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

Latest Episodes:

He Wrote the Book on Bubbles | Edward Chancellor on If AI is Different May 12, 2026

Show notes

Edward Chancellor joins Kai Wu on the latest episode of the Intangible Economy to discuss what financial history and capital cycle theory can teach investors about today’s AI boom. They explore why transformative technologies can still produce terrible investor returns, how overinvestment develops, where anti-bubbles may be forming, and what past episodes like the railway mania, the dot-com bubble, China’s investment boom and the post-2008 interest rate regime suggest about the risks and opportunities today.

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Topics covered:

How capital cycle theory applies to the AI data center boom
Why railway mania, autos, aircraft and the dot-com bubble offer lessons for today
Why markets often fund major technology transitions but fail to identify the winners
The prisoner’s dilemma driving hyperscaler AI spending
Whether AI demand can justify the supply being built
How GPU depreciation and AI capital spending may affect reported earnings
Why hallucinations and reliability may limit the total addressable market for large language models
The case for looking at AI anti-bubbles instead of shorting the bubble directly
Why China shows that strong GDP growth does not guarantee strong shareholder returns
How intangible capital, SaaS valuations and human capital fit into capital cycle analysis
Whether bubbles can be good for society while still being bad for investors
Why the long-term interest rate cycle may have changed
The role of gold in a world of expensive stocks, rising debt and vulnerable bonds

Timestamps:

00:00 Edward Chancellor on capital cycles, bubbles and AI
04:42 Why the railway mania became a classic overinvestment cycle
09:00 Why markets fund technology booms but often miss the winners
13:19 The prisoner’s dilemma behind AI spending
17:30 Will AI demand justify the supply being built
20:00 How capital spending can inflate profits before the bust
25:08 The AI Hindenburg moment and the limits of large language models
30:55 Why AI hype may exceed the proven technology
35:55 Why the anti-bubble may matter more than shorting AI
40:00 The energy transition bubble and the opportunity in overlooked assets
45:08 China’s lesson on GDP growth and shareholder returns
49:27 Big Booze, GLP-1s and the Lindy effect
54:23 Can intangible capital have its own capital cycle
59:54 SaaS valuations and the index creation warning signal
01:04:10 Why bubbles can help society but hurt investors
01:09:09 Why long-term rates may be in a new multi-decade cycle
01:14:07 Why Edward Chancellor still sees a role for gold

We Asked an Options Expert Why This Melt Up Hasn’t Broken — and Which Signal Could End It May 10, 2026

Show notes

Brent Kochuba of SpotGamma joins Jack Forehand for the May 2026 OPEX Effect to break down what options positioning is saying after a massive AI and semiconductor-led market rally. They discuss SPX call volume, zero DTE options, dealer gamma, VIX expiration, NVIDIA earnings, oil risk, AI CapEx, and why options flows may help explain both the market’s recent melt-up and the potential for a volatility shift after OPEX.

Guest Links

Brent Kochuba on X
https://x.com/spotgamma

SpotGamma
https://spotgamma.com/

Topics Covered

Why the market has ignored oil shocks and geopolitical risk while AI earnings dominate investor attention
How AI CapEx, semiconductors and mega-cap tech have driven a powerful melt-up in stocks
Why options volume and zero DTE trading are increasingly important for all investors
How dealer hedging, delta and gamma can affect stock market moves
Why options expiration can create short-term turning points in markets and volatility
What the May OPEX setup says about call-heavy positioning in the S&P 500
Why single-stock options activity in NVIDIA, Tesla, Apple, Amazon and AI-related names matters
How record SPX call volume is being driven by short-dated options flows
Why Brent is watching VIX expiration, NVIDIA earnings and May 19 to May 20 for volatility expansion
What oil, VIX, correlation and dispersion are signaling about market risk

