Excess Returns

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.
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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