Excess Returns

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 bonds
https://www.janushenderson.com/en-us/advisor/article/high-conviction-views-the-time-for-short-duration-bonds/
Janus Henderson Investors
https://www.janushenderson.com/en-us/advisor/
Topics covered:
Why deglobalization, fiscal spending and labor constraints could keep inflation and interest rates elevated

How the Bloomberg US Aggregate Bond Index concentrates interest rate risk and leaves out large parts of the bond market

How AAA CLOs work, why their coupons float, and why they are different from cash

Why tight corporate credit spreads may offer insufficient compensation for the risks investors take

The three jobs of fixed income: safety, income and insurance

How duration determines whether rising rates can wipe out a bond portfolio's income

Why bond ETF discounts can reflect price discovery when underlying bonds are not trading

How Treasury borrowing and AI hyperscaler debt issuance affect bond supply and relative value

Why AI capital spending, electricity demand, labor shortages and wealth effects can create inflation

How to rebuild the bond allocation around securitized credit, agency mortgages and the risks in your equity portfolio

Timestamps:
00:00 Rethinking bonds after years of disappointing returns
04:28 Why the forces behind the bond bull market have changed
10:09 The hidden interest rate risk in the Aggregate Bond Index
14:53 AAA CLO ETFs: Floating income, structure and drawdown risk
20:44 Treasury fiscal risk and tight corporate credit spreads
26:16 Moving beyond set-and-forget bond funds
30:45 How duration can overwhelm your bond yield
36:27 Bond ETF liquidity and price discovery during stress
41:11 Treasury borrowing, AI debt and securitized bond supply
46:00 How hyperscaler borrowing can create credit market dislocations
50:29 Four reasons AI could increase inflation
55:56 Rebuilding the 40% bond allocation in a 60/40 portfolio
01:02:00 Municipal bonds, recession protection and balancing equity risk
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.

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 Book
https://amzn.to/3Tf3of7
Topics covered:
Why Jared questions putting your entire life savings in the S&P 500

How the Awesome Portfolio differs from Harry Browne's Permanent Portfolio

Including home equity when measuring your overall asset allocation

Why volatility and frequent portfolio checking can lead to costly decisions

The life hedge: protecting against your job and investments declining together

Why Jared disagrees with Charlie Munger about tolerating large drawdowns

Index concentration, changing correlations, and the limits of diversification

The portfolio's historical backtests, including its losses in 2008 and 2022

Annual rebalancing, cash reserves, inflation protection, and cryptocurrency

Managing FOMO and taking practical steps toward a less stressful retirement portfolio

Timestamps:
00:00 Jared Dillian's case against an all-stock portfolio
06:33 The five equal allocations in the Awesome Portfolio
11:07 Why "never sell" can become a behavioral trap
15:26 The life hedge: when your paycheck and portfolio fall together
20:38 Risk-adjusted returns and S&P 500 concentration
24:49 Why rising interest rates hurt diversification in 2022
28:51 Backtested losses in 2008 and 2022
34:26 Combining home equity, retirement accounts, and savings
38:58 Cryptocurrency, portfolio distractions, and FOMO
44:31 The Death of Equities and lessons from past crashes
48:44 How diversification could have changed Jared's financial crisis
53:41 First steps toward reducing portfolio risk before retirement
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.

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.
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Topics covered:
Why sports betting is becoming a financial planning issue for Gen Z and wealthy families

How overconfidence and confusion between skill and luck encourage speculative behavior

Why rapid market recoveries may reinforce risk-taking instead of teaching caution

How recurring gambling losses can quietly undermine savings and wealth accumulation

The risks of placing gambling products alongside investments in brokerage apps

Leveraged ETF innovation, hourly resets and competing approaches to investor protection

AI circular financing, payment terms, leases and opaque special purpose vehicles

How one-time investment gains can distort headline earnings and future growth comparisons

Why less frequent corporate reporting could favor investors with greater resources

