Excess Returns

Jack Schwager joins Excess Returns to discuss Market Wizards: The Next Generation and the extraordinary young traders profiled in the newest installment of the Market Wizards series.

He explains how traders turned small accounts into fortunes, survived devastating losses, built exceptional risk-adjusted records and adapted from day trading to longer-term strategies, while revealing the psychology, risk management and commitment behind elite trading performance.

Jack Schwager on X
https://x.com/jackschwager

Market Wizards: The Next Generation
https://amzn.to/4psEOmH

Topics covered

• How video games, prop trading firms and modern technology shaped a new generation of traders

• How Jack Schwager finds candidates and verifies extraordinary trading track records

• Why return-to-risk measures can reveal more than the Sharpe ratio

• Lukas Froelich's astonishing 2020 performance and the limits of compounding and scalability

• Simon Rousseau's journey from a $40,000 borrowed account to nearly $500 million

• How breaking risk rules led to massive losses even after extraordinary success

• Kristjan Kullamägi's path from security guard to more than $100 million after repeated account blowups

• Phil Goedeker's success with short selling, option selling and unusually strong risk control

• Rick Bandazian Jr.'s merger arbitrage edge and more than a decade without a losing month

• Why financial markets may remain uniquely difficult for artificial intelligence to solve

• Lance Breitstein's apprenticeship, deliberate practice and shift from day trading to longer-term positions

• What traders and long-term investors can learn about talent, discipline, persistence and human nature

Timestamps

00:00 Intro to Market Wizards: The Next Generation
04:33 How Jack finds exceptional traders and how the trading ecosystem changed
09:15 Auditing Lukas Froelich's extraordinary 2020 returns
14:03 Simon Rousseau: turning $40,000 into nearly $500 million
18:42 The $50 million Carvana loss and the danger of breaking trading rules
22:54 Kristjan Kullamägi: from security guard to more than $100 million
28:36 Phil Goedeker and the risk of negative asymmetry strategies
32:41 Hedging option risk during the Liberation Day market selloff
37:34 Trading personality and Rick Bandazian Jr.'s no-loss record
41:36 Can artificial intelligence ever become a Market Wizard?
45:42 Lance Breitstein: choosing mentorship over a higher salary
49:42 What long-term investors can learn from elite traders
53:52 Innate talent, human nature and all-consuming commitment
57:58 What the next generation of trading may look like

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.

Eric Pachman of Data 4 The People joins Matt Zeigler to explain why headline employment and inflation data may be giving investors an incomplete picture of the U.S. economy. They examine falling labor force participation, Medicaid-funded healthcare jobs, wage quality, oil and diesel shortages, consumer financial stress and how AI can make public data more useful.

Eric Pachman on X
https://x.com/EricPachman

Data 4 The People
https://www.data4thepeople.com/

Main topics covered

• Why the establishment survey and household survey can tell very different labor market stories

• Why unemployment may miss weakening labor force participation and disappearing working-age Americans

• The decline in participation among older workers and men

• How healthcare and Medicaid-funded care have become the engine of U.S. job growth

• Why Medicaid cuts could create a major employment and consumer spending risk

• What occupational wage data reveals about the quality of new jobs and home healthcare pay

• The differences between CPI, PCE and core inflation and why the standard measures can be misleading

• How crude oil grades, refinery design and 3-2-1 crack spreads shape energy prices

• Why falling diesel inventories could spread inflation through transportation, food and retail

• What the single-income stress test reveals about household fragility, poverty and multiple-job holders

• How Data 4 The People is using AI to build public-interest data research tools

Timestamps

00:00 Intro
04:41 Why the unemployment rate can miss a labor crisis
11:24 Healthcare jobs, aging America and the Medicaid care economy
18:44 The Wage Ledger and the hidden quality of U.S. job growth
24:18 Why inflation is moving higher
30:48 Why every equity investor needs to understand oil
36:00 Crack spreads and the refinery mismatch problem
44:05 Why diesel is the inflation risk that matters most
48:34 The single-income stress test and consumer fragility
54:42 Data 4 The People's nonprofit mission
59:00 Building an AI research assistant for public data
01:03:37 Where to follow Eric and Data 4 The People

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.

Jim Paulsen joins us to explain why weakening economic momentum, tightening financial conditions and extreme AI enthusiasm could set the stage for a 10% to 20% stock market correction. We discuss labor market weakness, the growing divide between technology and the broader economy, fading tech leadership, market complacency, bond yields and the demographic forces that could keep US growth and inflation lower for years.

