Excess Returns

On this episode of the 100 Year Thinkers, Chris Mayer and Matt Zeigler discuss long-term investing, 100-baggers, AI stocks, SpaceX valuation, founder-led companies, and why the best investments often come with brutal drawdowns. We also cover his new book The Investor's Odyssey, the danger of letting labels like AI do too much work, how to think about TAM and capital allocation, and why patience may be the biggest edge for investors trying to own great businesses for decades.

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The Investor's Odyssey: Resisting the Sirens and Playing the Long Game⁠

https://amzn.to/44BMXeJ⁠

Main topics covered

• Why SpaceX, AI and trillion-dollar IPOs are testing investor discipline

• How Chris Mayer thinks about valuation after watching Google become a huge winner

• Why great businesses can still be terrible investments at the wrong price

• The danger of letting labels like AI, quality and TAM replace real analysis

• Why many AI features may not create real customer value

• What the dot-com bubble can teach investors about AI adoption and shakeouts

• Why investors do not need to be early if a company is truly exceptional

• How to separate AI anecdotes from real financial impact

• Why capital allocation and return on invested capital matter more as companies scale

• How to evaluate founder control, governance, incentives and trust

• Why the best long-term stocks can still fall 50 percent or more along the way

• What rational exuberance might look like for long-term investors

Timestamps

00:00 Intro: Chris Mayer on AI, SpaceX and long-term investing

04:00 SpaceX valuation vs Google and the risk of paying too much

08:01 Why labels like AI and quality can do too much work

12:05 The AI pause, the dot-com analogy and where real value may emerge

16:06 Why investors do not need to be early when a business is real

21:00 Becoming a great company versus already being mature

25:10 Thinking about TAM, market share and realistic growth expectations

29:43 Corporate governance, free float and shareholder rights

34:27 How to judge founder trust, incentives and compensation

38:57 Employee ownership, culture and building enduring companies

43:02 Investor frustration in a lopsided AI-driven market

47:02 Why even a perfect stock picker would face brutal drawdowns

52:17 The rise of trillion-dollar IPOs and the question of rational exuberance

56:29 The Investor's Odyssey and playing the long game

Ben Inker of GMO joins Excess Returns to break down whether the AI boom is an investment bubble, how it compares to 2000, 2007 and 2021, and why today’s risk may be more about earnings than valuations. We also discuss AI capital spending, market supply from IPOs, GMO’s seven-year asset class forecasts, international stocks, benchmark-free allocation and what private equity investors may be missing.

7 YEAR ASSET CLASS FORECAST

https://www.gmo.com/americas/research-library/gmo-7-year-asset-class-forecast-may-2026_gmo7yearassetclassforecast/

WHAT BARBARIANS LIKE TO TAKE PRIVATE

https://www.gmo.com/americas/research-library/part-1-what-barbarians-like-to-take-private_gmoquarterlyletter/

THE CASE FOR LIQUID ALTERNATIVES

https://www.gmo.com/americas/research-library/the-case-for-liquid-alternatives-in-todays-environment_insights/

Main topics covered

• Why GMO sees the AI boom as a bubble investors may be able to navigate

• The difference between easy bubbles and hard bubbles in portfolio construction

• Lessons from the internet bubble, the global financial crisis and the 2021 duration bubble

• Why today’s market may be an earnings bubble, not just a valuation bubble

• How AI data center spending affects corporate profits before depreciation shows up

• Why transformational technologies do not always reward the companies building them

• The risk of circular financing, debt-funded AI spending and increasingly creative deal structures

• How IPOs, share issuance and market supply can pressure stock returns

• GMO’s seven-year asset class forecasts and why international stocks look more attractive than U.S. stocks

• Why private equity portfolios may contain large hidden bets on small, lower-quality companies

Timestamps

00:00 AI, earnings bubbles and market supply
00:58 Why Ben Inker thinks the AI bubble may be easier to navigate
02:43 What makes a bubble easy or hard for investors
08:12 Comparing risk and return in 2000, 2007, 2021 and today
14:42 Why optimizers and real clients see risk differently
17:02 What GMO learned from managing through past bubbles
19:08 How today compares to the 2000 internet bubble
20:00 Why this may be an earnings bubble
23:34 Semiconductors, memory makers and the capital cycle
25:00 How AI CapEx compares to railroads, electricity and fiber optics
29:33 Debt, circular financing and strange AI deals
34:32 Why massive stock issuance could challenge the market
40:00 How GMO builds seven-year asset class return forecasts
41:40 Why interest rates change fair value for stocks and bonds
45:32 Why international, value and small-cap stocks look more attractive
49:06 The case for a benchmark-free portfolio
55:21 What 700 leveraged buyouts reveal about private equity
01:02:00 How public portfolios can offset private equity risks
01:03:37 Why investors need to understand what they are paid for
01:08:27 Closing thoughts

