The Meb Faber Show

In Episode 119, we welcome entrepreneur and technical analyst expert, Tom Dorsey. Meb begins by asking about a book which Tom claims had a tremendous influence on his entire life. From this, Tom tells us the story of being a young broker, eventually introduced to a book called The Three Point Reversal Method of Point & Figure Stock Market Trading by A.W. Cohen. After reading just the first paragraph, the clouds on Wall Street parted and he saw clearly. In the end, it’s the irrefutable laws of supply and demand that cause prices to change. Meb asks for more details, so Tom tells us how Point & Figure charting was created in the early 1900s. You’re watching the up and down movements of an asset – those movements represented by Xs and Os. You’re looking for patterns in these up and down movements. Meb asks how one goes from charting these Xs and Os into building an actual strategy. Tom gives us an example using just two stocks, Coke and Pepsi. He walks us through how we would analyze the price movements relativ

We recently published The Best Investment Writing, Volume 2. The first book was a hit, with MoneyWeek concluding that it “should be on every investor’s bookshelf.” But we made the second volume even better – we expanded it to include 41 hand-selected investment articles, written by some of the most respected money managers and investment researchers in the world. We thought it would be fun to bring on some of the authors so that they could read their specific chapter from the book. That’s what you’re getting in today’s special bonus episode. If you’re interested in picking up a copy of The Best Investment Writing, Volume 2, head on over to Amazon or our publisher’s website, which is Harriman House. Also, know that your purchase would benefit charity, as all writer-proceeds go to the charity of the specific author’s choosing. So, enough from me, let’s let Elroy take over with this special bonus episode. Learn more about your ad choices. Visit megaphone.fm/adchoices

Episode 118 has a radio show format. In this one, we cover numerous Tweets of the Week from Meb, as well as some write-in questions. We start by discussing articles Meb posted in his Tweets of the Week. These include a piece by Jason Zweig about how your broker might be making 10-times more money off your cash balance than you could make on it. Then there’s discussion of valuations – a chart by Leuthold shows how one measure of US market valuation has matched its 2000 level, and another has doubled it. At the same time, Longboard released a chart referencing a Goldman market outlook that claims “in 99% of the time at current valuation levels, equity returns have been single digit or negative”. We talk about US valuations and when “selling” might trump buy-and-hold. Then we jump to foreign valuations. GMO believes emerging markets are the biggest opportunity relative to other assets in the past 20+ years. Meb clarifies what this really means. Then there’s discussion of home country geographic sector bias, whet

We recently published The Best Investment Writing, Volume 2. The first book was a hit, with MoneyWeek concluding that it “should be on every investor’s bookshelf.” But we made the second volume even better – we expanded it to include 41 hand-selected investment articles, written by some of the most respected money managers and investment researchers in the world. We thought it would be fun to bring on some of the authors so that they could read their specific chapter from the book. That’s what you’re getting in today’s special bonus episode. If you’re interested in picking up a copy of The Best Investment Writing, Volume 2, head on over to Amazon or our publisher’s website, which is Harriman House. Also, know that your purchase would benefit charity, as all writer-proceeds go to the charity of the specific author’s choosing. So, enough from me, let’s let Ehren take over with this special bonus episode. Learn more about your ad choices. Visit megaphone.fm/adchoices

In Episode 117, we welcome entrepreneur and wealth advisor, Steve Lockshin. At Meb’s request, Steve walks us through his professional background in the financial services industry. It’s an interesting story, reflecting how wealth management has changed over the decades. Meb picks up on a term Steve used in describing his early years – “producer” (referencing an advisor) – making the point that if advisors were expected to produce revenue to the degree that “producer” was their name, it pointed toward a potential conflict with the client’s goals. Steve agrees, noting that the conflicts of interest in the business are challenging. He offers us an example using a mortgage payment scenario. If a client allocated capital toward paying down a high-rate mortgage rather than toward funding his equity portfolio, that debt paydown would benefit him, yet would decrease the advisor’s AUM, hurting the advisor’s personal revenue. Given this, the advisor may not be incentivized to make recommendations that are always in the

