The MOST Important Thing

Is the AI bubble about to burst? Contrarian investor Jesse Felder joins Dr. Alan O’Sullivan on The MOST Important Thing to examine NVIDIA, Big Tech’s AI spending boom, rising US Treasury yields, stubborn inflation, and the investment case for gold and energy stocks.

In Part 1, Jesse explains why data-centre opposition and tighter credit markets could threaten the AI infrastructure build-out. They discuss hyperscaler earnings, GPU obsolescence, the risk of overinvestment in AI compute, and why Jesse believes NVIDIA’s share-price chart is signalling a change in momentum.

The conversation then turns to the US 10-year Treasury yield, the possibility of a longer-lasting inflationary regime, and what higher interest rates mean for stock-market valuations. Jesse also makes the case for real assets, exploring gold, commodities, oil and gas producers, the energy capital cycle, and whether an economic slowdown could derail the energy supercycle.

From AI valuations and semiconductor stocks to gold, oil prices and inflation protection, this is a wide-ranging discussion of where investors may be underestimating risk — and overlooking opportunity.

CHAPTERS

00:00  Introduction: Jesse Felder returns

01:00  US elections, inflation and the cost of living

04:05  Data-centre backlash and semiconductor demand

06:43  Hyperscaler earnings, AI capex and credit risk

09:55  GPU obsolescence and the future of AI compute

13:41  Three charts: NVIDIA, Treasury yields and energy

17:25  Rising interest rates and financial-market stress

21:46  A new inflation and interest-rate regime?

25:13  Protecting purchasing power in an inflationary world

26:15  Gold, real assets and the energy supercycle

31:42  Could energy hold up in a recession?

37:24  Physical gold, funds and investor sentiment

CONNECT & FOLLOW

The Felder Report: https://thefelderreport.com

Subscribe to The MOST Important Thing for interviews on investing, financial markets, global macro, asset allocation and long-term wealth.

DISCLAIMER

For education and discussion only. Nothing in this video is personal financial advice. Views expressed by guests are their own.

Is the global economy entering a new inflationary era — and could rising government debt make the next downturn even harder to manage?

In this conversation with Dr Lacy Hunt, Alan O’Sullivan examines the forces reshaping the economic outlook: the reversal of globalization, accelerating money supply growth, slowing productivity and labour-force growth, and the escalating cost of servicing government debt.

Dr Hunt introduces what he calls “episodes of the Keynesian Endgame”: a situation in which deficits persist through both recessions and expansions, while rising interest expenses put increasing pressure on fiscal policy. He also explains why the US dollar’s reserve-currency status offers protection — but not necessarily indefinitely.

The discussion turns to what this environment means for investors: inflation expectations, Treasury bills and long-term bonds, the risks posed by heavy AI-related investment, and why an economic slowdown may no longer produce the bond-market response investors have historically expected.

In this episode:

• The shift from globalisation to reshoring and its inflationary implications
• Money supply, the velocity of money and the Fed’s inflation target
• Government deficits, rising interest costs and the “Keynesian Endgame”
• The dollar’s reserve-currency advantage and international capital flows
• Inflation expectations, purchasing power and the outlook for bonds
• AI investment, economic growth and potential financial-market vulnerabilities
• Why economic theories must evolve as the evidence changes

Dr Lacy Hunt is Executive Vice President and Chief Economist at Hoisington Investment Management. He joins Alan O’Sullivan for a discussion of the long-term economic forces that matter far beyond the daily headlines.

Subscribe to The MOST Important Thing for conversations with leading thinkers in economics, investing and business.

Disclaimer: This conversation is for education and information only and does not constitute financial or investment advice. Views expressed are those of the speakers.

#LacyHunt #Inflation #Economics #FederalReserve #GovernmentDebt #Investing

WARNING - This episode should be viewed given the educational content and graphs referred to during the episode.

Anyone tells you they "know" what the market is going to do is as dangerous as a one-legged man in an arse-kicking competition.