Ian Smith, portfolio manager at William Blair, joins Excess Returns to break down emerging markets, global diversification, and why EM may offer a very different opportunity set than US stocks. We discuss AI capex, the role of Korea, Taiwan, China and India, the impact of the dollar, quality investing, valuation, and how active investors can think about opportunity in a world shaped by AI disruption and geopolitical change.

William Blair Investment Management
https://im.williamblair.com/

The Problem With Quality
https://im.williamblair.com/insights/articles/the-problem-with-quality

Topics covered:

• Why emerging markets are not one single trade

• How AI capex is reshaping EM indexes and performance

• Why Korea, Taiwan and China are central to the AI supply chain

• The role of the US dollar in emerging market returns

• Why EM index concentration is higher than many investors realize

• What past innovation cycles can teach us about the AI buildout

• How AI is changing the definition of quality investing

• Why China’s manufacturing strength creates both opportunity and risk

• The long-term case for India despite high valuations

• How William Blair evaluates quality, trajectory and underappreciation

• Why valuation in emerging markets requires more than simple multiples

• The one investing lesson Ian Smith would teach the average investor

Timestamps:

00:00 Intro

04:10 Why emerging markets are not one market

08:37 Why EM is underrepresented in global indexes

13:16 How the dollar impacts emerging market returns

18:37 AI capex, picks and shovels, and EM supply chains

24:17 How William Blair is using AI in the investment process

28:30 Why quality and growth have decoupled in emerging markets

33:19 Why AI disruption creates opportunity for active managers

37:30 China’s overcapacity, competition and global manufacturing edge

42:00 India’s long-term growth drivers and valuation challenge

47:00 Finding underappreciated quality in EM stocks

52:01 Deglobalization, China and the future of global trade

56:09 The one lesson Ian Smith would teach investors

Tobias Carlisle joins Excess Returns to discuss why today’s market may be setting up a major opportunity in value stocks, small caps and micro caps. We cover stretched market valuations, AI capex, SpaceX and other massive IPOs, the risk of speculative growth assumptions, and how Tobias builds systematic deep value portfolios in ZIG and DEEP.

Tobias Carlisle on X
https://x.com/Greenbackd

Acquirers Funds
https://acquirersfunds.com/

Topics covered:

• Why elevated market valuations point to lower forward returns, not necessarily an immediate exit from stocks

• The case for small value, micro-cap value and mid-cap value after a long large-cap growth cycle

• Why equal-weight indexes and small caps may be signaling a market leadership shift

• Whether AI capex will create lasting profits or mostly benefit consumers

• The parallels and differences between AI, the dot-com boom, railroads and fiber optic buildouts

• How AI spending is being financed and why the stock market may be demanding more compute investment

• What the SpaceX IPO, OpenAI and Anthropic could mean for market supply and investor psychology

• Why base rates are being challenged by the growth of major technology platforms

• How disruption can create value traps and why traditional valuation metrics can struggle in disrupted industries

• The energy demand implications of AI data centers and why nuclear and natural gas could matter

• How Tobias combines valuation, quality, financial statements and portfolio construction in ZIG and DEEP

• Why quarterly rebalancing may be a practical balance between timing luck, momentum and trading costs

Timestamps:

00:00 Why AI value may accrue to consumers
04:00 What extreme market valuations say about future returns
08:22 Small caps, equal weight and the Mag Seven reversal
14:15 AI capex and lessons from past technology booms
19:47 Who gets the profits from AI?
23:00 Cash flow, debt and the AI spending race
28:06 SpaceX, giant IPOs and market supply
31:00 OpenAI, Anthropic and Mauboussin’s base rates
35:17 Is buying the S&P 500 more speculative than investors realize?
36:57 Value investing during disruptive technology cycles
41:07 War, energy prices and the broadening trade
45:32 Semiconductor valuations and aggressive growth assumptions
47:30 How Tobias builds the ZIG and DEEP portfolios
54:17 ETF rebalancing, timing luck and systematic value investing

Professor Aswath Damodaran joins Kai Wu on The Intangible Economy to break down how to value SpaceX, AI companies, intangible assets, and the future of value investing.

