the index
30:29 Rupert Mitchell – Why copying great investors is a mistake
31:18 Victor Haghani – Why asset allocation should be dynamic, not static
33:09 Dan Rasmussen – Why historical growth tells you almost nothing about future growth
33:45 Graeme Forster – Why you don't just need to be right 60% of the time
35:40 Shannon Saccocia – Why investors should think more like futurists than historians
36:21 Cem Karsan – Why options are not derivatives, but the true underlying
40:31 Aahan Menon – Why tariffs and macro news matter less than investors think
41:49 Andrew Beer – Why simple bets often outperform complex strategies
44:09 Bogumil Baranowski – Why successful investing requires far less work than people believe
45:55 Rick Ferri – Why advice fees and asset management fees should be separated
46:57 Cameron Dawson – Why multidisciplinary thinking is essential for investors
48:24 Mary Ann Bartels – Why blue chip dividend investing still has a place
49:40 Travis Prentice – Why turnover depends entirely on the strategy
50:24 Scott McBride – Why catalysts are overrated in value investing
50:58 Jared Dillian – Why tariffs and protectionism make economies poorer
53:35 Peter Atwater – Why shareholders are no longer the top corporate priority
54:34 Ian Cassel – Why turnover myths persist in microcap investing
55:31 Kris Sidial – Why trading psychology matters more than models
56:17 Noel Smith – Why top hedge fund returns are not the upper limit
57:09 Kai Wu – How AI will reshape investing jobs without replacing humans
01:00:49 Tim Hayes – Why markets cannot be forecast reliably
01:02:12 Doug Clinton – Why AI-powered asset management could be a multi-trillion-dollar industry
In this episode of Excess Returns, we sit down with Paul Eitelman, Global Chief Investment Strategist at Russell Investments, to unpack their 2026 outlook and the idea of a “Great Inflection Point” for markets and the economy. Paul explains why the U.S. economy may be shifting from resilience to reacceleration, how artificial intelligence is moving from hype to measurable returns, and why market leadership could finally broaden beyond the Magnificent Seven. The conversation blends macroeconomic analysis, behavioral finance, and real-world portfolio implications, offering investors a framework for thinking about growth, risk, and diversification as we head into 2026.
Main topics covered
• The cycle, valuation, and sentiment framework and how it shapes investment decisions
• Why economic growth may reaccelerate in 2026 after navigating policy headwinds
• Accelerating AI adoption and what early signs of ROI mean for productivity and profits
• The J-curve of new technologies and where AI may sit today
• Capital spending, leverage, and profitability risks among hyperscalers and large tech firms
• Energy demand, labor market impacts, and other societal risks tied to AI
• Tariffs, immigration, and uncertainty as fading or manageable economic headwinds
• Financial conditions, fiscal stimulus, and deregulation as emerging tailwinds
• The gap between hard economic data and weak consumer sentiment
• Why recession forecasts have been wrong and how to think about recession risk going forward
• Inflation dynamics, the Federal Reserve’s priorities, and the outlook for rates
• The case for market broadening beyond the Magnificent Seven
• Global diversification, small caps, international equities, and emerging markets
• Behavioral finance, investor sentiment, and staying invested through volatility
• Portfolio construction implications, including real assets and alternatives
Timestamps
00:00 Introduction and the Great Inflection Point outlook
03:00 Cycle, valuation, and sentiment investing framework
05:50 From economic resilience to potential reacceleration
07:00 AI as a transformational technology and historical parallels
09:20 Measuring returns on AI investment and productivity gains
11:00 The AI J-curve and timing of benefits
13:00 Capital intensity, leverage, and risks for big tech
15:00 Energy demand, labor markets, and AI risks
19:00 How Paul uses AI in his own research workflow
20:30 The case for economic reacceleration into 2026
21:40 Tariffs and their real economic impact
23:20 Immigration and labor supply effects
24:10 Uncertainty, confidence, and business decision-making
26:10 Financial conditions and household wealth
28:00 Fiscal stimulus and the One Big Beautiful Bill Act
29:20 Deregulation as a potential growth tailwind
30:40 Hard data versus soft data in the economy
34:10 Why recession forecasts failed
37:10 Recession risk outlook for 2026
40:30 Inflation dynamics and the Fed’s focus
43:50 Broadening market leadership beyond the Magnificent Seven
46:10 Investor sentiment, panic, and opportunity
49:00 Translating macro views into portfolio strategy
51:30 Real assets, alternatives, and diversification
54:30 Investing lessons, compounding, and staying invested
In the latest episode of Click Beta, Matt Zeigler, Dave Nadig and Cameron Dawson take a look back at 2025 and a look forward to 2026. Subscribe to Click Beta via the links below.