We prefer an intelligent framework based on probabilities, valuation and risk management. The core of this is humility.

Is the traditional 60/40 portfolio still fit for purpose? What should investors look for in a systematic fund manager? And how is AI changing the careers of people working in finance?

In Part 2 of The Most Important Thing, Alan O’Sullivan continues his conversation with Dr. Philip Seager, Head of Portfolio Strategy at Capital Fund Management (CFM).

Beginning with the 2008 financial crisis, Philip explains why trend-following strategies stood out during a prolonged market downturn and how investors might think about allocations to genuinely diversifying strategies. They discuss the changing correlation between stocks and bonds, inflationary regimes, the limits of private equity as a diversifier, and why a manager’s investment process may be more revealing than a recent performance chart.

The discussion then turns to CFM’s scientific research culture and the profound impact of artificial intelligence on quantitative finance. Philip describes how AI-assisted coding and prompt-based research are transforming daily workflows, while stressing the continuing importance of domain expertise, critical thinking and statistical judgement.

To close, they explore the influence of physics on financial research, recommended reading, the wisdom of crowds and how market flows shape prices.

Topics include managed futures, the 2008 crisis, portfolio construction, manager selection, inflation, stocks and bonds, AI in finance, scientific research and behavioural markets.

Explore CFM and the resources discussed:

Capital Fund Management on LinkedIn

https://www.linkedin.com/company/capital-fund-management/

Any statements regarding market events, future events or other similar statements constitute only subjective views, are based upon expectations or beliefs, involve inherent risks and uncertainties and should therefore not be relied on. Future evidence and actual results could differ materially from those set forth, contemplated by or underlying these statements. In light of these risks and uncertainties, there can be no assurance that these statements are or will prove to be accurate or complete in any way.

All opinions and estimates included in this document constitute judgments as at the date of this document and are subject to change without notice. CFM accepts no liability for any inaccurate, incomplete or omitted information of any kind or any losses caused by using this information. CFM does not give any representation or warranty as to the reliability or accuracy of the information contained in this document.

The information provided in this document is general information only and does not constitute investment or other advice. The content of this document does not constitute an offer or solicitation to subscribe for any security or interest.

The interviewer selected the graphs and images; CFM was not involved in that decision.

Can artificial intelligence outperform traditional fund managers? And how much of successful investing is genuine skill rather than market luck?

In Part 1 of The Most Important Thing, Alan O’Sullivan speaks with Dr. Philip Seager, Head of Portfolio Strategy at Capital Fund Management (CFM), about the science behind quantitative investing and what it means for constructing more resilient portfolios.

Drawing on his background in experimental particle physics and more than 25 years at CFM, Philip explains how systematic investors use large datasets, statistical testing and increasingly AI to identify investment opportunities. He also explores why impressive backtests can be misleading, how market beta can be mistaken for manager skill, and why traditional diversification may fail investors when they need it most.

The conversation examines trend following as a potential source of genuine diversification, including its behaviour during prolonged equity drawdowns, the limitations exposed by rapid market reversals, and the difference between trend following and buying downside insurance.

Topics include quantitative versus discretionary investing, alternative data, AI and neural networks, overfitting, active management, the 60/40 portfolio, trend following and crisis alpha.

Read Philip’s Financial Times article referenced in the conversation:

Philip Seager — Financial Times: Beating the Market Is Even Harder Than You Think

