Excess Returns

Brent Kochuba of SpotGamma joins Jack Forehand for the May 2026 OPEX Effect to break down what options positioning is saying after a massive AI and semiconductor-led market rally. They discuss SPX call volume, zero DTE options, dealer gamma, VIX expiration, NVIDIA earnings, oil risk, AI CapEx, and why options flows may help explain both the market’s recent melt-up and the potential for a volatility shift after OPEX.
Guest Links
Brent Kochuba on X
https://x.com/spotgamma
SpotGamma
https://spotgamma.com/
Topics Covered
Why the market has ignored oil shocks and geopolitical risk while AI earnings dominate investor attention

How AI CapEx, semiconductors and mega-cap tech have driven a powerful melt-up in stocks

Why options volume and zero DTE trading are increasingly important for all investors

How dealer hedging, delta and gamma can affect stock market moves

Why options expiration can create short-term turning points in markets and volatility

What the May OPEX setup says about call-heavy positioning in the S&P 500

Why single-stock options activity in NVIDIA, Tesla, Apple, Amazon and AI-related names matters

How record SPX call volume is being driven by short-dated options flows

Why Brent is watching VIX expiration, NVIDIA earnings and May 19 to May 20 for volatility expansion

What oil, VIX, correlation and dispersion are signaling about market risk

Timestamps
00:00 Intro: SPX call volume, call-heavy positioning and transient options flows
00:57 Are we in melt-up mode?
05:29 AI, UFOs and how fast market narratives are changing
09:00 Why options flows matter more for everyday investors
13:39 Could SpaceX become the next huge options market?
16:00 How dealer hedging, delta and gamma move through the market
20:44 Why OPEX can become a turning point for stocks and volatility
23:22 Why May OPEX is so call heavy
28:07 The market rally into May expiration
33:00 AI rebranding, meme behavior and downside headline risk
36:07 Reviewing last month’s oil and volatility setup
40:17 How the war flipped market leadership back to tech
44:13 Dealer gamma support in the S&P 500
49:19 Single-stock gamma in NVIDIA, Tesla, Apple and Amazon
51:06 Record SPX call volume and the role of zero DTE
54:55 Semiconductor, AI and memory call volume
57:50 From bearish positioning to peak-bull dispersion
59:22 Oil, the S&P 500 and changing correlations
01:03:06 COR1M, dispersion risk and when Brent considers hedging
01:04:57 Brent’s key takeaways for May OPEX and volatility expansion

Elena Khoziaeva, Co-Chief Investment Officer and Portfolio Manager at Bridgeway Capital Management, joins Excess Returns to discuss factor investing, small caps, value investing, market concentration, intangibles, passive investing, market neutral strategies, and the role of AI in quantitative investment research.
We cover how Bridgeway combines disciplined quantitative models with human judgment, why the S&P 500 may be less diversified than investors think, and how investors can think about diversification when mega-cap growth stocks dominate market returns.
Bridgeway Capital Management
https://bridgeway.com/
I Know What You Did Last Summer
https://bridgeway.com/perspectives/i-know-what-you-did-last-summer/
How Many Stocks Are Effectively in the S&P 500?
https://bridgeway.com/perspectives/how-many-stocks-are-effectively-in-the-sp500/
Topics Covered
Why quantitative investing still needs human judgment and skepticism

The difference between smart beta and true multi-factor portfolio construction

How Bridgeway combines value, quality, sentiment and risk controls

Why the size premium may depend on how small-cap stocks are defined

Why recently fallen large caps and IPOs can distort small-cap research

How the small-cap universe has changed as companies stay private longer

How intangible assets affect traditional value and quality metrics

Why value can work in bursts and why timing factor rotations is so difficult

How concentrated the S&P 500 has become using the HHI framework

Why passive investing may create opportunities for active small-cap managers

How market neutral strategies can help investors manage equity market volatility

How AI can help with data, text analysis and trading without replacing investment judgment