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In this episode of Excess Returns, we sit down with Adrian Helfert of Westwood to discuss how investors should be thinking about portfolio construction in a market shaped by artificial intelligence, high levels of concentration, shifting interest rate dynamics, and evolving economic signals. The conversation covers how AI-driven capital spending is changing return profiles across markets, why traditional investing rules are breaking down, and how investors can balance growth, income, and risk in an uncertain environment. Adrian shares his framework for understanding return drivers, his views on market concentration and valuation, and how to think about diversification, macro risk, and income generation going forward.
Main topics covered
• How Westwood frames portfolio construction around capital appreciation, income, and event-driven returns
• Why AI spending is both a major opportunity and a growing existential risk for large companies
• The sustainability of market concentration and what it means for future returns
• Whether higher interest rates really hurt growth stocks the way investors expect
• How massive data center and AI capital expenditures could translate into productivity gains
• The case for market broadening beyond the Magnificent Seven
• Why traditional recession indicators have failed in recent cycles
• How inflation, labor markets, and Federal Reserve policy interact today
• Rethinking the classic 60/40 portfolio and the role of private markets
• Using covered calls and active income strategies to manage risk and generate yield
Timestamps
00:00 Introduction and near-term opportunities versus long-term risk
02:40 Capital appreciation, income, and event-driven investing framework
06:30 Have markets structurally changed to support higher returns
09:30 Intangible assets, AI, and margin expansion
10:20 The scale of AI and data center capital spending
13:00 Productivity gains and return on investment from AI
16:00 AI as both opportunity and risk for companies
19:30 Market concentration and diversification concerns
23:30 Will market leadership eventually broaden
25:30 Growth stocks, duration, and interest rates
29:30 International diversification and global investing
33:30 Why recession indicators have failed
39:00 Inflation outlook and Federal Reserve policy
46:00 Rethinking the 60/40 portfolio
53:00 Enhanced income strategies and covered calls
59:00 One investing belief most peers disagree with
In this special episode, Adam Butler and Ben Hunt join Matt Zeigler to unpack one of the most charged debates in markets and economics today: whether our official statistics still reflect lived reality. Building on Mike Green’s work and Adam Butler’s essay The Bureau of Missing Children, the conversation moves beyond the technical definition of poverty to a deeper idea of economic precarity, the growing gap between what we measure and what people actually experience. Together, they explore debt, housing, childcare, labor mobility, AI, and the erosion of meaning in economic language, while wrestling with what policy, community, and human-centered solutions might look like in a world that increasingly feels unstable.
Main topics covered
Why the debate should focus on precarity rather than poverty
The disconnect between inflation statistics and lived experience
How debt, housing, childcare, and education drive economic insecurity
The idea of a participation budget for modern family formation
Why labor mobility has broken down since the financial crisis
How asset prices and credit intensify risk for households
The role of grandparents and off-balance-sheet support in the economy
Darwin’s wedge, positional goods, and rising costs of everyday life
The impact of AI, technocracy, and anti-human incentives
Centralized versus decentralized solutions to today’s economic challenges
What it means to carry the fire and preserve human-centered values
Timestamps
00:00 Introduction and the emotional roots of the precarity debate
02:00 Poverty versus precarity and what we are really measuring
06:30 Technocrats, narratives, and the limits of economic statistics
09:00 Personal experiences with precarity and debt
15:00 The Bureau of Missing Children and family formation economics
21:00 Modeling household income and participation budgets
25:50 Rising costs of childcare, housing, and everyday life
33:00 Darwin’s wedge and positional competition
36:45 Debt, housing, and labor immobility
40:00 Grandparents, unpaid care, and off-balance-sheet subsidies
46:30 How today differs from 40 or 50 years ago
49:40 Labor mobility as a lost engine of opportunity
55:00 Policy paths, mission-driven economics, and decentralization
01:11:00 Visionary leadership versus bottom-up solutions
01:15:50 Carrying the fire and preserving meaning
01:17:30 Where to follow Adam Butler and Ben Hunt
In this episode of Excess Returns, we sit down with David Wright, Head of Quantitative Investing at Pictet Asset Management, for a deep and practical conversation about how artificial intelligence and machine learning are actually being used in real-world investment strategies. Rather than focusing on hype or black-box promises, David walks through how systematic investors combine human judgment, economic intuition, and machine learning models to forecast stock returns, construct portfolios, and manage risk. The discussion covers what AI can and cannot do in investing today, how machine learning differs from traditional factor models and large language models like ChatGPT, and why interpretability and robustness still matter. This episode is a must-watch for investors interested in quantitative investing, AI-driven ETFs, and the future of systematic portfolio construction.
