Sticky Inflation. Cheap Volatility. A Less Predictable Fed. Why Aren’t Markets More Worried?

Former Fidelity president and MFS chairman Bob Pozen joins Excess Returns to discuss retirement investing, the risks in private credit, and why he favors a 90% stock and 10% cash portfolio for investors who can cover their living expenses without selling stocks.Drawing on decades in asset management, he shares lessons from Peter Lynch and Warren Buffett, explains why index funds are difficult to beat, and challenges conventional thinking about bonds, Social Security, and corporate earnings reporting.Bob Pozen's websitehttps://www.bobpozen.comFollow Bob Pozen on Twitterhttps://x.com/PozenResearch discussed:Consequences of Mandatory Quarterly Reporting: The U.K. Experiencehttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=2817120Rating Without Market Disciplinehttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=6859158Giving Life to Private (Rated) Credithttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=6857958Topics covered:What investors misunderstand about Peter Lynch and how fund liquidity shaped his approach versus Warren Buffett's.Lessons from leading Fidelity and rebuilding investor trust at MFS after its trading scandal.Why fees, fund size, and market efficiency make large-cap index funds difficult to beat.Private equity in 401(k) plans, liquidity constraints, and the problem with instant valuation markups.How private credit ratings and affiliated investments can obscure risks on insurance company balance sheets.Pozen's proposals for Social Security reform and the consequences of postponing difficult decisions.How automatic IRA enrollment could expand retirement savings access for workers without employer plans.Why Pozen favors a 90/10 portfolio for certain investors and how spending needs and inheritance goals affect allocation.Why quarterly financial reporting and quarterly earnings guidance deserve different treatment.The behavioral cost of chasing rallies and selling downturns, plus Pozen's work on AI and personal productivity.Timestamps:00:00 Peter Lynch, Warren Buffett, and staying the course05:27 Leading Fidelity and keeping stock funds invested11:03 Rebuilding trust at MFS after the trading scandal16:01 Why active managers struggle to beat index funds20:03 Private equity in 401(k)s and valuation concerns24:45 Private credit ratings and insurance company risks29:33 Regulatory gaps and affiliated insurance investments35:51 Social Security reform and the cost of waiting40:00 Automatic IRAs for workers without retirement plans44:09 The case for 90% stocks and 10% cash50:05 Why quarterly financial reporting matters55:00 The problem with precise quarterly earnings guidance59:00 Avoiding emotional market timing and AI productivity toolsLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

John Kerschner and Michael Contopoulos of Janus Henderson join Matt Zeigler to explain why persistent inflation and higher interest rates call for a different approach to bond investing. They explore short-duration bonds, AAA CLOs, mortgage-backed securities and how investors can rethink the fixed income allocation in a 60/40 portfolio.The conversation covers why traditional bond benchmarks may deliver too much interest rate risk for their yield, how ETFs expand access to securitized credit, and why the AI buildout could add to inflation rather than solve it.High-Conviction Views: The time for short-duration bondshttps://www.janushenderson.com/en-us/advisor/article/high-conviction-views-the-time-for-short-duration-bonds/Janus Henderson Investorshttps://www.janushenderson.com/en-us/advisor/Topics covered:Why deglobalization, fiscal spending and labor constraints could keep inflation and interest rates elevatedHow the Bloomberg US Aggregate Bond Index concentrates interest rate risk and leaves out large parts of the bond marketHow AAA CLOs work, why their coupons float, and why they are different from cashWhy tight corporate credit spreads may offer insufficient compensation for the risks investors takeThe three jobs of fixed income: safety, income and insuranceHow duration determines whether rising rates can wipe out a bond portfolio's incomeWhy bond ETF discounts can reflect price discovery when underlying bonds are not tradingHow Treasury borrowing and AI hyperscaler debt issuance affect bond supply and relative valueWhy AI capital spending, electricity demand, labor shortages and wealth effects can create inflationHow to rebuild the bond allocation around securitized credit, agency mortgages and the risks in your equity portfolioTimestamps:00:00 Rethinking bonds after years of disappointing returns04:28 Why the forces behind the bond bull market have changed10:09 The hidden interest rate risk in the Aggregate Bond Index14:53 AAA CLO ETFs: Floating income, structure and drawdown risk20:44 Treasury fiscal risk and tight corporate credit spreads26:16 Moving beyond set-and-forget bond funds30:45 How duration can overwhelm your bond yield36:27 Bond ETF liquidity and price discovery during stress41:11 Treasury borrowing, AI debt and securitized bond supply46:00 How hyperscaler borrowing can create credit market dislocations50:29 Four reasons AI could increase inflation55:56 Rebuilding the 40% bond allocation in a 60/40 portfolio01:02:00 Municipal bonds, recession protection and balancing equity riskLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

