Exceptionalism Is Ending. New Winners Are Rising | Olga Bitel on the $2 Trillion Opportunity

In this episode, William Blair Global Strategist Olga Bitel joins us to unpack her “Perpetual Growth Machine” framework and what it means for investors navigating AI, tariffs, inflation volatility, market concentration, and a shifting global order. We dig into why growth often emerges from solving problems, how monopolies can stunt future innovation, where AI’s productivity dividends could accrue, and why she sees the next decade’s best opportunities outside the United States. Olga also walks through the risks she’s watching, why facts change faster than narratives, and practical ways to connect top-down insights with bottom-up research.Topics coveredThe Perpetual Growth Machine: why needs spark innovation and growth, and how investors can spot it earlyWhy monopolies look great to investors but hurt long-term growth and innovationAI as a general purpose technology and the scale of potential productivity savingsHousing affordability, incomes, and policy bottlenecks through the PGM lensHow firms are actually adopting AI and how faster data changes research cadenceEurope’s defense build-out and the rise of national champions and small-cap innovatorsInterpreting market concentration and what it signals about competitionInflation oscillation, policy mix, and why the Fed’s tools have limitsTariffs as a regressive tax and how costs pass through to consumers over timeUS exceptionalism narrowing and why ex-US markets may lead in the coming cycleThe Draghi report and tearing down barriers inside the EU single marketComparing late-1990s tech to today’s AI build-out and who the next leaders may beGrowth vs. value: focusing on sustained profit inflections, not cheapness aloneUsing stakeholder analysis to link macro themes to bottom-up stock workBiggest opportunities: Japan, Korea, Europe, select emerging markets, and parts of the Middle EastBiggest risk: a breakdown in the global order amid US-China tensionsClosing lessons: stay curious, stay nimble, question narratives, track the factsTimestamps00:00 Introduction and Olga’s role at William Blair02:49 The Perpetual Growth Machine explained06:24 Policy bottlenecks, incentives, and growth09:32 AI as a general purpose technology and productivity math11:53 Practical AI adoption inside investment firms15:06 Where PGM points to opportunity right now16:26 Europe’s defense spending and emerging winners19:02 Macro setup and consumer health20:42 Inflation today and what’s changed under the hood22:46 The Fed’s dilemma and limits of monetary policy25:00 Tariffs 101: who pays and how it shows up28:55 Early evidence in goods prices29:41 US exceptionalism vs. the rest of the world31:00 The Draghi report and a real EU single market33:11 Can Europe and others catch up in tech?36:15 EU financial services barriers and capital deployment37:07 Portfolio implications: why look ex-US39:10 Late-1990s tech vs. today’s AI cycle41:20 Concentration risk and competition policy42:26 Value vs. growth through the PGM lens44:48 Base rates, sustaining growth, and churn at the top49:33 Marrying macro themes with bottom-up research51:08 Firsthand observation vs. headline narratives52:20 Biggest opportunities across regions53:00 Middle East changes and new listings54:48 Biggest risk: global order and US-China tensions55:36 Parting advice for investors

Ned Davis Research’s Chief Global Investment Strategist Tim Hayes joins us to break down NDR’s “360°” weight-of-the-evidence framework—how price, breadth, sentiment, macro and valuation fit together—and what those signals are saying right now. We dig into why he still classifies this as a secular bull market with rising secular-bear risks, how to separate real breadth thrusts from dead-cat bounces, the evolving bond/equity correlation, mega-cap concentration risk, the case for value/EM in a defensively rotating tape, and why gold’s secular and cyclical trends remain compelling. You’ll also hear how NDR allocates across stocks, bonds, cash (and gold), and Tim’s timeless lesson for investors: stay objective, disciplined, and flexible.Topics CoveredNDR’s 360° process: price + sentiment + macro + valuation, combined via equal-weighted composites (“weight of the evidence”)How to use breadth, put/call, and thrust signals without getting faked outSecular bull vs. secular bear: what would actually trigger the secular turnReading the bond market: why the stock/bond correlation flipped in 2022 and what a 10-year above approximately 5.0–5.25% could meanConcentration risk in mega-cap tech; implications for the U.S. vs. the rest of the worldWhere value, small caps, and EM can shine in defensive rotationsGold: drivers of the move, secular/cyclical setup, and role in a balanced allocationPractical allocation: when cash was king (2022), current market-weight posture, and sizing for gold“No Pets Allowed”: why aggregates beat single “pet” indicatorsUsing historical analogs carefully—and what to learn (and not learn) from themTim’s core lesson: you can’t forecast reliably—stay flexible and evidence-drivenTimestamps (YouTube Chapters)00:00 Don’t fight the tape—or the Fed (opening context)01:06 Intro and why NDR’s process beats single charts02:58 NDR’s 360° framework and composite models05:31 Indicators that matter: breadth, sentiment, macro/valuation08:11 Asset-allocation model (stocks/bonds/cash) and real-time record09:27 “Secular bull intact; secular-bear risk rising” explained13:04 What counts as a secular bear (’66–’82, 2000–’09)15:05 Tightening vs. easing cycles and thrust reliability16:22 What a breadth thrust actually looks like19:55 From sentiment extremes to 50/200-day confirmation20:06 Bonds and stocks: the correlation flip since 202222:47 Duration, rate-cut hopes, and why cash led in 202224:02 Mega-cap concentration risk—paths from here27:23 Valuation: tech earnings yield at extremes; U.S. most expensive29:14 Where value/small caps/EM can win; China’s role in EM33:25 Gold’s standout year—drivers and positioning36:16 Gold’s secular and cyclical bull case37:13 How much gold belongs in a balanced portfolio40:32 “No Pets Allowed”: trust aggregates, not single signals47:16 Bear-watch vs. rally-watch signals in 202549:02 Using historical analogs without overfitting51:00 NDR culture: objectivity over narratives53:41 Why independence matters53:59 Two closing questions: contrarian belief and one lesson59:03 Where to find Tim and NDR; disclaimer