We recently published The Best Investment Writing, Volume 2. The first book was a hit, with MoneyWeek concluding that it “should be on every investor’s bookshelf.” But we made the second volume even better – we expanded it to include 41 hand-selected investment articles, written by some of the most respected money managers and investment researchers in the world. We thought it would be fun to bring on some of the authors so that they could read their specific chapter from the book. That’s what you’re getting in today’s special bonus episode. If you’re interested in picking up a copy of The Best Investment Writing, Volume 2, head on over to Amazon or our publisher’s website, which is Harriman House. Also, know that your purchase would benefit charity, as all writer-proceeds go to the charity of the specific author’s choosing. So, enough from me, let’s let Todd take over with this special bonus episode. Learn more about your ad choices. Visit megaphone.fm/adchoices

In Episode 116, we welcome entrepreneur, CEO, and fund manager, Sarah Ketterer. Meb dives right in, asking about a quote on Causeway’s website which references how the shop blends fundamental and quant analysis. Sarah gives us her approach, which details how the fundamental and quant approaches work together, supporting one another. Meb pushes for more details. What’s Causeway’s actual process? Does it begin with a quant screen then an analyst takes over, or the other way around? Sarah tells us it depends on the client. She provides more details, but her feelings about the importance of a quant approach really comes through when she tells us “without a quant risk model, I’d argue an investment manager is completely blind”. Next, Meb brings up value, and asks what role it plays in Sarah’s approach, and how she sees value today. Sarah tell us that every strategy Causeway manages has a value emphasis to some degree. The more fundamental, the heavier the value exposure. And the quant-focused funds also have value

In Episode 115, we welcome entrepreneur and opportunity zone expert, Steve Glickman. Meb jumps right in, asking “what is an opportunity zone?” Steve tells us about this brand-new program that was created this past December. Most people don’t know about it yet. It was the only bipartisan piece of the Investing in Opportunity Act, which was legislation packed into the tax reform bill. Opportunity zones were designed to combine scaled investment capital with lower-income communities that haven’t seen investment in decades. You can essentially roll-over capital gains into opportunity funds – special investment vehicles that have to deploy their capital in these pre-determined opportunity zones. It could be a real estate play, a business venture play, virtually anything as long as the investment is in the opportunity zone and meets the appointed criteria. And the benefit of doing this? Steve tells us “ultimately, if you hold for…10 years or more in these opportunity zones…you don’t pay any new capital gains – ever

In Episode 114, we welcome entrepreneur and author, David Gladstone. We start with David’s backstory, which dovetails into how he got into farming, and subsequently, launching a farmland REIT. Meb asks for David’s broad thoughts on investing in farmland. David tells us “farmland is one of the most stable assets one can own.” He goes on to say how it correlates with gold, not with the stock market. David gives us an overview of the farming landscape – how corn and wheat are the big categories, but this isn’t where David goes with his REIT, too much competition. He focuses more on berries and specialty crops, which are far more profitable. He mentions how tree/vine/bush crops have a great long-term record for making money for farmers. Next, Meb asks about operations – does David manage the farms? Just rent them out? David tells us they use triple net leases with their farmer tenants. Sometimes they will also have a revenue participation, but that’s unusual. David goes on to say how farmland is becoming more sca

In Episode 113, we welcome entrepreneur and hedge fund expert, Stan Altshuller. Meb starts by asking Stan to give us his backstory, and how he came to co-found Novus Partners. After Stan gives us his origin story, Meb asks about Stan’s broad approach to the markets. Stan tells us that at Novus, they start with data. This data encompasses everything from public data from regulatory filings, to private data from daily holdings reports. They bring it into an accessible, searchable database. Then engineers and programmers write various algorithms that capture and present the details of that data. This helps identify takeaways such as where the risks might be in a portfolio, and how various portfolios compare to others. Meb asks about common takeaways from all this analysis. Stan points toward “diworsification.” As the name implies, too many investors have far too many holdings in their portfolio – from a diversification perspective, more than is needed or helpful. Stan tells us that 12 different investments is as