Baseball, emo music, Nirvana merchandise and what makes a meaningful role model

Timestamps:
00:00 Sports betting, ETFs and the gambling economy
05:24 Financial planning after crypto and gambling wins
10:57 Why slow gambling losses can be harder to recognize
16:55 Betting inside brokerage apps and regulatory backlash
21:03 Gambling budgets and the next wave of leveraged ETFs
25:04 AI financial shenanigans and hyperscaler cash flow
29:25 Who benefits from less corporate disclosure?
34:24 Discovering new passions in adulthood: Westerns and baseball
38:30 Hot Topic, Nirvana sweatpants and cultural gatekeeping
43:17 Can band merchandise introduce a new generation to music?
47:26 Keith Morris and the search for meaningful role models
51:34 Learning from imperfect people without idolizing them
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.

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 X
https://x.com/DanielTNiles
Niles Investment Management
https://www.nilesinvestmentmanagement.com
Topics covered:
Why AI can be both a transformational technology and an investment bubble

The AI metrics Dan watches: token pricing, token growth, cloud revenue and operating margins

What the Situational Awareness unwind showed about leverage, forced selling and semiconductor volatility

Why hyperscaler AI revenue can accelerate even as free cash flow deteriorates

How data center opposition, electricity constraints and politics could slow the AI buildout

Where value may accrue across the AI stack and why Anthropic and Google could pressure OpenAI

Why China’s memory chip expansion could bring semiconductor cyclicality back faster than investors expect

How AI is reshaping software, including security, systems of record, gaming and usage-based pricing

Why the shift from free cash flow to debt financing matters for AI CapEx, Treasury yields and credit markets

Dan’s long-short investment process, Fed outlook, market risk framework and emphasis on downside protection

Timestamps:
00:00 Intro
04:00 The signals Dan watches to know when the AI bubble is peaking
09:12 AI ROI, hyperscaler profits and the problem with negative free cash flow
14:19 Why data center politics could become a major risk to AI growth
21:28 Why semiconductors are still cyclical and China could change the supply picture
25:47 Why smart companies still get bubbles wrong and agentic AI could extend the cycle
30:43 Is software the next major casualty of AI disruption?
35:04 Why video games may be one of software’s safer AI categories
39:23 Can markets absorb the surge in AI debt and equity issuance?
45:28 Dan Niles’ long-short investment process and approach to downside protection
50:45 Why Dan thinks the Fed could raise rates in September
56:38 Why buy-and-hold can fail and downside protection matters
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.

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.
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Topics covered
Why credibility is a teacup and why policy reputation is difficult to repair once it breaks

How the Fed's July rate decision changed the market narrative around inflation credibility

The Four Horsemen: insurance and shadow banking losses, capital crowding out, the Iran war and oil inflation, and a stretched consumer

Why insurer-funded private credit could become a systemic risk if fraud and losses reach major institutions

How government borrowing and AI data center financing could push long-term interest rates higher

Why fading fiscal stimulus, depleted savings and higher energy costs leave the consumer vulnerable

What financial repression means and how the Fed and Treasury could try to cap rates and prevent major losses

Why AI investment may be the key source of US economic growth if consumer activity stalls

How Perscient tracks narrative regimes, virality and shifts in common knowledge across markets

Why gold can act as an inverse measure of trust in central banks and how Ben is positioning around the risks

Timestamps
00:00 Intro: Credibility is a Teacup
04:00 How the July Fed decision damaged inflation credibility
08:21 The Four Horsemen that could threaten the financial system
14:00 Oil inflation, the Iran war and a stretched consumer
18:39 What financial repression means
23:20 How the Fed and Treasury could try to prevent a systemic crisis
28:21 Why AI CapEx may be the only major source of GDP growth
35:00 When lost Fed credibility became a confirmed market narrative
39:34 Narrative stock versus flow and how bursts can move prices
44:00 The return of bearish AI CapEx narratives
48:09 Why private credit may be easier to can-kick than the 2008 crisis
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.