Meb Faber: The Problem with Long Term Investing

Given the year 2022 has shaped up to be so far, we thought this would be a great time to catch up with one of the luminaries of modern investing to talk about he wraps his head around successful long-term investing.
Meb Faber, illustrious co-founder and CIO at Los Angeles-based Cambria Asset Management joins Pierre and Adam to catch up on markets and investing and how he 'hacks' the long term investing problem.
Our conversation begins with a famous quote from another investing legend and goes from there. We get into an elemental discussion about what investors can begin to do now, where to invest, where to diversify, and how to think of setting themselves up for success going forward.
Highlights, we discuss:
• Lots of people say they are long term investors, but...
• how do you set yourself up for long term investing success
• what's the biggest problem in long-term investing - why?
• how can you set yourself up (what investments?) so that you can remain a long-term investor no matter what happens (like this year)
• How do you transition from 60/40 to something elementally more durable?
• What are the current market's portfolio building blocks - why?
• How much time is required?
• What are the easy hurdles, the structural basic investments that should be added?
• What to invest to diverge from hope that the past bubble will recover
• Is 60:40 over?
• 'Trinity' portfolio construction
• Is technology providing better recipes?
• What are the ingredients of a portfolio that allows you to remain invested no matter what happens?
• Be contrarian - What is contrarian?
• What's the way around inflation and higher rates
• What is the most contrarian investment you can make today?
• falling in 'love' with your investments complicates everything
• what is all that matters in investing over the long term?
• "To be a good investor, you have to be a good loser."
• Question: Assuming no tax repercussions, if you could liquidate your entire portfolio and start over anew, what would you put in your new portfolio?
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Where to find Meb Faber
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Meb Faber on Linkedin - / mebanefaber
Meb Faber on Twitter - / mebfaber
Cambria Investment Management - www.cambriainv...
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Where to find us:
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ReSolve Asset Management - investresolve....
ReSolve Asset Management Blog - investresolve....
Mike Philbrick - / michaelphilbrick
Rodrigo Gordillo - / rodrigogordillo
Adam Butler - / adamdbutler
Pierre Daillie - / pierre-daillie-advisor...
Joseph Lamanna - / josephlamanna
AdvisorAnalyst.com - advisoranalyst...
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"You don't have to be brilliant, just wiser than the other guys, on average, for a long time." Charlie Munger
Welcome to Raise Your Average, our deep dive journey into learning from the people and process behind the world of investing. Through conversations with leaders in the investments game, we peel back the layers of the onion on how these holders of the keys to the kingdom allocate their time, their energy, and their dollars.
We are all students and we are all teachers. We are the average of the 5 people we spend the most time with. Come hang out with us for a while and raise your average, as we raise ours.
Music credit: In Hip Hop, Paul Velchev (8MJZA6T3LK)

[@afs-drew9644]

🎉 Good show. New subscriber.

[@rocking1313]

I got a lot out of this chitchat - Thanks so much Meb for the gems. I subscribed to Excess Returns! "Better to be Rip Van Winkle than a Nostradamus " - be prepared instead of trying to guess what is going to do well Please do an episode with Meb focusing on Trend Following strategies for retail noobs "To be a good investor you have to be a good loser" - Every investment makes you richer or wiser , never both! Diversification looks silly when 5-7 securities deliver 85% of returns over a decade I'll contribute a quote for your listeners - It is easy to be Contrarian unless you need to make money from doing so!

[@SRQRay]

MEB Everything, all the time (watching). Life in the fast lane.

[@Patrickpettibone-lo2rp]

I know it wasn't a flex but it sounded like such a flex when he says he was having dinner Sith sharpe

[@vvv6446]

Sub 1000subs is way off for this gold. Can the gang do some Canadian content? Greetings from Toronto

[@jdavis6650]

Meb just my 2 cents. I think you are a confused individual. Maybe you just had a bad day. Please don't speak off the cuff when referencing factual data. If you don't know the answer, it's OK to say "I don't know, but I will find out." Too many sell side custodians are quick to arrive at a conclusive opinion without any factually defensible support. I cannot access console quality data on a whim,, but I do have the means to get it with a bit of work and money. This is the the pre-AI version of data collection. It will only improve. I only have to study 35-45 positions and one portfolio. Please don't forget there are other people out there ( even some retail investors) who can interpret data as well as you.--mostly because they have more focused time than you or your company can dedicate to one client or portfolio. There's a reason you get so much feedback. I hope the ratio changes for you. I believe you need an impetus to reconsider your model. Either way---good luck to you.

[@pauloalex975]

He always wears a hat though 🤷

[@pauloalex975]

Meb a legend 👏👏👍

[@tomsettles6873]

Asset allocation isn't that hard. You just have to adjust for rise and fall of interest rates for the ratio of fixed income vs stocks. Precious metals/commodities can be increased or decreased based on P/E of stocks. There definitely isn't a way to outperform the market with a "set it and forget it" strategy with such an activist Fed and super high government debt levels.

[@SIMARJEETMEHTA]

How do you invest for the long-term? Just follow Buffett. Duh. No one better. Or just buy Berkshire.

[@pauloalex975]

So sad how many smart people started with science and then went to non productive finance 🤮🤮🤮😖

[@raulheimann3808]

If you start with science for financial reasons and discover that making money in finance is more effective... Guess where scientific thinking leads you to.

[@theWebWizrd]

Finance is productive when done right. When done right it is about allocating capital efficiently so that smart things that people want get more money. Of course, often it doesn't work out that way :)