Excess Returns 4r3q44

David Giroux, CIO and Head of Investment Strategy at T. Rowe Price Investment Management, has achieved something rare in investing—beating his Morningstar peer group for 17 consecutive years. In this conversation, Giroux shares his investment philosophy, including how he identifies GARP (growth at a reasonable price) opportunities, adapts to market inefficiencies, and constructs a resilient portfolio. He also discusses his outlook on AI, interest rates, market cycles, and why long-term thinking remains a powerful edge in today's short-term-obsessed market. We cover: Why most investors overlook high-quality GARP stocks—and how Giroux takes advantage How he navigates market cycles with 5-year IRR forecasts Why long-term thinking gives him a contrarian advantage The impact of AI on productivity, employment, and portfolio margins His quantitative and qualitative approach to evaluating companies What investors get wrong about financials, utilities, and ive investing The CEOs he ires most—and what makes them exceptional Why he thinks macro forecasts (including Fed-watching) offer little value

In this episode of Excess Returns, Matt Zeigler sits down with Rupert Mitchell—founder of Blind Squirrel Macro—for an insightful, opinionated, and often humorous discussion on global market dynamics, the Mag 7, structural portfolio shifts, and what it takes to be a successful generalist investor. From the “Chart of Truth” to the hidden value in tire stocks, Rupert brings decades of experience and a distinctive lens to markets, risk, and opportunity. 🔍 Topics Covered: Why European pension funds are rethinking U.S. equity exposure The “Chart of Truth” and its implications for global allocations The unexpected strength of retail investors in recent rallies Mag 7 dominance, Nvidia’s market impact, and AI euphoria Why Apple might be the ultimate funding short A deep dive into the “Bushy” portfolio and why 60/40 is broken How inflation volatility shapes asset choices and international diversification The case for owning Goodyear and Korean utilities The problem with adjusted EBITDA and financial storytelling How being a generalist can be a competitive investing edge

🎙️ Inside Causeway’s Quant Playbook | Joe Gubler on Factor Innovation, Risk, and Portfolio Design In this episode of Excess Returns, we sit down with Joe Gubler, Director of Quantitative Research at Causeway Capital. Joe shares a deep dive into Causeway’s distinctive approach to factor investing, blending traditional quant signals with fundamental insights, and building models that adapt to market context. From constructing proprietary sustainability alpha signals to using machine learning to refine quality definitions, Joe reveals a cutting-edge playbook for the future of quantitative investing. 📌 In This Episode, You'll Learn: Why Causeway doesn't treat its quant model as sacrosanct How to blend fundamental overlays with systematic strategies The logic behind composite factors and contextual weighting Unconventional factor signals like corporate events and peer-based momentum How machine learning enhances quality assessment How Causeway adapts factor models across regimes and markets What most quants miss when it comes to factor construction and interpretation The evolving role of AI and NLP in alpha generation Joe's views on ive flows and fundamental mispricings

In this episode of Excess Returns, we welcome back Katie Stockton, founder and managing partner of Fairlead Strategies, for a deep dive into the current state of the market through the lens of technical analysis. Katie walks us through her outlook on U.S. and international equities, key sector rotations, and the signals her indicators are sending about what’s next. We also explore the strategy behind her tactical ETF (TACK) and how investors can use chart-based insights to manage risk and identify opportunities in a complex macro environment. 📌 Topics Covered: The current technical setup: secular bull, cyclical bear How to interpret gaps, indicators, and moving averages Weakening market breadth and its implications Sector rotation: what’s working and what’s not The outlook for international vs. U.S. markets Sentiment extremes and the "fear & greed" indicators Technical setups in commodities: crude oil and gold Thoughts on Bitcoin, the dollar, and bond spreads How the TACK ETF applies technical signals in practice

