Money For the Rest of Us

Contrarian Investing with GMO's Ben Inker - FEG Insight Bridge

Feb 5, 2025

Ben Inker, Co-head of asset allocation at GMO, shares his insights on contrarian investing, drawing from his experiences influenced by mentors like Jeremy Grantham. He and Greg Dowling, CIO at FEG Investment Advisors, delve into the significance of deep value stocks in today's market. They discuss the challenges posed by the rise of passive investing and the concentration risks in large-cap tech stocks. Together, they explore emerging opportunities in underappreciated sectors, like Japanese small caps, offering valuable perspectives for savvy investors.

50:41

Episode guests

Greg Dowling

Ben Inker

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

A deeper analysis of asset returns is crucial for investors, as it reveals sustainable trends versus random fluctuations for better decision-making.

The podcast emphasizes the potential of Japanese small-cap stocks, which offer strong fundamentals and competitive advantages amid current overvaluation concerns.

Deep dives

Understanding Asset Returns

The discussion emphasizes the importance of dissecting asset returns to identify their underlying drivers. It highlights that merely focusing on past performance can be misleading, as understanding the factors contributing to those returns can provide more accurate insights into future prospects. Ben Inker posits that a deeper analysis can reveal which returns may be sustainable, which might reverse, and which could be random fluctuations. This analytical approach is foundational to effective asset allocation and is crucial for individual investors aiming to make informed decisions.

Intro

4min

Navigating Career Challenges and Company Evolution

9min

The Art of Communication in Investment

2min

Market Dynamics and Investment Strategies

34min

Personal Hobbies and Family Adventures

2min

Essential Investment Literature for Insight Seekers

2min

This week on episode 510, we share a conversation between Ben Inker of GMO and Greg Dowling of FEG Investment Advisors on contrarian investing, deep value stocks, and the rise of passive investing. David introduces the episode by sharing his key takeaways from the discussion.

FEG Investment Advisor is David's former institutional advisory firm, where he worked for 17 years, before founding Money for the Rest of Us. Greg Dowling is Chief Investment Officer of FEG, and David's former business partner and colleague.

Topics discussed in the episode include:

How experienced professionals can have a significant influence on one's career, such as the impact Jeremy Grantham and David Swenson had on Ben's career
The impact of the rise of passive investing
Investment opportunities in quality and deep-value stocks
The distinct risks of the high concentration in large-cap tech stocks

Show Notes

FEG episode page

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