Timestamps

00:00 Intro: SPX call volume, call-heavy positioning and transient options flows
00:57 Are we in melt-up mode?
05:29 AI, UFOs and how fast market narratives are changing
09:00 Why options flows matter more for everyday investors
13:39 Could SpaceX become the next huge options market?
16:00 How dealer hedging, delta and gamma move through the market
20:44 Why OPEX can become a turning point for stocks and volatility
23:22 Why May OPEX is so call heavy
28:07 The market rally into May expiration
33:00 AI rebranding, meme behavior and downside headline risk
36:07 Reviewing last month’s oil and volatility setup
40:17 How the war flipped market leadership back to tech
44:13 Dealer gamma support in the S&P 500
49:19 Single-stock gamma in NVIDIA, Tesla, Apple and Amazon
51:06 Record SPX call volume and the role of zero DTE
54:55 Semiconductor, AI and memory call volume
57:50 From bearish positioning to peak-bull dispersion
59:22 Oil, the S&P 500 and changing correlations
01:03:06 COR1M, dispersion risk and when Brent considers hedging
01:04:57 Brent’s key takeaways for May OPEX and volatility expansion

We Asked a $4.5B Quant Manager Why the S&P 500 Is Just 46 Stocks — and Why Small Caps Aren't Dead May 08, 2026

Show notes

Elena Khoziaeva, Co-Chief Investment Officer and Portfolio Manager at Bridgeway Capital Management, joins Excess Returns to discuss factor investing, small caps, value investing, market concentration, intangibles, passive investing, market neutral strategies, and the role of AI in quantitative investment research.

We cover how Bridgeway combines disciplined quantitative models with human judgment, why the S&P 500 may be less diversified than investors think, and how investors can think about diversification when mega-cap growth stocks dominate market returns.

Bridgeway Capital Management
https://bridgeway.com/

I Know What You Did Last Summer
https://bridgeway.com/perspectives/i-know-what-you-did-last-summer/

How Many Stocks Are Effectively in the S&P 500?
https://bridgeway.com/perspectives/how-many-stocks-are-effectively-in-the-sp500/

Topics Covered

Why quantitative investing still needs human judgment and skepticism
The difference between smart beta and true multi-factor portfolio construction
How Bridgeway combines value, quality, sentiment and risk controls
Why the size premium may depend on how small-cap stocks are defined
Why recently fallen large caps and IPOs can distort small-cap research
How the small-cap universe has changed as companies stay private longer
How intangible assets affect traditional value and quality metrics
Why value can work in bursts and why timing factor rotations is so difficult
How concentrated the S&P 500 has become using the HHI framework
Why passive investing may create opportunities for active small-cap managers
How market neutral strategies can help investors manage equity market volatility
How AI can help with data, text analysis and trading without replacing investment judgment

Timestamps

00:00 Why fewer than 50 stocks are driving S&P 500 returns
01:04 Bridgeway’s evidence-based investing approach
02:59 Why quantitative models need human judgment
07:52 Smart beta vs multi-factor investing
11:32 How Bridgeway builds multi-factor portfolios
16:08 Rethinking the size premium
20:31 Has the small-cap universe gotten worse?
23:49 How intangibles change value investing
28:05 Does value still work?
30:09 Why value returns can be episodic
33:11 Why factor investors need patience
35:22 How concentrated is the S&P 500?
40:29 Factor strategies as portfolio diversifiers
41:41 Passive investing and market structure
44:27 Managing volatility with market neutral strategies
49:40 How systematic managers update their models
55:02 How Bridgeway is using AI
01:00:03 Elena’s biggest lesson for investors

The Last Moat | Chris Mayer and Ian Cassel on the Stock Picking Edge AI Can’t Replicate May 06, 2026

Show notes

This episode of our new showThe 100 Year Thinkers brings together Chris Mayer and Ian Cassel for a deep discussion on long-term stock picking, microcap investing, business quality, AI disruption, management teams, and the behavioral skills that separate great investors from great analysts.

They explore why the edge in investing may increasingly come from judgment, presence, relationships, patience, and the ability to hold the right businesses through uncertainty.

