Investing in Durable Businesses | AI, War & Long-Term Winners

This video originally was posted on the Excess Returns YouTube channel. Rainwater Equity has received permission to repost this content. In this conversation, Joseph Shaposhnik, Founder and Portfolio Manager of Rainwater Equity, sits down the hosts of Excess Returns to talk about investing through geopolitical shocks, AI disruption, and massive capital cycles. Joseph shares how disciplined investors can stay focused on durable businesses and long-term free cash flow—rather than reacting to short-term headlines. He also breaks down how his team evaluates opportunities across AI, defense, and broader markets, and where he sees the most compelling opportunities today. Find Out More About Joseph Shaposhnik: LinkedIn:   / joseph-shaposhnik-21424a5   Follow on X: https://x.com/JShaposhnik Timestamps 00:00 – Why most headlines don’t matter for long-term investing 01:23 – How disciplined investors process breaking news 02:41 – Defense spending, geopolitics, and real economic impact 03:57 – Why doing less often leads to better performance 05:04 – Understanding the AI cycle: winners, losers, and uncertainty 06:56 – Which “safe” businesses may be disrupted by AI 08:06 – The “Magnificent 493” opportunity beyond mega-cap tech 11:11 – How AI is shifting tech from asset-light to capital-heavy 12:50 – Why hyperscalers may no longer be capital-light businesses 14:32 – Concentration risk in AI and betting on a single winner 16:39 – The best way to invest in AI: picks and shovels 18:57 – AI may be winner-take-all (and why that matters) 21:39 – Buffett’s framework: why constant change hurts returns 23:01 – Why we reduced exposure to software companies 24:30 – The spectrum of software risk: sticky vs vulnerable models 26:07 – What separates winners: learning cultures and adaptability 27:30 – Why it’s still early in the AI disruption cycle 29:39 – Is software still a high-quality business model? 31:32 – AI and jobs: disruption vs increased demand for talent 33:30 – Why recurring revenue businesses can weather uncertainty 36:00 – What makes a business anti-fragile in an AI world 37:00 – Why decentralization and learning cultures drive adaptability 38:30 – The most vulnerable business models in AI (repackaging risk) 40:00 – Why forecasting the economy is a losing game 42:00 – Building portfolios that can survive multiple outcomes 44:00 – Why we’re still in the early innings of AI disruption 47:00 – How great management teams adapt during major change 50:00 – Why aligning with evolving management teams matters 53:00 – The biggest mistake investors make in fast-changing markets 56:00 – Final takeaway: focus on compounding, not predictions Disclosures & Disclaimers Not Investment Advice: The information provided in this video is for educational and informational purposes only and should not be construed as investment, legal, or tax advice. The views expressed by Joseph Shaposhnik and the hosts of Excess Returns are their own as of the date of recording and are subject to change without notice. No Solicitation: This content does not constitute an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Rainwater Equity. Any such offer or solicitation will be made only by means of a confidential private offering memorandum or prospectus. Risk of Loss: Investing in securities involves risk, including the potential loss of principal. Past performance is not indicative of future results. There is no guarantee that the investment strategies discussed will be successful or that the target returns mentioned will be achieved. Portfolio Holdings: Specific securities mentioned are discussed to illustrate investment philosophy and should not be considered recommendations to buy or sell. These securities may or may not be held in portfolios managed by Rainwater Equity at any given time. Third-Party Content: This video was originally produced and published by Excess Returns. While Rainwater Equity has received permission to repost this content, it does not necessarily endorse all views or advertisements presented by the original creator or the YouTube platform.