We discuss why big markets do not automatically create big value, how AI CapEx is changing the character of major technology companies, and why the best investment stories still have to connect to the numbers.

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Topics covered:

• Valuing SpaceX after its IPO and why price matters even for great companies

• How Starlink, space launch, and xAI fit into SpaceX’s valuation story

• Why total addressable market can mislead investors in AI and other disruptive industries

• The problem with AI unit economics, data centers, power, water, and reinvestment needs

• Why growth can destroy value when margins and returns on capital are weak

• How intangible assets, R&D, future growth, and narratives should show up in valuation

• The Big Market Delusion and how overconfidence drives boom and bust cycles

• Why AI CapEx is different from the dot-com boom and could create broader risks

• How AI is changing the character of the Magnificent Seven and semiconductor companies

• Why value investing became rigid, ritualistic, and righteous, and how it can evolve

Timestamps:

00:00 Why great companies can still be bad investments

01:03 Introducing Aswath Damodaran and The Intangible Economy

01:49 SpaceX IPO, Starlink, xAI, and the challenge of valuing uncertainty

05:31 Why Starlink became the core of SpaceX’s current revenue

10:31 How Damodaran valued SpaceX across launch, connectivity, and AI

14:07 Why AI’s huge market may still have difficult unit economics

17:10 The tension between SpaceX competing in AI and renting data centers to competitors

20:00 Why valuation should use distributions instead of false precision

22:39 How stories and numbers work together in valuation

26:45 Why investors confuse promises, potential, and businesses

30:49 The Big Market Delusion and overconfidence in AI investing

33:02 Why the AI CapEx boom is different from the dot-com bubble

35:17 How AI infrastructure is changing the Magnificent Seven

38:36 Nvidia, Micron, semiconductors, and the risk of peak cycle earnings

41:00 Why the biggest AI market stories could be scary for society

43:37 AI disruption, labor markets, and the speed of technological change

46:30 Measuring which jobs and companies are most exposed to AI automation

49:00 Why AI cost structure may look more like Spotify than software

51:13 The unresolved business model questions for LLMs and AI agents

52:29 Why traditional value investing lost its edge

56:03 Passive investing, book value, and the blame game in value investing

58:13 Why rigid value investing is vulnerable to AI disruption

01:00:58 How value investing can adapt to intangible assets and uncertainty

01:02:21 Why any company can be a good investment at the right price

01:04:57 Why investing mistakes and track records are harder to judge than they look

In the third episode of First Principles with Andy Constan, Andy breaks down the changing structure of markets as the IPO window reopens, AI CapEx accelerates, and corporate buybacks shift toward new equity supply. We discuss what the SpaceX IPO says about capital markets, whether AI spending can create disinflationary growth, why the consumer is still holding up, and what could challenge the current market bubble.

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Topics covered:

• Why IPOs are central to the purpose of public markets

• How Andy evaluates whether the SpaceX IPO worked

• Why issuers may want IPOs to trade higher after pricing

• The shift from stock buybacks to new equity issuance

• Why AI CapEx is changing the supply and demand for shares

• How hyperscaler spending is being funded through cash, bonds, and stock

• The economic test for whether AI investment pays off

• Disinflationary productivity growth versus labor displacement

• Why the current economy is still supported by consumption

• The role of wealth effects and consumer dissaving

• Why falling oil prices may not eliminate inflation pressure

• What Andy is watching in Fed policy, tariffs, AI CapEx, and equity issuance

• How Kevin Warsh could approach rates, QT, and the Fed balance sheet

Timestamps:
00:00 Intro and key themes
04:18 How Andy reads the SpaceX IPO
08:27 Why underwriters and regulators want IPOs to work
13:00 Why issuers may want IPOs to trade higher
17:05 From stock buybacks to new equity supply
21:06 The 600 to 700 billion dollar shift in share supply
26:42 The economic test for AI tokens
32:09 Can AI create disinflationary productivity growth?
38:10 Is AI CapEx holding up the economy?
41:00 Wealth effects, dissaving, and the consumer
45:52 Oil prices, war, and inflation
49:07 Jalen Brunson, incentives, and long-term value
52:00 Fed policy, tariffs, and what matters this summer
55:36 Kevin Warsh, QT, and the Fed balance sheet
58:42 Closing thoughts

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.

