Excess Returns

Brent Kochuba, Ben Hunt, Aahan Menon and Eric Pachman join Matt Zeigler and Jack Forehand on November’s Last Call to make sense of the post-election selloff and the pressures facing businesses and households.

Brent Kochuba explains why the weakest AI cloud stocks caught his eye even while the Nasdaq was rallying. Ben Hunt argues the midterms changed what investors could take for granted about presidential power, with governors gaining a bigger say in where data centers get built.

Aahan Menon traces how a decline in AI shares could reach the dinner table as households that grew wealthier on paper rethink their spending. Eric Pachman follows a different cost all the way to the grocery aisle. When diesel gets more expensive, a grocer has to decide how much of the freight bill to absorb and how much to pass on to shoppers.

Topics covered:
- Why Brent Kochuba watched the weakest AI cloud stocks for confirmation of the rally
- How negative dealer gamma can amplify selling and why November options expiration matters
- What Ben Hunt means by an election making the limits of presidential power “common knowledge”
- Why governors, electricity bills and local jobs matter to the next data center permit
- Why Aahan Menon sees little immediate change in federal spending after the midterms
- How stock gains support consumer spending and data center investment feeds corporate profits
- How Eric Pachman uses the Producer Price Index to see how many industries face unusual cost increases
- Who borrowed oil from the Strategic Petroleum Reserve and what it will take to return those barrels

Guest research and links:

Brent Kochuba | SpotGamma
https://spotgamma.com/
SpotGamma on X
https://x.com/spotgamma

Ben Hunt | Perscient
https://www.perscient.com/
Epsilon Theory on X
https://x.com/EpsilonTheory

Aahan Menon | Prometheus Research
https://www.prometheus-macro.com/
Aahan Menon on X
https://x.com/AahanPrometheus

Eric Pachman | Data 4 The People
https://www.data4thepeople.com/
How the Strategic Petroleum Reserve (SPR) Works in 2026
https://www.data4thepeople.com/p/spr-exchange

Chapters:
00:00 A post-election rally gives way to a Nasdaq selloff
05:06 Brent Kochuba on unwinding election hedges
12:05 The AI cloud stocks that missed the bounce
16:38 Negative gamma and what could break the selling cycle
26:28 Ben Hunt on what the election made common knowledge
37:31 Aahan Menon on fiscal policy and the AI wealth effect
43:03 What a slowdown in data center spending would mean for profits
48:35 Eric Pachman on price pressure across industries
57:31 Tanker traffic, freight costs and emergency oil loans
1:05:10 Who gets a say when a data center comes to town?
1:10:48 Political compromise and a Philadelphia sports story

Learn more about the Excess Returns podcast network:
https://excessreturns.co

No 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.

Mike Green explains how passive investing is reshaping stock prices, market concentration, and the way investors build portfolios. His argument: understanding which funds receive money—and how they allocate it—is increasingly essential to understanding the stocks those funds own.

The founder of Tier1 Alpha Asset Management joins Matt Zeigler and Justin Carbonneau to connect retirement contributions, target-date funds, and index construction to the buying pressure behind the market's largest companies. He explains why he believes giant IPOs benefit from index mechanics, why liquidity does not keep pace with market capitalization, and how fund flows may help explain the behavior of value, size, and momentum.

Green also walks through the investment framework he is building at Tier1: tracking thousands of funds, estimating their impact on individual securities, and making small portfolio tilts to account for those flows. The conversation explores what could interrupt retirement-driven buying, where fundamental analysis still matters, and how his planned strategies incorporate managed futures for diversification.

Topics covered:
- Why Mike Green thinks fund selection is increasingly shaping security prices
- Why low-float index inclusions can create demand for giant IPOs
- Why giant IPOs and smaller offerings can face very different sources of demand
- Retirement contributions, target-date allocations, and the employment catalyst that could change flows
- How passive flows may help explain value, size, and momentum-factor behavior
- Why liquidity does not grow in proportion to market capitalization
- Tier1's approach to tracking fund flows and making small portfolio tilts
- Where discounted cash flow analysis fits in a market shaped by mechanical buying
- Tracking error, managed futures, and Tier1's planned portfolio strategies
- What employment trends could mean for the retirement contributions supporting passive flows

Chapters:
00:00 Mike Green on the election and giant IPOs
05:44 IPO demand, passive buying, and weakening employment
11:18 Valuation in a market shaped by flows
16:46 Passive flows, value, and momentum
21:27 Tracking fund flows and building portfolio tilts
26:31 Inflation, energy bottlenecks, and pricing power
30:50 AI investment returns and the fiber-optic analogy
35:33 Fed policy, market rules, and Tier1's planned strategies
43:18 The K-shaped economy, AI jobs, and gig work
48:00 Political risks, optimism, and human agency
53:32 Closing thoughts and where to follow Mike Green

Tier1 Alpha Asset Management
https://www.t1acapital.com/

Mike Green on X
https://x.com/profplum99

Learn more about the Excess Returns podcast network:
https://excessreturns.co

No 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.

