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Podcast: Excess Returns
Episode:

The Most Extreme Speculation in 40 Years | Richard Bernstein on What It Means for Markets
Category: Business
Duration: 00:59:22
Publish Date: 2025-11-05 14:20:28
Description:

In this episode, we are joined by Richard Bernstein, CIO and CEO of Richard Bernstein Advisors. We discuss why this is one of the most speculative market environments he has seen in his 40-year career, why he still believes it may also be one of the best eras for patient long-term investors, and how to think about the real opportunities hiding beneath the market's current narrow leadership. Richard breaks down his profit cycle framework, shares why investors are confusing economic stories for investment stories, and explains why non-US quality stocks and dividend strategies may be primed for a comeback.Topics covered
• Speculation across asset classes and why it matters
• Why fundamentals still offer big opportunities
• The profit cycle vs the economic cycle
• Divergence between the market leaders and the broader market
• Inflation, pricing power, and corporate margins
• Parallels between the AI boom and the dot-com bubble
• Misallocation of capital and risks to the market
• The case for non-US quality stocks
• Where value investing could shine again
• Dividend compounding and long-term wealth building
• How RBA approaches macro-driven ETF investing
• What investors are getting wrong about diversification
• Deglobalization, reindustrialization, and long-term themes

Timestamps
00:00 Intro and speculative environment
01:46 Best opportunities for patient investors
03:52 Profit cycle framework explained
06:00 Where we are in the profit cycle
07:32 What investors are missing on inflation
09:12 Lessons from the dot-com era and AI comparisons
13:46 What could trigger the speculative unwind
17:18 Valuations, CAPE, and return expectations
20:23 AI’s impact on margins and productivity
22:39 Can value outperform again
25:41 International opportunities and quality stocks
34:31 Market breadth and narrow leadership
36:00 The Fed, inflation targeting, and policy risks
40:11 RBA’s investment process and ETF selection
47:13 Diversification vs speculation behavior
49:26 Misallocation of capital and market risks
52:00 Deglobalization and manufacturing opportunities
54:13 Closing question: Stock market vs horse race
57:40 The business Richard would start today
58:29 Where to follow Richard Bernstein
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