The Meb Faber Show
About This Show
Ready to grow your wealth through smarter investing decisions? With The Meb Faber Show, bestselling author, entrepreneur, and investment fund manager, Meb Faber, brings you insights on today’s markets and the art of investing.
Featuring some of the top investment professionals in the world as his guests, Meb will help you interpret global equity, bond, and commodity markets just like the pros. Whether it’s smart beta, trend following, value investing, or any other timely market topic, each week you’ll hear real market wisdom from the smartest minds in investing today. Better investing starts here.
For more information on Meb, please visit MebFaber.com. For more on Cambria Investment Management, visit CambriaInvestments.com. And to learn about Cambria’s suite of ETFs and other investment offerings, please visit CambriaFunds.com.
Most Recent Episode
#89 - Blair Hull - “Emotions Will Kill You in This Game"
7 days ago
In Episode 89, we welcome legendary market veteran, Blair Hull. We start per usual, with our guest’s background. In this case, long-time Meb Faber Show listeners may think they’ve heard it before. That’s because Blair’s background shares an interesting similarity with that of Ed Thorp – the card game, Blackjack. It turns out Blair made a considerable sum of money playing Blackjack after reading Ed’s writings on the game. Blair tells us you needed an advantage, and then you need to stay in the game. That’s why he played with a team. More hands played according to their system tilted the odds in his favor. This is a fun part of the podcast you’ll want to listen to for all the details, including Meb’s foray into card counting with a partner that botched the system after drinking too many Bloody Mary’s. Eventually, Blair took his winnings and used them to get a seat on the Pacific Exchange, where he became a market maker and began trading options. Blair tells us he was intrigued with market timing, resulting in a paper he wrote which concluded that you can time the market. Meb asks about the genesis of Blair’s market timing strategies. Blair points back to Blackjack – each different card provides an idea about the future. In a similar way, various indicators provide an idea about a market’s future. So, part of the challenge is which indicators do you consider and what weights do you put on them? Next, Meb digs deeper, asking for more specifics of Blair’s strategy, inquiring about the indicators. Blair mentions one indicator that piqued his interest – the Federal Reserve Bank Loan Officer Survey. They found the correlations with 6-month returns was about 30%, which is a fairly high correlation for an indicator. He then took this indicator and combined it with a few others and ran a regression with no forward-looking bias to see if they could exceed the returns of the S&P. What were the results? You’ll have to listen. The conversation bounces around a bit before Blair mentions how valuation is one of their key variables. He tells us his valuation method combines three different aspects: CAPE, cyclically adjusted dividend yield including buybacks, and book-to-price. The guys spend a while discussing the various inputs in Blair’s model before discussing sentiment (which Meb calls “squishy). Both guys like sentiment, with Blair even having invested in two