Capital, AI, and the Limits of Liquidity — with Andrea Eisfeldt | Treussard Talks (E24)

Andrea Eisfeldt holds the Laurence D. and Lori W. Fink Endowed Chair in Finance at UCLA Anderson and is a Research Associate at the National Bureau of Economic Research. She received her PhD in economics from the University of Chicago, trained under John Cochrane, Lars Hansen, and Doug Diamond — three names that account for multiple Nobel Prizes between them. Her research covers intangible capital, liquidity, human capital compensation, and what AI is doing to firm values and labor markets.

The accounting data that underlies most factor investing was built for an economy that no longer exists. The companies that dominate markets today run on software, customer relationships, and engineering talent. None of it shows up on the balance sheet the way it should. Andrea has spent the better part of two decades building the tools to correct for that — and the implications are significant.

We also get into liquidity. Why it dries up in bad times. Why that is structural, not accidental. And how the current stress in private credit fits a pattern that goes all the way back to her dissertation.

Andrea is an eternal optimist. Her optimism is grounded in mechanisms, not sentiment.

You'll hear us cover:

• Why accounting statements were designed to record transactions, not to serve as portfolio management inputs — and what that means for factor investing today
• The three categories of intangible capital: knowledge, customer, and organization — and how partial non-rivalry creates natural economies of scale
• Why market concentration and pricing power are not the same thing, and why conflating them leads to bad investment thinking
• The task-level research on AI and firm value: how workforce composition predicted abnormal stock returns in the weeks following ChatGPT's release in November 2022
• The bottleneck model: why the human oversight still required by AI becomes both a constraint on growth and the most highly compensated skill in the economy
• Equity compensation beyond the C-suite: why ignoring it distorts what we think we know about labor's share of income and firm ownership
• Endogenous liquidity: why the greed-fear cycle has a structural explanation — and why liquidity disappears in bad times in ways that are entirely predictable in advance
• The frontier problem: why engineering liquidity from illiquid assets always runs into limits, and why private credit stress is a feature of that pattern, not an accident

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Disclaimer: The content of Treussard Talks is for informational and educational purposes only and should not be considered financial advice. The views expressed are those of the host and guest and do not necessarily reflect the opinions of Treussard Capital Management or its affiliates. Listeners should consult with their own financial advisor before making any investment decisions. For full disclosures, visit treussard.com.

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