#61 - Jack Vogel - “(Factor Timing?) It's Next to Near Impossible"

61 minutes

In Episode 61, we welcome Jack Vogel, CFO/CIO of Alpha Architect, and the partner of Wes Gray, who you may remember as one of our earliest Meb Faber Show guests.

After Jack tells us a bit about his background and how he came to be at Alpha Architect, Meb jumps in, starting with "factors" - specifically, the value factor. Meb asks about Jack's value philosophy in general, and how he creates a value portfolio.

What follows is a great look at how a professional portfolio manager/asset allocator creates a portfolio. Using quantitative tools, Jack starts by constructing the universe of potential assets to include, keeping in mind scale. Next, Jack applies some forensic accounting in order to exclude certain toxic assets that one wouldn't want in a portfolio. Then, he screens for value. Jack likes using enterprise multiples. Finally, he looks for "quality." These are things like free cash flow, margin growth and marketing stability.

Meb then points the conversation toward momentum investing. Jack offers us a general overview first, noting how momentum investing can be really beneficial for value investors. He also makes the point how it's definitely different than growth investing.

In discussing creating a momentum portfolio, Jack discusses adding seasonality (which means addressing when to rebalance) and quality. On the topic of quality, Jack gives us a great example of what it means in the context of earnings; it involves two stocks, one of which is flat for an extended period, but then explodes in value in a short amount of time, versus the other that experiences the same growth, but gradually and consistently over the entire period. Which earnings are more "quality"? Jack gives us his thoughts.

Next up is Alpha Architect's great tool, Visual Active Share. It's a wonderful way for investors to compare the holdings of an ETF to its benchmark index. Investors can use this to see just how "different" the ETF in question truly is. After all, you don't want to be paying too much in fees for an ETF that's really just a closet index fund. The guys discuss whether there's a particular number for what "good" active share is, as well as the challenge of tracking error as you grow more "different."

As usual, there's a great deal more in this episode: Alpha Architect's new value, momentum, trend ETF... A discussion of the state of robos... What new tools Jack and his crew at Alpha Architect are working on now in order to help investors pull back the curtain on various funds... And of course, Jack's most memorable trade - it was the last individual stock he owned, which he now refers to as 'The Titanic.'

What was the stock? Find out in Episode 61.

More episodes from The Meb Faber Show

#333 – Startup Series – Rob Forster, Wonderbird Spirits - Making Gin Is Truly An Art

In episode 333, we welcome our guest, Rob Forster, co-founder of Wonderbird Spirits, Mississippi's first grain-to-glass gin distillery. 

 

 

In today’s episode, we hear how Rob stopped …

#332 – Mebisode – Journey to 100X

Episode 332 is a Mebisode. In this episode, you’ll hear Meb talk about his journey investing in over 250 private companies since 2014. He explains why he chose to do so and his framework …

#331 – Phil Nadel, Forefront Venture Partners - The Best Companies Are Founded By Folks Who Personally Feel The Pain Point

In episode 331, we welcome back our guest, Phil Nadel, co-founder of Forefront Venture Partners, one of the largest and most successful syndicates on …

#330 – Guillermo Cornejo, Riders Share - Riders Share Is Like An AirBnB, But For Renting Motorcycles

In episode 330, we welcome our guest, Guillermo Cornejo, founder and CEO of Riders Share, the first & largest motorcycle peer-to-peer rentals platform in the United States.

 

In today’s …

#329 – Samantha McLemore, Miller Value Partners - We're In Optimism With Pockets Of Euphoria

In episode 329, we welcome our guest, Samantha McLemore founder of Patient Capital Management and a Co-Portfolio Manager at Miller Value Partners.   

#328 – Startup Series – Katie Echevarria Rosen Kitchens, FabFitFun - Paying $50 And Getting Over $300 In Full-Size Products Is A Pretty Cool Thing

In episode 328, we welcome our guest, Katie Echevarria Rosen Kitchens, co-founder of FabFitFun, a lifestyle membership that provides a curated …

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