Podcast Summary: The 100 Year Thinkers | Chris Mayer and Robert Hagstrom on Finding the Next Great Compounders

Podcast: Excess Returns
Episode: The 100 Year Thinkers
Date: October 13, 2025
Special Guests: Robert Hagstrom, Chris Mayer, Bogomil Baranowski, Matt Zeigler

Episode Overview

This episode marks the debut of "The 100 Year Thinkers," a podcast dedicated to exploring investment strategies and portfolio construction from a genuinely long-term perspective—measured in decades rather than quarters. Hosts Matt Ziegler and Bogomil Baranowski join forces with renowned investors and authors Chris Mayer ("100 Baggers") and Robert Hagstrom ("The Warren Buffett Way"). Together, they examine whether investors can still find market-beating compounders in today’s mega-cap, momentum-driven market, and how the structure of modern indices like the S&P 500 affects both active and passive investment strategies.

Key Themes and Discussion Points

1. Concentrated Portfolios & The Reality of Market Dominance

• Concentration in Indexes: Most popular market indices are now quasi-concentrated vehicles. “The top 10 of the S&P is at like 38%... Top 10 of the Nasdaq's at over 50%” (Matt Ziegler, [01:36]).
• Pitfalls of Concentration: To run a highly concentrated portfolio (10–15 stocks), “there's a lot of stocks and businesses that just should be off the table completely. Things that are highly levered... You can't have that when you're concentrated.” (Bogomil Baranowski, [02:59]; [21:09]).
• Market Cap Magnitude: The enormity of today’s largest companies makes future outperformance (e.g., “100-baggers”) improbable. “The smallest market cap of the big seven is Tesla at $1.4 trillion. 'A little baby.' Then Nvidia is like four and a half. You’re talking about market caps that are the size of GDPs of European countries.” (Baranowski & Mayer, [01:16]-[01:26]).

2. Are Today’s Mega-caps Still Investible Compounders?

• Historic Underperformance of Top Holdings: Research shows that when the S&P 500's top 10 stocks hit high concentration levels, “they underperform like 88% of the time over the next five year period or something like that.” (Chris Mayer, [03:26]).
• Network Effects & Unique Economics: Today’s leading firms are different due to their “network economic businesses,” contrasting with past brick-and-mortar market leaders. “It’s a totally different animal.” (Robert Hagstrom, [12:38]).
• Persistence and Change at the Top: Almost all former mega-caps fade: “Nobody stays on top... very competitive marketplace... Microsoft had a lost decade before it really took off.” (Baranowski, [17:12]).

3. Benchmarks, Fairness, and the Role of Index Construction

• Flawed Measures?: Comparing to the S&P is akin to telling a baseball manager, “You have to have more wins than the New York Yankees.” (Mayer, [09:21]).
• Index Impact on Markets: The S&P 500 has evolved from a benchmark to a market participant, “no longer just an observer…it became participant.” (Baranowski, [37:29]).
• Benchmark Construction Critique: “The problem is in the S&P 500... they could easily change the weights of the top 10... that's up to the S&P committee.” (Hagstrom, [11:23]).

4. Comparing Equal-weight vs. Cap-weight Indices

• Different Outcomes, Same Stocks: Despite same composition, equal weight and cap weight yield “so different” outcomes during certain periods, especially when extremes dominate performance. (Podcast Host, [14:09]).
• Stock Swapping and Turnover: “Every year the S&P swaps out 20 names. Over a decade or two, the S&P starts to look very different.” (Baranowski, [14:14]).

5. Performance, Process, and Investor Psychology

• Frequency vs. Magnitude: “It’s not how many times you’re right… It’s how much money you make when you’re right, less how much you give back when you’re wrong.” (Hagstrom, [01:24], [52:15]).
• Personalized Goals: “You can’t start with your goal being to beat the S&P 500… You have to try to create the team that’s going to score the most runs, give up the fewest.” (Baranowski, [50:15]).
• Patience is Key: “You have to allow that you’re going to fall behind… so you can gain a lot of ground later on. Buffett fell behind, we all fall behind…” (Podcast Host, [51:30]).