In this episode of Excess Returns, we welcome back Research s founder Rob Arnott to explore his provocative research challenging mainstream economic assumptions. Rob walks us through why government stimulus often fails to deliver real growth, how decades of rising spending have shaped today’s economic environment, and what the implications are for debt, deficits, and future returns. We also dive into trade policy, tariffs, and where Rob sees the best opportunities in today’s markets using Research s’ capital markets expectations. Full Paper:https://www.researchs.com/publications/articles/1080-stimulus-does-not-stimulate 🎯 Topics Covered: Why stimulus doesn't always stimulate economic growth The hidden cost of high government spending Lessons from Japan, Ireland, and the EU on fiscal policy Why Keynes wouldn’t recognize today’s “Keynesianism” The role of stimulus during crises like COVID and 2008 Tariffs as strategy vs. economic drag Rob’s take on Trump, trade wars, and negotiating tactics Crowding out: What debt does to private investment Research s’ expected returns across major asset classes Why large-cap U.S. stocks may be the most overvalued The opportunity in value, small-cap, and international markets

In this episode of Teach Me Like I'm 5, options expert Kris Abdelmessih breaks down one of the most foundational—and misunderstood—concepts in options trading: put-call parity. Using Lego analogies, homemade spreadsheets, and Fast & Furious references, Kris shows how options are like building blocks you can combine to create any payoff you want—including replicating a stock itself. Whether you're a beginner trying to understand options basics or a seasoned investor looking for deeper insights into synthetic positions and implied interest rates, this episode is packed with practical lessons presented in the most approachable way possible. What We Cover: Why calls and puts are “the same” through the lens of put-call parity How to visualize and replicate stock payoffs using only options The concept of synthetic positions: synthetic stock, calls, and puts How put-call parity collapses complex strategies into basic building blocks The real mechanics behind covered calls—and what they really are How professional traders use options pricing to infer interest rates and stock borrowing conditions A deep dive into "box spreads" and how they replicate zero-coupon bonds

In this episode of Excess Returns, we dive deep into one of the most complex and pressing issues facing successful investors today: what to do with concentrated stock positions. Whether from employee stock compensation or a major investment win, holding too much of a single stock presents serious tax and diversification challenges. Our guests—Wes Gray of Alpha Architect, Sri Narayan of Cache Financial, and guest host Dave Nadig—break down the innovative solutions that are changing the game. From exchange funds to Section 351 conversions, this is a masterclass in modern wealth and risk management. Topics Covered: The problem with concentrated stock positions and why it’s getting worse How stock-based compensation fuels investor overexposure Why traditional exchange funds fall short—and how Cache is solving it Understanding Section 351 ETF conversions and tax-deferred diversification The mechanics behind Cache's NASDAQ 100 and S&P 500 strategies How exchange funds work: structure, lockups, and liquidity Using ETFs to rebalance and solve diversification constraints Real estate allocations and the 20% illiquid asset requirement Costs, fees, and transparency of the modern exchange fund model Regulatory and legal perspectives behind the structure Practical advice for advisors and investors with low-basis positions How to access, evaluate, and engage with Cache and Alpha Architect solutions

What does it mean to come of age during chaos—and how does that shape the generations who must lead us through it? In this thought-provoking episode of Rabbit Hole, Dave Nadig speaks with Neil Howe—author of The Fourth Turning Is Here—about the evolving role of Gen X in today's world, the generational dynamics underpinning societal shifts, and what history teaches us about crisis, community, and rebirth. This is not just a theory session—it’s a practical guide to understanding where we are in the cycle and what might come next. Topics Covered: Why generational transitions are slowing—and why that matters The Gen X identity crisis: from latchkey kids to future elders How community rises from conflict during fourth turnings Millennials' collective investing mindset vs. Gen X contrarianism The historical role of financial repression and inflation in crises Parallels between Gen X and the Lost Generation How institutions are built—and who builds them Will the next societal reboot be state-driven or community-driven? Global synchronization of generational crises and what that implies What comes after the fourth turning—and how Gen X fits into it

In this episode of Excess Returns, Kai Wu of Sparkline Capital returns to break down his latest research piece, Investing Amid Trade Wars. Using over two dozen insightful visuals, Kai explores how investors should think about global trade exposure in an era of rising tariffs, economic nationalism, and geopolitical uncertainty. He makes the case for staying invested in high-quality multinational companies—especially those rich in intangible assets—and offers four actionable ways to build more resilient global portfolios. Topics Covered: Why the market reaction to tariffs is both rational and potentially short-sighted The long-term outperformance of global vs. domestic firms How to define and measure global trade exposure at the company level Real-world trade shocks and what they reveal about investor behavior The four traits of resilient global firms Why intangible-heavy businesses are uniquely positioned to weather trade disruptions International vs. U.S. multinationals: hidden value in non-U.S. stocks Practical suggestions for portfolio construction in a deglobalizing world