Main topics covered:
What artificial intelligence and machine learning really mean in an investing context
How machine learning models are trained to forecast relative stock returns
The role of features, signals, and decision trees in quantitative investing
Key differences between machine learning models and large language models like ChatGPT
Why interpretability and stability matter more than hype in AI investing
How human judgment and machine learning complement each other in portfolio management
Data selection, feature engineering, and the trade-offs between traditional and alternative data
Overfitting, data mining concerns, and how professional investors build guardrails
Time horizons, rebalancing frequency, and transaction cost considerations
How AI-driven strategies are implemented in diversified portfolios and ETFs
The future of AI in investing and what it means for investors
Timestamps:
00:00 Introduction and overview of AI and machine learning in investing
03:00 Defining artificial intelligence vs machine learning in finance
05:00 How machine learning models are trained using financial data
07:00 Machine learning vs ChatGPT and large language models for stock selection
09:45 Decision trees and how machine learning makes forecasts
12:00 Choosing data inputs: traditional data vs alternative data
14:40 The role of economic intuition and explainability in quant models
18:00 Time horizons and why machine learning works better at shorter horizons
22:00 Can machine learning improve traditional factor investing
24:00 Data mining, overfitting, and model robustness
26:00 What humans do better than AI and where machines excel
30:00 Feature importance, conditioning effects, and model structure
32:00 Model retraining, stability, and long-term persistence
36:00 The future of automation and human oversight in investing
40:00 Why ChatGPT-style models struggle with portfolio construction
45:00 Portfolio construction, diversification, and ETF implementation
51:00 Rebalancing, transaction costs, and practical execution
56:00 Surprising insights from machine learning models
59:00 Closing lessons on investing and avoiding overtrading
In this episode of our new show The 100 Year Thinkers, Robert Hagstrom, Chris Mayer, Bogumil Baranowki and Matt Zeigler explain how investors get trapped by labels, abstractions, and simplistic models, and why breaking free with better mental models, language, and long-term thinking is a real edge in markets.
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Brent Kochuba takes a look behind the scenes at the options flows driving the market heading into the December options expiration and the end of 2025.
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Ed Yardeni returns to Excess Returns to break down the evolving market landscape, why he moved the Magnificent 7 to underweight, and how AI, productivity, interest rates, global markets, and sector leadership will shape the next stage of the Roaring 2020s. Ed explains why the economy has remained so resilient, what could finally trigger a true market broadening, and how investors should think about everything from tech competition to inflation, private credit risks, and Fed policy heading into 2026.
Main topics covered
• Why Ed reduced the Magnificent 7 and tech from overweight to market weight
• How extreme sector concentration affects portfolio construction
• The escalating competition inside AI and large-cap tech
• The AI CapEx boom and how it changes earnings, margins, and valuation
• Valuation considerations for tech leaders at this stage of the cycle
• Whether the Mag 7 should be compared to past tech bubbles
• How AI adoption may spread to the broader economy and boost productivity
• Economic impact of AI on jobs, wages, and long-term inflation
• Why the US economy avoided recession despite persistent warnings
• Rolling recessions vs traditional recessions and how they shape markets
• Private credit risks and whether they pose a systemic threat
• Prospects for small caps, mid caps, financials, industrials, and healthcare
• Why 2026 may finally bring true market broadening
• The outlook for international investing and emerging markets
• Ed’s S&P 500 roadmap to 7,700 next year and 10,000 by 2029
• Fed policy, rate cuts, inflation, bond vigilantes, and political pressure
• Key risks investors should monitor heading into 2026
Timestamps
00:00 Mag 7 concentration and the case for rebalancing
03:00 How Ed builds probability-based market scenarios
04:30 Why the Roaring 2020s thesis still holds
06:00 The no-show recession and economic resilience
07:00 Why he moved the Mag 7 and tech to market weight
09:30 How every company is becoming a technology company
12:20 Knowing when a successful thesis has run its course
13:30 The dominance of the US market and global diversification
15:00 Why market weight, not overweight, for tech and the Mag 7
16:00 Tech competition, AI leapfrogging, and margin pressure
18:30 The CapEx boom and valuation questions
21:00 Comparing today’s tech leaders to the 2000 era
23:00 How AI could lift productivity across the entire economy
25:00 Putting AI in historical context
27:00 How new technologies solve constraints like energy and compute
29:00 AI’s long-term impact on productivity and growth
30:00 Labor market disruption and job transition dynamics
31:20 Will AI be deflationary over time?
32:30 Technology, China, automation, and global deflation forces
33:00 Ed’s forecast for the S&P 500 through 2029
35:00 Why recession indicators failed this cycle
37:00 How liquidity facilities prevent credit crunches
39:00 Private credit risks and transparency challenges
40:45 The potential for market broadening in 2026
42:20 Takeaways from the latest Fed meeting
44:00 Should the Fed be cutting rates?
