#49 - Steve Sjuggerud - “This is Not What the Peak of a Bull Market Looks Like"

78 minutes

In Episode 49, we welcome Dr. Steve Sjuggerud. The conversation begins with Meb and Steve reminiscing about the origin of their friendship, which dates back some 10 years. This leads the guys into Steve’s background, and how he transitioned from being a broker into being the highly-popular investment newsletter writer he is today.

Meb asks Steve to describe his investing framework. Similar to Meb, Steve likes both value and trend. Specifically, he looks for 3 things: assets that are “cheap,” “hated,” and “in an uptrend.” This methodology applies to all sorts of asset classes. The guys dig deeper into value and trend, leading to Steve ultimately to say, “If I had to choose between one or the other, I would actually choose momentum over value.” Meb agrees.

Next, Meb asks how the world looks to Steve today. Is he buying? Defensive? Where’s he looking? And so on…

Steve tells there are always reasons to sell or stay out of the market. Despite this, Steve’s thesis is that interest rates will stay lower than you can imagine, longer than you can imagine. And this will drive asset classes higher than we can imagine. We’re still not at absurd equity levels yet here in the U.S. – Steve says we’re maybe around the 7th or 8th inning of this bull market. But the biggest gains can often come at the end of a bull market, so there’s potentially more significant room to run.

As the guys discuss this, the conversation tilts toward investor sentiment. They agree that irrational exuberance for this bull market simply doesn’t exist right now. There’s no euphoria. Steve sums it up simply: “This is not what the peak of a bull market looks like.”

Yeah, valuations are high, but interest rates are near historic lows. Relative to bond yields, the equity values are far more reasonable. Investors need to compare returns to what you can get through other asset classes.

The guys jump around a bit, touching upon the warning signs Steve will look for to tip him off as to when to bail on U.S. stocks, a discussion of the Commitment of Traders report and how to use it, and then a discussion of U.S. housing and how it’s a solid investment right now because housing starts are nowhere near what they need to be to equalize supply and demand.  

The guys then turn toward foreign equities, where it appears that value and trend are lining up. Foreign has been cheap for a while, but it’s been underperforming. And now that appears to be changing. Meb asks Steve to tell us what he’s seeing – it generally boils down to one big thing: China.

You’ll definitely want to listen to this part of the discussion, as Steve tells us about a revolution in mobile payments that’s already happened in China (and will likely happen here in the U.S.). But beyond that, Chinese stocks as a whole are now incredibly cheap. Even better, there are going to be tailwinds of adding Chinese stocks to a major index. I won’t get into the details here, but the analogy the guys use is having the teacher’s manual of a high school textbook with all the answers ahead of time. Best of all, Steve gives us the names of some actual ETFs that may benefit from this trend.

There’s much more in this value-packed episode: gold and gold mining stocks… Steve’s investment in St. Gaudens coins… Steve’s surfboard and vintage guitar collections (including the story of a $30K guitar he bought and later sold for $72K)… And of course, Steve’s most memorable trade – which involved a painful 50% loss for Steve and his subscribers, all stemming from the lie of a certain global politician.

Which politician and which lie? Find out in Episode 49.

More episodes from The Meb Faber Show

#170 - Bill Martin - On The Short Side, Position Sizing Is The Biggest Driver Of Success

In episode 170, we welcome our guest, Bill Martin. Bill and Meb start the conversation by diving into Bill’s early entrepreneurial experience running …

The Best Investment Writing Volume 3: Aswath Damodaran – The Perils of Investing Idol Worship: The Kraft Heinz Lessons!

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 …

#169 - Jeremy Jacobson - We Ended Up Saving Roughly 70% Of After-Tax Income For About 10 Years

In episode 169, we welcome our guest, Jeremy Jacobson. Jeremy begins with his backstory of being an engineer by trade, and after paying off his …

#168 - Brian Livingston - What’s True Is That We Have To Adapt To Modern Markets

In episode 168 we welcome Brian Livingston. Brian discusses his background and eventual transition into the world of investing out of a need to invest the money he had from the proceeds of …

The Best Investment Writing Volume 3: Rob Arnott – Yes. It’s a Bubble. So What?

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 …

#167 - The Cannabis Opportunity

Episode 167 is a Meb Short. In this episode, you’ll hear Meb discuss a fresh opportunity…The Cannabis Opportunity. Meb covers some of his thoughts on thematic investing and how we arrived …

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