https://www.ft.com/content/299b4cd0-9ce8-431e-aaec-3f7b8d704910

Capital Fund Management on LinkedIn

https://www.linkedin.com/company/capital-fund-management/

Additional resource

https://share.google/7AWCMqojgoG1tyZpc

The Most Important Thing Podcast  |  Hosted by Alan O’Sullivan

Important Disclaimer

Any statements regarding market events, future events or other similar statements constitute only subjective views, are based upon expectations or beliefs, involve inherent risks and uncertainties and should therefore not be relied on. Future evidence and actual results could differ materially from those set forth, contemplated by or underlying these statements. In light of these risks and uncertainties, there can be no assurance that these statements are or will prove to be accurate or complete in any way. All opinions and estimates included in this document constitute judgments as at the date of this document and are subject to change without notice. CFM accepts no liability for any inaccurate, incomplete or omitted information of any kind or any losses caused by using this information. CFM does not give any representation or warranty as to the reliability or accuracy of the information contained in this document. The information provided in this document is general information only and does not constitute investment or other advice. The content of this document does not constitute an offer or solicitation to subscribe for any security or interest. The interviewer selected the graphs and images; CFM was not involved in that decision. 

In this episode of The Long & Short, Ivan Yates and Dr Alan O’Sullivan revisit the Wall Street Crash of 1929, the 2008 global financial crisis and today’s concerns around AI valuations, defence stocks and changing investment regimes. From speculative bubbles to excessive private debt, they explore why crashes happen, what investors can learn from previous cycles, and whether the old investment playbook still works.

Featuring insights from previous conversations with financial historian Edward Chancellor, economist Professor Steve Keen and investor Jesse Felder, alongside an additional perspective from financial historian Professor Russell Napier.

Topics covered: historical bubbles and market psychology; the role of private debt in 2008; falling interest rates and the shift towards real assets; bull and bear markets; AI and dot-com comparisons; contrarian positioning; economic cycles; and lessons from Ireland’s financial history.

Previous guest interviews featured in this episode:

Edward Chancellor — The Price of Time and historical market bubbles

Professor Steve Keen — How he predicted the 2008 crash

Jesse Felder — The market paradigm shift since the 1980s

Professor Russell Napier — The New Rules of Money (Part 1)

Subscribe to The MOST Important Thing for interviews and commentary on markets, investing, economics and geopolitics.

For information and educational purposes only. Nothing in this episode constitutes personal investment advice. Investments involve risk, including possible loss of capital.

#FinancialMarkets #Investing #MarketHistory #FinancialCrisis #AI #Economics

Are Bonds a Buy?

This episode explores whether bonds are becoming attractive again amid sticky inflation, rising fiscal concerns, and the AI spending boom. Alan argues that bond markets are pricing in deeper risks, but the best opportunity to buy may come after a significant sell-off in US stocks.

Key topics

• Why Treasury yields have fallen despite hotter-than-expected inflation
• How public debt, fiscal deficits, and bond-market volatility may affect equities
• Why corporate bond yields could be an early warning for stocks
• How falling real yields could make gold more attractive
• Europe’s weak growth outlook and pressure on the euro
• Inflation, interest rates, and the resilient US economy
• Why Alan’s verdict on bonds is “not yet”—and what he’s watching next

Timestamps

00:00 — Are bonds a buy?
 01:56 — Falling yields despite hot inflation
 03:32 — The potential link between an equity correction and a bond-buying opportunity
 05:31 — Debt, deficits, and bond-market concerns
 06:21 — Real yields and gold
 07:39 — Europe’s growth and debt concerns
 08:59 — Inflation and the possibility of more Fed hikes
 13:31 — Why the US economy still looks resilient
 14:46 — Final verdict on bonds

Will artificial intelligence transform economic growth—or are expectations running far ahead of reality? And what does the rise of AI mean for graduates, white-collar professionals and the future of work?

In Part 2 of his conversation with Dr Alan O’Sullivan, renowned economist and Northwestern University professor Robert J. Gordon challenges predictions of limitless AI-driven growth. He explains why many human-centred and physical jobs remain difficult to automate, while roles involving computer-based tasks could face significant disruption.

The discussion also examines the economics behind the AI investment boom: who will ultimately generate the revenue needed to justify enormous spending on data centres, chips and electricity? Professor Gordon considers the implications for productivity, education and independent thinking, drawing on his experience teaching university students.

