Excess Returns

Ben Hunt returns to Excess Returns to break down the hidden risks building inside private credit and the parallels between today’s “alternative asset managers” and the shadow banking system that triggered the 2008 financial crisis. Using the Godfather’s Tessio as a metaphor for betrayal and broken trust, Ben explains how opacity, leverage, and narrative collapse can turn small defaults into systemic crises. He and Matt Zeigler explore what’s really happening beneath the surface of private markets, how common knowledge shifts shape investor behavior, and how Perscient Pro’s “storyboards” and “semantic signatures” help track the narratives driving markets in real time.

Main topics covered

• Why Ben believes we’re at a “trust-breaking” moment similar to 2007

• The Godfather analogy and what frauds reveal about human behavior

• How private credit has evolved into today’s “shadow banking” system

• Flow machines, hidden leverage, and why opacity is intentional

• The dangers of informational asymmetry between investors and lenders

• How broken trust creates chain reactions in financial systems

• The link between narrative collapse and liquidity crises

• Common knowledge, crowd reactions, and market psychology

• Doom loops between Wall Street and the real economy

• How Perscient Pro tracks financial narratives using semantic signatures

• Why gold’s current rally is about safety, not debasement

• What investors should monitor next in credit, housing, and macro narratives

Timestamps
0:00 Hidden leverage and the trust problem
1:04 Introduction to Ben Hunt and Epsilon Theory
2:12 The Tessio analogy – betrayal and the structure of fraud
6:10 How private credit became today’s shadow banking system
10:55 Flow machines and why opacity is intentional
14:48 Trust breaks and the “funding stops first” dynamic
18:35 The Biden “common knowledge” moment explained
21:00 What happens when narratives collapse
24:26 Apollo, asymmetric information, and shorting First Brands
28:00 Hidden leverage and the domino effects of default
33:40 The “doom loop” between Wall Street and the real economy
39:10 Why Silicon Valley Bank was different
44:18 What a “run on Wall Street” could look like
48:00 Perscient Pro and tracking financial storyboards
53:32 Semantic signatures and narrative detection
57:10 Housing, inflation, and gold storyboards
1:00:48 Where to follow Ben Hunt and learn more about Perscient Pro

In this episode of Excess Returns, Gene Munster and Doug Clinton of Deepwater Asset Management join Justin and Jack to explore the technological, economic, and investing implications of AI. They discuss why they believe we’re still in the early stages of a multi-year bull market driven by AI, how the technology is reshaping jobs and productivity, and what it means for investors. The conversation also covers how companies like Nvidia, Apple, Tesla, and Meta fit into this AI cycle, the energy demands of AI, and the future of AI-driven investing through Intelligent Alpha and its GPT ETF.

Topics covered:
• Why Gene and Doug believe AI represents a once-in-a-generation wealth creation opportunity
• How AI may impact corporate profitability and hiring trends
• The political and social dynamics slowing AI adoption
• Doug’s “detective, people-pleaser, and tastemaker” framework for future human jobs
• How Intelligent Alpha uses large language models to manage portfolios
• The advantages of AI-driven investment models over humans
• Economic and market implications of an AI productivity boom
• The hardware-data-application structure of technological cycles
• The role of energy, especially nuclear and solar, in supporting AI growth
• The competitive race among model providers like OpenAI, Google, and Meta
• Apple’s long-term AI positioning and potential comeback
• Tesla’s valuation, autonomy vision, and the future of robotics
• The inevitability and function of bubbles in breakthrough technologies
• The rise of private markets and retail investor access to innovation
• Future frontiers in quantum computing and biotechnology

Timestamps:
00:00 Introduction and Deepwater’s AI thesis
03:00 Why AI marks a multi-year bull market opportunity
08:00 Political reality and limits of AI deployment
11:00 The future of human work: detectives, people-pleasers, tastemakers
16:00 Inside Intelligent Alpha and the GPT ETF
19:00 Why AI can outperform human managers
25:00 How AI affects productivity, margins, and employment
26:00 Hardware, data, and application cycle in AI
28:00 The energy constraint: nuclear, gas, and solar
29:30 The model race: OpenAI, Google, Meta
34:00 Apple’s role and long-term AI potential
39:30 Tesla, autonomy, and long-term disruption
44:00 Are bubbles necessary for technological revolutions?
49:00 Private vs. public investing in innovation
51:00 Beyond AI: quantum computing and life extension technologies
54:45 Closing thoughts

