When markets trade on fantasy rather than fundamentals, it’s usually just a matter of time before gravity reasserts itself.
That’s one of the big takeaways from our latest conversation with Seth Cogswell, Managing Partner at Running Oak Capital, and creator of the Running Oak Efficient Growth ETF (RUNN) — a mid-cap blend strategy designed to balance growth and downside protection.
The Tale of Two Markets
Cogswell notes that 2025 has been “a tale of two periods.” Through early spring, RUNN outperformed nearly every peer benchmark, especially when markets wobbled. But the picture shifted as speculative fervor took hold.
“High volatility names — zombie companies, meme stocks — doubled in six months,” Cogswell says. “Meanwhile, quality companies with earnings and manageable debt were left behind.”
According to research he cites from BTIG and Goldman Sachs, the gap between profitable and unprofitable companies has rarely been wider. The result? A replay of late-2020’s mania, where risk and quality ceased to matter — until they did.
Buying a Lexus for the Price of a Camry
Cogswell sees short-term underperformance not as a flaw but as an opportunity.
“If we kept up with those high-volatility names, we should be fired,” he quips. “That’s not what we do. Our focus is efficient growth — and right now, it’s like buying a Lexus for the price of a Camry.”
Running Oak’s process leans into companies that make money, control debt, and trade at attractive valuations. The strategy’s long-tested record — more than three decades of data — shows outperformance over the S&P 500 with roughly half the drawdowns. That history, he argues, creates a margin of safety that speculation can’t replicate.
Themes, Memes, and Dreams
Cogswell’s critique of today’s investing culture is pointed: portfolios built on “themes, memes, and dreams.”
He believes the widespread adoption of index funds — while a positive for reducing fees — has created structural distortions.
“Index funds buy more of what’s gone up, simply because it’s gone up,” he explains. “It’s buy high, buy higher, buy higher still — and never sell.”
The result, he warns, is a market where traditional discipline — buying low and selling high — has all but disappeared from the core of most portfolios. The “hollowing out” of that core, as described in The Bogle Effect, has left many investors overexposed to momentum without realizing it.
Back to Common Sense
Running Oak’s philosophy centers on reintroducing that lost discipline.
“We buy companies when they’re attractively valued, and we sell when they’re not,” Cogswell says. “It’s common sense — but it’s been forgotten.”
He argues that investors have become obsessed with cost over context. “We’ve focused on fees over fundamentals,” he says. “Saving a few basis points doesn’t matter if you’re buying at the wrong price.”
Education Through “Not So Passively Aggressive”
Cogswell is now taking that message to a wider audience through a new video series called Not So Passively Aggressive — an educational project designed to help investors think critically about the structure of today’s market.
“People work decades to save for retirement, yet they’re told not to think about how they invest,” he says. “That’s insane. There’s no other major life decision where you’d say, ‘Don’t think — just do.’”
The series explores how passive investing has reshaped market behavior — and what risks come with that convenience. His mission is simple: restore common sense to investing through education, transparency, and humility.
Where to Watch and Learn More
Cogswell’s Not So Passively Aggressive series will be available on Apple Podcasts, Spotify, YouTube, and likely even Instagram or TikTok (“begrudgingly,” he laughs).
You can also learn more about his firm and ETF at RunningOak.com or RunningOakETFs.com, and connect with him on LinkedIn.
Lead-Lag Live is part of The Lead-Lag Report, where we spotlight conversations that cut through the noise — separating market fantasy from fundamental truth.
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