Jurrien Timmer of Fidelity explains how he reads a stock market correction by looking at what has changed in earnings, interest rates and the price investors will pay for future growth. A selloff driven by higher rates can look much like one driven by fears of slower growth on a stock chart. The difference matters when you’re counting on bonds to cushion the decline.

Jurrien joins Justin Carbonneau and Jack Forehand to put the AI investment boom in that historical context. The companies building data centers once had enough cash left over to buy back large amounts of their own stock. Now much of that cash goes back into the business. He explains why a slower buildout could help some of the biggest spenders, and how a semiconductor stock can look cheap just as its earnings are peaking.

They also look beneath the S&P 500, where a handful of large companies can pull the index lower even as most stocks remain in uptrends. Jurrien discusses what higher bond yields offer a long-term investor, why he considers gold and other diversifiers alongside stocks and bonds, and how rebalancing can turn a market decline into an opportunity to buy when others need to sell.

Topics covered:

- What CoreWeave’s bonds signaled about the cost of financing AI infrastructure

- Why semiconductor earnings and price-to-earnings ratios can move in opposite directions

- How Treasury yields affect the price investors will pay for stocks

- What the 1994 correction reveals about strong earnings in a rising-rate environment

- How Jurrien Timmer’s investment clock pairs earnings growth with financial conditions

- Why bonds can provide income even when their value as a hedge changes

- How gold, commodities and other diversifiers fit into a 60/20/20 portfolio

- How the shift from buybacks to capital spending changes the economics of owning the Magnificent Seven

- What market breadth and long-term valuations suggest about opportunities beyond the largest U.S. stocks

Chapters:

00:00 The AI buildout meets the limits of financing

07:44 Semiconductor cycles and peak earnings

11:57 The Fed model and the competition between stocks and bonds

19:16 Growth scares, rate scares and inflation risk

24:01 The investment clock and the stock market’s influence on growth

29:00 Bond income and the case for a 60/20/20 portfolio

34:27 Real yields, fiscal risk and Fed policy

42:57 What comparisons with 1994 and 1999 can tell us

47:23 From share buybacks to AI capital spending

55:58 Rebalancing when other investors are selling

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.

Corey Hoffstein and Adam Butler explore why diversification is hard to stick with and how return stacking changes what investors can hold alongside stocks and bonds. When stocks keep climbing, a strategy that trails them for years can feel like a mistake. When inflation pushes stocks and bonds down together, the reason for owning something different gets easier to see.

Drawing on their Return Stacked symposium, the two join Matt Zeigler to discuss which risks are worth adding to a portfolio. Corey explains why even a strategy with little connection to the stock market can lose money on the day stocks fall. Adam revisits 2008, when some hedge funds suspended withdrawals just as investors needed cash to rebalance.

They use managed futures to show how return stacking works. An investor can keep the stock and bond exposure of a 60/40 portfolio and use futures to add another strategy. That introduces leverage and makes two questions especially important. What will the portfolio need to hold as collateral, and can the investor stay with the strategy through a long drawdown?

Topics covered:

- What Corey Hoffstein took from Cliff Asness’s early experience running AQR

- Why an inflation shock can hurt stocks and bonds at the same time

- How Adam Butler adds managed futures while keeping a portfolio’s stock and bond exposure

- Why the same leverage can produce very different outcomes depending on the strategy added

- The difference between low correlation and protection during a stock market crash

- What went wrong when institutions paired liquid futures with illiquid hedge funds in 2008

- How holding both exposures in one fund changes collateral management and rebalancing

- Why managed futures can fit alongside stocks, bonds or gold

- How long a diversifier can disappoint before an investor gives up on it

Return Stacked research

https://www.returnstacked.com/

Return Stacked ETFs

https://www.returnstackedetfs.com/

Seven Thoughts on Running Big Money for the Long-Term | Cliff Asness

https://www.integrityia.com/wp-content/uploads/2014/06/Seven-Thoughts-on-Running-Big-Money-For-the-Long-Term-2009.pdf

Corey Hoffstein’s Flirting with Models podcast

https://www.flirtingwithmodels.com/episodes

Corey Hoffstein on X

https://x.com/choffstein

Adam Butler on X

https://x.com/gestaltu

Return Stacked Portfolio Solutions on LinkedIn

https://www.linkedin.com/company/return-stacked-portfolio-solutions

Chapters:

00:00 Corey Hoffstein on Cliff Asness and investing for the long run

07:15 Adam Butler on AQR’s early years

12:58 When inflation hurts both sides of a 60/40 portfolio

17:21 How return stacking preserves stock and bond exposure

23:02 Choosing which risks to add with leverage

29:15 Why investors give up on diversifiers during drawdowns

33:27 Portable alpha and the liquidity failures of 2008

38:13 How a single fund manages collateral across both exposures

43:26 What decades of managed futures returns can tell us

50:37 Adam Butler on market timing and the case for spreading 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.

Chris Mayer and Robert Hagstrom explain how they decide whether a falling stock price has exposed a mistake or given them a chance to buy a business they already know well.

Subscribe to the 100 Year Thinkers of Spotify⁠⁠⁠

⁠⁠⁠Subscribe to the 100 Year Thinkers of Apple

On 100 Year Thinkers, Matt Zeigler and Bogumil Baranowski ask both investors to put that judgment to work during a Nasdaq selloff. Robert starts with an unlikely pair: Nvidia and Walmart. What assumptions about growth and returns on capital would justify paying a higher earnings multiple for the retailer? Chris starts with free cash flow per share. He explains what he wants to know about a business before its stock drops 30% and he has to decide whether to buy more, hold on or sell.

They give their winners the same scrutiny. Chris admits that a run of strong quarters can tempt him to spend all his research time on the companies that are struggling. Robert borrows a habit from Sherlock Holmes: look for the evidence that could overturn your favorite explanation. The conversation closes with a question for AI executives trying to win over a town that would host a data center. What does the community get in return for the power and water the facility will use?

Topics covered:

- Robert Hagstrom on why volatility rises when different investors start making the same trade

- What the valuations of Nvidia and Walmart imply about their future earnings

- Chris Mayer on free cash flow per share and Ben Graham’s voting machine and weighing machine

- What readers of The Warren Buffett Way and 100 Baggers sometimes miss about their authors

- How Robert Hagstrom uses detective work to test an investment thesis

- Why Chris Mayer revisits companies that keep delivering strong results

- What a concentrated portfolio asks of an investor and where indexing fits

- How a watchlist helps both investors put a sharp price decline in context

- When share buybacks make sense and what AI companies need to explain to local residents

Robert Hagstrom’s research at EquityCompass

https://www.equitycompass.com/author/robert

Chris Mayer’s books at Woodlock House Family Capital

https://www.woodlockhousefamilycapital.com/portfolio

Chris Mayer on X

https://x.com/chriswmayer

Chapters:

00:00 What a Nasdaq selloff tells long-term investors

12:23 Ben Graham’s weighing machine and free cash flow per share

17:58 Who sets the example for patient investors today?

22:07 What readers miss about Robert Hagstrom and Chris Mayer

26:07 Sherlock Holmes and the evidence against an investment thesis

32:52 Studying winners as skeptically as mistakes

39:05 The case for picking businesses in an indexed market

44:36 Building a shopping list before prices fall

49:12 When a falling price earns a closer look

53:37 What shareholders need to hear from CEOs

1:02:07 Why data centers are a hard sell for their neighbors

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.