Subscribe to the 100 Year Thinkers on Spotify⁠⁠

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Topics Covered

Why being present with management teams may still be an investor edge in the age of AI
How microcap investing differs from small-cap, mid-cap and large-cap investing
Why talking to management can build conviction but also create bias
How Chris Mayer thinks about vertical market software, mission-critical systems and AI disruption
Why AI may become table stakes rather than a durable competitive advantage
How small companies can use AI to improve workflows, sales, inventory and productivity
Why many microcaps have short shelf lives and rarely become true long-term compounders
The role of intelligent fanatics, owner-operators and repeat winners in great investments
Why management transitions can create powerful microcap opportunities
The difference between being a great analyst and being a great investor
Why execution, position sizing, selling losers and holding winners matter more than hit rate
How Matt and Bogumil apply the lessons to AI, business quality and the limits of small business scalability

Timestamps

00:49 Introducing Chris Mayer, Ian Cassel and 100 Year Thinkers

04:59 Ian Cassel’s first management meeting and XM Satellite Radio

09:00 Why management meetings deepen understanding but can also mislead

14:32 Chris Mayer on the real edge in long-term investing

18:40 Mission-critical software, systems of record and AI disruption

22:45 How microcap companies are using AI in real businesses

27:02 AI as table stakes and when disruption creates opportunity

31:29 Why most microcaps have short shelf lives35:51 Finding Tom Brady before the market knows he is Tom Brady

40:53 Why owner-operators and intelligent fanatics matter

45:03 Second-in-command leaders, repeat winners and chips on shoulders

49:27 Analyst vs investor and the missing skills of stock picking

54:00 Using data to identify investor strengths, weaknesses and decision errors

58:14 Position sizing and letting small positions earn the right to grow

01:03:00 Peter Lynch, stocks as businesses and learning to think like an owner

01:07:00 AI, human judgment and the limits of automation

01:11:00 Why not every small business can become the next Facebook

01:15:00 Where to follow Bogumil and the 100 Year Thinkers series

We Asked Rich Bernstein and Chris Davis Why This Market Isn’t as Safe as It Feels May 04, 2026

Show notes

This week’s Excess Returns Weekly Wrap examines what Chris Davis and Rich Bernstein can teach investors about letting winners run, inflation risk, market concentration, dividends, AI, and the difference between economic stories and investment returns. Jack Forehand and Matt Zeigler break down clips on portfolio concentration, the 1960s vs. the 1970s, investor complacency, the Fed’s inflation target, durable businesses, and where the next market opportunity may be hiding.

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Topics Covered

Why letting winners run can be so powerful, but so hard for professional investors
Chris Davis on how his mother outperformed by never selling great companies
The tradeoff between concentration, diversification and real-world portfolio risk
Why Rich Bernstein thinks today may look more like the 1960s than the 1970s
How oil prices affect consumer behavior when measured against wages
Chris Davis on why perceived risk can be very different from actual risk
What cars, insurance and investor behavior reveal about market complacency
Why the Fed’s 2% inflation target may not reflect the world investors are living in
The relationship between valuation, durability and software stocks
Why higher inflation could increase demand for dividends and near-term cash flow
Chris Davis on why exceptional people and management teams matter in investing
Why AI may be a great economic story but not necessarily a great investment story

Timestamps

00:00 Letting winners run, 1960s inflation and investor risk perception
02:18 Chris Davis on how his mother outperformed by never selling
08:32 Reinvestment risk and the limits of active management
12:45 Why oil shocks may matter less when gasoline is low relative to wages
20:25 Chris Davis on why feeling safe can make investors take more risk
29:20 Rich Bernstein on whether the Fed’s 2% inflation target is outdated
34:08 Chris Davis on durability, valuation and software stocks
39:39 Why cash flow gives durable companies room to adapt
43:16 Rich Bernstein on dividends, inflation and the need for cash today
51:55 Chris Davis on why people matter more than investors think
56:07 The risk and value of investing with exceptional leaders
1:01:30 Rich Bernstein on AI as an economic story vs. an investment story
1:05:13 Why AI productivity may not translate into obvious stock market winners

We Asked Ben Hunt, Jim Paulsen, Kevin Muir and Brent Kochuba Why Bad News Can’t Break This Market May 01, 2026

Show notes

This episode of Last Call breaks down one of the most confusing market environments in recent memory: why stocks continue to rise despite war, oil shocks, and growing macro risks. Through conversations with Jim Paulsen, Ben Hunt, Kevin Muir, and Brent Kochuba, we explore the tension between strong earnings, hidden risks in private credit and global growth, and the powerful role of flows and positioning in driving markets higher.