Jared Dillian joins Matt Zeigler to discuss The Awesome Portfolio, his approach to asset allocation built around 20% each in stocks, bonds, gold, cash, and real estate. They explore how diversification, annual rebalancing, and managing volatility can help investors reduce financial stress and build a portfolio they can stick with through bear markets.Jared explains his "life hedge" concept, challenges conventional wisdom about stock market drawdowns, and shares how losing half his net worth during the financial crisis shaped his investing philosophy.Buy The Awesome Portfolio Bookhttps://amzn.to/3Tf3of7Topics covered:Why Jared questions putting your entire life savings in the S&P 500How the Awesome Portfolio differs from Harry Browne's Permanent PortfolioIncluding home equity when measuring your overall asset allocationWhy volatility and frequent portfolio checking can lead to costly decisionsThe life hedge: protecting against your job and investments declining togetherWhy Jared disagrees with Charlie Munger about tolerating large drawdownsIndex concentration, changing correlations, and the limits of diversificationThe portfolio's historical backtests, including its losses in 2008 and 2022Annual rebalancing, cash reserves, inflation protection, and cryptocurrencyManaging FOMO and taking practical steps toward a less stressful retirement portfolioTimestamps:00:00 Jared Dillian's case against an all-stock portfolio06:33 The five equal allocations in the Awesome Portfolio11:07 Why "never sell" can become a behavioral trap15:26 The life hedge: when your paycheck and portfolio fall together20:38 Risk-adjusted returns and S&P 500 concentration24:49 Why rising interest rates hurt diversification in 202228:51 Backtested losses in 2008 and 202234:26 Combining home equity, retirement accounts, and savings38:58 Cryptocurrency, portfolio distractions, and FOMO44:31 The Death of Equities and lessons from past crashes48:44 How diversification could have changed Jared's financial crisis53:41 First steps toward reducing portfolio risk before retirementLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

Cameron Dawson and Dave Nadig join Matt Zeigler on Click Beta to explore how sports betting, leveraged ETFs and speculative behavior are blurring the line between gambling and investing. They also examine AI circular financing, hyperscaler cash flow and corporate disclosure, asking what investors might be missing beneath headline earnings. The conversation closes with baseball, music fandom and the challenge of learning from imperfect role models.Subscribe to Click Beta on Spotify⁠⁠⁠⁠Subscribe to Click Beta on Apple PodcastsTopics covered:Why sports betting is becoming a financial planning issue for Gen Z and wealthy familiesHow overconfidence and confusion between skill and luck encourage speculative behaviorWhy rapid market recoveries may reinforce risk-taking instead of teaching cautionHow recurring gambling losses can quietly undermine savings and wealth accumulationThe risks of placing gambling products alongside investments in brokerage appsLeveraged ETF innovation, hourly resets and competing approaches to investor protectionAI circular financing, payment terms, leases and opaque special purpose vehiclesHow one-time investment gains can distort headline earnings and future growth comparisonsWhy less frequent corporate reporting could favor investors with greater resourcesBaseball, emo music, Nirvana merchandise and what makes a meaningful role modelTimestamps:00:00 Sports betting, ETFs and the gambling economy05:24 Financial planning after crypto and gambling wins10:57 Why slow gambling losses can be harder to recognize16:55 Betting inside brokerage apps and regulatory backlash21:03 Gambling budgets and the next wave of leveraged ETFs25:04 AI financial shenanigans and hyperscaler cash flow29:25 Who benefits from less corporate disclosure?34:24 Discovering new passions in adulthood: Westerns and baseball38:30 Hot Topic, Nirvana sweatpants and cultural gatekeeping43:17 Can band merchandise introduce a new generation to music?47:26 Keith Morris and the search for meaningful role models51:34 Learning from imperfect people without idolizing themLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