6. Private Equity and Public Markets

• PE Underperformance: “Private equity returns for the last, I’d say 10 years… it's been atrocious… If you look at the economics, it's nowhere near [public mega-caps like Nvidia].” (Hagstrom, [42:22]).
• Market Saturation and Fees: “There are 19,000 private equity funds in the US… So the opportunity set is nowhere near what it was.” (Hagstrom, [42:22]).
• Liquidity and Alignment Issues: Public markets offer the “opportunity to buy really good businesses at 50 cents on the dollar. You’ll never get that in the private market.” (Hagstrom, [42:22]).

Notable Quotes & Memorable Moments

• On Outperforming Today’s Mega-caps:
  “To get a hundred bag from there is… yeah, it's a big number.”
  —Chris Mayer, [03:25]

• On Index Construction’s Issue:
  “If the S&P 500 was made up of the economics of the 490 stocks, this market wouldn't be up anywhere near where it's now. The weight of the market… happens to be coinciding with the stocks that have the highest returns.”
  —Robert Hagstrom, [00:48] and [05:26]; restated [07:09]

• On Benchmark Comparison:
  “Let's say you're the manager of the Boston Red Sox. What if I made your goal you have to have more wins than the New York Yankees… is that a good goal?”
  —Chris Mayer, [09:21]

• On Government & Market Leaders:
  “I think it's more government hurting them and forcing them to break up... I almost look at the government as almost targeting [the ‘Magnificent Seven’] in a different way, not so much helping but almost breaking them apart.”
  —Bogomil Baranowski, [23:46]–[24:42]

• On the Evolution of Innovation in Markets:
  “The innovation and earnings growth that we used to depend upon the Russell 2000 for is actually at the top part of the S&P 500… that's just mind-blowing.”
  —Robert Hagstrom, [32:54]

• On Passive Investing’s Triumph:
  “Let’s give credit where credit's due. The S&P 500 for the last 20 years has beaten active managers.”
  —Robert Hagstrom, [39:48]

• On Private Equity’s ‘Illiquidity Premium’ Myth:
  “If you can't sell what you own, it must not be worth that much because believe me, Wall Street’s looking for good ideas around the world. And if you can't sell it… it must mean that your pat hand... is not that attractive.” —Robert Hagstrom, [48:03]

• On True Long-term Performance:
  “It's a frequency versus magnitude... not how many times you're right, less how many times you're wrong. It's how much money you make when you're right...”
  —Robert Hagstrom, [52:15]

Essential Timestamps

• [00:32] – Launch and premise of "100 Year Thinkers"
• [01:16] – On market cap sizes and analogy to GDP
• [02:59] – Can there still be “100 baggers” among the mega-caps?
• [03:26] – Historical underperformance of highly concentrated index tops
• [05:26] – Concentrated portfolios vs. index benchmarking
• [11:23] – Index construction and S&P committee's role
• [14:14] – Annual turnover of S&P 500 constituents and implications
• [20:05] – Concentration limits and risk management in portfolios
• [23:46] – Government intervention and mega-cap company risks
• [32:35] – Shift of innovation from small-caps to mega-cap stocks
• [39:48] – Success and robustness of S&P 500 as “wealth-generating machine”
• [42:22] – Private equity: critique of recent performance and industry fees
• [50:15] – Reframing performance goals beyond just beating benchmarks
• [52:15] – Importance of “frequency vs. magnitude” in investment outcome

Closing Thoughts

• Long-Term Thinking: Outperformance is less about beating arbitrary benchmarks and more about disciplined process, sound economics, and matching investments to temperament and goals.
• Personalization and Process: "You can't outperform the S&P 500, but you can perform pretty well with yourself and your personality if you're willing to know it." (Chris Mayer, [57:07])
• Enduring Wisdom: The best clients (and investors) treat investments like business owners—focusing on cash flow, growth, and quality rather than market volatility and monthly scoreboard checking.

For further reading, the work of all speakers is available online and via their firms:

• Robert Hagstrom: Equity Compass, “The Warren Buffett Way”
• Chris Mayer: Woodlock House Family Capital, “100 Baggers”
• Bogomil Baranowski: Blue Infinitas Capital, “Talking Billions”

This episode is a masterclass in zooming out, prioritizing process, and aligning investment approaches with both market realities and your individual temperament.