In this episode of Excess Returns, we sit down with Louis-Vincent Gave of Gavekal Research for one of the most wide-ranging and eye-opening conversations we have ever hosted. Louis breaks down how China transformed its economy over the last seven years, why Western observers consistently misunderstand the country’s growth model, and what this means for global markets, AI competition, supply chains, currencies, energy, demographics, and the next decade of investing. If you want a clearer picture of China, global macro dynamics, and the forces shaping markets today, this is essential viewing.

Topics covered in this episode:
• Why Western investors misread China’s economy
• China’s response to the US semiconductor embargo
• How China redirected all lending toward industry
• The scale and speed of China’s move up the value chain
• China’s EV dominance and the BYD vs. Tesla comparison
• The new global deflation and reflation forces
• Why China now looks like the US did in 2009
• Energy, labor, and industrial competitiveness
• China’s open-source AI approach vs. America’s closed systems
• “Hunger Games” capitalism and the impact on investors
• Where foreign investors consistently get China wrong
• The RMB as the most mispriced major asset
• How China’s demographics shape policy and markets
• Why fears of a Taiwan conflict are overblown
• How Louis is positioning for China’s next bull market

Timestamps:
00:00 China’s economic shock and the US semiconductor embargo
02:00 What the West gets wrong about China
04:00 Competition, local governments, and industrial incentives
06:10 China’s lending shift: real estate to industry
08:00 China’s rapid climb up the value chain
10:00 BYD vs Tesla and China’s engineering surge
12:30 The global deflationary shock and US–China tensions
15:00 From defense to offense: China’s policy pivot
17:00 China’s reflation and emerging market implications
18:20 Scarcity of energy, labor, and time
21:00 China’s cost advantages vs the US
24:00 Comparing AI strategies: open vs closed systems
28:00 “Hunger Games” capitalism in China
31:30 Investing challenges and opportunities in China
34:00 China’s new high-tech niche champions
37:00 Capital-light Chinese AI vs US capital intensity
40:30 Rethinking US-China blocs and global alliances
44:00 Why Europe will be torn apart by the next phase
45:30 Will China outperform the US over the next decade?
47:00 The massively undervalued RMB
49:00 China’s barbell investment setup
50:00 China’s demographic crisis and policy response
53:00 Taiwan risk: myth vs reality
58:00 How Louis could be wrong
01:00:40 Louis’s contrarian investing belief
01:02:00 Louis’s one lesson for investors

In this episode, we sit down with Sanctuary Wealth Chief Investment Strategist Mary Ann Bartels to break down her new 2026 outlook. We cover her long-term S&P 500 forecast, why she believes we are still early in a secular bull market, how technological innovation is fueling productivity and profitability, the risks she’s watching in 2026, and the case for international stocks, gold, and diversification. Mary Ann also explains why skepticism suggests we are not yet in a true bubble, how valuations fit into today’s market, and what investors should understand about cycles, inflation, and long-term compounding.

Topics Covered
• Secular bull markets and why the long-term trend still points higher
• Whether today’s market is following historic bubble patterns
• AI, technology cycles, and the connection between innovation, productivity, and profits
• Why skepticism means we are not yet near euphoria
• The 2026 “reset” and how the presidential cycle could affect markets
• Valuations, earnings trends, and interest-rate dynamics
• Market concentration, structural changes, and the role of mega-caps
• Growth vs value and why growth leadership may persist
• Why international markets may be entering their own secular bull market
• Inflation outlook, tariffs, and what the data now suggests
• Private credit concerns and overall financial-system stability
• Gold’s surge, future targets, and its role as portfolio diversification
• Portfolio construction, risk, and the importance of compounding for younger investors

Timestamps
00:00 Market patterns, bubbles, and early-cycle dynamics
01:00 Introduction
02:00 Long-term S&P 500 outlook
04:00 Historical bubble analogs and market psychology
06:00 Skepticism vs optimism
09:00 2026 reset and election-year dynamics
13:00 Valuations and PE expansion
17:00 Long-term valuation trends
17:40 Innovation cycles and economic growth
20:20 Productivity, AI CapEx, and profitability
21:00 Technology adoption across industries
22:20 Digitization and long-term tech layers
22:30 Market concentration and structural changes
25:00 Why corrections are more frequent
27:20 Growth vs value
31:00 International markets outlook
36:00 Correlations, deglobalization, and opportunity
38:40 Inflation short-term vs long-term
40:30 Private credit and financial stability
43:30 Gold outlook and targets
45:40 Diversifying concentrated portfolios
48:40 Crypto, private markets, and generational shifts
49:20 Key risks for 2026
51:40 What most investors get wrong
53:00 The one lesson for the average investor
54:40 Closing

In this episode of Excess Returns, we talk with Carl Kaufman, Co-President and Co-CIO of Osterweis Capital Management, about navigating today’s fixed income landscape. Carl breaks down the major segments of the bond market, explains how credit and interest rate cycles interact, discusses private credit risks, and shares how he builds durable, low-volatility bond portfolios. Drawing on more than two decades managing one of the top multi-sector income funds, Carl offers clear, practical insights for investors trying to understand yields, defaults, duration, and where returns are most attractive today.

Main topics covered:
• Overview of investment grade, high yield, leveraged loans, and private credit
• How today’s credit quality is shifting across the bond market
• Why the high yield market may be higher quality than most investors realize
• How levered loans and private credit have changed system dynamics
• How Carl uses the interest rate cycle and credit cycle to position the portfolio
• Why he avoids style boxes and instead buys bonds like a stock picker
• The flaws in fixed income indexing and why active management matters more in bonds
• How he evaluates companies, business models, leverage, and free cash flow
• Why distributors and equipment rental companies are strong long-term bond businesses
• The risks of the AI Capex boom and echoes of past bubbles
• Where defaults are rising and why private credit concerns may not be systemic
• Why his portfolio is short duration and how he uses cash as optionality
• How he protects against large drawdowns and manages risk across cycles
• His perspective on the Fed, inflation, employment data, and rate cuts
• Carl’s one investing belief most peers disagree with
• The one lesson he would teach every investor

Timestamps:
00:00 Intro and bond market quality shift
01:00 Carl’s background and fund philosophy
02:42 Defining investment grade, high yield, loans, and private credit
08:00 Why high yield quality has improved
10:07 The two-cycle approach: interest rates and credit
14:31 How today’s cycle differs
18:03 Why forecasting matters less than knowing where you are
18:52 Buying bonds like a stock picker
25:28 Index flaws in fixed income
26:56 Sectors Carl prefers
29:16 Thoughts on AI Capex, Nvidia, and financing trends
33:10 Sector concentration in bond portfolios
34:51 Position sizing and portfolio construction
35:43 Cracks in private credit and default data
39:45 Private credit for retail investors
40:34 Why Carl is short duration today
44:57 Using cash and liquidity as a strategic tool
45:44 Risk management and drawdowns
47:29 The Fed, inflation, employment, and policy uncertainty
53:53 Closing questions: belief peers disagree with
54:45 One lesson for the average investor