In Episode 112, we welcome Professor Peter Ricchiuti. We start with Peter’s origin story, which includes his time in the investment world, then managing money for the state of Louisiana, then teaching at Tulane where he created, and now runs, the Burkenroad Reports program (a student stock research program). Diving into investing, Meb asks Peter about his broad approach to the markets and the economy. Peter tells us that from an economist’s perspective, “labor” is a huge factor when evaluating economic conditions. And he believes the U.S. is facing challenges with its labor pool. From a narrower, equity-perspective, Peter tells us that right now things look perhaps a little too good. He notes “you’re better off investing when things look miserable.” At present, given so much market optimism, he’s pulling back. The conversation turns toward the global market, and how interconnected we all are these days. Peter tells us that part of the reason we’ve done so well over the past several years is because so many co

Episode 111 has a radio show format. In this one, we cover numerous Tweets of the Week from Meb, as well as some write-in questions. Before jumping in, a few housekeeping items… Meb discusses a proxy campaign with which we need your help, an award Cambria just received, Meb’s new Office Hours, when the Trinity ETF will launch, a new webinar we’re going to put on later this summer, and more. We start with some of Meb’s Tweets of the Week. We discuss a WSJ op ed piece penned by Jamie Dimon and Warren Buffett, in which they suggest short-termism is harming the economy. Specifically, they believe public companies should reduce or eliminate the practice of estimating quarterly earnings. Next, there’s a quote from Jim O’Shaughnessy: “Money is like manure; if you pile it up it stinks to high heaven, but if you spread it around, it does a lot of good.” This is a springboard into a conversation about the role of cash in a portfolio, especially in today’s market. This segues into the next subject – how Americans are re

In Episode 110, we welcome author and market data expert, Dr. Bryan Taylor. Meb begins by asking how Bryan built the massive financial database that is Global Financial Data. Bryan walks us through how the database developed over time. The conversation soon turns to Bryan’s book, Debts, Defaults, Depression and Other Delightful Ditties from the Dismal Science. Bryan tells us this is actually the first of two books. It includes stories about the past that people might find interesting – some of the crazy things that have happened in the financial markets, as well as an inference about what that might mean for the future. The follow-up book will focus on a number of specific cases, from The East India Company, all the way up to some of Trump’s companies. Next, Meb changes gears – there are a few contenders getting close to becoming the first $1T company. Meb uses this as a chance to look back at the first $1B company. Bryan tells us that title goes to Standard Oil. He then walks us through its history, includi

In Episode 109, we welcome ETF and crypto expert, Matt Hougan. After a quick, fun story about Matt’s first job…as a 9-foot tall seal mascot for a minor league baseball team…Meb asks about the state of the ETF industry – where we are today, and where we’re going. Matt tells us that ETFs have become a dominant force in investing. Since the financial crisis, some $2 trillion of capital has flowed into ETFs. In comparison, the mutual fund industry has seen $0 inflows during that time. In terms of issues that are shaping ETFs and will continue to do so over the coming years, Matt points toward fee wars, distribution networks, and the growing reality that it’s getting harder for smaller companies to get a foothold within the ETF space. Overall, Matt believes the days of fastest ETF growth are in front of us. Referencing back to the capital flows differential between ETFs and mutual funds since 2008, Meb asks if there will there be a Netflix/Blockbuster moment when the lion’s share of assets leaves mutual funds and

Episode 108 has a radio show format. In this one, we cover some of Meb’s Tweets of the Week and various write-in questions. After giving us the overview of his upcoming travel, Meb shares his thoughts on our recent episode with James Montier. It evolves into a conversation about the importance of “process” in investing. Next, we talk about a Tweet from Meb which evaluated what matters more – your savings rate or your rate of return. As you might guess, in the early years, savings trumps, but for longer investment horizons, rate of return is far more influential. It’s not long before we jump into listener questions. Some that you’ll hear Meb address include: What is the best way to include commodities in a portfolio? Specifically, is it better to have an ETF containing futures contracts or an ETF containing commodities equities? Obviously historical returns from bonds, especially the last 40 years, will not be repeated in the future. How will you position yourself personally – not Trinity, but personally – f

