Hedgeye Podcasts Hedgeye Investing Summit Spring 2025 | Meb Faber, Co-Founder & CIO of Cambria IM
Apr 17, 2025
Meb Faber, co-founder and CIO of Cambria Investment Management, shares his expertise in global asset allocation and quantitative investing. He discusses the interplay between market valuations and economic indicators, stressing flexibility in strategies. Faber compares investment planning to a balanced diet, advocating for diverse asset allocation. He critiques traditional passive investing, emphasizing the importance of adapting to market conditions. Finally, he highlights the significance of managing stress through robust investment strategies and continuous education.
AI Snips
Chapters
Books
Transcript
Episode notes
Stock Market Valuation Vulnerability
- The US stock market recently reached one of its highest valuations, second only to 1999's peak bubble.
- High valuation makes markets vulnerable, as history shows with long periods of no returns after peaks.
Expensive & Declining Markets Danger
- Expensive markets going down represent the worst scenario, combining overvaluation and declining trends.
- This phase is dangerous for investors due to multiple triggers accelerating downside risk.
Colombia Market Crash Anecdote
- Meb Faber warned Colombian investors in 2014 about the market's high valuation despite strong enthusiasm.
- The market then crashed 70%, illustrating dangers of ignoring valuation and emotional attachment.