The Meb Faber Show - Better Investing Radio Show: Meb on Markets at Extremes, Anything BUT Market Cap, and Embracing Volatility | #616
Feb 3, 2026
Colby Donovan, radio co-host and interviewer who steers market conversations. He presses Meb on market-cap limits and alternatives. They cover CAPE extremes, equal-weight and global shifts. Conversation jumps to the quiet comeback of gold, commodities, and real assets. They close by probing trend-following and portfolio substitutes without diving into technical takeaways.
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Market-Cap's Dominance Is A Potential Weakness
- Market-cap weighting can become a liability when a few mega-cap stocks dominate valuations.
- Anything-but-market-cap (e.g., equal weight, fundamental weight) likely fares better if US multiples stay extreme.
Style Leadership Swings Are Long And Repeating
- Style leadership often persists for years then flips hard, creating long multi-year runs for different weighting schemes.
- Historical cycles show equal weight and cap-weight alternate long stretches of outperformance.
Market-Cap Shares Shift Dramatically Over Time
- Country market-cap share can change drastically over decades, as Japan and the US demonstrate.
- Owner participation and cultural risk-taking help explain why some countries' market share compounds higher.