In this episode of Excess Returns, we sit down with Brent Donnelly, veteran trader, author, and president of Spectra Markets, to dive deep into macro markets, trading philosophy, the role of the Fed, and how AI is changing the way traders operate. Brent shares insights from his decades in FX and macro trading, his flexible approach to positioning, and the lessons he’s learned about risk management, narratives, and humility in markets.Topics Covered:Why the Fed is becoming more political and what that means for marketsThe “re-acceleration that wasn’t” and lessons from quickly abandoning tradesHow to structure trades like gold calls and TLT puts for asymmetric payoffFX as the “exhaust valve” for tariffs and global capital flowsCanada’s housing bubble and CAD vulnerabilitiesInflation targeting, bond vigilantes, and the Fed’s credibilityAvoiding the trap of perma-bearishness and using stop-losses as forced humilityThe importance of imagination in regime changes and Fed forecast errorsHow Brent is using LLMs and AI to trade headlines, structure trades, and analyze patternsTrading bubble names with options and risk-aware structuresLessons on flexibility, humility, and embracing uncertainty in marketsTimestamps:00:00 – Fed independence and political pressure02:00 – The failed “re-acceleration” thesis06:00 – Structuring gold calls and TLT puts14:00 – FX as the exhaust valve for tariffs20:50 – Canada’s housing market and CAD risks26:30 – The Fed as a political institution32:40 – Inflation targeting and 3% as the new 2%35:20 – Avoiding perma-bear bias and using stop-losses42:00 – The Fed dinner story and the humility of wrong forecasts46:30 – Using LLMs and AI in trading53:00 – Shorting bubble names with call spreads56:00 – Cheat sheets and pattern recognition with AI59:30 – Lessons on flexibility and humility in trading1:02:15 – Closing thoughts and where to follow Brent

In this episode of Excess Returns, we welcome back Cullen Roche of Discipline Funds for an in-depth conversation on the economy, markets, demographics, AI, and investing frameworks. Cullen cuts through the noise to explain the real forces shaping inflation, interest rates, the role of the Federal Reserve, and why he believes the U.S. faces more disinflationary pressures than inflationary risks. We also dive into his “defined duration” investing framework and preview his upcoming work on portfolio strategies.Topics CoveredWhy fears of a looming debt crisis may be misplacedInflation outlook, tariffs, and the Fed’s “soft landing” challengeThe importance of Fed independence and risks of politicizationImmigration, demographics, and long-term disinflationary trendsHow AI is reshaping productivity, inequality, and the job marketDefined Duration Investing and asset-liability matchingLessons from all-weather strategies and the Permanent PortfolioCullen’s “Forward Cap Portfolio” and future of global marketsTimestamps00:00 – Cullen on debt crisis fears02:32 – State of the U.S. economy post-COVID05:18 – Inflation, tariffs, and shelter costs10:25 – Soft landing vs. rolling recessions14:07 – The Fed’s role and impossible job19:25 – National debt and Ray Dalio’s crisis warning27:52 – AI boom and disinflationary forces31:01 – Immigration, demographics, and inflation37:23 – Aging population and wealth inequality43:00 – How AI impacts productivity and jobs52:00 – Defined Duration Investing explained1:01:34 – Portfolio strategies: Permanent Portfolio & risk parity1:03:54 – Cullen’s “Forward Cap Portfolio”1:06:31 – Closing thoughts and future projects