Buy Toby's Bookhttps://amzn.to/478SMBfIn this episode of Excess Returns, we sit down with Tobias Carlisle, founder and portfolio manager at the Acquirers Fund, and author of the new book “Soldier of Fortune: Warren Buffett’s Sun Tzu and the Ancient Art of Risk Taking.” Tobias joins Matt Zeigler and Bogumil Baranowski to explore how timeless strategic principles from The Art of War apply to investing and how Warren Buffett embodies many of those ideas—from invincibility and victory without conflict to the disciplined avoidance of ruin. The conversation connects Buffett’s real-world decisions—from Apple to General Re to Japan’s trading houses—to broader lessons on temperament, risk, and wisdom in markets.

Main topics covered:
• The three key ideas from The Art of War that define Buffett’s approach: invincibility, victory without conflict, and unassailable strength
• Why Buffett’s General Re acquisition was a misunderstood masterstroke in defensive investing
• How Buffett achieved “victory without conflict” through his massive Apple investment
• The principle of via negativa — succeeding by avoiding mistakes and ruin
• Temperament vs. intellect and the psychology of avoiding self-defeat
• Circle of competence and why simplicity often beats complexity
• Sins of omission vs. sins of commission in investing decisions
• How Buffett applies wu wei (effortless action) through patience and alignment with natural forces
• Lessons from Buffett’s Japanese trading house investments and moral law in business
• The role of reputation, intuition (coup d’œil), and character in long-term investing
• Charlie Munger’s blueprint and the strategic architecture of Berkshire Hathaway

Timestamps:
00:00 Introduction and overview of Tobias Carlisle’s key ideas
02:00 Applying Sun Tzu’s “invincibility, victory without conflict, and unassailable strength” to Buffett
06:00 The General Re acquisition as a defensive masterpiece
12:00 Victory without conflict — Buffett’s Apple investment
19:00 The principle of via negativa and avoiding ruin
22:00 Survival, temperament, and controlling emotion in investing
25:00 Circle of competence and the power of simplicity
28:00 Sins of omission vs. sins of commission
32:00 Temperament, intellect, and avoiding self-defeat
40:00 Wu wei and investing with effortless alignment
49:00 Position sizing, concentration, and the Kelly Criterion
50:00 Buffett’s investments in Japan’s trading houses
56:00 Reputation, intuition, and the power of pattern recognition
61:00 Charlie Munger’s blueprint and Buffett’s strategic genius
64:00 Closing thoughts and where to find Tobias online

In this episode of Excess Returns, Jerry Parker joins us for a deep dive into the philosophy and practice of trend following. As one of the original Turtle Traders, Jerry shares lessons from Richard Dennis and Bill Eckhardt, explores how trend following has evolved over the decades, and offers timeless wisdom on markets, psychology, and risk management. From his early days in the Turtle Trading program to running Chesapeake Capital today, Jerry explains what it takes to survive and thrive as a systematic trader in an uncertain world.

Topics covered:
• The origins of the Turtle Trading program and what Jerry learned from Richard Dennis and Bill Eckhardt
• How trend following has evolved from short-term to longer-term systems
• Why trading psychology is harder than following the rules
• The role of discomfort and doing “hard things” in successful investing
• The design and diversification of a robust trading universe
• Risk management, drawdowns, and letting profits run
• Why trend following belongs alongside a 60/40 portfolio
• How ETFs are expanding access to managed futures strategies
• Incorporating crypto and new markets into trend following systems
• The internal truths of trend following and why smooth returns can be dangerous

Timestamps:
00:00 Trading should be hard
02:00 The origins of the Turtle Trading program
08:00 Evolution of trend following systems
12:00 The psychology of following rules
16:00 The famous Turtle Trader true/false test
20:00 Could the Turtle program work today?
23:00 Building a diversified trading universe
28:00 Risk management and position sizing
32:00 How trend following complements 60/40 portfolios
38:00 Managed futures, stocks, and diversification
41:00 The rise of trend-following ETFs
45:00 Incorporating crypto and futures
48:00 Where the strongest trends are now
52:00 AI and systematic investing
53:30 The internal truths of trend following
56:00 The belief Jerry holds that most investors would disagree with

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Warren Pies joins Excess Returns to discuss why he believes we’ve entered a “Debasement Regime,” what that means for investors, and how it differs from the post-GFC deflationary era. He explains the psychology behind this shift, how it’s changing market behavior, and what it means for asset allocation, gold, bonds, small caps, and the Federal Reserve. This conversation covers macro strategy, portfolio construction, and how investors can adapt to a world focused on protecting purchasing power rather than principal.