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Topics Covered

Why markets are ignoring war, oil shocks, and geopolitical risk
The “supernova” risk in private credit and why it hasn’t hit markets yet
How supply-driven inflation differs from 1970s-style demand inflation
Why pessimistic sentiment may actually be supporting markets
The role of earnings growth and valuation resets in fueling the rally
Bull vs bear case for markets based on macro, earnings, and positioning
Why free cash flow trends may be more concerning than earnings
How options flows and dealer positioning are suppressing volatility
The AI capex boom and its impact on market leadership and breadth
The growing divide between Mag 7 earnings and the rest of the market

Timestamps

00:00 Intro and market overview
01:37 Why markets are not falling despite negative news
03:00 Buy-the-dip behavior and earnings resilience
06:11 Ben Hunt on “supernova” risks in private credit
08:00 Hidden credit crunch in middle market companies
10:24 Why private credit matters for economic growth
14:10 Oil supply shocks and global growth risks
17:00 Why markets can ignore risks before they appear
18:48 Jim Paulsen on market resilience and sentiment
20:00 Why pessimism may reduce downside risk
22:24 Inflation vs labor force growth framework
24:00 Why current inflation is supply-driven, not demand-driven
26:00 Potential shift from inflation focus to growth focus
29:11 Kevin Muir on bull vs bear market setup
31:00 War impact on rates, oil, and positioning
33:00 Fed reaction and shifting rate expectations
35:00 Why earnings remain the dominant market driver
37:00 Why geopolitics often doesn’t move markets
40:00 Bear case: weak free cash flow and employment risk
44:26 Brent Kochuba on options flows and positioning
47:00 Why markets ignore rising rates and oil
49:00 Call buying, dispersion, and tech leadership
51:00 Energy as both hedge and AI-driven opportunity
54:00 Correlation, volatility, and market structure
56:00 Dealer positioning and suppressed volatility
58:00 Earnings strength and narrow market leadership
01:01:00 Free cash flow vs earnings debate
01:01:55 AI capex and long-term market implications

The Opportunity No One Sees | Richard Bernstein on Finding Value in a Narrow Market Apr 29, 2026

Show notes

This episode explores one of the most important debates in markets today: whether investors are underestimating the risk of higher inflation and overconcentrating in a narrow group of growth stocks.

Richard Bernstein of Janus Henderson Investors joins Excess Returns to explain why today’s environment may look more like the inflationary 1960s than the 1970s, what that means for portfolios, and why many investors may be disappointed with passive index returns over the next decade.

Richard walks through the implications of rising import prices, global conflict, and deglobalization, and how these forces could drive a structural shift toward higher inflation and shorter-duration investing. He also explains why market concentration, AI enthusiasm, and capital flows may be setting up a broadening opportunity across overlooked areas of the market.

Follow Rich on Twitter:
https://twitter.com/RBAdvisors

Company Website:
https://www.rbadvisors.com

Why investors in S&P 500 index funds may face disappointing long-term returns
The shift from exporting disinflation to importing inflation through global trade
How war and geopolitical conflict are influencing inflation expectations and markets
Why today’s environment resembles the 1960s “guns and butter” period more than the 1970s
The case for structurally higher inflation and a potential shift in Fed targets
Why shorter-duration assets, dividends, and cash flow matter more in inflationary regimes
The risks of overconcentration in AI and mega-cap growth stocks
How capital flows and valuation distortions create opportunities outside the Mag 7
The case for international equities and why investors are significantly underweight
Where Bernstein sees the most compelling long-term opportunities across sectors and regions