In this episode of Excess Returns, we sit down with EricPachman of Bancreek Capital to explore the intersection of data, economics, andinvesting. Eric shares his unique journey from the corporate world tohealthcare transparency and ultimately to building a data-driven investmentfirm rooted in information theory. We dive deep into employment trends,healthcare’s role in the economy, immigration, inflation, and how hissystematic process identifies companies with the endurance to thrive. ### Topics Covered * Eric’s unconventional career path: from Morgan Stanley andExxonMobil to founding 46Brooklyn and joining Band Creek * How personal experiences led him to tackle healthcaretransparency and drug pricing reform * The role of **information theory** in investing and thefoundation of Band Creek’s systematic process * Building powerful data visualizations to understand labormarkets, inflation, and structural economic changes * Why healthcare dominates recent U.S. job growth and therisks of overreliance on one sector * The impact of immigration on labor force growth andstructural inflation * Key drivers of inflation and how to interpret CPI and PCEdata * How Band Creek applies systematic endurance and the KellyCriterion to equity selection * Sector exposures and lessons learned from applyingdata-driven models internationally * Eric’s views on cognitive biases, why most investors can’treliably beat the market, and the power of data analysis

In this episode of Excess Returns, we welcome back Cole Smead of Smead Capital for a wide-ranging conversation on markets, history, and the principles of value investing. Cole shares his perspectives on fiscal largesse, inflation, passive flows, energy markets, U.S. exceptionalism, and the timeless lessons of Buffett and Munger. His insights bridge economic history with today’s market realities, giving investors a framework to think about risk, capital allocation, and opportunity costs.Deficits, monetary policy, and why recessions are hard to find todayInflation dynamics and lessons from the 1960s and 1970sThe U.S. government’s role in markets (Intel stake, big government policies)American exceptionalism vs. global capital allocation improvementsEarnings quality and the divergence between accounting and economic profitsPassive investing flows, weak competition, and investor behaviorEnergy investing: from fracking bust to efficiency and capital disciplineComparing the AI boom with past manias and capital cyclesSmead Capital’s investment process and evaluating “wonderful companies”Buffett, Munger, and the lessons of asset-light vs. capital-intensive businessesClosing insights: why returns on capital matter more than EPS or revenue00:00 – Opening quote and fiscal deficits02:00 – Debt, inflation, and recession risks08:50 – Government stake in Intel & big government era12:15 – U.S. exceptionalism and arrogance17:30 – Earnings quality erosion in U.S. businesses24:00 – Passive flows and human behavior27:30 – Opportunities in energy investing34:00 – Energy buildout vs. AI boom38:00 – Smead Capital’s investment process44:00 – Lessons from Buffett and Munger51:00 – Standard closing question

In this episode of Excess Returns, we sit down with Brent Schutte, CIO of Northwestern Mutual, to discuss the current macro landscape and what it means for investors. Brent shares his balanced perspective on the Fed, inflation, tariffs, concentration risk in markets, and why diversification may be more important now than ever. With over 30 years of investing experience, Brent provides valuable lessons from past cycles that help put today’s environment in context.The Fed’s dual mandate and why both inflation and unemployment risks matterHow tariffs could reshape growth and inflation dynamicsMarket concentration and the dominance of the Magnificent SevenLessons from past cycles (1999 tech bubble, 2007 commodities, Japan in the 1980s)The role of diversification, including small/mid caps, international equities, and commoditiesActive vs. passive investing and how to evaluate managersRecession signals, rolling recessions, and hidden economic weaknessWhy humility and balance are essential in portfolio construction00:00 – Introduction & importance of diversification02:00 – The Fed’s mandate and tariffs’ impact on growth & inflation07:30 – Reaction to Powell’s Jackson Hole speech & Fed independence15:20 – Hidden recession, labor market signals & AI’s economic role20:30 – Reliability of recession indicators post-COVID26:00 – Tariffs, uncertainty & risks for investors28:40 – Market concentration and the Magnificent Seven34:00 – Rethinking diversification: 60/40, commodities, and international exposure41:20 – Lessons from past market cycles (Japan, dot-com, China, commodities)45:15 – Passive flows, active management, and evaluating skill vs. luck50:00 – Government stakes in companies (Intel discussion)52:00 – Standard closing questions & final lessons

