This was so much fun. @CliffordAsness joins @CultishCreative and me on @excessreturnpod to walk through the greatest hits of his research. We covered: • Bubble Logic and what investors still get wrong about bubbles • Why volatility is a useful measure of risk • The myth of “cash on the sidelines” • How private markets hide volatility • Why missing the best (and worst) 10 days is a bad argument • The case for international diversification • When to pull the goalie in hockey • Machine learning, overfitting and the future of quant investing bit.ly/4wLUk00

What jobs will AI create? "I have no clue." Dom Rizzo's reason for optimism starts with his great-grandfather arriving at Ellis Island, and a future he never could have imagined. "I'm neither in the dismiss it and age of abundance camp, but I'm not a jobs doomer either." T. Rowe Price Global Technology Fund manager Dom Rizzo on why the jobs of tomorrow are so hard to picture today.

"Credibility is built from deeds, not words." Raising rates is one thing. Keeping them high when stocks fall and employment weakens is another. "If they hike, or continue to hike or maintain rates at a high level and stocks and the employment situation worsen and they stick with it until inflation is dead, those are the deeds." Andy Constan on what it takes to earn credibility as an inflation fighter.

If you have not seen some of the new tools @EricPachman has been rolling out on Data 4 The People - @excessreturnpod has got you covered. Labor market, inflation measurements, measuring the impact of diesel prices... Eric is ON FIRE right now: piped.video/5bXUBAPRvr0?si=85u1…

"There's no new burst to fill it back up again, and price just goes down with it." What keeps a market narrative alive. And what happens when the new stories stop coming? "The narrative level is the state or regime that we're in, and the flow is the narrative bursts that are coming out." Ben Hunt on how a story turns into a price.

"Warren Buffett, who everyone loves to copy and clone, he never cloned anyone." "I talk about moats. I talk about the margin of safety. Come on. Where are my returns, bro?" Why can copying a great investor leave out the very thing that made them great? Gary Mishuris on the difference between learning from Buffett and imitating him.

"How many railroads are in the top 10 market cap in the US? What about electricity companies? What about canal companies?" Building a technology that changes the world and capturing its rewards are two different things. "You don't need a Ferrari to go to the corner store to get milk. A Ford will work just fine." Dan Niles on where the value could move as AI gets cheaper, and why the eventual winners may sit on top of the infrastructure being built today.

"We don't trade gold." "We keep it in the portfolio as a spare tire." When investors started asking Rich Bernstein about silver after years of silence, he saw a warning sign. Rich Bernstein on what investor questions reveal about sentiment, and why he treats gold as insurance.

The biggest danger in sports betting is not be the big loss. "That kind of grinding despair in a financial situation, I think is much harder to recover from than the one big mistake." Dave Nadig on why slowly losing can be harder to learn from than losing it all at once.

The latest rate spike raises a bigger portfolio question: What happens when stocks and bonds stop protecting you from each other? "I think it's less about uncertainty and it's more about instability." Liz Ann Sonders on why what drives interest rates matters for your whole portfolio.

The idea that rate cycles unfold over generations is always good context when I find myself getting caught up in day to day moves.

“If you're buying something at half book, you're literally buying a building that cost a hundred dollars for fifty dollars.” Why does price-to-book work so much better in Japan than in the US? “It turns out that book value is a really good predictor for returns in Japan because it's an entirely tangible economy. And then you go to the US, and it seems to be completely bonkers and doesn't work at all. Is it any surprise, given that the US is the most intangible economy?” Dan Rasmussen on why the same valuation metric can work in one market and fail in another.

A short yet broad-ranging talk with @KrisAbdelmessih on @Panoptica_ai for his @EpsilonTheory: Unplugged essay, "After this post you will be sizing bets in your head" Kelly bets, using AI to learn math, creativity... NEW Notes on Notes!

"I lost $157,000 in three minutes." Trading SPACs took him from $6,000 to dreams of becoming a millionaire, and then a six-figure loss in minutes. “I felt like I just got slapped in the face by Mike Tyson.” Jack Raines on the big ups and downs of trading SPACs.

"They worked at Lehman, they were paid by Lehman, and they loaded up on Lehman stock." “If you wanted to buy Lehman stock, they would offer you a 10% discount. So a lot of employees were like, ‘Oh my God, free money, 10% discount on the stock.’” What happens when your paycheck and your portfolio depend on the same thing? Jared Dillian on the life hedge.

Can a company have a powerful competitive advantage that investors struggle to see? "Sometimes there are businesses where the moat is not really obvious, but it leaves its fingerprints." "It's a question of what it is and whether you can understand it." Chris Mayer on finding the invisible moat.

Could the US-China AI race come down to who can power it? "They're trying to make the technology free and lean on where they have enormous advantage, which is really in the energy and energy delivery." Jason Hsu on why he sees electricity as China's edge in the AI race.

What's in the Value Investor Seminar Gary Mishuris (@BehavioralValue) teaches? I have an incredible preview up on @excessreturnpod We get into why the classic investment books still matter, and end with a discussion on how he's using AI at his firm. piped.video/kmHUKeQ5x_8?si=9o2U…

A profitable strategy can become a very expensive habit. "It's like an old friend who you grew up with, but who is really actually a bad person, and you just can't get away from being their friend 'cause you've been friends with them for so long.” Brent Donnelly on why traders keep running dead strategies.

The more time I have spent building complex strategies, the more I have recognized that the simple ones often work best.

Get the full episode here: Spotify: bit.ly/4v5veb9 Apple: bit.ly/4dhsYWJ