#30 - Listener Q&A Episode

62 minutes

As Meb is back from another series of speaking engagements, Episode 30 starts with a brief recap of his travels. But we hop in quickly, first addressing the election. We’ve had several anxious people write in, requesting commentary on the financial markets now that Trump will be taking over. Meb offers his thoughts, which we can reduce to one word: irrelevant.

Next Meb gives us an overview of a white paper he’s soon to begin writing – a rebuttal to detractors of Shiller’s CAPE ratio. He provides some convincing points on why CAPE can be an effective timing tool. You’ll want to hear this if you’re a CAPE fan – even more so if you believe CAPE is flawed.

After that, we hop into listener Q&A. A few of the questions you’ll hear Meb tackle are:

-          How does CAPE do as a valuation metric for a stock index when the composition of the index is changing or there is significant dilution?

 

-          When it comes to value filters like P/B or P/E, how do you rank metrics which can become negative or distorted when they get too close to zero?

 

-          Besides trend following, what other alternative strategies (e.g. long/short, diversified arb, global macro, market neutral, etc.) do you believe are a worthy addition to a balanced portfolio?

 

-          Please address living through drawdowns versus using trailing stops. Discuss the tradeoff between minimizing drawdowns versus potentially missing huge recoveries.

 

-          What do you think of using CAPE in Frontier markets? And does the 10-month SMA timing model work in these markets?

 

-          How do you practically implement the bond strategy laid out in your paper, “Finding Yield in a 2% World”?

 

-          James O’Shaughnessy’s “What Works on Wall Street” references an investing strategy that posted amazing returns for many years. Seems too good to be true. Any insights? Wouldn’t everyone be using this system if it really was this wonderful?

 

-          Any pointers on how to do your own backtesting?

As usual, there’s lots more, including the common investor sentiment of “I’m waiting until the uncertainty dies down before I put more money into the markets,” Meb’s thoughts on cash and inflation, and the benefits of systematic investing. All this and more in Episode 30.

More episodes from The Meb Faber Show

#182 - Larry Hite - I Want To Be In A Position Where Something Great Can Happen…If I Don’t Get That, I Don’t Want To Play

In episode 182 we welcome our guest, Larry Hite. Larry and Meb start off the conversation with Larry’s origin as a trend follower, and the parallels …

#181 - Radio Show: Zero Trading Commissions…Valuations…And Trend Following

Episode 181 has a radio show format. We cover a variety of topics, including the new ETF rule:

  • Major brokerage firms dropping ETF trading …

#180 - Rodrigo Gordillo - “This Craftsmanship Perspective Is About Identifying The Difference Between Complex Versus Robust”

In episode 180 we welcome back our guest, Rodrigo Gordillo. Meb and Rodrigo start the conversation with a walk through Rodrigo’s background and his experience growing up in Peru. Rodrigo …

The Best Investment Writing Volume 3: Justin J. Carbonneau – 10 Reasons Why It’s Tough to be a True “Intelligent Investor”

Last year when we published The Best Investment Writing Volume 2, we offered authors the opportunity to record an audio version of their chapter to …

#179 - Dan Ferris - What We Do In The Markets, It’s An Unnatural Act…You’ve Got To Have Some Discipline

In episode 179 we welcome our guest, Dan Ferris. Meb begins with a discussion of Dan’s background as a guitarist, and his path into finance.

Dan then provides a high level view of his …

#178 - Nobody Wants To Invest In Your Sh*t

Episode 178 is a Meb Short. In this episode, you’ll hear Meb discuss the transactional nature of investing, finding an investment approach that works, and deploying an objective framework …

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