In this episode of The OPEX Effect, Jack Forehand and Brent Kochuba break down the market structure impact of the SpaceX IPO, options expiration, dealer gamma, volatility, and the next major setup for the S&P 500 and Nasdaq. They discuss why SpaceX may trade more on flows than fundamentals, how call buying could create a gamma squeeze, and why June OPEX, VIX expiration, FOMC, oil, Iran headlines, and index inclusion could all collide at once.

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Topics covered:

• Why SpaceX is a flows game at the start of trading

• How the SpaceX IPO could affect liquidity across mega cap tech stocks

• Why fundamentals may not matter when index flows and forced buying dominate

• The role of Nasdaq, Russell, and S&P 500 index decisions in SpaceX trading

• How options could create a gamma squeeze in SpaceX

• Why dealer hedging flows can push stocks higher or lower

• What June options expiration could mean for the S&P 500

• Why VIX expiration and FOMC create a key market window

• How Core1M signaled the recent volatility spasm

• Why expensive calls, not put buying, drove the recent market stress

• The key S&P 500 levels Brent is watching into OPEX

• How oil, rates, inflation, and Fed policy could affect market volatility

• Why Nasdaq options pricing is diverging from the S&P 500

• How SpaceX index inclusion could widen the gap between Nasdaq and the S&P

• What would make Brent add protection or look for another short-term market correction

Timestamps:

00:00 Opening clips and the SpaceX flow setup
05:27 Elon Musk net worth after the SpaceX IPO
07:13 SpaceX, liquidity, Mag Seven selling, and index demand
12:48 Why SpaceX may trade on flows before fundamentals
17:59 What options trading could change for SpaceX
22:05 How call buying can create a gamma squeeze
28:24 Why June OPEX matters more than a normal expiration
33:55 VIX expiration, FOMC, and market path dependency
37:20 The Core1M signal and the recent volatility spasm
41:22 The S&P 500 gamma map and key risk levels
46:25 Why expensive calls drove the market stress
50:14 Oil, rates, inflation, and the Fed setup
57:03 The JPMorgan collar and the 6900 to 7000 support zone
58:32 Nasdaq versus S&P 500 after the SpaceX IPO
01:03:14 Brent’s summary, SpaceX gamma squeeze risk, and the next market setup

Mike Green joins Excess Returns to explain why passive investing, index construction, SpaceX, AI IPOs and mega-cap concentration may be changing how the stock market actually works. We discuss how passive flows can affect prices, why AI earnings may be more circular than investors think, what could break the current market narrative, and why the economy feels much weaker for many households than the headline data suggests.

Michael Green Twitter
https://x.com/profplum99

Simplify Asset Management
https://www.simplify.us/

Topics covered:

• Why the SpaceX IPO has turned passive investing into a mainstream market structure debate

• How index committees and passive flows can influence individual stocks

• Why low float, Nasdaq demand and passive buying could create unusual IPO dynamics

• How new AI-related equity issuance could change the supply-demand balance in the stock market

• The research behind passive flows, market impact and cap-weight concentration

• Why Mike thinks passive buying explains more of mega-cap outperformance than AI fundamentals

• The circular financing risk in AI, including Nvidia, CoreWeave, Google and Anthropic

• Why buy-the-dip flows, ETFs, CTAs and vol control funds matter for market direction

• How headline economic data can miss household stress, second jobs and lost purchasing power

• What Mike is watching to see whether the AI trade and market narrative are starting to break

• Why AI may be hugely valuable to consumers before it creates major business productivity gains

• How companies may eventually redesign business models around AI rather than simply automate tasks

• Why SpaceX wealth creation could seed the next generation of competitors

• How inflation, gasoline prices, low savings and a K-shaped economy are affecting consumers

Timestamps:

00:00 Passive indices, AI profits and why this market feels different
04:07 Why SpaceX changed the passive investing debate
08:01 The research behind passive flows and market impact
12:16 Why Mike thinks passive flows explain mega-cap strength
16:18 ETF flows, buy-the-dip behavior and bubble dynamics
20:28 Why economic data can miss household stress
25:13 Bubble warnings, CAPE and what investors may be ignoring
29:17 AI as a consumer advice engine versus a productivity revolution
33:29 How businesses may redesign themselves around AI
37:51 Why IPO wealth may create the next generation of competitors
42:06 Mike Green’s upcoming book on passive investing and market structure

AI could become the next general purpose technology, reshaping economic growth, inflation, interest rates and portfolio construction. Vanguard Global Chief Economist Joe Davis joins Excess Returns to explain why AI, demographics, fiscal deficits and globalization may define the next decade for investors, and why the biggest market winners may eventually come from outside the technology sector.