In this episode, Kris Sidial s Jack Forehand and Brent Kochuba to break down the mechanics of tail risk hedging, why most volatility strategies fail, and how his team approaches dislocations in the market. We explore what's really driving volatility behind the scenes, the evolving market structure, and why the current environment may be far more precarious than it appears. If you’ve ever wondered how professional vol traders monetize chaos—or why volatility can stick around far longer than people expect—this episode is for you. Topics Covered: What tail risk funds are and why many of them underperform How to build a long volatility strategy that doesn’t bleed capital Why rebalancing is a critical component of portfolio resilience Liquidity fragility and how it amplifies market moves Retail's role in the latest rally and the fading institutional bid Structural risks created by ive flows and policy shifts Monetizing volatility spikes The psychological traps that lead to poor volatility trading decisions Why volatility might stay elevated for far longer than most expect

Are we heading toward a recession—or just stuck in macroeconomic purgatory? In this episode of Excess Returns, Dave Nadig and Matt Zeigler sit down with Cameron Dawson, CIO of NewEdge Wealth, to explore the uncertain territory between headline-driven panic and hard data reality. From the implications of sweeping tariffs to the capital war no one's talking about, Cameron offers one of the sharpest macro takes we've heard. We cover where the market might go next, how investors should respond to volatility, and what signals to trust in a confusing environment. Topics Covered: Why we’re in a “no man’s land” between tariffs and hard data The potential economic fallout of 145% tariffs on China Capital war: Why treasury demand may be fading What the collapse in shipping and trucking data tells us How margin compression could trigger job cuts The case for value over growth after a Mag 7 blow-off Using technicals, sentiment, and positioning to spot turning points Why quality stocks may beat traditional defensives Whether hedging is worth it vs. holding T-bills Practical strategies for rebalancing through market chaos

In this episode of Excess Returns, Justin and Jack welcome Travis Prentice from Informed Momentum Company to discuss the ins and outs of momentum investing. Travis brings nearly three decades of momentum investing experience and shares valuable insights about momentum strategies, misconceptions, implementation challenges, and how momentum can be effectively combined with other factors. This conversation offers both beginning and experienced investors a comprehensive look at this powerful investment strategy. Topics Covered: What momentum investing is and how it differs from growth investing The mechanics of cross-sectional momentum and relative strength Common misconceptions about momentum strategies How fundamental data can enhance momentum strategies The significance of continuous vs. dynamic momentum Portfolio construction, sector concentration, and rebalancing approaches Momentum performance across different market caps and geographies The risk profile of momentum vs. value strategies Momentum crashes - what they are and how to mitigate them Tax efficiency of momentum strategies The impact of ive investing on momentum strategiesOptimal factor combinations for diversified portfolios

hosts Matt Ziegler and Jack Forehand as they interview Jared Dillian (@DailyDirtNap on Twitter) for a fascinating discussion on current market conditions, macroeconomic trends, and controversial investment perspectives. Jared shares his unique takes on everything from tariffs to portfolio construction, offering insights that often challenge conventional wisdom. Topics Covered: Jared's contrarian view that tariffs are deflationary rather than inflationaryThe potential long-term decline of the dollar despite possible short-term strengthHow financial wars have replaced hot and cold wars in global politicsThe future of US debt and potential parallels to past debt crisesJared's "Awesome Portfolio" strategy: 20% stocks, 20% bonds, 20% cash, 20% gold, 20% real estateWhy international stocks may continue to outperform US equitiesPossible recession indicators and economic headwindsFed policy predictions and why rates might not be cut as expectedThe value of sentiment indicators and Twitter as a market research toolWhy free trade benefits economies and the risks of protectionist policies

