Framework: base, bull, and bear cases

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In this episode of Last Call, Jack Forehand and Matt Zeigler look past the headlines to unpack what really moved markets this month. From the viral AI end of times scenario that sparked responses from Citadel, Fed Governor Waller, and Jeremy Siegel, to the growing stress in private credit and the rotation out of US mega cap stocks, this is a different kind of market wrap. Instead of recapping what the S and P 500 did, we explore what investors are actually doing with their money, how narratives shape positioning, and what the data says about whether this time is different.

Featuring Brent Kochuba of SpotGamma, Ben Hunt of Epsilon Theory, Rupert Mitchell of Blind Squirrel Macro, and Meb Faber of The Idea Farm, this episode dives into AI, software stocks, options flows, credit cycles, global equity markets, gold, and the power of base rates in investing.

Main topics covered:

• The viral AI bear case scenario and why a fictional narrative moved real markets

• How investors should think in probabilities, bull cases, base cases, and bear cases

• What options pricing and put call ratios reveal about real fear versus social media fear

• The state of software stocks and whether extreme bearishness may have marked a short term bottom

• Private credit stress, rising default risks, and why every credit cycle ends when lenders say no more

• An on the ground anecdote from San Francisco illustrating how refinancing risk is playing out in real time

• The rotation from US mega caps into international stocks and why fiscal spending matters for equity markets

• Gold and gold miners as potential beneficiaries of global liquidity and currency shifts

• Why base rates matter when evaluating explosive AI revenue forecasts

• Historical lessons from the Nifty Fifty, Japan’s bubble, the dot com era, and other periods when investors believed this time is different

• Portfolio construction tools including diversification, rebalancing, and trend following in bubble environments

Timestamps:

00:00 Introduction and the AI end of times narrative
02:16 Why investors are responding to fiction and what we can learn from it
08:00 Brent Kochuba on options flows and software stock positioning
13:00 Has extreme bearishness in software marked a bottom
19:55 Ben Hunt on private credit and the boom bust cycle
27:00 A San Francisco refinancing story and when lenders say no
33:08 Rupert Mitchell on global markets, fiscal spending, and gold
44:22 Meb Faber on base rates, bubbles, and this time is different
01:00:16 How to track AI’s real world impact in corporate data

If you enjoy deep dives into investing, AI, market structure, credit cycles, global equities, and evidence based portfolio construction, be sure to subscribe to Excess Returns for more conversations like this.