Jim also explains why he does not expect a recession or the end of the long-term bull market, but believes investors may need to reduce their concentration in AI and technology stocks as leadership quietly shifts toward the broader market.

Jim Paulsen on X
https://x.com/jimwpaulsen

Paulsen Perspectives
https://paulsenperspectives.substack.com/

Main topics covered

• Why Jim expects a 10% to 20% market correction without a recession
• What zero job creation, declining full-time employment and rising unemployment reveal about the labor market
• Why housing starts, real disposable income and GDP forecasts point to weaker economic growth
• How higher Treasury yields, oil prices, a stronger dollar and slower money growth have tightened financial conditions
• Why the economic damage from an oil shock often appears after oil prices peak
• The widening earnings and economic divide between AI investment and the rest of the economy
• What investor positioning, shrinking liquidity and low defensive exposure reveal about market complacency
• Why strong earnings momentum does not eliminate the risk of a market decline
• Evidence that technology, communication services and the Magnificent Seven are losing market leadership
• Why old economy sectors may outperform technology during the next stage of the bull market
• How weak labor force growth could push economic growth, inflation and Treasury yields lower
• Why demographics, immigration and productivity will shape the long-term US economic outlook

Timestamps

00:00 Why Jim Paulsen expects a 10% to 20% market correction
04:32 The labor market weakness investors may be overlooking
08:42 Housing, disposable income and GDP growth are deteriorating
13:03 How tighter financial conditions could slow the economy
17:09 Why oil shocks and the yield curve threaten earnings growth
21:41 Investor complacency and the disconnect between markets and Main Street
25:54 How today’s AI boom differs from the dot-com bubble
30:20 Defensive stocks reach an extreme last seen near major market tops
34:36 Record earnings expectations, momentum and extreme valuations
39:00 Technology, communication services and the Magnificent Seven lose momentum
43:00 The hidden market rotation from new era to old era stocks
47:01 Why Jim expects Treasury yields to fall below 3%
51:43 The demographic forces suppressing growth and inflation
55:45 America’s long-term growth challenge and what could change it

Katie Stockton of Fairlead Strategies joins Excess Returns to break down the current technical setup for the S&P 500, Nasdaq 100, mega-cap tech, market breadth, sector rotation, international stocks and gold. We discuss why short-term momentum has weakened, what would confirm a more serious breakdown, how investors can use technical analysis for risk management, and where breakouts are appearing outside the AI and semiconductor trade.

Katie Stockton on X
https://x.com/StocktonKatie

Fairlead Strategies
https://www.fairleadstrategies.com/

Fairlead Funds
https://www.fairleadfunds.com/

Main topics covered

• Why the S&P 500 is still in a long-term uptrend but showing short-term momentum loss

• How Katie defines overbought and oversold using the stochastic oscillator

• Why the March monthly MACD sell signal became an unusual whipsaw

• What the QQQs and Nasdaq 100 are saying about technology leadership

• How investors can use stop losses, hedges and moving averages to manage risk

• Why the market has held up despite underperformance in the Magnificent Seven

• The difference between market breadth and market leadership

• Why sector rotation is improving in healthcare, industrials, utilities, insurers and biotech

• How sentiment indicators like the VIX and Fear and Greed Index fit into market timing

• How the Fairlead Tactical Sector ETF uses trend following, sector rotation, Treasuries and gold

• What the charts are saying about emerging markets, developed international stocks and the U.S.

• Why gold has moved from a strong bull market into a more tactical trading environment

Timestamps

00:00 Intro
00:58 Why the S&P 500 is losing short-term momentum
05:04 How overbought conditions can reset without a major decline
08:39 Why whipsaws make confirmation so important
12:02 What the QQQs are saying about technology leadership
16:51 How to manage risk with stop losses and hedges
20:07 Why the market held up despite Mag Seven weakness
23:49 How market breadth differs from market leadership
28:14 What sentiment indicators are saying about investor positioning
32:58 Why the market is in a technical void
36:00 Sector rotation beyond technology and semiconductors
40:54 How the Fairlead Tactical Sector ETF manages drawdowns
46:05 What international stock charts are saying versus the U.S.
50:13 Why markets have been resilient despite geopolitical risk
52:05 What the chart of gold is telling investors now

Matt Zenz of Longview Research Partners joins Excess Returns to explain how evidence-based investing can help investors navigate AI excitement, market concentration, high valuations, IPO hype, factor investing and fixed income tax drag. We discuss why bubbles are hard to identify in real time, why diversification still matters, how valuation spreads shape expected returns, what AI capex does and does not tell us, and how investors can think about taxable bonds more efficiently.

