The Meb Faber Show - Better Investing Tax Strategies, Exchange Funds, and Portfolio Optimization with Wes Gray & Srikanth Narayan | #591
5 snips
Jul 18, 2025 
Wes Gray, founder and CEO of Alpha Architect, brings his quantitative investing expertise, while Srikanth Narayan, founder of Cache, leverages his tech background to address concentrated stock risks. They explore innovative methods for converting concentrated investments into diversified ETFs, enhancing tax efficiency. The duo discusses the benefits of exchange funds, the importance of managing stock concentration, and the complexities of tax strategies in investment management. They also reflect on the lessons learned from the speculative SPAC market.
AI Snips
Chapters
Transcript
Episode notes
Founder’s Exchange Fund Experience
- Srikanth Narayan started Cash after struggling to access exchange funds for his concentrated Uber stock.
- He noted the long wait and high fees from traditional providers like Goldman Sachs.
Exchange Fund Diversification Bottleneck
- Exchange funds pool various concentrated stocks to create diversified portfolios without immediate tax events.
- Challenges arise as some sectors lack enough low-basis stocks, creating a bottleneck in building diverse funds.
Risk of Stock Concentration
- Concentrated stock positions are historically risky and tend to underperform.
- Buy-and-hold concentrated stocks often fail compared to diversified or even low-risk assets.