Timestamps
00:00 Why fewer than 50 stocks are driving S&P 500 returns
01:04 Bridgeway’s evidence-based investing approach
02:59 Why quantitative models need human judgment
07:52 Smart beta vs multi-factor investing
11:32 How Bridgeway builds multi-factor portfolios
16:08 Rethinking the size premium
20:31 Has the small-cap universe gotten worse?
23:49 How intangibles change value investing
28:05 Does value still work?
30:09 Why value returns can be episodic
33:11 Why factor investors need patience
35:22 How concentrated is the S&P 500?
40:29 Factor strategies as portfolio diversifiers
41:41 Passive investing and market structure
44:27 Managing volatility with market neutral strategies
49:40 How systematic managers update their models
55:02 How Bridgeway is using AI
01:00:03 Elena’s biggest lesson for investors

This episode of our new showThe 100 Year Thinkers brings together Chris Mayer and Ian Cassel for a deep discussion on long-term stock picking, microcap investing, business quality, AI disruption, management teams, and the behavioral skills that separate great investors from great analysts.
They explore why the edge in investing may increasingly come from judgment, presence, relationships, patience, and the ability to hold the right businesses through uncertainty.
Subscribe to the 100 Year Thinkers on Spotify⁠⁠
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Topics Covered
Why being present with management teams may still be an investor edge in the age of AI

How microcap investing differs from small-cap, mid-cap and large-cap investing

Why talking to management can build conviction but also create bias

How Chris Mayer thinks about vertical market software, mission-critical systems and AI disruption

Why AI may become table stakes rather than a durable competitive advantage

How small companies can use AI to improve workflows, sales, inventory and productivity

Why many microcaps have short shelf lives and rarely become true long-term compounders

The role of intelligent fanatics, owner-operators and repeat winners in great investments

Why management transitions can create powerful microcap opportunities

The difference between being a great analyst and being a great investor

Why execution, position sizing, selling losers and holding winners matter more than hit rate

How Matt and Bogumil apply the lessons to AI, business quality and the limits of small business scalability

Timestamps
00:49 Introducing Chris Mayer, Ian Cassel and 100 Year Thinkers
04:59 Ian Cassel’s first management meeting and XM Satellite Radio
09:00 Why management meetings deepen understanding but can also mislead
14:32 Chris Mayer on the real edge in long-term investing
18:40 Mission-critical software, systems of record and AI disruption
22:45 How microcap companies are using AI in real businesses
27:02 AI as table stakes and when disruption creates opportunity
31:29 Why most microcaps have short shelf lives35:51 Finding Tom Brady before the market knows he is Tom Brady
40:53 Why owner-operators and intelligent fanatics matter
45:03 Second-in-command leaders, repeat winners and chips on shoulders
49:27 Analyst vs investor and the missing skills of stock picking
54:00 Using data to identify investor strengths, weaknesses and decision errors
58:14 Position sizing and letting small positions earn the right to grow
01:03:00 Peter Lynch, stocks as businesses and learning to think like an owner
01:07:00 AI, human judgment and the limits of automation
01:11:00 Why not every small business can become the next Facebook
01:15:00 Where to follow Bogumil and the 100 Year Thinkers series

This week’s Excess Returns Weekly Wrap examines what Chris Davis and Rich Bernstein can teach investors about letting winners run, inflation risk, market concentration, dividends, AI, and the difference between economic stories and investment returns. Jack Forehand and Matt Zeigler break down clips on portfolio concentration, the 1960s vs. the 1970s, investor complacency, the Fed’s inflation target, durable businesses, and where the next market opportunity may be hiding.
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Topics Covered
Why letting winners run can be so powerful, but so hard for professional investors

Chris Davis on how his mother outperformed by never selling great companies

The tradeoff between concentration, diversification and real-world portfolio risk