Main topics covered
• The shift from deflation to debasement and what defines this new regime
• Why protecting purchasing power is replacing the fear of losing principal
• Fiscal policy, deficits, and how politics drive the debasement dynamic
• The cyclical vs. secular forces shaping markets today
• Labor market analysis and the idea of “malignant stasis”
• How bonds fit in a debasement era and when they hedge equities again
• Valuations, bubbles, and why Warren sees room for the S&P 500 to rise further
• Gold as the key debasement asset and how to manage the trend
• Portfolio construction in a 60/40-is-dead world
• AI, productivity, and the longer-term implications for growth and inflation
• What could ultimately break the debasement regime

Timestamps
00:00 Debasement vs. deflation and the new investor mindset
07:40 Fiscal deficits, policy shortcuts, and the debasement channel
10:25 Reacceleration or illusion: the cyclical economic outlook
16:42 The labor market’s “malignant stasis” and what it signals
21:17 How Warren values bonds and equities in this environment
29:34 Bond vigilantes and the likelihood of a true bond revolt
34:00 Valuations, bubbles, and the path to S&P 7,000
38:27 Why small caps remain a short against large caps
41:37 Value stocks, energy, and timing hard asset rotations
45:08 Gold’s breakout and how to manage the position
50:00 Portfolio construction in a debasement era
54:32 AI’s potential to reshape productivity and demographics
57:13 What could end the debasement regime
59:46 Managing risk with technicals and conviction with fundamentals

Andy Constan returns to Excess Returns to break down today’s macro environment using his Four-Pillar Framework — growth, inflation, risk premia, and flows. Drawing on lessons from his time at Bridgewater and Brevan Howard, Andy explains how he blends systematic and discretionary approaches to form a clearer picture of markets. He discusses the AI-driven CapEx boom, the economic effects of tariffs, Fed independence under Trump, and why the current setup could produce extreme outcomes in either direction.

Topics covered:

• Systematic vs. discretionary macro investing

• Andy’s Four-Pillar Framework: growth, inflation, risk premia, and flows

• How AI CapEx is driving growth — and what happens when it stops

• Tariffs, policy shifts, and their impact on inflation and growth

• The Fed’s independence and what it means for markets

• Risk premia, volatility, and asset allocation in uncertain environments

• How major flows and corporate buybacks shape market direction

• Why Andy sees a “digital” macro environment with binary outcomes

Timestamps:
00:00 Intro and setup
02:00 Systematic vs. discretionary macro investing
14:00 The Four-Pillar Framework explained
22:00 Growth outlook and AI-driven CapEx boom
33:00 The real impact of tariffs on the economy
39:00 Thinking in probabilities and constructing macro portfolios
40:00 Fed independence and policy alignment
47:00 Labor market dynamics and AI uncertainty
48:30 Risk premia and asset allocation
56:00 Flows, buybacks, and corporate debt
01:00:00 What Andy’s watching next
01:06:00 Why macro outcomes have never been more digital

In this episode of Excess Returns, macro strategist Julian Brigden of MI2 Partners joins the show to break down today’s volatile market landscape. Brigden discusses why he believes we’re in one of the most fertile environments for macro investors in decades, the forces driving dollar weakness, inflation, and capital rotation, and how investors can position amid shifting policies, labor constraints, and AI’s uncertain impact. He also explains the risks of U.S. exceptionalism, the fragility of equity markets, and why he’s long everything not tied to the U.S.

Topics covered:

• The role of macro as a “supporting actor” that becomes essential at tops and bottoms

• Why this may be the best macro environment in 40 years

• The policy and market implications of tariffs, immigration, and a weaker dollar

• Positioning for U.S. underperformance and the case for international assets

• How Brigden uses price confirmation and technical signals in his process

• The dollar’s impact on equity and sector leadership

• Inflation, labor markets, and the “no firing, no hiring” phenomenon

• Why AI’s economic impact will take longer than expected

• The probabilities of recession, inflation, and soft landing scenarios

• Fiscal dominance, debt, and the future of financial repression

• Why bonds are “a crap place to have your cash”

• The fragile reflexive cycle of passive investing and U.S. equities

• Lessons for individual investors about thinking independently and avoiding industry “cheerleaders”