45:00 Fed independence under political pressure
47:00 Why bond vigilantes may return in 2026
48:00 International investing opportunities and ETFs
49:30 Closing thoughts and key risks ahead
In this episode of Excess Returns, we sit down with Andrew Beer to break down managed futures, hedge fund replication, diversification, and what investors can realistically expect from these alternative strategies. Andrew explains why managed futures can act like a “cloudy crystal ball,” how trend strategies capture major macro shifts, why complexity isn’t always your friend, and how advisors can communicate these concepts to clients. We also explore fees, model portfolios, allocation decisions, global macro themes, and what smart-money positioning looks like heading into 2025.
Topics Covered
What managed futures actually are and how they work
How trend strategies capture big macro shifts
Why diversification is most valuable during market stress
Why investors struggle with complexity and line-item risk
The statistical case for adding managed futures to a 60/40 portfolio
Barriers to adoption and how advisors should explain the strategy
The role of model portfolios and why slow rebalancing can hurt in regime shifts
Why Andrew prefers simplicity over complexity in managed futures
Fee sensitivity, ETFs, and how this strategy goes mainstream
Indexing, replication, and building more efficient alternatives
Why manager selection is hard in this space
The “rush to complexity” and why it often hurts returns
How hedge fund replication works and what it captures
What smart money is positioned for today across equities, rates, currencies, and commodities
Macro themes: inflation, rate cycles, the dollar, yen, and global equity opportunities
Why international equities may finally be turning
How managed futures complement – not replace – stocks and bonds
What mainstream adoption might look like over the next decade
Timestamps
00:00 Intro and why managed futures matter
02:00 Explaining managed futures in simple terms
06:18 The four major asset classes trend funds trade
10:00 Why trends form and how information reveals itself in prices
11:55 Diversification and how managed futures improve portfolios
14:00 Why investors haven’t widely adopted the strategy
17:01 Communicating the “what,” not the “how,” with clients
18:55 How model portfolios behave in regime change
21:55 How managed futures can move faster than traditional allocations
24:00 Why a simple portfolio of major markets works
26:00 Making alternatives feel less risky
28:00 Performance dispersion across managed futures ETFs
30:00 Why complexity doesn’t equal value
35:20 Fees, ETFs, and what mainstream adoption requires
38:00 The real reason for the industry’s “rush to complexity”
40:35 Should managed futures exclude equities and bonds?
43:00 Why it’s so hard to handicap what will work in advance
46:00 The human side of alternatives and advisor communication
47:00 Hedge fund replication explained
50:00 How replication identifies major themes
52:00 Why replication works only in certain strategies
53:10 What smart money positioning looks like today
55:45 Inflation, rates, the dollar, and global opportunities
58:00 The path to managed futures becoming a standard allocation
59:22 Where to find Andrew Beer online
We are including this episode from our separate show Teach Me Like I'm Five in the Excess Returns feed. If you would like to continue receiving new episodes, subscribe using the links below.
In the episode, we sit down with Business Breakdowns host Matt Reustle to discuss how he breaks down businesses and the common characteristics that the best businesses he has looked at share.
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In this episode of Excess Returns, Graeme Forster of Orbis joins us to discuss two major research papers: Six Courageous Questions for 2026 and Sunrise on Venus. We explore how long-running global trends may be reversing, what that means for U.S. dominance, the future of international and emerging markets, the risks and opportunities created by AI and massive CapEx spending, the dollar’s shifting role, and how investors should think about valuation, humility, and navigating a world where the economic “water” is changing. This conversation is packed with global macro insight, long-term investing lessons, and practical frameworks for building more resilient portfolios.
Topics Covered:
• Why long-term market “water” becomes invisible to investors
• Self-reinforcing global cycles and how China’s WTO entry reshaped the world
• Signs the 25-year U.S. outperformance cycle may be breaking
• How tariffs, political shifts, and corporate reforms change the global landscape
• Why international and emerging markets may now offer better expected returns
• Why U.S. large caps are not the entire story of American exceptionalism
• How to think about valuation, margins, and discounted cash flow models across markets
• The AI boom, bubbles, capital cycles, and asymmetric outcomes
• How AI CapEx constraints influence winners and losers
• The shifting role of the U.S. dollar and why market shocks may behave differently
• Maslow’s hierarchy, needs vs. wants, and the return of state-driven capital investment
• Deglobalization, reshoring, and the national-security lens for investing
• How to evaluate China and Taiwan inside emerging markets
• Why humility is an investor’s greatest edge
Timestamps:
00:00 Introduction
01:02 Why Orbis wrote Six Courageous Questions for 2026
03:44 The David Foster Wallace “water” analogy and investing
06:12 How a 25-year self-reinforcing cycle powered U.S. outperformance
10:12 Signs the cycle may be breaking
12:00 Corporate reform and opportunity in Asia
13:55 Why active share, benchmarking, and incentives distort investor behavior
17:31 Decomposing S&P 500 returns: margins, valuations, fundamentals
20:20 Expected returns inside and outside the U.S.