Longview Research Partners
https://longviewresearchpartners.com/

Main topics covered

• Why evidence-based investing matters during bubble-like markets

• The emotional reality of holding risk assets through painful periods

• How to think about market concentration without jumping straight to bubble calls

• Why global diversification changes the mega-cap dominance story

• What high market valuations mean for financial planning and expected returns

• Why wide valuation spreads may create a better setup for value stocks

• What factor research says about AI capex and corporate investment

• How Longview builds a diversified factor strategy around discount rates

• Why implementation, trading flexibility and scale matter in factor investing

• The small cap premium debate, IPOs, fallen angels and survivorship bias

• Why AI may increase data mining risk in quantitative investing

• How fixed income tax drag can quietly reduce after-tax returns

Timestamps

00:00 Why painful markets create future return premiums
04:00 Market concentration, AI winners and the value of diversification
09:40 How high valuations should influence financial planning
13:12 Why wide valuation spreads matter for value investors
14:01 What factor research says about AI capex
16:20 How Longview's EBI strategy looks for higher discount rates
18:58 Why Longview starts with the market and then tilts
21:45 Comparing 1999, 2008 and today through expected returns
24:33 Intangible assets, price-to-book and the limits of accounting adjustments
28:32 SpaceX, IPOs and how indexes handle new mega-cap companies
33:21 Why implementation and trading flexibility can affect returns
36:17 Passive flows, price elasticity and market price discovery
39:35 The small cap premium, IPOs and fallen angels
42:21 Are today's small caps lower quality than history?
46:01 Why AI may not uncover the next great factor premium
48:04 Why fixed income may be the most inefficient part of taxable portfolios
51:29 How LVIG tries to convert bond income into deferred capital appreciation
52:50 The after-tax return opportunity from tax deferral
54:58 Which investors may benefit most from tax-efficient fixed income
56:26 Where to learn more about Matt Zenz and Longview

Jeff Klingelhofer of Aristotle Pacific joins Excess Returns to break down the fragile circular relationship between AI capital spending, the stock market, the high-end consumer and the broader economy. We discuss fixed income markets, Fed policy, inflation, private credit, the national debt, business cycle risk and how investors should think about bonds after the end of the zero-rate era.

Aristotle Pacific
https://www.aristotlepacific.com/

Main topics covered

• Why AI CapEx has become one of the biggest drivers of the US economy and stock market

• How the high-end consumer, asset prices and AI spending have created a circular market setup

• Why today’s fixed income market is very different from the zero-rate era

• How bonds can serve as income, ballast and portfolio protection in the current environment

• Why the Fed may care more about inflation expectations than markets expect

• The Fed’s overlooked third mandate and what moderate long-term interest rates mean

• How Kevin Warsh could change the Fed’s approach to forward guidance, inflation and the balance sheet

• Why the business cycle is not dead, even if Fed intervention has lengthened it

• What investors should understand about the national debt, higher rates and inflation

• Why private credit is useful but not automatically better than public credit

• How flexible fixed income investing can find opportunities across credit, securitized markets and capital structures

• Why sentiment, not just fundamentals, drives market prices

Timestamps

00:00 AI CapEx, the stock market and the fragile economic loop
04:03 Why fixed income markets look different after zero rates
08:45 Does the Fed still have investors’ backs?
13:43 Are AI companies using dangerous forms of financing?
18:54 Why starting yields change the stock bond hedge
23:42 The Fed’s overlooked third mandate
29:03 Why inflation expectation stability may drive Fed policy
33:11 How Kevin Warsh may change the Fed regime
38:46 What a smaller Fed balance sheet could mean for asset prices
43:24 The national debt, higher rates and inflation
50:25 Why fixed income should be managed across silos
55:08 The one lesson for the average investor

Meb Faber, co-founder and CIO of Cambria Investment Management, joins Excess Returns to discuss his new book, Investing in America: The Rise of a 250 Year Bull Market.