When we started Excess Returns, we wanted to come up with one way to boil down the best advice from the experts we have interviewed into one simple question. That led us to create a standard closing question that we ask all of our guests, “Based on your experience in the markets, if you could teach one lesson to your average investor, what would that be?”. Over the history of the podcast, we have asked that question to close to 200 guests ranging from great investors to academic experts to options and macro traders. In this episode, we share the answers from our 50 most popular guests all in one episode. Featured guests include Liz Ann Sonders, Cliff Asness, Guy Spier, Michael Mauboussin, Mike Green, Cem Karsan, Chris Davis, Aswath Damodaran, Jack Schwager, Rick Ferri and many others. Topics Covered:The fundamental purpose of investing: preserving and growing wealth rather than getting rich quick The importance of base rates in investment decisions Portfolio monitoring frequency and its impact on investment psychology Viewing stocks as ownership in actual businesses rather than trading vehicles The value of patience, humility, and self-forgiveness in the investment process Diversification across asset classes, strategies, and time frames The benefits of simplicity in investment approaches The psychological challenges of investing and how to overcome them Compounding as a fundamental wealth-building tool The danger of performance chasing and overconfidence The value of a rules-based investment process

In this episode of Excess Returns, Matt Zeigler sits down with Andrew Cohen, who shares his extraordinary journey from Goldman Sachs trader to working directly with Bernie Madoff and ultimately becoming a victim of history's largest Ponzi scheme. Now a respected finance professor, Cohen offers unique insights into Wall Street's trading culture, the shock of Madoff's fraud, and how he rebuilt his life in academia after losing almost everything. Topics Covered: Andrew's early career at Goldman Sachs and how basketball gambling on the trading floor taught him market-making skills The trading operations and technology at Bernard L. Madoff Investment Securities in the early 1990s Working dynamics with Bernie Madoff's sons, Mark and Andy, and office politics How Andrew was invited to invest in Madoff's "exclusive" fund Andrew's decision to leave Wall Street at the height of his success The devastating moment Andrew learned about Madoff's arrest and the Ponzi scheme The additional ordeal of facing clawback lawsuits after losing his investment Transitioning to academia and finding a more fulfilling career path Lessons for investors and finance students about risk, technology, and communication

hosts Matt Zeigler and Justin Carbonneau as they sit down with Richard Bernstein, CEO and Chief Investment Officer of Richard Bernstein Advisors. In this insightful conversation, Rich shares his expert perspective on today's market challenges, including the unprecedented narrowness of recent markets, the impact of tariffs on the US economy, and why the current environment calls for a shift toward value investing and greater diversification. Drawing on decades of experience, Bernstein offers practical wisdom for navigating today's uncertain investment landscape. Topics Covered: The difference between the 2008 financial crisis and today's economic challengesWhy 2023-2024 saw the most narrow stock market since the Great DepressionThe potential impact of tariffs as "the biggest tax on consumers in our professional careers"Why investors should err on the side of value over growth in the current marketHow US debt levels impact interest rates and economic competitivenessThe role of the Federal Reserve as a lagging rather than leading indicatorWhy gold serves as an effective hedge against uncertaintyBernstein's skeptical view on cryptocurrency and Bitcoin valuationThe limitations of index funds in today's market environmentTimeless advice for wealth building: stick to fundamentals and avoid "get rich quick" thinking

In this episode of Excess Returns, we are ed by Jim Paulsen of Paulsen Perspectives. We unpack the complexities of tariffs, Federal Reserve policies, and investor psychology amidst a turbulent market environment. Jim brings his decades of experience to provide context, rational analysis, and long-term perspectives, steering clear of bold predictions and focusing instead on practical advice for navigating these uncertain times. Main Topics Covered: Jim’s perspective on market corrections and advice for investors during volatile periods, emphasizing emotional discipline and long-term thinking.The economic implications of tariffs, debunking the notion that they’re inflationary and exploring their contractionary effects.Critique of Federal Reserve policy, including their unprecedented actions and failure to ease despite market signals of deflation risk.Analysis of the U.S. dollar’s value and its impact on trade competitiveness, proposing a weaker dollar as an alternative to tariffs.The resilience of the private sector, bolstered by strong balance sheets and liquidity, as a buffer against recession fears.Thoughts on government debt, executive overreach, and Trump istration policies like deregulation and immigration.Investment strategies for the current environment.

