In this episode of Excess Returns, we welcome back Cullen Roche of Discipline Funds for an in-depth conversation on the economy, markets, demographics, AI, and investing frameworks. Cullen cuts through the noise to explain the real forces shaping inflation, interest rates, the role of the Federal Reserve, and why he believes the U.S. faces more disinflationary pressures than inflationary risks. We also dive into his “defined duration” investing framework and preview his upcoming work on portfolio strategies.

Topics Covered

• Why fears of a looming debt crisis may be misplaced

• Inflation outlook, tariffs, and the Fed’s “soft landing” challenge

• The importance of Fed independence and risks of politicization

• Immigration, demographics, and long-term disinflationary trends

• How AI is reshaping productivity, inequality, and the job market

• Defined Duration Investing and asset-liability matching

• Lessons from all-weather strategies and the Permanent Portfolio

• Cullen’s “Forward Cap Portfolio” and future of global markets

Timestamps
00:00 – Cullen on debt crisis fears
02:32 – State of the U.S. economy post-COVID
05:18 – Inflation, tariffs, and shelter costs
10:25 – Soft landing vs. rolling recessions
14:07 – The Fed’s role and impossible job
19:25 – National debt and Ray Dalio’s crisis warning
27:52 – AI boom and disinflationary forces
31:01 – Immigration, demographics, and inflation
37:23 – Aging population and wealth inequality
43:00 – How AI impacts productivity and jobs
52:00 – Defined Duration Investing explained
1:01:34 – Portfolio strategies: Permanent Portfolio & risk parity
1:03:54 – Cullen’s “Forward Cap Portfolio”
1:06:31 – Closing thoughts and future projects

In this episode of Excess Returns, we sit down with EricPachman of Bancreek Capital to explore the intersection of data, economics, andinvesting. Eric shares his unique journey from the corporate world tohealthcare transparency and ultimately to building a data-driven investmentfirm rooted in information theory. We dive deep into employment trends,healthcare’s role in the economy, immigration, inflation, and how hissystematic process identifies companies with the endurance to thrive.

### Topics Covered

* Eric’s unconventional career path: from Morgan Stanley andExxonMobil to founding 46Brooklyn and joining Band Creek

* How personal experiences led him to tackle healthcaretransparency and drug pricing reform

* The role of **information theory** in investing and thefoundation of Band Creek’s systematic process

* Building powerful data visualizations to understand labormarkets, inflation, and structural economic changes

* Why healthcare dominates recent U.S. job growth and therisks of overreliance on one sector

* The impact of immigration on labor force growth andstructural inflation

* Key drivers of inflation and how to interpret CPI and PCEdata

* How Band Creek applies systematic endurance and the KellyCriterion to equity selection

* Sector exposures and lessons learned from applyingdata-driven models internationally

* Eric’s views on cognitive biases, why most investors can’treliably beat the market, and the power of data analysis

In this episode of Excess Returns, we welcome back Cole Smead of Smead Capital for a wide-ranging conversation on markets, history, and the principles of value investing. Cole shares his perspectives on fiscal largesse, inflation, passive flows, energy markets, U.S. exceptionalism, and the timeless lessons of Buffett and Munger. His insights bridge economic history with today’s market realities, giving investors a framework to think about risk, capital allocation, and opportunity costs.

• Deficits, monetary policy, and why recessions are hard to find today

• Inflation dynamics and lessons from the 1960s and 1970s

• The U.S. government’s role in markets (Intel stake, big government policies)

• American exceptionalism vs. global capital allocation improvements

• Earnings quality and the divergence between accounting and economic profits

• Passive investing flows, weak competition, and investor behavior

• Energy investing: from fracking bust to efficiency and capital discipline

• Comparing the AI boom with past manias and capital cycles

• Smead Capital’s investment process and evaluating “wonderful companies”

• Buffett, Munger, and the lessons of asset-light vs. capital-intensive businesses

• Closing insights: why returns on capital matter more than EPS or revenue

00:00 – Opening quote and fiscal deficits
02:00 – Debt, inflation, and recession risks
08:50 – Government stake in Intel & big government era
12:15 – U.S. exceptionalism and arrogance
17:30 – Earnings quality erosion in U.S. businesses
24:00 – Passive flows and human behavior
27:30 – Opportunities in energy investing
34:00 – Energy buildout vs. AI boom
38:00 – Smead Capital’s investment process
44:00 – Lessons from Buffett and Munger
51:00 – Standard closing question