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Excess Returns

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:

The Winners That Get Away | Chris Davis and Robert Hagstrom on Holding Great Businesses Oct 11, 2026

Show notes

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 Still Sees a Bull Market. So Why Is Her ETF Only 50% in Stocks? Oct 08, 2026

Show notes

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 on Small-Cap Investing, AI Infrastructure and Opportunities Beyond Big Tech Oct 07, 2026

Show notes

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 Still Sees S&P 10,000 by 2029. So Why Is He Getting More Cautious? Oct 04, 2026

Show notes

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

The 10-Year Hit a 24-Year High. Nobody Is Buying Puts. Are You Watching the Wrong Market? Oct 03, 2026

Show notes

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.

They Beat All US Stock Funds Since 2003 | Michael Baron on the AI Winners Investors Miss Oct 01, 2026

Show notes

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.

The Game Was Rigged in Their Favor. 28% Went Bust Anyway | Kris Abdelmessih on How to Size Bets Sep 29, 2026

Show notes

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.

We Asked the Data Journalist Who Rebuilt the Jobs Report What the Headline Number Hides Sep 26, 2026

Show notes

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.

He Lost $157,000 in 3 Minutes | Jack Raines on the Lesson Winning Never Taught Him Sep 23, 2026

Show notes

Jack Raines turned $6,000 into roughly $400,000 trading SPACs, then lost $157,000 in three minutes after taking a very different bet. The author of Young Money joins Matt Zeigler to discuss what that experience taught him about investing risk, the urge to chase more, and the time a growing portfolio can cost you.

The conversation follows Jack Raines from SPAC warrants and market narratives to a broader question: how do you allocate money, time, and risk to build a life you actually want? They explore the limits of a trading edge, why cheap stocks can get cheaper, and how debt, career choices, and status shape the decisions investors make beyond their portfolios.

Young Money: A Field Guide to Wealth and Purpose in Your Twenties
https://amzn.to/4AtUsDoJack Raines' Young Money newsletter
https://www.youngmoney.co/

Jack Raines on X
https://twitter.com/Jack_Raines

Topics covered:

How Jack Raines grew his Roth IRA through SPAC warrants and pre-merger common shares, and why those positions carried different risks.
Why an edge in one corner of the market did not translate into a successful concentrated earnings bet.
How a million-dollar target and constant account checking changed Jack Raines' relationship with money and time.
What SEC filings, Discord research, and market narratives contributed to his trading process.
Why Jack Raines bought Figma after questioning the market's AI narrative and speaking with designers.
Applying portfolio thinking to careers, creative projects, and opportunities that change with each stage of life.
Weighing retirement saving against other opportunities, and why Jack Raines treats expensive debt as a constraint on taking risks.
Escaping the "someday" trap while giving long-term venture investments time to develop.
Combining steady income and index funds with independent bets, while treating status as a tool rather than a goal.
Why Jack Raines believes investors learn about risk through experience, with stakes they can afford to recover from.

Timestamps:
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.

The AI Gap Is Closing | Jason Hsu on China, Momentum Crashes and the S&P’s Seven-Stock Bet Sep 20, 2026

Show notes

Jason Hsu, founder and CIO of Rayliant Global Advisors and co-founder of Research Affiliates, joins Excess Returns to discuss the US-China AI race, the economics of AI spending, and what market concentration means for investors. We explore China's energy and open source advantages, opportunities in Chinese stocks, and how factor investing and machine learning can help build more diversified portfolios.

Rayliant Global Advisors
https://rayliant.com

Rayliant on X
https://twitter.com/rayliant

Topics covered:

Why Jason believes AI safety requires cooperation between the US and China
How Chinese AI models are closing the gap with US developers
China's electricity infrastructure and the competitive threat from open source AI
Where AI profits could accrue across hardware, energy, models and applications
How chip restrictions are encouraging China to develop domestic capabilities
Why retail trading creates opportunities and challenges for factor investors in China
Chinese technology companies, dividend-paying state enterprises and US-China trade
The AI spending arms race and the concentration risk facing S&P 500 investors
Momentum crashes, value cycles and how Rayliant uses machine learning to combine factors
Why advisors' greatest contribution may be helping clients find meaning in their wealth

Timestamps:

00:00 Jason Hsu on AI competition and safety
04:00 How close are Chinese AI models to the US?
08:25 China's energy advantage and open source economics
14:12 Who captures AI profits, and can China catch up in chips?
18:41 Chinese stocks, retail trading and speculation
24:01 China's overlooked opportunities and dividend stocks
28:05 US-China interdependence and the AI spending arms race
33:24 The AI concentration hiding in the S&P 500
37:25 Momentum crashes, value cycles and factor performance
41:54 Machine learning and building multifactor portfolios
48:46 Financial advisors, Jack Bogle and having enough
53:23 Why inefficient markets do not make alpha easy

Learn more 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.

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