00:00 Intro and why index investors could be disappointed
00:01:13 War, inflation, and the impact of rising gasoline prices
00:02:40 Importing inflation and the role of global trade dynamics
00:03:33 1970s oil shock vs 1960s guns and butter comparison
00:05:00 Why today’s inflation environment may be less severe than the 1970s
00:06:30 Defense spending, tax cuts, and inflation expectations
00:08:54 Why Bernstein is taking the “over” on inflation and deficits
00:10:00 The case for a higher long-term inflation target
00:11:00 Why the Fed may resist changing its 2% inflation target
00:12:00 Deglobalization and the rise of global conflict
00:14:00 Global inflation dynamics and divergence across countries
00:15:21 Why cash and short-duration assets may outperform
00:17:00 Asset-liability mismatches and the endowment model stress
00:18:23 Market concentration and parallels to the dot-com bubble
00:20:00 AI as an economic story vs an investment story
00:21:00 Capital flows, valuation excess, and future return expectations
00:22:39 Why market broadening opportunities may emerge
00:24:19 Passive flows, ETFs, and market distortions
00:25:40 Where Bernstein sees sector opportunities today
00:27:34 The case for dividends in an inflationary environment
00:31:00 Why near-term cash flow matters more than long-term growth
00:33:07 Corporate behavior, capital allocation, and rising hurdle rates
00:36:02 Profit cycle strength and why the market should broaden
00:41:36 Evaluating IPOs and speculative investments
00:47:09 The risk of a lost decade for index investors
00:50:21 Gold, commodities, and portfolio diversification
00:53:48 Most attractive overlooked opportunities today
00:58:06 Biggest long-term risks and what keeps Bernstein up at night

Feeling Safe Is the Risk | Chris Davis on Finding Durable Companies in a Disrupted World Apr 27, 2026

Show notes

This episode with Chris Davis of Davis Advisors explores how investors should think about risk, valuation, and opportunity in a market defined by high valuations, technological disruption, and major macro shifts. Davis lays out a framework for navigating uncertainty, explains why durability matters more than ever, and shares hard-earned lessons on selling great companies too early.

Davis Advisors
https://www.davisadvisors.com

Topics Covered

Why high valuations signal complacency even in an uncertain macro environment
The three major forces reshaping markets: higher cost of capital, deglobalization, and AI
How to identify durable and resilient businesses in a fragile world
Why growth and value are not opposites and how expectations drive opportunity
Lessons from past bubbles and why today may resemble 1999 in market structure
The hidden risks in passive investing and index concentration
Chris Davis’ five-part framework for investing in AI (winners, enablers, users, protected, disrupted)
Why most investors lose money by overpaying for growth and underestimating competition
The importance of management quality and “great people” in long-term investing success
Why the biggest investing mistakes are often the great companies you sell too early

Timestamps

00:00 Intro and key investing paradox on risk perception
02:45 Why today’s market reflects complacency despite uncertainty
05:20 Valuations, concentration, and optimism in current markets
08:52 Lessons from 1999 and how value investing can outperform in downturns
12:00 Durability, resilience, and why balance sheets matter more now
15:21 Kodak, disruption, and risks of passive investing
18:00 Perception vs reality of risk and behavioral mistakes
21:51 Market structure, moral hazard, and the “buy the dip” mindset
26:34 How investors should think about AI as a long-term technology shift
29:30 Why picking early AI winners is dangerous
33:00 The role of enablers like semiconductors, energy, and infrastructure
36:00 AI users and which companies benefit most from adoption
38:00 Businesses protected from disruption vs “walking dead” companies
42:00 The biggest investing mistake: selling great companies too early
46:00 Portfolio concentration and lessons from real-world experience
50:00 Berkshire Hathaway, long-term culture, and durable business models
54:00 Learning from mistakes: Costco case study
57:00 The importance of management and why people matter more than investors think

Buy High, Sell Higher | Travis Prentice on Dispersion, Passive's Structural Risk and Why 52 Week Highs Don't Mean What You Think Apr 24, 2026

Show notes

This episode explores how massive structural shifts—AI, deglobalization, and the rise of passive investing—are reshaping markets and what that means for investors.

Informed Momentum Company CIO Travis Prentice breaks down why 52 week highs don't mean what you think, the extreme dispersion beneath the surface of the market, why traditional definitions of risk may be flawed, and how investors should think about momentum, quality, and diversification in a rapidly changing environment.