22:34 Why international stocks offer richer opportunity sets
24:25 Currency implications and weakening dollar dynamics
26:18 American exceptionalism beyond the top 10 mega caps
28:49 Where Orbis is finding value today
30:25 Biotech, healthcare, and post-COVID dislocation
31:05 How Orbis thinks about valuation in an intangible-heavy world
32:09 Is AI a bubble or the beginning of something bigger?
34:30 Game theory of AI CapEx and right-tail outcomes
36:00 CapEx cycles, history, and who benefits
38:00 Indirect AI beneficiaries and the SK Square example
40:35 Maslow’s hierarchy and the shift from wants to needs
42:32 Deglobalization, national security, and domestic reinvestment
44:00 Capital returning to home markets and strategic industries
46:00 Can anything reverse these structural trends?
48:00 Balancing bottom-up investing with macro awareness
49:45 The deeper risk in emerging markets: owning vs. avoiding
51:00 Valuation still matters for long-term returns
52:29 Corporate behavior, dividends, and re-rating cycles
53:52 How Orbis views China vs. bottom-up opportunity
55:34 Why great investors must be right 90–95% of the time in decision quality
58:00 One lesson Graeme would teach the average investor
James Grant, legendary founder of Grant’s Interest Rate Observer, joins us for a wide-ranging conversation on cycles, interest rates, inflation, credit, the Federal Reserve, private markets, gold, and the future of investing. Grant brings five decades of historical perspective to today’s market extremes, explaining why this era of ultra-low interest rates created distortions that will shape returns for years to come — and where patient investors may ultimately find opportunity.
Topics Covered
• The historical patterns that define major market cycles
• Why interest rate cycles unfold over generations
• What the 2021 bond market top tells us about the next decade
• How inflation behaves like an underground coal fire
• The shift from “capitalism without capital” to the “tangible twenties”
• Geopolitical tension, military spending, and inflation risk
• The Fed’s role in shaping today’s market distortions
• The long-term consequences of QE and financial repression
• Private credit, opaque marks, and the fragility beneath the surface
• Rising risks inside life insurance balance sheets
• Why credit cycles always go further than anyone expects
• The challenge of finding long opportunities in today’s market
• Why liquidity and patience may be the biggest opportunities
• Whether the classic 60/40 portfolio still works
• Gold as money and why confidence in paper currencies is eroding
• Jim Grant’s one lesson for the average investor
Timestamps
00:00 Cycle extremes and market absurdities
01:00 Interest rates over generations
07:00 Defining major tops and bottoms
12:30 Where we are in the current rate cycle
14:00 Inflation, armed conflict, and tangible investment
18:00 The “tangible twenties” and data center boom
19:00 Coal fire inflation analogy
20:00 Fed independence, politics, and monetary power
25:00 The long shadow of the 2008 crisis
30:00 QE, zero rates, and long-term consequences
33:00 Housing affordability and locked-in rates
34:00 Risks in private credit and opaque marks
36:00 How far the credit cycle has progressed
38:00 Japan, value investing, and long cycles
43:00 Where opportunities exist today
47:00 The future of the 60/40 portfolio
49:00 Structural risks from low-rate distortions
51:00 Freedom, politics, and economic consequences
56:00 Gold as money
58:00 What Jim Grant believes most investors disagree with
59:30 The one lesson Jim Grant would teach the average investor
In this episode, we’re joined again by Jim Paulsen to break down the key themes shaping markets and the economy heading into 2026. Jim explains why policymakers may be fighting the wrong battle, why real sustainable growth has quietly collapsed over the past 20 years, and how shifts in policy, demographics, productivity, inflation, and investor psychology all tie together. We also walk through Jim’s latest charts from Paulsen Perspectives and explore what they mean for stocks, sectors, interest rates, the dollar, and leadership in the year ahead.
