My guest, this episode, likely needs little introduction. His paper, a Quantitative Approach to Tactical Asset Allocation is the highest ranked paper on SSRN with over 200,000 downloads at the point of recording.
But Meb Faber’s interests go far beyond tactical asset allocation. His work over the last decade-plus – from his blog to his podcast to the books he has authored – spans broad topics such as shareholder yield, global value, hard asset alternatives, risk parity, and angel investing to name a few.
I rarely enter these podcast conversations with a singular objective. Being a prolific writer, however, there is very little that someone cannot find out about Meb’s investment beliefs through a simple Google search. What I was keen to learn in this conversation is what drives those beliefs. Why does Meb keep searching and exploring? Is it simple curiosity, or is there a deeper, underlying philosophy that unifies his body of work?
As you can likely guess from the title of this podcast, there is indeed a unifying theory. But I’ll let Meb explain.
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2:09 - Meb hijacks the show to ask a very important question.
4:14 - What was the catalyst for writing A Quantitative Approach to Tactical Asset Allocation?
9:59 - Meb discusses what helped make the paper so popular.
12:52 - Meb reflects on a decade of out-of-sample performance.
15:33 - Corey asks Meb what he thinks the common misinterpretations of the paper are.
21:54 - Meb dives into how his thinking on investing has evolved since 2006.
26:48 - Historically, it's really hard to find a buy-and-hold portfolio that has not lost 25% on a real basis at some point.
32:27 - Corey asks Meb to distill his thoughts and answer, "What does Meb Faber actually believe in?" It all sums up to: "just survive."
37:57 - Meb discusses how the "just survive" mentality leads to the Trinity Portfolio.
42:20 - Meb discusses how financial advisors and asset managers have implicit exposure to financial markets.
44:02 - Meb opens up about his experience with farmland and angel investing.
46:52 - Meb discusses the criteria he uses to think about launching a new strategy or ETF at Cambria.
53:44 - Meb explores the balance of simple versus complex in strategy design and management.
58:00 - If you were an investment strategy, what strategy would you be and why?