This ETF Beats QQQ by Targeting ‘Low Marginal Cost’ Winners (AOTG) | John Tinsman

What if the best investing edge isn’t a chart pattern… but a business model?

Jim Iuorio and Bob Iaccino sit down with John Tinsman (Founder, AOT Invest) to break down why “low marginal cost” companies have dominated for decades—and how his ETF AOTG is built to target them.

In this episode, John explains the core thesis behind AOTG: prioritize high-growth, profitable businesses where the cost of serving the next customer is near-zero—then rebalance to keep growth high while lowering valuation metrics. We also dig into drawdowns, bear-market questions, why Apple isn’t always “growth,” and how passive market-cap indexing can distort allocations at exactly the wrong times.

What you’ll learn:

- Why “low marginal cost” is the hidden driver behind mega-winners (Visa, Microsoft-style economics)

- Why John focuses on profitable growth (and avoids speculative “story stocks”)

- How AOTG thinks about valuation (why Palantir got cut, why cheaper faster growers can win)

- What happens in a sharp tech selloff and how AOTG handles slowdowns / profitability changes

- Why John believes today’s Nasdaq is not the Nasdaq of 2000

- Rebalance cadence, portfolio turnover, and what can hurt this strategy

Timestamps:

00:00 – Welcome + why Jim is laser-focused on portfolio construction now

02:05 – From investing in high school → building AOTG

05:02 – “Low marginal cost”: what it is (and why Ford ≠ Visa)

07:32 – Tech disruption risk + why moats form anyway

09:44 – Why John avoids small/mid caps + stock-based comp dilution

13:26 – Drawdowns, volatility, and why fundamentals matter

17:27 – AOTG vs QQQ/SPY performance discussion

20:38 – “You haven’t been through a bear market…”—John’s response

30:38 – Valuation filter: why Palantir got removed

35:11 – 2000–2003 Nasdaq comparison (then vs now)

37:52 – How often AOTG rebalances + turnover

43:29 – The hardest question: what crushes this strategy?

48:40 – Bonus: best burger in the Chicago suburbs 🍔

Tickers mentioned:

AOTG, QQQ, SPY (plus company examples referenced: NVDA, V, HOOD, etc.)

Follow along on social media: 

Twitter:    https://x.com/bob_iaccino

Twitter:   https://x.com/jimiuorio

LinkedIn:  https://www.linkedin.com/in/bob-iaccino/

LinkedIn:   https://www.linkedin.com/in/james-iuorio/

Newsletter:  http://theunfilteredinvestor.com/

This episode is sponsored by: 

Independence Ark: https://www.independenceark.com/

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AmerGold https://www.amergold.com/

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