Topics covered in this episode:
• The state of inflation and why CPI and PPI may be sending a very different message
• The 20-year collapse in real sustainable GDP growth
• Why job creation, labor force growth, and productivity have all structurally weakened
• The rise in unemployment duration and what it signals about lost “animal spirits”
• How demographics, immigration policy, and cultural shifts are shaping growth
• Productivity puzzles: innovation vs. distraction in a tech-driven economy
• Why the real economic risk may be deflation, not inflation
• How monetary policy, the yield curve, the dollar, and fiscal policy have remained contractionary
• Tariffs as a hidden tax and their real impact on inflation
• How an easing cycle could reshape market leadership in 2026
• Jim’s Total Policy Stimulus Index and what it reveals about small caps, cyclicals, value, and foreign stocks
• The difference between today’s tech cycle and the dot-com bubble
• What a broadening market might look like if policy finally turns supportive
• How international equities could respond to a weaker dollar
• Why tech may underperform without collapsing
• Jim’s expectations for S&P 500 returns in 2026 and the potential for a more balanced leadership environment
Timestamps:
00:00 Market setup and inflation overview
02:00 Reviewing recent corrections and sector broadening
04:00 Bond yields, easing expectations, and fear-based asset leadership
06:00 Tech’s relative performance beginning to fade
07:00 GDP growth collapse over two decades
09:00 Structural slowdown in job creation
10:30 Labor force growth and aging demographics
12:00 The doubling of unemployment duration
14:00 Population trends, immigration, and slowing productivity
17:00 The rise of de-risking and falling monetary velocity
19:00 Trade deficits, globalization, and policy contraction
22:00 Why inflation risk may be overstated
26:00 CPI/PPI data versus the inflation narrative
29:00 Money supply, real rates, and the longest yield curve inversion
31:00 The strong dollar as a contractionary force
34:00 International stock performance and currency impact
35:00 Tax burden relative to slower growth
37:00 Tariffs as taxes and their real economic effect
39:00 What would it take to restore growth and optimism?
42:00 The Total Policy Stimulus Index explained
47:00 Policy’s impact on equal-weight, small caps, cyclicals, and value
52:00 How foreign stocks respond to policy and the dollar
54:00 Tech valuations today vs. the dot-com era
55:00 Fed response differences between now and 2000
57:00 Why today’s tech cycle is structurally different
59:00 What 2026 might look like for the S&P 500
01:01:00 Why price targets are inherently unreliable
01:01:45 Closing thoughts and sign-off
In this special episode of Excess Returns, we share the most important investing lessons from more than 50 of our top guests. After asking more than 200 investors, strategists, academics, and market thinkers the same closing question about the one lesson they would teach the average investor, we compiled the most powerful, timeless, and repeatable insights into a single episode. This collection highlights common themes around patience, discipline, humility, diversification, risk management, and long-term thinking, while revealing how great investors navigate markets, behavior, and uncertainty.
Main topics covered:
Why investing is about preserving and growing wealth, not getting rich
Why neither get in nor get out is an investing strategy
The role of base rates in decision-making
The dangers of performance chasing
Why you should look at your portfolio less often
The importance of independent thinking and avoiding envy
Treating stocks as businesses, not trading sardines
Diversification across assets, strategies, and economic regimes
The behavioral traps that destroy wealth
Liquidity, supply and demand, and how markets really function
The value of patience, long-term thinking, and sticking to your plan
How to build a resilient portfolio that survives different market environments
Why simplicity often beats complexity
The role of humility, self-awareness, and keeping emotions out of investing
Timestamps:
00:00 Investing is about preserving and growing wealth
00:45 Why neither get in nor get out is a strategy
01:16 How we arrived at the one-lesson question
02:00 Finding a portfolio you can live with
03:00 Avoiding envy and chasing 10-baggers
04:00 Why watching markets too closely hurts results
05:00 The Matt Levine rule of unbelievable returns
06:00 The power of base rates
08:00 Look at your portfolio as little as possible
10:00 Treat your holdings like real businesses
12:00 Be invested early and think independently
14:00 Be kind to yourself and keep taking action
15:58 Do not chase performance
17:00 Treat every position like you put it on today
18:31 Your portfolio is secondary to your life
19:44 Buy when others are fearful
20:00 Be Rip Van Winkle, not Nostradamus
22:00 Navigate the noise and avoid the siren song
23:38 The value of simplicity and studying history
24:59 Patience and tuning out the noise
26:00 True diversification and preparing for unknown regimes
27:50 Stick to a strategy that fits your personality
29:00 Diversify and be humble about what you know
30:00 Most results come from the market, not manager skill
32:38 Keep investing simple
34:00 Focus on what is knowable
35:00 Believe in long-term economic and market resilience
37:00 Get out of your own way
38:22 Build a philosophy you can stick to
39:00 Misjudging probabilities and confidence
40:46 Book your gains and contain your losses
41:00 Diversification is protection against bad luck
42:00 Supply, demand, and liquidity always matter
45:00 Markets as a political utility
46:00 Find something real if you want true alpha
47:00 Write down your decisions
48:32 Why 100 percent indexing is unrealistic for most
50:00 Alpha through portfolio structure, not just stock picking
52:00 Dividends and long-run investing
53:56 Valuation, time horizons, and patience
55:00 Embracing uncertainty and avoiding pigeonholing
56:33 Rules-based processes
57:35 Buy good businesses, not just cheap ones
59:00 Think long term and save early
01:01:00 Focus on the basics first
01:02:00 Avoid catastrophic losses
01:03:22 Evidence-based investing and avoiding resulting
01:04:09 Know what you own and keep fees low
01:05:00 Simple strategies often work best
01:06:00 Compounding and emotional control
01:07:00 Treat savings as savings, not lottery tickets
01:07:50 Balance enjoying today with protecting tomorrow
01:08:00 Stay invested and think long term
01:08:41 Be humble, patient, and systematic
01:09:00 Do your own work and build conviction
In this episode of Excess Returns, Matt sits down with Ben Hunt to break down his new Epsilon Theory essay, World War AI. They explore how the US government, markets, and Big Tech are rapidly shifting the AI narrative from productivity and progress toward a national security arms race with massive implications for energy, capital, jobs, inflation, and the broader economy. Ben explains why AI buildout is consuming enormous resources, how this echoes World War II scale mobilization, why consumers are already feeling the strain, and what policies could still steer the country toward a healthier economic path.