Coming into View: How AI and Other Megatrends Will Shape Your Investmentshttps://amzn.to/4v8L7OfVanguard Megatrends Research Hubhttps://explore.vanguard.com/megatrends.html

Topics Covered:

AI as a potential general purpose technology
Why long-term megatrends can affect short-term market returns
The four forces shaping the next decade: technology, demographics, deficits and globalization
Why Vanguard believes AI could lift U.S. growth above consensus
How AI could offset aging demographics and rising debt
Why great technology cycles often include major stock market drawdowns
The difference between AI automation, augmentation and new industry creation
Why the next AI winners may be in healthcare, financial services and other service industries
The risk that AI disappoints and fiscal deficits dominate the outlook
How tariffs, oil prices and AI investment interact in the macro outlook
What AI could mean for 60/40 portfolios, value stocks, fixed income and international markets
Joe Davis’ lesson for average investors: the power of compounding

Timestamps:

00:00 Why every great technology eventually faces a market drawdown
04:28 The four megatrends shaping the economy
08:56 How megatrends explain short-term S&P 500 moves
13:22 Why AI may be in the 1996 or 1997 stage
18:29 Where the next AI winners could emerge
21:44 AI, fiscal deficits and the danger of kicking the can
26:17 Why 2% growth and 2% inflation may be unlikely
30:31 How to tell if AI augmentation is really working
33:19 AI, globalization and which countries could benefit
38:14 Why investors need a multi-factor macro scorecard
41:23 What AI means for the 60/40 portfolio
44:12 Joe Davis on investing, compounding and Vanguard’s megatrends research

On the latest Click Beta, Matt Zeigler, Dave Nadig and Cameron Dawson discuss what could happen when SpaceX goes public and why this IPO may be as much a market structure problem as a valuation problem.

They break down the potential impact of a $1.75 trillion IPO, 100 times sales, a small free float, forced index buying, passive fund flows, options trading, bubble dynamics and what advisors should tell clients who want SpaceX exposure.

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Dave Nadig
https://x.com/davenadig

Cameron Dawson
https://x.com/CameronDawson

Topics Covered:

• Why the SpaceX IPO could create a chaotic first 30 days of trading

• How 100 times sales, no earnings and a $1.75 trillion valuation change the discussion

• Why pre-IPO access, lockups, fees and vehicle structure matter for investors

• How Palantir and Tesla frame the debate over extreme growth stock valuations

• Why SpaceX could create unusual supply and demand pressure in the public market

• How options trading, Nasdaq 100 inclusion and accelerated index rules could affect price discovery

• Why free float matters and how a 4 percent float could become a 12 percent index adjustment

• How much passive demand might chase SpaceX shares after the IPO

• What the bubble triangle says about technology, speculation, money and credit

• Why real earnings do not disprove a technology-driven bubble

• How liquidity, private credit gates, IPO supply and buybacks could shape the next phase of the market

• Why advisors need to help clients think through sizing, exit plans and safe access

• Peak season travel, TikTok monoculture, Ocean City, Coheed and Cambria, and the lost art of CDs and mixtapes

Timestamps:

00:00 Why the first 30 days could be chaotic

04:00 Why everyone is talking about the SpaceX IPO

09:23 The market structure problem behind SpaceX

13:00 Options trading, small indexes and forced buying

17:18 How much passive demand could chase SpaceX

21:27 Why real earnings do not disprove a bubble

25:43 Liquidity, IPO supply and why bubbles can keep going

29:13 What advisors tell clients who want SpaceX

33:17 Fake SPVs, scams and safe access

37:39 Ocean City, peak season and Jersey Shore memories

41:39 Coheed and Cambria opening for Shinedown

45:44 Summer concerts, Bikini Kill, Weezer and The Shins

46:25 Cleaning out old cars and rediscovering CDs

50:10 Old iPods, underwater MP3 players and forgotten playlists

53:20 Mixtapes, liner notes and physical music culture

55:08 Where to find Dave Nadig and Cameron Dawson