#132 - Radio Show - Since 1989 80% of Stocks Had a Collective Return of 0%... A Goldman Bear-Market Indicator at Its Highest Point in Decades... and Listener Q&A

69 minutes

Episode 132 has a radio show format. In this one, we cover numerous Tweets of the Week from Meb as well as listener Q&A.

For our Tweets of the Week, a few we cover include:

  • A chart from Longboard about returns. Since 1989, the worst performing 11,513 stocks – which is 80% of all stocks, collectively had a total return of 0%. The best performing 2,942 stocks (20% of all) accounted for all the gains.
  • A tweet about another option selling fund blow-up.
  • A Jason Zweig post about how many investors should question the dogma of “stocks for the long” run since history shows that a portfolio of bonds has outperformed stocks surprisingly often and for long periods.
  • The statistic “According to Goldman, its indicator at 73% marks the highest bear-market reading since the late 1960s and early 1970s, which (with a few exceptions) is consistent with returns of zero over the following 12 months.”

We then jump into listener Q&A. Some you’ll hear include:

  • In your book, Global Asset Allocation, you compare the results of well-known asset allocations and find that the returns are quite close. Over a long period of time, would you also expect the results of a momentum / value strategy to be similar? Is the main advantage that it allows for better behavior (lower drawdowns, etc) or would you also expect the performance to differ (net of fees)?
  • Would you rather own a stock with a high free cash flow yield or high dividend yield?
  • I was wondering if you could touch on the process of launching an ETF. What are the startup costs, how much AUM and at what fee would the ETF breakeven?
  • I've heard you (and others) extol the benefits of a diversified global allocation but I rarely (if ever) hear the counter argument: that the US deserves a premium to the rest of the world because it has the largest and deepest capital markets, has comparatively lower regulation and fosters innovation and creative destruction. Do those factors warrant an over-allocation to US equities?
  • How much should the average investor be willing to spend (as a percentage of portfolio value) in order to carry some protection in the form of puts?
  • What beats the 60/40 portfolio over the next 5 and 10 year periods?

As usual, there are plenty of rabbit holes. You’ll find them all in Episode 132.

More episodes from The Meb Faber Show

#290 – Bill Smead, Smead Capital Management - There’s Less Respect For Stock Picking Experts Right At This Moment Than There Has Been Since The Peak Of The Dot-Com Bubble

In episode 290, we welcome our guest, Bill Smead, the Chief Investment Officer for Smead Capital Management.  In today’s episode, Bill explains why he believes the market is undergoing a …

#289: Stocks Are Allowed To Be Expensive Since Bonds Yields Are Low…Right?

Episode 289 is a Mebisode. In this episode, you’ll hear Meb put today's stock valuations into historical perspective. He addresses the claim that …

#288 - Best Idea Show - Doug Pugliese, Alpha Architect - Why Not Elect A 1042 Sale And Control When You Pay Those Taxes?

In episode 288, we welcome our guest, Doug Pugliese, the Head of 1042 QRP Solutions at Alpha Architect, where he manages the firm’s qualified …

#287 – Jonathan Hsu, Tribe Capital - Our Specific Areas Of Expertise Are Around Being Able To Tell A Story Utilizing Your Own Data

In episode 287, we welcome our guest, Jonathan Hsu, the co-founder and General Partner at Tribe Capital, a venture capital firm focused on using product and data science to engineer N-of-1 …

#286 – Jeremy Grantham, GMO - What Day Is The Highest Level Of Optimism? It’s The Day The Market Hits The Peak

In episode 286, we welcome our guest, Jeremy Grantham, co-founder and Chief Investment Strategist of GMO. 

In today’s episode, Jeremy begins by talking about the current market, which he …

#285 – Best Idea Show - David Marcus, Evermore Global Advisors - Do You Sell Things That You Like To Buy Things That You Now Love?

In episode 285, we welcome our guest David Marcus, the co-founder and Chief Investment Officer of Evermore Global Advisors, where he manages the Evermore Global Value Fund. In today’s …

How you can listen to this podcast

You can listen to episodes right here on the website, or if you prefer, in a podcast app. Listening in an app makes it easier to keep track of what you’ve already heard, listen without using your data plan and many other conveniences.

Recommended apps
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56