Topics covered:
• Why the AI narrative flipped from optimism to national security
• How AI CapEx creates shortages of energy, capital, and investment elsewhere
• The parallels between AI buildout and World War II economic mobilization
• Why the promise of AI-driven productivity and leisure was never realistic
• The coming squeeze on consumers through higher prices and reduced availability
• Why energy bottlenecks and electricity scarcity may lead to rationing
• The risk of stagflation and a shrinking job base as AI replaces human labor
• The political paths this could take, from authoritarianism to backlash
• Ben’s three-policy plan: reshoring, energy expansion, and electricity caps
• How investors should think about the boom-bust risk of hyperscale growth
• Why awareness and public conversation are essential before the window closes
Timestamps:
00:00 AI narrative shift and the failure of the carrot
01:20 Measuring narratives through Perscient Pro
05:30 Why Ben wrote World War AI
07:30 The carrot vs. the stick in AI storytelling
11:00 Utility bills, consumer squeeze, and rising economic pressures
12:30 World War II-level spending and debt dynamics
15:30 Crowding out the consumer economy
17:00 Interest rates, borrowing, and capital shortages
20:00 Energy usage, electricity scarcity, and cost-push inflation
24:00 Rationing risk and historical parallels
26:00 Jobs, productivity, and AI’s impact on labor
31:00 The lack of new job creation in an AI-driven economy
33:00 Why new-tech job optimism does not apply here
38:00 Market skepticism and narrative extremes
41:00 Political risk, backlash, and potential future paths
42:20 The three policies: reshoring, energy buildout, electricity caps
49:30 Investment implications and the boom-bust cycle
55:00 How AI growth must be subordinated to broader economic goals
57:00 Why connecting consumer pain to AI buildout is essential
59:30 Early signs of state-level limits on data centers
01:02:00 Where to follow Ben Hunt and the continuing story
In this episode of Excess Returns, we sit down with Louis-Vincent Gave of Gavekal Research for one of the most wide-ranging and eye-opening conversations we have ever hosted. Louis breaks down how China transformed its economy over the last seven years, why Western observers consistently misunderstand the country’s growth model, and what this means for global markets, AI competition, supply chains, currencies, energy, demographics, and the next decade of investing. If you want a clearer picture of China, global macro dynamics, and the forces shaping markets today, this is essential viewing.
Topics covered in this episode:
• Why Western investors misread China’s economy
• China’s response to the US semiconductor embargo
• How China redirected all lending toward industry
• The scale and speed of China’s move up the value chain
• China’s EV dominance and the BYD vs. Tesla comparison
• The new global deflation and reflation forces
• Why China now looks like the US did in 2009
• Energy, labor, and industrial competitiveness
• China’s open-source AI approach vs. America’s closed systems
• “Hunger Games” capitalism and the impact on investors
• Where foreign investors consistently get China wrong
• The RMB as the most mispriced major asset
• How China’s demographics shape policy and markets
• Why fears of a Taiwan conflict are overblown
• How Louis is positioning for China’s next bull market
Timestamps:
00:00 China’s economic shock and the US semiconductor embargo
02:00 What the West gets wrong about China
04:00 Competition, local governments, and industrial incentives
06:10 China’s lending shift: real estate to industry
08:00 China’s rapid climb up the value chain
10:00 BYD vs Tesla and China’s engineering surge
12:30 The global deflationary shock and US–China tensions
15:00 From defense to offense: China’s policy pivot
17:00 China’s reflation and emerging market implications
18:20 Scarcity of energy, labor, and time
21:00 China’s cost advantages vs the US
24:00 Comparing AI strategies: open vs closed systems
28:00 “Hunger Games” capitalism in China
31:30 Investing challenges and opportunities in China
34:00 China’s new high-tech niche champions
37:00 Capital-light Chinese AI vs US capital intensity
40:30 Rethinking US-China blocs and global alliances
44:00 Why Europe will be torn apart by the next phase
45:30 Will China outperform the US over the next decade?
