Excess Returns

Barry Ritholtz, Dave Nadig and Matt Zeigler explore why AI's real productivity gains don't automatically translate into an investing edge. From stock picking and market concentration to the financing behind the AI buildout, they separate enthusiasm for the technology from the economics of owning it.

Subscribe to Click Beta on Spotify⁠⁠⁠

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In this episode of Click Beta, Barry Ritholtz and Dave Nadig join Matt Zeigler for a conversation about where AI is already changing their work and where investors should ask harder questions. Barry shares how his team uses AI to analyze portfolio drift and identify clients who may need a rebalance. The discussion also covers client relationships, consumer pricing, creative side projects, and why Barry is increasingly enthusiastic about bonds without calling an end to the equity bull market.

Topics covered:

• Why widely available AI tools may improve research without creating a lasting stock-picking advantage
• Market breadth, mega-cap concentration, and the potential impact of large tech IPOs
• Data center financing, credit quality, and the risk of rapid technological change
• Barry Ritholtz's use of AI to analyze allocation drift, taxes, and household circumstances
• How better meeting records can strengthen the human side of financial advice
• Learning to collaborate with AI and asking better questions
• The debate over dynamic pricing, consumer data, and whose interests AI agents serve
• Baseball tools, astronomy dashboards, music discovery, and the joy of experimenting
• Deciding which tasks to automate and which activities are worth doing yourself
• Barry Ritholtz's case for bonds, municipal income, and avoiding the reach for yield

Find our guests:

Barry Ritholtz — The Big Picture - https://ritholtz.com
Ritholtz Wealth Management - https://www.ritholtzwealth.com
Barry Ritholtz on X - https://x.com/Ritholtz
Dave Nadig's work at etf.com - https://www.etf.com
Dave Nadig on X - https://x.com/DaveNadig

Timestamps:

00:00 Meet Click Beta: AI and the stock-picking question
05:14 AI concentration and market breadth
10:08 Tech IPO valuations and data center financing
15:22 Barry Ritholtz: AI and portfolio rebalancing analysis
20:58 Can AI improve the human side of financial advice?
25:49 Better client questions and better prompts
30:13 The AI imagination gap: collaboration versus search
36:48 Dynamic pricing and the consumer-retailer arms race
41:26 Consumer data and the incentives behind AI agents
45:54 Astronomy, music, and testing your assumptions
51:18 Automating busywork to make room for curiosity
55:39 Creative experiments and choosing what to automate
01:00:11 Why Barry Ritholtz is excited about bonds
01:04:37 Bonds versus equity income and closing thoughts

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.

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

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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 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 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 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

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

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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.

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.

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.

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.

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.