In Episode 107 we welcome the great James Montier. The chat starts on the topic of James’ questionable sartorial choices. He tells us he’s “always been a fan of dressing badly.” But the guys quickly jump in with Meb noting how James has generally been seeing the world as expensive over the last few years. Has anything changed today? James tells us no; by in large, we’re still trapped in this world where, frankly, you’re reduced to this game of “picking the tallest dwarf.” In general, every asset is expensive compared to normal. He summarizes, telling us “there really is a serious challenge to try to put together an investment portfolio that’s going to generate half-decent returns on a forward-looking basis.” Meb digs into, focusing on James’ framework for thinking about valuation, specifically, as a process. James starts from accounting identities. There are essentially four ways you get paid for owning an equity: a change in valuation, a change in profitability, some growth, and some yield. James fleshes out

In Episode 106 we welcome market vet, Brian Singer. Meb dives right now, asking Brian for his general approach to the markets. Brian tells us it’s fundamental in nature. They look at about 100 different asset markets, trading the broad markets rather than individual equities or bonds. They look for mis-pricings, then when one has been identified, they dig in, running both quantitative and qualitative analyses. They follow this with various risk management strategies. The overall portfolios are both long and short. As Brian often writes about macro factors that affect asset prices, Meb asks which macro factors are influential today. Brian gives us his thoughts – not just on macro factors, but game theaters as well. He talks about populism, energy (which ties into the Middle East game theater), and Chinese growth. Additional game theaters beyond the Middle East he discusses are the European Union and Asia. Next, Meb asks about Brian’s process. How does it really work when you’re putting together a portfolio? Br

Episode 105 is a wholly unique show. In this episode, we depart from traditional investment themes, and instead, bring you an episode featuring Meb’s second professional love, biology. Specifically, we welcome the renowned evolutionary biologist and writer, Olivia Judson. It turns out Olivia wrote for The Economist in her early years. Meb asks how a scientist got started writing for a business magazine. Olivia tells us of the progression that led from one article submission to several other articles, to a staff job. Next, Meb asks about the genesis for writing Dr. Tatiana's Sex Advice to All Creation. (For anyone unaware, the book is written in the style of a sex-advice column to animals. It details the variety of sexual practices in the natural world and provides the reader with an overview of the evolutionary biology of sex.) Olivia tells us one of her early articles was the inspiration, though she’d been studying and researching the topic for years. She thought the book would take her only six months to wr

In Episode 104, we welcome the legendary, Ken Fisher. Meb starts with a quick word of congratulations to Ken, as his firm just passed $100B in assets under management. The guys then discuss Ken’s interest in fishing with a bow and arrow, which eventually morphs into a conversation about a millionaire who allegedly hid a million dollars somewhere in the Rockies, leaving clues to treasure-hunters searching for it. The guys then jump into investing, discussing Ken’s early days in launching Fisher Investments. They touch upon one of Ken’s early claims to fame, championing the price-to-sales ratio. This leads to a conversation about being factor agnostic, which includes some interesting takeaways from Ken on capital pricing. Soon, Meb brings up Ken’s book, Debunkery, and asks about one of its points: namely, the misbelief by so many investors that bonds are safer than stocks. What follows is a great commentary by Ken about short-term volatility risk versus opportunity cost risk. When you look at longer, rolling ti

Episode 103 is a solo-Meb show. We just finished a short paper that references the old nutritional “Food Pyramid” published by the FDA a couple decades ago. Given what we’ve learned about health-conscious eating in the years since, that old guideline now seems a bit off-base. In the same way, the investing wisdom of yesteryear now seems similarly misguided. Meb walks us through the white paper that delves into these ideas in this short, just-Meb episode, identifying how his “Investment Pyramid” looks today. Also, most of Meb’s books are now free! Just click here. Get all the details in Episode 103. Learn more about your ad choices. Visit megaphone.fm/adchoices