Two Quants and a Financial Planner

This week’s Excess Returns Weekly Wrap breaks down the biggest investing lessons from Aswath Damodaran, Andy Constan and Tobias Carlisle. We discuss SpaceX valuation, AI capital spending, IPO mechanics, market overvaluation, the shift from buybacks to issuance, and whether value, small caps and equal weight stocks are starting to reverse years of mega-cap dominance.Topics covered:Why Aswath Damodaran says valuation requires both stories and numbersHow investors can evaluate SpaceX without relying only on total addressable marketWhy IPOs are designed to trade well after issuanceHow a small public float can influence the perceived value of an entire companyWhy expensive market valuations do not automatically mean investors should sell everythingWhat history suggests about forward returns when market valuations are extremeWhy AI is changing the capital intensity of the Magnificent 7The underrated role of restraint in business strategy and AI spendingHow the market is shifting from buybacks to stock issuanceWhy value, small caps and equal weight stocks may be showing early signs of a reversalTimestamps:00:00 Intro and this week’s episodes with Aswath Damodaran, Andy Constan and Tobias Carlisle04:17 What the SpaceX story needs to justify the valuation08:56 Why IPO issuers may want the stock to trade up13:20 Why mean reversion looks harder to trust in today’s market17:28 How AI CapEx changes the Mag 7 valuation equation22:21 Why buybacks and issuance matter for stock market supply27:28 Are value, small caps and equal weight stocks starting to reverse?31:53 Why market broadening can continue if recession is avoided

In this episode, we kick off our book project, "The Most Important Investing Lesson: What the World’s Best Investors Would Teach You", with a deep dive into the ideas of Michael Mauboussin. We explore his most enduring lessons—concepts that have reshaped how we think about investing, decision making, and life. From base rates to expectations investing, we unpack how Mauboussin’s frameworks can help investors build better models of the world and make more rational, probabilistic decisions.Main topics covered:Why base rates are the most underused yet powerful tool in investing and lifeHow to apply expectations investing and reverse engineer stock pricesWhy multiples are not valuation and how to earn the right to use shortcutsUnderstanding the paradox of skill and why luck matters more when everyone is goodLessons investors can apply across fields like business, sports, and personal decision makingHow humility, reference classes, and feedback loops improve judgmentReflections on learning, writing, and how AI tools are changing the creative processTimestamps:00:00 Introduction and the idea behind the book04:00 Michael Mauboussin on base rates and decision making10:00 Expectations investing and reversing the valuation process19:00 Multiples are not valuation—understanding shortcuts28:00 The paradox of skill and why luck matters more than we think38:00 How to apply these ideas in investing and life45:00 Closing thoughts and audience feedback on the book project

In this episode, Matt Zeigler and Dave Nadig revisit one of the most popular interviews on Excess Returns—our deep-dive conversation with Neil Howe, co-author of The Fourth Turning. But instead of leaning into the usual doom-and-gloom narrative, they unpack the misunderstood lessons at the heart of Howe’s generational theory.From inflation and leadership to passive investing and community, Matt and Dave explore the deeper patterns shaping our society and markets—and why so many people miss the bigger picture.🎙️ Topics discussed include:Why the Fourth Turning is more about renewal than collapseThe misunderstood role of inflation in crisis periodsHow generational memory loss fuels leadership failureWhy passive investing might be the ultimate Millennial moveGen X’s emergence as a uniquely flawed (and necessary) leadership classHow conflict can become the incubator for lasting communityThis is not a forecast—it’s a framework. And it might just change how you see the world around you.

Some of the most insightful investment conversations start with a single question: “What do you believe that most of your peers disagree with?” In this episode of Excess Returns, Jack Forehand and Matt Zeigler dive into 11 controversial investing takes—from QE and technical analysis to macro obsession and fee structures. You’ll hear nuanced perspectives from top investors who challenge conventional wisdom, and you might even find yourself rethinking your own beliefs.🧠 This is a fast-paced, thought-provoking ride through the investment ideas most likely to start a debate at your next finance happy hour.Topics Covered:Why QE may always be inflationary (Andy Constan)The case for separating advice fees from asset management fees (Rick Ferri)Why trimming and adding to positions might be a waste of time (Chris Mayer)A defense of free trade in a protectionist world (Jared Dillian)Why turnover isn't always a bad thing (Travis Prentice)Multidisciplinary investing vs. deep specialization (Cameron Dawson vs. Katie Stockton)When it’s OK to override your quant model (Joe Gubler)The trap of emulating famous investors (Rupert Mitchell)The entertainment vs. value tradeoff of macro (David Giroux)Rethinking shareholder primacy in today’s political landscape (Peter Atwater)Timestamps:00:00 - Intro & Why QE is Inflationary (Andy Constan)07:20 - Separate Fees for Advice & Management (Rick Ferri)11:00 - No Trimming or Trading Around Positions (Chris Mayer)15:30 - AI Will Be a Net Positive (Andrew Cohen)19:00 - The Case for Free Trade (Jared Dillian)23:30 - Turnover Isn't Always Bad (Travis Prentice)27:00 - Multidisciplinary Investing (Cameron Dawson)31:00 - Investing Solely on Technicals (Katie Stockton)34:00 - Overriding the Quant Model (Joe Gubler)41:00 - Don’t Try to Be the Next Buffett (Rupert Mitchell)44:00 - Macro Doesn’t Always Add Value (David Giroux)48:00 - Shareholders Don’t Come First Anymore (Peter Atwater)

In this episode of Excess Returns, we explore the profound impact of passive investing with one of the most provocative thinkers in the space—Mike Green. Mike has developed a framework that challenges traditional market assumptions, shedding light on how seemingly "passive" investment flows might be actively reshaping markets, valuations, and even systemic stability. Using clips from our interviews, Mike breaks down complex ideas with clarity, humor, and critical insight. This is a must-watch for anyone who wants to understand the hidden mechanics behind modern markets—and what they mean for your portfolio.Topics Covered:Why passive investors aren't truly passiveThe systemic risk behind the growth of index investingHow passive flows distort price discovery and market behaviorThe QDIA effect and its unintended consequencesThe breakdown of correlation between value and growth stocksWhy international markets continue to underperformMike's thoughts on unemployment data and the gig economyThe real lesson investors should take from all thisWhat individual investors can realistically do about it