In this episode of Excess Returns, we sit down with Shawn Gibson and Eric McArdle of Liquid Strategies to explore the rapidly growing world of option-based ETF strategies. With the rise of covered calls, buffered products, and hedged equity funds, it’s more important than ever for investors to separate smart solutions from risky marketing gimmicks. Shawn and Eric break down how their firm approaches overlays, income generation, and downside protection in a way that helps advisors and investors achieve better long-term outcomes.The evolution of options in ETFs and why adoption has acceleratedCommon flaws in covered call strategies and the risks investors missHow Liquid Strategies uses option overlays to add return, income, and downside protectionThe “Swiss Army knife” approach to using put spreads for multiple portfolio goalsThe importance of timeframe in option strategies and the debate around 0DTEWhy “high yield” products often just return investor capitalUsing options for true risk management and hedging vs. cosmetic protectionHow Liquid Strategies structures its ETF suite and interval fundsWhere hedged equity and bond overlays can serve as ballast in portfoliosStandard closing lessons for investors on staying invested and balancing risk00:01 – Introduction to Liquid Strategies and option-based ETFs02:34 – The rise of options in portfolios and industry evolution05:29 – Flaws in common options strategies08:19 – Covered calls: why they often disappoint12:00 – Balancing upside, downside, and income in overlays15:31 – What overlay strategies really mean20:19 – The “Swiss Army knife” of selling put spreads24:09 – Why timeframe matters and 0DTE options debate28:56 – How rates and volatility impact option overlays32:59 – The importance of systematic but flexible processes36:46 – High yield traps and returning investor capital43:04 – Using options for hedging and risk management46:47 – How advisors incorporate overlays into portfolios48:54 – ETFs vs. interval funds explained54:26 – Where overlays fit in today’s asset allocation57:55 – Closing lessons for investors

In this episode, Jim Paulsen of Paulsen Perspectives joins us to break down the state of the economy, the Fed’s policy stance, inflation risks, and what’s really happening beneath the surface of the stock market. Jim explains why the headline numbers often mask the struggles of many companies, why the S&P 500 looks stretched while much of the market remains undervalued, and what investors should watch as we head into the fall.Weak GDP growth, jobs slowdown, and why the U.S. may avoid recession despite sluggish dataHow fiscal policy, tariffs, the dollar, and monetary policy are shaping growthWhy corporate profits outside the S&P 500 remain below trend despite large-cap strengthThe Fed’s inflation obsession, the 2% target debate, and Jackson Hole policy shiftsJim’s case that inflation fears are overblown, with supporting data on CPI, PPI, wages, and expectationsHistorical supports for bull markets (liquidity, interest rates, dollar, confidence) and why they’ve been missingDivergence between S&P 500 valuations vs. the rest of the marketStructural disconnect between small/mid-caps and large-cap earningsThe opportunity for market broadening if the Fed eases policyWhat Jim will be watching heading into year-end00:00 – Economic growth slowdown and risks of recession02:00 – Policy backdrop: fiscal, monetary, dollar, and tariffs07:00 – Why recession may still be avoided15:00 – Powell, Jackson Hole, and the Fed’s inflation stance24:00 – Are inflation fears overblown?36:00 – Inflation surprise index and momentum37:00 – What supports bull markets (liquidity, rates, dollar, confidence)41:00 – Trendline analysis: S&P vs. broader market47:00 – Russell 2000 earnings vs. S&P 500 divergence52:00 – Corporate profits divergence and policy implications59:00 – What Jim is watching heading into year-end

In this episode of Excess Returns, we sit down with Mike Philbrick of Resolve Asset Management to discuss why the traditional 60/40 portfolio may no longer be enough, the role of “psychological commodities” like gold and Bitcoin, and how return stacking can change the way investors think about diversification. Mike shares insights on macro regimes, investor psychology, and why these once-fringe assets may now be foundational in building resilient portfolios.Topics Covered:Why the 1982–2020 period was a “golden era” for stocks and bondsHow today’s macro regime challenges traditional diversificationThe case for gold and Bitcoin as portfolio diversifiersDebt, inflation, and the shifting role of scarce assetsWhy lack of cash flows is a feature, not a bug, for gold & BitcoinGenerational differences in crypto adoption and advisor psychologyHow return stacking works and why it matters for investorsThe evolving regulatory and institutional landscape for BitcoinRisks: existential threats, quantum computing, policy changesTokenization, blockchain innovation, and the future of financeMike’s one lesson for the average investorTimestamps:00:00 – Why the 1982–2020 period was a golden era03:00 – Stocks, bonds, and changing correlations07:00 – Debt, inflation, and the macro backdrop10:00 – Gold, Bitcoin, and the cash flow debate14:20 – Why investors resist gold & Bitcoin19:00 – Generational divides and adoption rates23:00 – The evolution of gold and parallels to Bitcoin26:30 – What is Bitcoin? Digital gold vs growth asset28:30 – Career risk flipping: from owning to not owning32:00 – Behavioral biases and implementation frictions35:00 – Sizing matters: avoiding “all or nothing” mistakes36:00 – Market-cap weights and neutral allocations38:00 – Long-term real returns of gold & Bitcoin40:00 – Will Bitcoin and gold compete or complement?43:00 – Portfolio construction: risk-weighting gold & Bitcoin44:00 – Return stacking explained49:00 – Trend following and dead money periods51:00 – Risks: quantum computing, regulation, behavior56:00 – Tokenization, blockchain rails, and innovation1:01:13 – Mike’s one lesson for the average investor