Papers and Resources Discussed:

Risks Hiding in Plain Sight
https://www.informedmomentum.com/risks-hiding-in-plain-sight-how-the-dominance-of-passive-investing-is-reshaping-market-risk/

Is Quality Broken?
https://www.informedmomentum.com/is-quality-broken-ai-driven-disruption-is-testing-standard-definitions-of-quality/

Buy High, Sell Higher
https://www.informedmomentum.com/buy-high-sell-higher/

Topics Covered:

The hidden divergence beneath index performance and why the market isn’t as stable as it looks
Why value and momentum are working together—and what that signals about market broadening
How AI and deglobalization are driving a major regime shift in markets
Why momentum investors ignore narratives and focus purely on what’s working
The structural risks created by the rise of passive investing and index concentration
How tracking error replaced real risk—and why that may be dangerous
Why quality stocks (especially software) are under pressure in the AI era
The key insight behind 52-week highs as a powerful momentum signal
Why buying stocks near highs works despite investor intuition
How momentum strategies adapt to changing leadership and market regimes
The importance of combining factors like value, momentum, and quality for long-term success

Timestamps:

00:00 Intro and major market shifts
01:32 Market divergence beneath the surface
03:00 Factor performance and broadening market trends
05:13 Why market concentration hurts factor investing
06:48 AI and deglobalization as structural drivers
08:14 Does this environment change how you invest?
11:02 Has the market sped up? Momentum implications
14:00 Passive investing and hidden structural risks
17:00 Tracking error vs real risk in portfolios
19:00 AI as a potential change agent for markets
21:09 How passive flows impact factor investing
24:00 What defines “quality” in factor investing
27:04 Why software and quality are under pressure
29:13 AI disruption and changing expectations
32:20 How to evaluate factor underperformance
34:35 Comparing today’s market to the 1990s
37:38 Buy high, sell higher: 52-week highs
41:00 52-week highs vs traditional momentum
43:20 Combining signals for better outcomes
46:00 Why 52-week highs improve downside protection
48:17 What momentum is picking up today
50:21 Misconceptions about momentum and growth
52:12 Timing and implementation of momentum
54:18 Momentum reversals and market behavior
57:17 Future research and improving momentum signals

The Secular Plateau | Chris Bloomstran on Why We May Be at Peak Valuations Apr 22, 2026

Show notes

This episode features Chris Bloomstran of Semper Augustus discussing market concentration, AI capital spending, Berkshire Hathaway, and the risks facing today’s equity investors. The conversation explores whether we are at a secular valuation plateau, how AI investment may reshape returns, and why passive investors may face more risk than they realize.

Semper Augustus Investments
https://www.semperaugustus.com

Topics covered:

Why extreme market concentration in the Mag 7 may create long-term risks
The concept of a “secular plateau” vs a market peak
How AI capex could become a classic capital cycle with poor returns
Why hyperscaler spending may not translate into shareholder profits
The hidden risks of leverage both on and off balance sheets
Why buy-and-hold investing is harder than it seems in practice
How valuation discipline drives long-term investment outcomes
Berkshire Hathaway’s cash position and what it signals about opportunity
Why capital allocation matters more than growth narratives
Lessons from past bubbles including railroads, fiber, and the Nifty Fifty
The fragility of life and how it shapes investing priorities
The importance of independent thinking in the age of AI

Timestamps:
00:00 Intro
05:12 The “Both Sides Now” framework and AI theme
09:03 Secular peak vs secular plateau in markets
13:08 Leverage risks and balance sheet quality
17:42 Why passive investors are more concentrated than they think
21:12 The limits of long-term compounding and disruption risk
25:06 Why valuation matters more than “forever stocks”
29:10 Portfolio construction and return on capital differences
33:18 AI capex boom and capital cycle parallels
37:05 Why hyperscaler spending may not generate adequate returns
41:12 The math problem behind AI investment returns
45:10 Competition, redundancy, and pricing pressure in AI
49:02 Is AI an existential risk for big tech?
52:06 Berkshire Hathaway’s cash and Apple sales
56:08 Capital allocation lessons from Coca-Cola vs Apple
59:20 What Berkshire’s cash signals about future opportunities
01:02:10 The fragility of life and investing priorities
01:05:28 Final lessons for investors: reading, skepticism, and independent thinking

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