47:00 The massively undervalued RMB
49:00 China’s barbell investment setup
50:00 China’s demographic crisis and policy response
53:00 Taiwan risk: myth vs reality
58:00 How Louis could be wrong
01:00:40 Louis’s contrarian investing belief
01:02:00 Louis’s one lesson for investors
In this episode, we sit down with Sanctuary Wealth Chief Investment Strategist Mary Ann Bartels to break down her new 2026 outlook. We cover her long-term S&P 500 forecast, why she believes we are still early in a secular bull market, how technological innovation is fueling productivity and profitability, the risks she’s watching in 2026, and the case for international stocks, gold, and diversification. Mary Ann also explains why skepticism suggests we are not yet in a true bubble, how valuations fit into today’s market, and what investors should understand about cycles, inflation, and long-term compounding.
Topics Covered
• Secular bull markets and why the long-term trend still points higher
• Whether today’s market is following historic bubble patterns
• AI, technology cycles, and the connection between innovation, productivity, and profits
• Why skepticism means we are not yet near euphoria
• The 2026 “reset” and how the presidential cycle could affect markets
• Valuations, earnings trends, and interest-rate dynamics
• Market concentration, structural changes, and the role of mega-caps
• Growth vs value and why growth leadership may persist
• Why international markets may be entering their own secular bull market
• Inflation outlook, tariffs, and what the data now suggests
• Private credit concerns and overall financial-system stability
• Gold’s surge, future targets, and its role as portfolio diversification
• Portfolio construction, risk, and the importance of compounding for younger investors
Timestamps
00:00 Market patterns, bubbles, and early-cycle dynamics
01:00 Introduction
02:00 Long-term S&P 500 outlook
04:00 Historical bubble analogs and market psychology
06:00 Skepticism vs optimism
09:00 2026 reset and election-year dynamics
13:00 Valuations and PE expansion
17:00 Long-term valuation trends
17:40 Innovation cycles and economic growth
20:20 Productivity, AI CapEx, and profitability
21:00 Technology adoption across industries
22:20 Digitization and long-term tech layers
22:30 Market concentration and structural changes
25:00 Why corrections are more frequent
27:20 Growth vs value
31:00 International markets outlook
36:00 Correlations, deglobalization, and opportunity
38:40 Inflation short-term vs long-term
40:30 Private credit and financial stability
43:30 Gold outlook and targets
45:40 Diversifying concentrated portfolios
48:40 Crypto, private markets, and generational shifts
49:20 Key risks for 2026
51:40 What most investors get wrong
53:00 The one lesson for the average investor
54:40 Closing
In this episode of Excess Returns, we talk with Carl Kaufman, Co-President and Co-CIO of Osterweis Capital Management, about navigating today’s fixed income landscape. Carl breaks down the major segments of the bond market, explains how credit and interest rate cycles interact, discusses private credit risks, and shares how he builds durable, low-volatility bond portfolios. Drawing on more than two decades managing one of the top multi-sector income funds, Carl offers clear, practical insights for investors trying to understand yields, defaults, duration, and where returns are most attractive today.
Main topics covered:
• Overview of investment grade, high yield, leveraged loans, and private credit
• How today’s credit quality is shifting across the bond market
• Why the high yield market may be higher quality than most investors realize
• How levered loans and private credit have changed system dynamics
• How Carl uses the interest rate cycle and credit cycle to position the portfolio
• Why he avoids style boxes and instead buys bonds like a stock picker
• The flaws in fixed income indexing and why active management matters more in bonds
• How he evaluates companies, business models, leverage, and free cash flow
• Why distributors and equipment rental companies are strong long-term bond businesses
• The risks of the AI Capex boom and echoes of past bubbles
• Where defaults are rising and why private credit concerns may not be systemic
• Why his portfolio is short duration and how he uses cash as optionality
• How he protects against large drawdowns and manages risk across cycles
• His perspective on the Fed, inflation, employment data, and rate cuts
• Carl’s one investing belief most peers disagree with
• The one lesson he would teach every investor
Timestamps:
00:00 Intro and bond market quality shift
01:00 Carl’s background and fund philosophy
02:42 Defining investment grade, high yield, loans, and private credit
08:00 Why high yield quality has improved
10:07 The two-cycle approach: interest rates and credit
14:31 How today’s cycle differs
18:03 Why forecasting matters less than knowing where you are
18:52 Buying bonds like a stock picker
25:28 Index flaws in fixed income
26:56 Sectors Carl prefers
29:16 Thoughts on AI Capex, Nvidia, and financing trends
33:10 Sector concentration in bond portfolios
34:51 Position sizing and portfolio construction
35:43 Cracks in private credit and default data
39:45 Private credit for retail investors
40:34 Why Carl is short duration today
44:57 Using cash and liquidity as a strategic tool
45:44 Risk management and drawdowns
47:29 The Fed, inflation, employment, and policy uncertainty
53:53 Closing questions: belief peers disagree with
54:45 One lesson for the average investor