Episode summary
The Edge Has Shifted | Matt Reustle on How the Best Investors Use AI
Excess Returns
· · 1 hr 4 min · Guests: Matt Reustle
Summary
AI is helping investors widen their funnel, speed up due diligence, and monitor more information than they could manually track, but the guest argues it is not a simple alpha machine. He says the biggest shift came with late-2024 and early-2025 deep research models, which behave more like agentic workflows than basic chatbots and can produce junior-analyst-style outputs rather than one-shot answers.
The guest frames the practical value of AI around workflow leverage: screening ideas, synthesizing transcripts and filings, watching KPIs and customer commentary, and setting recurring monitors that surface signals an investor would otherwise miss. He argues these tools are best used to kill weak ideas faster, expose mismatches in management narratives, and reduce the time spent on low-value manual work.
He also emphasizes that results depend heavily on prompting, source requests, and clear mental models. The guest recommends telling the model its role, audience, and output format, then iterating until the process is customized to the investor’s own decision framework. In his view, the near-term edge comes from productivity, customization, and better safeguarding against blind spots, not from replacing human judgment.
Key takeaways
- The guest says deep research models marked the real inflection point for investors, because they act more like agentic analysts than simple LLMs.
- He argues AI is most useful for monitoring positions, scanning transcripts, and setting recurring alerts on the signals an investor actually cares about.
- The guest says the best use of AI is often to kill bad ideas earlier by checking for deal-breakers like accounting issues, incentives, or pricing power.
- He recommends prompting with role, audience, purpose, and sources, because better specificity materially improves output quality.
- He thinks AI will make lean teams more efficient and widen the gap between investors who experiment and those who do not.
- He expects customization, not generic templates, to be the main long-run shift in investor workflows.
Notable quotes
“The best people that I know at using AI have very specific systems which anytime a new model's released, they'll have their prompts which are detailed”
“where the big inflection I think came was when the deep research models started to come out”
“AI is better than I was as a intern for sure. Um and much faster than I was as a junior analyst”
“you can put in a monitor for any type of interesting um commentary around logistics coming from”
“the power of quality prompting um was something that I underestimated initially”
How the episode opens
I think that's really where it it comes into play is giving any individual investor a ton of leverage in terms of their traditional work process and due diligence process. you can put in a monitor for any type of interesting um commentary around logistics coming from. Okay, let's pick out the sectors that matter most to these specific companies that I care about and you can input that and set it up so that it's done on a reoccurring basis and sending you information that otherwise you just would have never seen.
The best people that I know at using AI have very specific systems which anytime a new model's released, they'll have their prompts which are detailed and they'll see what this new model does in terms of output and be able to compare that to the previous model. I still don't think it's solved this really obvious alpha generating solution. Most of this is just coming out as an extension of what they might have otherwise done, but they're able to do it faster.
You're watching Excess Returns. I'm Matt Sigler. We're talking AI, how to use it, how not to use it, and I can think of no better guest than Colossus and Business Breakdown's own one of my favorite investors, Matt Russell.
Welcome back to Tax Returns. always a pleasure to be with you and you make me brush up on my communication of whatever is going on up here in my head. So, it's always a good excuse uh to get on and talk through things.
So, it's good to be back. We wanted you specific to this because you did a business breakdowns episode that was walking through using AI as an investor, an allocator, an adviser, all these things. And both Jack Forehand and I were behind the scenes going like, "This is a really freaking cool episode.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai for investing
- deep research models
- agentic ai workflows
- prompt engineering
- portfolio monitoring
Companies and tickers mentioned
- Business Breakdowns
- OpenAI
- ChatGPT
Watch the episode
Watch “The Edge Has Shifted | Matt Reustle on How the Best Investors Use AI” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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