Bob Elliott and Aahan Menon examine how stock-market wealth is helping consumers spend faster than their paychecks grow—and what that means for corporate profits if stocks stop rising.
Elliott, co-founder of Unlimited, and Menon, founder of Prometheus Research, join Matt Zeigler to connect household spending, AI investment, and the earnings expectations built into markets. They discuss where their growth outlooks differ, why persistent inflation complicates the Fed's choices, and how bonds can look attractive against stocks while still looking unattractive against cash.
The conversation also explores whether AI is producing the economy-wide gains needed to justify its investment boom, how forward spending commitments could reverse, and why both guests distinguish those risks from a repeat of the 2008 credit crisis.
Topics covered:
- What the midterm election could change for fiscal policy and data-center construction
- Oil and AI as the competing forces behind inflation and growth expectations
- Bob Elliott's distinction between peak growth and peak pricing of growth
- How household wealth and drawing down savings support consumer spending
- Aahan Menon on wages, workforce participation, immigration, and demographics
- Why both guests think central banks are reluctant to deliver tighter policy
- Bonds versus stocks, bonds versus cash, and Aahan Menon's inflation-nowcast rule
- Bob Elliott's test for AI: accelerating productivity and revenue beyond the technology sector
- How business investment and household spending feed corporate profits
- Why AI commitments could weaken spending and earnings without a systemic credit crisis
Chapters:
00:00 Bob Elliott and Aahan Menon on the election
04:25 Oil, AI, and the market's growth expectations
09:25 Peak growth pricing and the consumer spending gap
15:45 Household wealth, wages, and the labor market
20:08 The Fed's response to persistent inflation
24:12 Bonds versus stocks and bonds versus cash
30:28 Inflation nowcasts and the test for AI productivity
37:05 AI revenue expectations and the sources of profits
43:38 Credit risks and AI's forward spending commitments
50:38 Where Bob Elliott and Aahan Menon disagree

Learn more about the Excess Returns podcast network:
https://excessreturns.co

No 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.

Michael Howell of CrossBorder Capital explains why slowing global liquidity could challenge stocks even as AI earnings remain strong. His concern is a growing competition for funding: money is flowing into real-world investment just as a huge wave of existing debt needs refinancing.

With Jack Forehand and Justin Carbonneau, Howell walks through his liquidity cycle, the role of collateral and repo markets, and why he believes government bonds deserve another look. He also discusses the difference between declining liquidity growth and an outright contraction, the risks of financing the AI buildout, and how China's debt problems could shape the longer-term outlook for gold.

Topics covered:
- How Michael Howell measures global liquidity as the financial system's capacity to provide funding
- Why a strong real economy can compete with financial markets for money
- The four phases of the liquidity cycle and the shift from speculation toward turbulence
- Why bank reserves, Treasury issuance, and collateral volatility matter beyond the Fed's policy rate
- How AI earnings have given technology stocks an unusual second wind late in the cycle
- The debt maturity wall and why Michael Howell watches debt relative to liquidity
- How refinancing stress can spread through interconnected balance sheets
- The case for government bonds as liquidity tightens and economic growth slows
- Why Michael Howell distinguishes US Treasury yields from Europe's fiscal pressures
- China's debt burden, potential monetary expansion, and the implications for gold and Bitcoin

Chapters:
00:00 Michael Howell on slowing global liquidity
04:29 Why Main Street competes with Wall Street for funding
09:12 The four phases of the liquidity cycle
14:03 Repo markets, collateral, and the role of central banks
18:15 Private credit creation and Fed-Treasury coordination
22:25 Asset allocation through the liquidity cycle
29:28 AI cyclicality and comparisons with past booms
33:35 The debt maturity wall and refinancing demands
41:23 Debt-to-liquidity stress and financial system fragility
46:04 Refinancing risks and Europe's fiscal pressures
50:19 Treasury yields, nominal growth, and China's economy
55:43 The outlook for 2027, China's debt, and gold

Learn more about the Excess Returns podcast network:
https://excessreturns.co

No 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 Davi of Astoria Investment Management explains how he builds diversified portfolios in a tech dominated market. With Jack Forehand and Justin Carbonneau, Davi walks through an alternative approach. He also explains why he sees echoes of the 1970s in today's inflation, what he watches in credit markets for signs of stress in the AI buildout, and where real assets fit alongside stocks and bonds.

Topics covered:
- Why John Davi trimmed Astoria's equity overweight without trying to call a market top
- What the 10-year Treasury yield looks like relative to nominal economic growth
- How SPY and QQQ overlap, and what a conventional equal-weight index changes besides stock weights
- The question facing the Magnificent Seven: can earnings grow fast enough to justify AI spending?
- Where John Davi agrees with the passive investing feedback-loop argument and where it falls short
- What goes in the 20% when a 60/40 portfolio becomes 50% stocks, 30% bonds, and 20% diversifiers
- Why John Davi favors AI adopters and watches credit default swaps on the companies funding the buildout
- How Astoria screens for quality at a reasonable price using profitability, dividends, and valuation
- What trading floors taught John Davi about hedging before a drawdown

Chapters:
00:00 John Davi on earnings, rates, and trimming equity risk
05:05 Is the 10-year Treasury yield high relative to growth?
10:16 Seven stocks and the changing risk inside the S&P 500
14:33 Diversifying around SPY and QQQ
20:02 Equal stock weights without a big tech underweight
24:46 Passive flows, prices, and buying the dip
30:04 Higher rates, the 60/40 portfolio, and real assets
37:08 From AI builders to companies using AI
42:40 Credit spreads and cracks in the AI trade
47:34 Adding a quality screen to growth stocks
55:12 Why John Davi hedges and resists chasing past winners

Research discussed:
Rates Hit Multi-Decade Highs. Will Growth and Earnings Keep the Rally Going?
https://www.astoriaim.com/single-post/rates-hit-multi-decade-highs-will-growth-and-earnings-keep-the-rally-going

Astoria Investment Management
https://www.astoriaim.com/

Astoria on X
https://x.com/AstoriaAdvisors

Learn more about the Excess Returns podcast network:
https://excessreturns.co

No 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.