Turning to the longer-term outlook, Gordon identifies population ageing and declining fertility as central challenges to economic growth. He discusses retirement ages, immigration, inequality and why the labour market may increasingly favour skilled trades over traditional graduate careers.

They close with a recommendation of Brad DeLong’s Slouching Towards Utopia and Gordon’s advice to young people planning a career in an AI-driven economy.

• AI, automation and the future of white-collar employment
• Productivity, technological progress and the return on AI investment
• University education, examinations and AI-generated coursework
• Demographics, fertility, retirement and long-term economic growth
• Immigration, income inequality and skilled-trades shortages
• Career advice and book recommendations

Robert Gordon TED Talk — The death of innovation, the end of growth  https://www.youtube.com/watch?v=PYHd7rpOTe8&pp=0gcJCR0AztywvtLA

Subscribe to The MOST Important Thing for conversations on economics, investing, wealth and the forces shaping our future.

Disclaimer: This episode is for general information and discussion only and does not constitute financial or investment advice.

Is gold the ultimate portfolio insurance — or has its extraordinary rise made it too risky? And could a changing global monetary order reshape how we invest?

In this episode of The MOST Important Thing, Dr Alan O’Sullivan and Ivan Yates examine gold’s role in a diversified portfolio, the central-bank buying driving demand and the question of trust in the US dollar. They also discuss silver, copper, uranium, oil and other real assets, before weighing the opportunities and risks of Bitcoin.

Drawing on conversations with Ronnie Stoeferle, Russell Napier and Justin Huhn, Alan explores what a potential monetary reset could mean for investors — and why portfolio diversification may matter more than ever.

Previous guest interviews referenced in this episode:

Ronnie Stoeferle — Gold, Trust and the Monetary System — https://podcasts.apple.com/ie/podcast/ep2-why-gold-is-the-best-hedge-against-a/id1876953002?i=1000751266217

Justin Huhn — Uranium and Nuclear Energy — https://podcastrex.com/shows/the-most-important-thing/uraniums-long-runway-china-scarcity-the-nuclear-investment-opportunity

Russell Napier — Gold and the Monetary Reset — https://open.spotify.com/episode/1Aqq65d972ehdcjQOAtxl1

Topics include: gold allocation and volatility; central-bank reserves; inflation and commodities; nuclear energy; Bitcoin as a store of value; and the future of the global monetary system.

Subscribe for more insights from The MOST Important Thing. Available on YouTube, Spotify and Apple Podcasts.

IMPORTANT - PLEASE READ

For information and educational purposes only. Nothing in this episode constitutes personal investment advice.

Professor Robert J. Gordon, one of the world’s leading economists on productivity and long-run economic growth, joins Alan O’Sullivan to examine why the extraordinary gains of the past two centuries may be becoming harder to repeat.

In Part 1, Gordon explains the difference between economic growth and productivity, traces the three major industrial revolutions, and discusses why the period from 1920 to 1970 delivered such exceptional productivity growth. He also revisits the central thesis of The Rise and Fall of American Growth and explains why productivity growth has slowed since the mid-2000s.

The conversation then turns to the major headwinds facing advanced economies: ageing populations, rising public debt, inequality and the diminishing contribution of education to productivity. Gordon also discusses the contrast between mature economies and faster-growing developing countries, as well as the role of energy, electrification and technology in future growth.

Topics include:

• Economic growth vs productivity

• The three industrial revolutions

• Why 1920–1970 was an exceptional period for productivity

• The post-2005 productivity slowdown

• Demographics and ageing populations

• Government debt and interest rates

• Inequality and living standards

• Education and graduate underemployment

• Growth in China, India and the developing world

• Energy, electrification and the transition away from fossil fuels

Part 2 continues the discussion with artificial intelligence, white-collar employment, education, demographics, retirement, immigration and advice for young people entering the labour market.

Ted talk: https://www.youtube.com/watch?v=PYHd7rpOTe8

Amazon UK – Robert J. Gordon, The Rise and Fall of American Growth