Finding the Hidden Gems in Mid-Cap Markets

Lead-Lag Live

Ever wonder why everyone seems to chase the same handful of mega-cap tech stocks? Seth Cogswell of Running Oak challenges this herd mentality with a refreshingly contrarian perspective: the real opportunity lies in investing where others aren't.
This candid conversation explores how market complacency has driven investors to overlook compelling opportunities hiding in plain sight. Seth makes a powerful case for mid-cap stocks, which have actually outperformed large-caps by 60 basis points annually over 33 years—delivering 20% more total return—yet remain undervalued while the S&P 500's largest components trade at extreme premiums.
The discussion delves into today's unprecedented corporate debt landscape, where companies have borrowed heavily just to finance buybacks rather than productive investments. As interest rates rise, we may witness a complete reversal of this trend: companies selling equity to pay down debt, creating significant headwinds for overleveraged firms and their shareholders. Meanwhile, "zombie companies" that survived only through cheap refinancing face an existential threat.
Seth shares the philosophy behind Running Oak's RUNN ETF, explaining why quality factors like lower debt and earnings consistency matter more than ever, and why equal-weighting positions offers both protection and opportunity in today's market environment. You'll gain insights into why historical patterns suggest today's market concentration is anomalous rather than the new normal.
Whether you're concerned about portfolio concentration, seeking undervalued opportunities, or simply want a fresh perspective on navigating today's complex markets, this conversation offers practical wisdom that cuts through the noise. Ready to discover where smart money is quietly positioning for the next market phase? Listen now and reconsider what might be missing from your investment approach.

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Chapters

1. Investing Where Others Aren't (00:00:00)

2. Running Oak's Long-Term Relationship Approach (00:02:41)

3. Market Irrationality and Complacency (00:09:07)

4. The Debt Problem and Zombie Companies (00:14:57)

5. Why Mid-Caps Outperform Large Caps (00:22:49)

6. Quality Investing and Portfolio Weighting (00:32:33)

7. The Simple Power of Contrarian Investing (00:40:28)