Dan Niles joins Excess Returns to explain why he believes AI is a genuine industrial revolution and a bubble at the same time, with significant opportunity still ahead but growing risks in semiconductors, software, AI CapEx and credit markets. We discuss NVIDIA, OpenAI, Anthropic, China’s semiconductor push, data center politics, AI debt issuance, Fed policy and the downside protection framework Dan uses to navigate technology cycles.Dan Niles on Xhttps://x.com/DanielTNilesNiles Investment Managementhttps://www.nilesinvestmentmanagement.comTopics covered:Why AI can be both a transformational technology and an investment bubbleThe AI metrics Dan watches: token pricing, token growth, cloud revenue and operating marginsWhat the Situational Awareness unwind showed about leverage, forced selling and semiconductor volatilityWhy hyperscaler AI revenue can accelerate even as free cash flow deterioratesHow data center opposition, electricity constraints and politics could slow the AI buildoutWhere value may accrue across the AI stack and why Anthropic and Google could pressure OpenAIWhy China’s memory chip expansion could bring semiconductor cyclicality back faster than investors expectHow AI is reshaping software, including security, systems of record, gaming and usage-based pricingWhy the shift from free cash flow to debt financing matters for AI CapEx, Treasury yields and credit marketsDan’s long-short investment process, Fed outlook, market risk framework and emphasis on downside protectionTimestamps:00:00 Intro04:00 The signals Dan watches to know when the AI bubble is peaking09:12 AI ROI, hyperscaler profits and the problem with negative free cash flow14:19 Why data center politics could become a major risk to AI growth21:28 Why semiconductors are still cyclical and China could change the supply picture25:47 Why smart companies still get bubbles wrong and agentic AI could extend the cycle30:43 Is software the next major casualty of AI disruption?35:04 Why video games may be one of software’s safer AI categories39:23 Can markets absorb the surge in AI debt and equity issuance?45:28 Dan Niles’ long-short investment process and approach to downside protection50:45 Why Dan thinks the Fed could raise rates in September56:38 Why buy-and-hold can fail and downside protection mattersLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

Ben Hunt joins Matt Zeigler to explain why damaged Fed and Treasury credibility could matter just as four major risks converge across private credit, AI financing, oil and the consumer. They discuss financial repression, rising long-term rates, shadow banking and insurance risk, the AI CapEx growth engine, and why Hunt believes gold may benefit if policymakers keep trying to suppress the price of money.Subscribe on Spotify⁠⁠Subscribe on AppleTopics coveredWhy credibility is a teacup and why policy reputation is difficult to repair once it breaksHow the Fed's July rate decision changed the market narrative around inflation credibilityThe Four Horsemen: insurance and shadow banking losses, capital crowding out, the Iran war and oil inflation, and a stretched consumerWhy insurer-funded private credit could become a systemic risk if fraud and losses reach major institutionsHow government borrowing and AI data center financing could push long-term interest rates higherWhy fading fiscal stimulus, depleted savings and higher energy costs leave the consumer vulnerableWhat financial repression means and how the Fed and Treasury could try to cap rates and prevent major lossesWhy AI investment may be the key source of US economic growth if consumer activity stallsHow Perscient tracks narrative regimes, virality and shifts in common knowledge across marketsWhy gold can act as an inverse measure of trust in central banks and how Ben is positioning around the risksTimestamps00:00 Intro: Credibility is a Teacup04:00 How the July Fed decision damaged inflation credibility08:21 The Four Horsemen that could threaten the financial system14:00 Oil inflation, the Iran war and a stretched consumer18:39 What financial repression means23:20 How the Fed and Treasury could try to prevent a systemic crisis28:21 Why AI CapEx may be the only major source of GDP growth35:00 When lost Fed credibility became a confirmed market narrative39:34 Narrative stock versus flow and how bursts can move prices44:00 The return of bearish AI CapEx narratives48:09 Why private credit may be easier to can-kick than the 2008 crisisLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