We explore why the United States became one of the greatest long-term compounding stories in market history, what investors can learn from 250 years of booms and busts, and why Meb can be optimistic about America while still cautious on today’s expensive market-cap-weighted S&P 500.

Investing in America: The Rise of a 250 Year Bull Market
https://amzn.to/4f1H5Aw

Meb Faber on X
https://x.com/MebFaber

Main topics covered

• Why America can be viewed as the ultimate venture capital success story

• How joint stock companies, risk-taking and ownership helped shape the U.S. economy

• Why studying 250 years of market history changes how investors think about volatility

• The long-term case for stocks and why the time horizon matters so much

• Why bear markets are a natural part of capitalism and long-term compounding

• How U.S. market dominance happened and why it was not preordained

• Why expensive valuations, low dividend yields and new supply may matter today

• The role of dividends, buybacks, shareholder yield and reinvestment in long-term returns

• Why diversification across global stocks, bonds and real assets can help investors stay invested

• What gold, REITs and foreign stocks teach us about starting points and narratives

• Why early investing, child investment accounts and compounding can change investor behavior

• How creative destruction reshapes sectors, companies and the market leaders of each era

• Why Meb remains optimistic about America while still cautious on parts of the U.S. market

Timestamps

00:00 Why America was not guaranteed to become the market winner
01:15 Meb Faber on writing Investing in America
02:25 America as the ultimate venture capital success story
06:22 How a culture of ownership helped the U.S. stock market compound
09:19 Why studying 250 years of market history matters
12:00 Why ownership is the core investing lesson
15:14 Bear markets, recessions and the danger of recent history
18:16 Why U.S. stocks beat the rest of the world by so much
22:20 Lessons from financial history that surprised Meb
27:05 Why stocks can lose for long periods and bonds can win
30:00 Why investors need to get used to being in a drawdown
33:24 Dividends, buybacks and the importance of reinvestment
37:27 Why gold and REITs beat the S&P 500 after 2000
40:55 How balanced portfolios survive different market regimes
43:03 The power of starting early and letting compounding work
48:16 Why global diversification matters outside the U.S.
50:40 Creative destruction, sector change and market leadership
55:20 Why Meb is still optimistic about investing in America
59:33 Where to find the book, Cambria and Meb online

In this episode of Last Call, we look back at June 2026 and break down the biggest market stories shaping investors’ outlook for the second half of the year. Matt Zeigler and Jack Forehand are joined by Andy Constan, Ben Hunt, Brent Kochuba and Eric Pachman to discuss the SpaceX IPO, AI and semiconductor cyclicality, Fed credibility, options flows, labor market quality, crack spreads and inflation risk.

Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠

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Main topics covered

• Why the SpaceX IPO became the biggest market story of the month

• How index flows, ETF buying and hedge fund positioning shaped SpaceX trading

• Andy Constan on why future earnings growth may be oversubscribed across AI stocks

• Why AI spending is benefiting semiconductors, memory and chip equipment companies

• The Fab Five companies behind semiconductor capacity and why they matter

• Ben Hunt on Fed credibility, market narratives, gold, the dollar and trust

• Brent Kochuba on options flows, correlation risk and volatility spasms in tech stocks

• Why short-term options volume may signal excess speculation in QQQ and AI stocks

• How SpaceX options trading changed after the first wave of retail excitement

• Eric Pachman on why headline job growth may hide weakness in wages and job quality

• Why crack spreads, refining constraints and oil logistics may matter more for inflation than crude prices alone

• What investors should watch next in AI, semiconductors, memory, innovation and market cycles

Timestamps

00:00 Intro
01:02 Matt and Jack introduce Last Call and the June market review
03:05 Why SpaceX dominated the month and how the IPO traded after opening
07:33 Andy Constan on Fab Five Freddy eating the semis
10:35 Why future earnings growth may be oversubscribed across the stock market
13:35 How AI compute spending flows through chips, fabs and semiconductor equipment
17:45 Are parts of the semiconductor market showing signs of an earnings bubble?
20:12 Ben Hunt on the Fed credibility chart that surprised him
23:50 Why Fed credibility, Sell America, gold and the dollar are connected
29:48 Brent Kochuba on options flows behind AI stocks, semis and SpaceX
33:36 Why semiconductor volatility may be warning of a short-term reset
38:46 What SpaceX options trading says after the initial surge
42:12 Eric Pachman on jobs, wages and what the Fed may be missing
48:24 Why crack spreads matter for oil, refining, gas prices and inflation
55:28 What to watch next in AI, semiconductors, memory demand and market cycles
59:01 Why efficiency, competition and cyclical thinking matter for AI investors
01:03:02 Matt and Jack close the episode

No information on this podcast should be construed as investment advice. Securities discussed in the podcast may be holdings of the firms of the hosts or their clients.

