Excess Returns Challenging Conventional Investing Beliefs with Meb Faber
Aug 8, 2024
Meb Faber, founder of Cambria Investment Management and known for his unconventional investing views, delves into challenging mainstream financial beliefs. He critiques the Federal Reserve’s performance and advocates for innovative strategies like trend-following and international diversification for U.S. investors. Meb addresses behavioral biases that lead to poor investment decisions, emphasizing the need for a systematic and diversified approach. He also discusses the risks of home country bias and the potential of various asset classes, urging investors to rethink their allocation strategies.
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Dividend Investing Considerations
- Dividend investing, while popular, isn't necessarily the most tax-efficient approach.
- Consider value investing or synthetic dividends for potentially better after-tax returns.
Market Manipulation and Short Squeezes
- Meb Faber recalls the meme stock craze and the narrative around market manipulation.
- He emphasizes that short squeezes and market volatility have always existed, citing historical examples like Volkswagen.
Trend-Following Allocation
- Allocate a significant portion of your portfolio to trend-following strategies.
- Meb Faber suggests a 50% allocation, far exceeding typical recommendations.