This month on Last Call, Kevin Muir, Aahan Menon, Ben Hunt and Brent Kochuba break down the market through four lenses: macro, inflation data, narrative and options positioning. They examine whether midterm election volatility is underpriced, why inflation may be more demand-driven and persistent than headline data suggests, how the Fed's credibility has shifted under Kevin Warsh, and why options markets still look remarkably complacent.Follow Last Call on Spotify⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠Topics coveredWhy ending Fed forward guidance could create more uncertainty around interest rate decisionsKevin Muir's case that midterm election volatility is unusually cheapWhy seasonal volatility, low implied correlation and election risk may favor owning protectionAahan Menon on inflation breadth and why 70 to 80 percent of PCE components are above the Fed's 2 percent targetWhy demand-driven inflation may be stickier than supply-driven inflationHow oil shocks can feed into core inflation and increase pressure on the Fed to hikeBen Hunt on the sudden collapse in the Fed credibility narrative and why gold has respondedThe four risks facing the Fed and Treasury: oil, fading fiscal stimulus, insurance and private credit stress, and the long end of the Treasury curveBrent Kochuba on why implied volatility and put positioning show a market with very little fearNvidia options positioning, potential resistance near 250 to 275, and what dealer gamma says about the stockStanley Druckenmiller's AI-written Wall Street Journal op-ed and what AI-assisted writing means for investment thinkingTimestamps00:00 Midterms, inflation, Fed credibility and options complacency07:45 Kevin Muir on why midterm volatility may be underpriced11:55 Why this midterm could be more volatile than the options market expects16:36 Cheap volatility and how election risk could get repriced20:39 Inflation breadth and why the headline numbers miss the bigger problem25:43 Why cooling inflation data may hide persistent demand-driven pressure33:31 Ben Hunt on why the Fed credibility narrative suddenly reversed40:01 Four risks the Fed and Treasury cannot afford to ignore44:43 What the options market says after Jackson Hole49:10 Why Fed events can become an expensive options tax53:14 Why falling volatility could help stocks push toward new highs57:34 Druckenmiller, AI-written investment commentary and authenticity01:01:53 Why writing is part of thinking in an AI worldLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

Kevin Muir of The MacroTourist joins Matt Zeigler to break down the bond market, Scott Bessent's Treasury buybacks, the Treasury General Account, AI-driven earnings growth, leveraged ETF risk, gold and the U.S.-Canada trade fight. Kevin explains why rising long-term yields may be less surprising than investors think, how the AI capex boom can inflate earnings before costs show up, and why leveraged ETFs and policy uncertainty could make markets more fragile.Kevin Muir on Xhttps://x.com/kevinmuirThe MacroTouristhttps://themacrotourist.comTopics coveredWhy stronger nominal GDP, large fiscal deficits and record corporate issuance are pressuring long-term Treasury yieldsHow Scott Bessent's Treasury liquidity buybacks work and why investors are comparing them with QE and Operation TwistHow replacing long-dated Treasuries with T-bills could ultimately force reserve management purchases by the Federal ReserveWhy the Treasury General Account matters for liquidity and why attempts to manage the yield curve can distort market signalsJim Chanos's "earnings bubble" argument and how massive AI data-center capex can boost current earnings while costs are amortizedWhy stock prices can fall before forward earnings estimates roll over, and why retail investors may have an advantage over institutionsHow daily-reset leveraged ETFs create reflexive buying and selling and could amplify a semiconductor or single-stock selloffWhy Kevin is bullish on gold again, the role of People's Bank of China demand, and how he combines fundamentals with technical signalsWhy platinum below production cost caught his attention and what rolling mini-bubbles in gold, silver and AI say about investor psychologyWhat 2025 U.S.-Canada trade data says about autos, oil and gas, manufacturing, tariffs and the economic cost of policy uncertaintyTimestamps00:00 Intro06:31 Scott Bessent's Treasury buybacks and the bond market10:39 How T-bill issuance could lead to debt monetization18:25 The AI capex boom and the "earnings bubble"22:27 The giant bet embedded in accelerating AI earnings27:37 Why leveraged ETFs are changing market structure32:00 How forced ETF unwinds can amplify a selloff36:41 Why Kevin is bullish on gold again41:57 Platinum, production costs and the precious metals trade46:08 Sentiment extremes and why popular trades get dangerous51:00 Globalization, manufacturing and America's distribution problem55:00 Why oil and gas dominate the U.S.-Canada trade deficit59:00 How tariff uncertainty can deter U.S. manufacturing investment01:03:10 The trade math Kevin wants investors to seeLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