In this episode of Excess Returns, Matt Zeigler is ed by special co-host Bogumil Baranowski to sit down with Chris Mayer. As the author of the acclaimed book 100 Baggers: Stocks That Return 100-to-1 and How to Find Them, former editor of influential newsletters, and co-founder of Woodlock House Family Capital, Chris brings a wealth of experience and a unique perspective to the table. In this conversation, we dive deep into the world of long-term investing, exploring timeless principles, the impact of AI on future opportunities, and the mindset required to identify and hold onto extraordinary businesses. Whether you're a seasoned investor or just starting out, this episode is packed with wisdom to help you navigate the markets with patience and purpose. Main Topics Covered: The potential for 100-bagger stocks in emerging industries like AI and how time reveals the winners. The "twin engines" of growth and multiples, and why great businesses often trade at high valuations. The merits and challenges of concentrated investing in a market dominated by giants like the "Mag Seven." Strategies for dealing with drawdowns and maintaining conviction in great companies through volatility. The importance of aligning investment strategies with the right type of capital, especially for family wealth. How experiences as a banker, newsletter editor, and board member shape a business-owner mindset. The role of boards in capital allocation and setting incentives that drive long-term value. Insights from general semantics as a tool for critical thinking and avoiding investment pitfalls. The power of journaling to track evolving thoughts and foster humility in investing. Why patience is the ultimate lesson for investors and how to tune out market noise.

In this episode, we are ed by Rick Ferri, a renowned advocate for low-cost, evidence-based investing. With the market in the midst of a significant selloff, it was a great time to get Rick’s practical wisdom on navigating market volatility, maintaining simplicity in investing, and making informed portfolio decisions amidst economic uncertainty. With his disciplined approach and decades of experience, Rick shares actionable advice for investors looking to stay the course through today’s challenges. Whether you’re a seasoned investor or just starting out, this discussion offers valuable perspectives to help you achieve long-term financial success. Main Topics Covered: Strategies for handling market uncertainty and avoiding rash decisions during volatile times. The benefits of simplicity in investing and why the industry pushes complexity. Debunking the myth of the "dead" 60/40 portfolio and tailoring asset allocation to individual needs. Practical tips for sticking to your asset allocation through market ups and downs. How inflation impacts portfolios and why personal inflation rates matter. The case for international diversification and its long-term benefits. Thoughts on economic policies like tariffs and their potential effects on markets. Direct indexing: who it’s for, who it’s not for, and how it’s often oversold. Why active management struggles to outperform, despite persistent marketing efforts. Evaluating alternative investments like private credit and their risks. Addressing the "age in bonds" rule of thumb and its relevance for different investors. Questions to ask financial advisors to ensure you’re getting value for your fees. Rick’s evolution as an investor and the four stages to simplicity. An overview of the Core Four portfolio and its alignment with economic realities. Approaches to rebalancing and when to let asset allocations glide. Rick’s unique view on separating advisor fees for advice and asset management.

In this episode, we dive into the current economic landscape and its implications for investors with Andy Constan, founder of Damped Spring Advisors. Andy shares his expert analysis on the U.S. economy’s trajectory, the impact of policy shifts under the new istration, and the tools investors should consider—or avoid—in today’s volatile markets. From navigating the “slowdown sea” to unpacking the effects of tariffs and national debt, this conversation offers a deep dive into the forces shaping financial conditions and what it all means for your portfolio. Don’t miss Andy’s unique perspectives, including his contrarian take on quantitative easing! Main Topics Covered: Andy’s “Island Framework” and the current economic slowdown, including his shift from “Higher for Longer Island” to the “Slowdown Sea” en route to “Recession Island.” The alignment of Trump, Powell, and Bessant’s goals to slow growth and curb inflation, and why this favors bonds over stocks. The role and relevance of the “Trump Put” and “Powell Put” in today’s market, and why they’re farther out of the money than many expect. The economic impact of proposed policies like tariffs, immigration restrictions, and expenditure cuts, including the Department of Government Efficiency (DOGE) initiative. The national debt debate: its mechanics, risks, and why Andy sees it as a burden on future generations. Long-term inflation drivers, including demographics, productivity, and deglobalization’s inflationary pressures. The Federal Reserve’s current position, its balance sheet challenges, and its flexibility to respond to economic shifts.The mechanics and pitfalls of leveraged ETFs, and why they’re a poor choice for long-term investors. Andy’s contrarian view on quantitative easing as inherently pro-growth and inflationary, despite the 2008-2018 experience.