Episode summary
The Panic Is in Bonds. The Risk Is in Earnings. Are You Watching the Wrong Market?
Excess Returns
· · Hosts: Jack Forehand, Matt Zeigler · Guests: Kevin Muir, Dan Rasmussen, Ian Cassel
Summary
Long-term bond yields are framed as more rational than alarming because nominal growth, inflation, deficits, Treasury supply, corporate issuance, and AI-related capital spending are all pushing rates higher. The host argues the bigger danger is not simply a valuation reset in stocks, but policy efforts to suppress rates and distort a market signal that still reflects a real supply-demand imbalance. Kevin Muir’s view is that bonds have backed up only modestly relative to the macro backdrop, and that the surprise should be how orderly the move has been.
The episode also argues that private equity’s software obsession was a classic momentum trade with a lag. Dan Rasmussen says allocators and firms chased the best trailing returns into software and healthcare technology, often at inflated prices, only to discover that recurring revenue is not the same as a durable moat. The host connects that to AI, warning that software economics that once looked bulletproof may face the same kind of disruption newspapers did.
Ian Cassel’s conversation shifts to what separates good, great, and GOAT stock pickers: long track records, a small number of truly elite skills, and the ability to evolve over time. The episode closes by stressing that AI leaders may be taking massive risks because of futurist and rationalist worldviews, but that technological adoption is slower and messier than the believers assume.
Key takeaways
- Kevin Muir argues the rise in long-term yields is broadly consistent with stronger nominal GDP, higher inflation, large deficits, and heavy bond issuance.
- The host warns that suppressing market rates can remove an important economic signal and create unintended consequences.
- Dan Rasmussen says private equity acted like a three- to five-year momentum investor and crowded into software and healthcare technology at stretched prices.
- The host and Dan caution that recurring revenue does not make a software business bulletproof, especially if AI changes the economics.
- Ian Cassel defines a good stock picker as someone who beats the S&P over 10 years, a great one over 20 years, and a GOAT as delivering 20% net returns over 20 years.
- The episode argues that AI capital spending may boost current earnings while embedding more risk in future expectations than the market appreciates.
Notable quotes
“it really is actually somewhat stayed in terms of its its actual ranges”
“the real danger is that everyone is losing their minds because everyone has priced in uh a risk-free rate that is much lower”
“investment committees uh are momentum investors with the three-year lag”
“software is eating the world and so you can pay whatever you want for any software asset”
“this is not a bubble um in terms of those prices that they're paying in terms of multiples on the stock”
How the episode opens
Welcome to the Exis Returns weekly rap. I'm Jack Forehand joined as always by Matt Ziggler. Matt, what's going on?
Hey man, I'm excited to do this. This is again embarrassment of riches. Do you do I I don't exclusively listen to our podcasts or the conversations I have and then what else is going on.
But I have to say you we get some pretty amazing conversations over here and having Kai and you and all of us firing on all cylinders here. This is an amazing list. Well, I I am the editor, so I do have to exclusively listen to our podcast.
But uh you can't necessarily judge the quality based on that because I'm forced to listen to every one of them, but I do think they were really good this week. Um as I always do. So, we got Kevin Weir, Dan Rasmmanson, Ian Castle, and uh I mean that alone right there, we have a giant macro conversation.
We have the PE complex and everything that's going on there, and then a micro cap stock conversation with Ian. That's that's not your average finance channel. I'm pretty
Yeah, the kind of balance we're trying to create with the podcast. Um, you know, we're trying to do and the YouTube algorithm doesn't love this, but we're trying to do a lot of different things. I mean, we talk some macro. E Ian's thing is is a very philosophical thing about a book that he wrote that's really really great.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- bond yields
- ai capex
- private equity software
- stock picking skills
- earnings bubble
Companies and tickers mentioned
- NVDA
- Nvidia
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Excess Returns, this episode and its artwork belong to Excess Returns. Octagon is not affiliated with the show; this page is an independent summary.