Timestamps:
00:00 Macro at extremes and U.S. underperformance risk
02:00 How Brigden uses macro analysis to time markets
06:00 Why this is a generational macro opportunity
08:00 Tariffs, growth, and the policy shift under Trump
12:00 Price confirmation and process discipline
15:00 The case for non-U.S. assets and sector rotation
20:00 Inflation waves and the labor market’s fragility
26:00 AI, uncertainty, and hiring hesitation
36:00 Recession vs. reacceleration probabilities
42:00 The debt problem and fiscal dominance
47:00 Sector positioning and the weak dollar playbook
51:00 Passive flows and market reflexivity
56:00 The hyper-financialized U.S. economy
01:00:00 AI, equity valuations, and risk of disappointment
01:01:00 Lessons for investors and independent thinking

Katie Stockton, founder and managing partner at Fairlead Strategies, joins us for her quarterly technical outlook on markets, sectors, and asset classes. In this episode, Katie breaks down what her indicators are showing for equities, discusses the implications of new DeMark signals on the S&P 500 and Nasdaq, and explores opportunities across sectors like healthcare, utilities, and energy. She also analyzes key macro charts including gold, oil, Treasury yields, and the dollar, and explains how investors can use technical analysis to manage risk and identify trends heading into year-end.

Main topics covered:
• The current technical setup for the S&P 500 and how Katie reads market momentum
• The role of moving averages, MACD, and DeMark indicators in her process
• Breadth, sentiment, and seasonal factors influencing market direction
• Why the AI and tech rally may be entering a more selective phase
• Sector analysis: healthcare, utilities, energy, and consumer staples
• Trends in financials and what’s driving sector rotations
• Overview of the Fairlead Tactical Sector ETF (TACK) and its positioning
• The broadening theme, mega-cap leadership, and market concentration
• Technical outlooks for gold, oil, Treasury yields, and the dollar
• How correlations between bonds and equities are evolving
• Key risk metrics Katie is watching into year-end

Timestamps:
00:00 Introduction and S&P 500 setup
04:15 How Katie uses key technical indicators
07:00 Reading trend strength through moving averages
10:00 Balancing short- and long-term signals
12:00 Seasonality and sentiment in the current market
15:00 DeMark sell signals on the S&P and Nasdaq
18:30 What a correction could mean for the AI trade
20:20 Sector rotation and using technicals for allocation
23:30 Opportunities in healthcare and energy
25:30 Utilities and countertrend setups
27:20 Consumer staples and defensive positioning
29:00 Financials and recent weakness
31:00 Inside the TACK ETF and its strategy
34:10 Market breadth and mega-cap concentration
37:00 Gold’s breakout and sell discipline using technicals
41:00 Oil’s setup and resistance levels
43:15 10-year Treasury yield analysis
46:20 The dollar index and its key levels
48:15 Relationship between stocks and bonds
51:10 Final takeaways and closing

In this episode of Excess Returns, we’re joined by Rob Thummel of Tortoise Capital to discuss the critical intersection of energy and technology. Rob explains why “electricity is the new oil” as AI and data center demand reshape global power needs. We explore the future energy mix, investment opportunities across natural gas, nuclear, and renewables, and how investors can position for decades of transformation in the energy ecosystem.

Topics covered:

• How AI is driving a new era of electricity demand

• The evolving U.S. energy mix: oil, gas, nuclear, and renewables

• Why electricity is becoming the new oil

• The scale of power needed to support AI and data centers

• Opportunities and challenges in renewables and battery storage

• The resurgence of nuclear and the role of natural gas

• How U.S. shale transformed inflation and global energy markets

• Energy infrastructure and why it offers steady returns

• How the TCAI ETF captures the “AI infrastructure” opportunity

• Risks and resilience of the U.S. power grid

• Lessons from 30 years investing in energy

Timestamps:
00:00 Electricity is the new oil and the future of AI energy demand
02:00 The evolving U.S. energy mix and global demand growth
08:00 Why electricity, not oil, will power the next economic era
11:00 How much power AI and data centers will need
15:00 Can renewables meet rising energy demand?
20:00 The comeback of nuclear and its challenges
25:00 How U.S. shale changed global energy and inflation
32:00 Why energy infrastructure is less volatile than commodities
36:00 Inside Tortoise’s new AI infrastructure ETF (TCAI)
43:00 The rise of digital and electricity infrastructure plays
45:00 How Tortoise evaluates investments and valuations
49:00 The resilience and future expansion of the U.S. grid
52:00 Closing lessons: contrarian investing and energy’s importance