Excess Returns

Excess Returns

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Excess Returns is an investing podcast hosted by Jack Forehand and Justin Carbonneau, partners at Validea. Justin and Jack discuss a wide range of investing topics with the goal of helping those who watch and listen become better long term investors, all in twenty minutes or less per episode.


The Importance of Challenging Your Own Beliefs
Mar 29 • 19 min
Confirmation bias is one of the most damaging biases in investing. All of us want to be right. We all want to think that opinions that disagree with ours don’t have sensible arguments to support them. So we gravitate toward people who agree with ours.…
Looking at Different Ways to Manage Risk
Mar 22 • 21 min
There are many ways to manage risk in a portfolio. Traditional methods like blending stocks with bonds will work for most investors, but more creative methods can also make sense in some cases. One thing all risk management techniques have in common…
Q&A: Answering Investors’ Questions in Uncertain and Volatile Times
Mar 19 • 19 min
With the market in the midst of a significant decline and uncertainty reaching levels we haven’t seen in many years, we have received many questions about what is going on, and where we go from here. So we decided to do a Q&A episode to do our best to…
Some Thoughts on Market Panics
Mar 15 • 18 min
The argument that investors should stay the course during market declines is an easy one to make. It also in most cases is the correct one, since figuring out when to get out of the market, and when to get back in, is very difficult for most investors to…
Some Thoughts on the Struggles of Factor Investing in the Past Decade
Mar 8 • 13 min
The long-term evidence to support factor investing is compelling. Academic work has shown that factors like value and momentum have produced an excess return relative to the market over time. But what occurred in the most recent decade was in many ways…
The Dangers of Headline Investing
Mar 1 • 16 min
The recent market sell off related to the Coronavirus has many investors worried. And with good reason. When panics like this set in, we all tend to focus on worst case scenarios and want to take action in response. But the process of analyzing headlines…
The Pros and Cons of Trend Following
Feb 23 • 18 min
To say that the track record of market timers in general is dismal would be an understatement. There are so many factors that impact market returns that getting them all right is next to impossible. And even if you do, figuring out what is and is not…
The Pitfalls of Back Testing
Feb 16 • 16 min
Back testing is one of the most misused tools in investment management. Almost every back test outperforms the market, but those same strategies often struggle when run with actual money. In this episode, we discuss the reasons why back tested results…
Lessons From Our Most Read Five Questions Interviews
Feb 9 • 17 min
In this week’s episode, we talk about the biggest lessons from the first year of our Five Questions interview series. Our Five Questions series features in depth interviews with leaders in the investing industry. We discuss the five most important lessons…
The Benefits of a Value Composite
Feb 2 • 15 min
Picking the right value metric can be one of the biggest challenges of quantitative value investing. Although the Price/Book is the most widely used value metric, its struggles in recent years and valid concerns that have been raised about its viability…
The Perils of Market Forecasting
Jan 26 • 16 min
We have just completed market prediction season. Its the time of year where there are countless forecasts about what the economy will do in the new year. Its when experts tell you what interest rates will do for the year. And most of all, its when you see…
The Challenges of Developing a Sell Strategy
Jan 19 • 17 min
As difficult as it is to figure out the right stocks to buy, determining when to sell can be even more challenging. In this episode, we look at the important factors to consider when deciding when to sell and develop a systematic sell framework that can…
Bonus: Long Live Value Investing?
Jan 16 • 7 min
After we finished recording this week’s episode on the case against value stocks, we kept the recorder rolling and we have included that audio in this short bonus episode. We discuss the challenges of figuring out whether you have overcome your…
The Case Against Value Stocks
Jan 12 • 18 min
Confirmation bias is one of the biggest problems in investing. We all have a set of core beliefs, and we tend to surround ourselves with people who also believe them and focus on information that validates them. That can be dangerous, though, because it…
The Double Edged Sword of Avoiding Value Traps
Jan 5 • 14 min
Many value stocks are cheap because they deserve to be. Some of them no longer have sustainable businesses, and as a result their current discounted multiple will look really expensive relative to where their business is headed. These types of stocks are…
Lessons From the March For the Fallen
Dec 29, 2019 • 14 min
In this episode, we discuss Justin’s experience participating on the Alpha Architect team in last year’s March for the Fallen. and how some of the lessons he learned from it can be applied to investing. The March for the Fallen is an event hosted by the…
Six Common Misconceptions About Factor-Based Strategies
Dec 22, 2019 • 22 min
Factor strategies have grown exponentially in the past decade. Almost every major asset manager now offers their variation of things like value, momentum, quality, and low volatility. But to use them properly, it is important to understand what they can…
The Rising Bar for Active Management
Dec 15, 2019 • 15 min
The market has always been tough to beat, but the ability to investors to gain inexpensive exposure to factors like value and momentum has made the job of active managers even harder. In this week’s episode, we talk about why the pursuit of alpha has…
The Mechanics of Value Investing
Nov 26, 2019 • 18 min
There is a tendency to believe that all value investing strategies are similar. But beneath the surface, many value approaches couldn’t be any more different. These differences can lead to substantially different outcomes in both the long- and short-term.…
Excess Returns (Trailer)
Nov 25, 2019 • 0 min