Dan Rasmussen, founder and managing partner of Verdad Advisers and author of The Humble Investor, joins Kai Wu to examine the unraveling of private equity, the rise of private credit, and how AI is reshaping software, labor, and the economics of technology investing. They also explore the massive AI CapEx boom, why value investing has struggled in the intangible-heavy U.S. market, the unusual opportunity in Japanese small caps, and how investors can quantify intangible value in biotech.Subscribe on Spotify⁠⁠⁠⁠⁠⁠Subscribe on AppleTopics covered:Why private equity became a consensus trade and why exits are now cloggedHow leverage and high debt costs threaten private equity returnsWhat publicly traded private equity funds reveal about true volatility and NAV discountsHow private equity shifted from old-economy buyouts into software and healthcare technologyWhy AI may have erased code as a software moat while strengthening other intangible advantagesHow ARR lending helped private credit finance software buyouts and created an obsolescence mismatchWhat AI is doing to hiring, junior roles, productivity and the composition of workWhy the AI CapEx boom may be a crowded, path-dependent overinvestment cycleWhy traditional value metrics work better in Japan than in the intangible-heavy U.S.How Tokyo Stock Exchange reforms, buybacks and dividends can unlock value in Japanese small capsHow R&D spend, specialist ownership and short interest can help quantify biotech valueTimestamps:00:00 Intro04:03 Why private equity's debt burden changes the equity math09:24 How private equity became a software momentum trade13:29 Why code may no longer be a durable software moat17:48 How private credit enabled software buyouts through ARR lending23:56 AI productivity, jobs and why displacement is slower than expected30:23 Why the AI CapEx boom may be the market's most crowded risk34:29 Rational overinvestment, leverage and the timing risk in AI38:46 Why consumers may capture more of AI's value than investors44:07 Japan's below-book-value reform and the return of old-school value51:03 Quantifying biotech value with R&D, specialist ownership and short interest55:08 Dan's non-consensus views on private markets and JapanLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.

Ian Cassel, founder of MicroCapClub and author of Stock Picker, joins Matt Zeigler to break down the mindset, temperament and core skills required to outperform as an active stock picker. They discuss microcap investing, position sizing, active patience, valuation, management quality, portfolio survival, benchmarking against the S&P 500 and how great investors evolve their edge over decades.Stock Picker: How to Develop the Mindset, Temperament, and Strategy to Outperform Wall Streethttps://amzn.to/4hU28ImTopics coveredHow an investor's motivations change as ambition gives way to family, legacy and the scarcity of timeHow Ian turned $20,000 into $120,000, then watched it fall to $8,000, and why that early win permanently shaped his risk toleranceIan's four-part survival framework: recession-resistant growth, strong balance sheets, conservative valuation and signs of intelligent fanaticismWhy balance-sheet strength is not just defensive and can let great companies act aggressively when competitors are forced to retreatWhy Ian targets roughly a 25 percent CAGR without relying on multiple expansionThe Judas goat lesson, talking your book on social media and why investors still have to do their own workWhy comparing short-term returns can corrupt an investing process and why Ian measures himself against the S&P 500 over a 10-year horizonThe five core stock-picking skills: identifying, analyzing, buying, selling and holding, plus why selling matters especially in microcapsWhy position sizing should account for initial excitement, and why Ian now starts much smaller than he did earlier in his careerActive patience, expanding your circle of competence and the difference between good, great and GOAT stock pickersWhy temperament evolves with experience, why leverage can destroy otherwise good investing, and why the best investors keep sharpening their edgeWhy Ian is willing to back repeat-winner management teams before every piece of the business is fully in placeTimestamps00:00 Intro06:58 The $20,000 to $120,000 win and 90 percent loss11:02 Ian Cassel's four-part survival framework15:02 Why strong balance sheets create offensive optionality19:03 The Judas goat and social media stock promotion23:18 Why comparison is the enemy for stock pickers29:39 The five core stock-picking skills34:43 Active patience and knowing what you are looking for39:28 Good, great and GOAT stock pickers47:02 How investor temperament evolves over time52:03 Leverage, situational awareness and surviving to compound57:24 Betting on repeat-winner management before the numbers arriveLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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.