Why Rich Bernstein thinks today may look more like the 1960s than the 1970s

How oil prices affect consumer behavior when measured against wages

Chris Davis on why perceived risk can be very different from actual risk

What cars, insurance and investor behavior reveal about market complacency

Why the Fed’s 2% inflation target may not reflect the world investors are living in

The relationship between valuation, durability and software stocks

Why higher inflation could increase demand for dividends and near-term cash flow

Chris Davis on why exceptional people and management teams matter in investing

Why AI may be a great economic story but not necessarily a great investment story

Timestamps
00:00 Letting winners run, 1960s inflation and investor risk perception
02:18 Chris Davis on how his mother outperformed by never selling
08:32 Reinvestment risk and the limits of active management
12:45 Why oil shocks may matter less when gasoline is low relative to wages
20:25 Chris Davis on why feeling safe can make investors take more risk
29:20 Rich Bernstein on whether the Fed’s 2% inflation target is outdated
34:08 Chris Davis on durability, valuation and software stocks
39:39 Why cash flow gives durable companies room to adapt
43:16 Rich Bernstein on dividends, inflation and the need for cash today
51:55 Chris Davis on why people matter more than investors think
56:07 The risk and value of investing with exceptional leaders
1:01:30 Rich Bernstein on AI as an economic story vs. an investment story
1:05:13 Why AI productivity may not translate into obvious stock market winners

This episode of Last Call breaks down one of the most confusing market environments in recent memory: why stocks continue to rise despite war, oil shocks, and growing macro risks. Through conversations with Jim Paulsen, Ben Hunt, Kevin Muir, and Brent Kochuba, we explore the tension between strong earnings, hidden risks in private credit and global growth, and the powerful role of flows and positioning in driving markets higher.

Follow Last Call on Spotify⁠⁠⁠⁠
⁠⁠⁠⁠Follow Last Call on Apple Podcasts⁠

Topics Covered
Why markets are ignoring war, oil shocks, and geopolitical risk

The “supernova” risk in private credit and why it hasn’t hit markets yet

How supply-driven inflation differs from 1970s-style demand inflation

Why pessimistic sentiment may actually be supporting markets

The role of earnings growth and valuation resets in fueling the rally

Bull vs bear case for markets based on macro, earnings, and positioning

Why free cash flow trends may be more concerning than earnings

How options flows and dealer positioning are suppressing volatility

The AI capex boom and its impact on market leadership and breadth

The growing divide between Mag 7 earnings and the rest of the market

Timestamps
00:00 Intro and market overview
01:37 Why markets are not falling despite negative news
03:00 Buy-the-dip behavior and earnings resilience
06:11 Ben Hunt on “supernova” risks in private credit
08:00 Hidden credit crunch in middle market companies
10:24 Why private credit matters for economic growth
14:10 Oil supply shocks and global growth risks
17:00 Why markets can ignore risks before they appear
18:48 Jim Paulsen on market resilience and sentiment
20:00 Why pessimism may reduce downside risk
22:24 Inflation vs labor force growth framework
24:00 Why current inflation is supply-driven, not demand-driven
26:00 Potential shift from inflation focus to growth focus
29:11 Kevin Muir on bull vs bear market setup
31:00 War impact on rates, oil, and positioning
33:00 Fed reaction and shifting rate expectations
35:00 Why earnings remain the dominant market driver
37:00 Why geopolitics often doesn’t move markets
40:00 Bear case: weak free cash flow and employment risk
44:26 Brent Kochuba on options flows and positioning
47:00 Why markets ignore rising rates and oil
49:00 Call buying, dispersion, and tech leadership
51:00 Energy as both hedge and AI-driven opportunity
54:00 Correlation, volatility, and market structure
56:00 Dealer positioning and suppressed volatility
58:00 Earnings strength and narrow market leadership
01:01:00 Free cash flow vs earnings debate
01:01:55 AI capex and long-term market implications