Warren Pies of 3Fourteen Research joins Excess Returns to break down the AI bull market, the macro risks investors should watch, and why the data still supports continued strength in semiconductors and equities. We discuss GPU demand, token usage, open source AI, Fed policy, housing weakness, oil, earnings growth, market valuations and the biggest risks to the current cycle.

Warren Pies on X
https://x.com/WarrenPies

3Fourteen Research
https://www.3fourteenresearch.com/

Caliban
https://www.3fourteenresearch.com/caliban

Main topics covered

• Which bearish AI arguments actually matter for investors

• Why regulatory risk may be the biggest long-term AI concern

• How data center spending is crowding out housing investment

• Why the Fed may struggle to cool AI-driven investment without hurting the labor market

• What GPU availability says about real-time AI compute demand

• Why open source AI is not yet replacing frontier models

• How token pricing and OpenRouter data help measure AI usage

• Why semiconductor stocks may still be in the middle of a major cycle

• How semis are being valued differently than traditional cyclicals

• Why Fed policy, earnings growth and market multiples are key to the second half of 2026

• What oil positioning and refined product inventories say about macro risk

• Why 3Fourteen remains constructive on equities despite rising overheating risk

Timestamps

00:00 Intro
01:04 Which bearish AI arguments have teeth?
04:00 Why AI regulation is the biggest long-term risk
07:03 Technology spending versus housing investment
11:03 How AI CapEx is showing up in inflation data
13:04 Why the labor market is more fragile than headline jobs data suggests
16:24 Why GPU availability is a cleaner signal than CapEx announcements
21:00 What token pricing and OpenRouter data reveal about AI demand
27:36 How 3Fourteen benchmarks frontier models against open source AI
30:00 Why the semiconductor selloff looked like a buyable dip
34:02 Are semiconductors still cyclical businesses?
38:08 Why Fed tightening could be the thing that ends the bull market
42:15 What the oil shock means now
45:47 Refined product inventories, crack spreads and energy stocks
47:18 Are earnings estimates becoming too optimistic?
50:49 Why the debasement regime still supports equities
54:05 Where to find Warren Pies and 3Fourteen Research

Ritavan joins Excess Returns to explain The System Gambit, a new framework for understanding competitive advantage, business strategy, AI disruption and long-term compounding. We discuss why traditional moat checklists can miss the real source of value, how companies can build systems competitors cannot copy, and what investors should look for when AI changes the game.

The System Gambit
https://amzn.to/4b0J32I

Main topics covered

• Why the traditional moat checklist can fail investors

• The three requirements for a true System Gambit

• How investors can evaluate business strategy from the outside

• Why code is not always the moat in the age of AI

• What history can teach investors about asymmetry and leverage

• Why AI adoption is not the same as AI value creation

• The difference between moving fast and understanding the game

• Lessons from Nokia, ASML, Amazon and Walmart

• How intangible investment and J curves can hide long-term value

• Why the best companies build compounding systems competitors cannot copy

• How investors can identify companies changing the game rather than optimizing the old one

Timestamps

00:00 Opening preview and introduction

04:00 The three ingredients of a System Gambit

08:49 Why code is not the moat in AI software

13:00 Skanderbeg and changing the rules of the game

17:00 Good moats, good narratives and asymmetric advantage

22:31 Microscope vs telescope as a lesson for AI

28:35 AI winners, losers and high dispersion markets

32:08 Signal quality, bottlenecks and why AI adoption is not enough

36:00 Nokia, agility and the failure to build a causal model

40:15 Why understanding the game beats speed

44:00 Intangible investment, the J curve and ASML's hidden edge

49:54 The contrarian AI thesis behind The System Gambit

54:00 How to recognize a real System Gambit

58:27 Amazon, Walmart and multi-paradigm compounding

1:03:00 Prime, FBA and platform leverage

1:07:00 Walmart's answer to Amazon

1:11:06 Closing thoughts and where to find Ritavan