15: Meb Faber on Building The All Seasons Portfolio
By Sam Marks / Johnny FD
Meb Faber is one of our hero’s in Finance. A high energy straight shooter that is highly explorative and analytical. He gave up his skis to catch the surf in Manhattan Beach while co-founding his company Cambria Investments Management. Many of our listeners already follow Meb through his blog, podcasts and many books, and had to chance to catch up with him about modelling an “All Seasons Portfolio”. Originally introduced by BridgeWater’s Ray Dalio, the investment allocation was once again hyped up in its reintroduction of Tony Robbins new book Money Master the Game. Meb has researched and compared dozens of the most coveted asset allocation models dating back to the early 1900’s and we wanted to see how the All Seasons Portfolio stacked up against others like the Perfect Portfolio, and the 60/40. This episode is perfect for anyone looking to learn how to model a buy and hold portfolio and learn more about how today’s economic environment may give clues to future investment performance. Links for Meb: http://mebfaber.com/ Cambria Investments Twitter Where are we: Sam – Singapore Meb – Manhattan Beach Recommended: Money Master The Game – Tony Robbins The Ivy Portfolio – Meb Faber Global Value – Meb Faber ShareholderYield – Meb Faber The Intelligent Asset Allocator – William Bernstein Triumph for the optimists – Elroy Dimson, Paul Marsh, Mike Staunton Demographic Cliff – Harry Dent Discussed: The Idea Farm The All Seasons Portfolio – Ray Dalio David Swenson Risky Party 160% model – Global Market Portfolio The Capitalism Distribution (Longboard) Vanguard Betterment Some awesome links to Meb’s content: Tony Robbins All Season Portfolio Risk Parity Model (*watch the first video) Asset Allocation Strategies (*our favorite article) Global Asset Allocation (*get Meb’s book free) Meb’s Podcast Timp Stamp – Topic: 09:20 – How Meb got into finance 10:15 – Starting up Cambria 11:00 – 1500 blogs in 5 years 14:00 – Traditional investment advice vs. modern 14:45 – Modelling a portfolio for the future 16:40 – Having an appreciation for history 17:45 – The world’s investment Gurus 19:10 – Comparing 6 great portfolio models 20:45 – Why low cost fees make a huge difference 21:45 – Why buy and hold allocations don’t matter as much 22:50 – Japan’s market was flat for 2 decades 26:22 – Foreign markets are reasonable or really cheap 28:27 – What does risk parity mean? 31:30 – The simple takeaway of risk parity 32:00 – Negative interest rates 32:30 – Will bond rates continue to rise? 33:45 – Why high yield stocks are now dangerous 42:00 – Where REITs stand at the moment 35:00 – How models performed in the inflationary 70’s 36:20 – Reviewing the ALL Seasons Portfolio 37:14 – “Go enjoy your Summer” 38:25 – Being asset class agnostic 39:00 – Home country bias 40:00 – Dollar weighted vs. time weighted returns 41:33 – Advisor value, talking you out of emotional moves 42:25 – Investment timelines 43:40 – Dliving through a bear market 44:45 – Designing a model for the future (Global Market) 45:50 – The Trinity Portfolio 48:40 – What is exciting about Emerging Markets 48:00 – Small Cap growth prospective 50:00 – The capitalism distribution 51:50 – Meb’s opinion on Robo Advisors 53:50 – Robo-Advisors in bear markets 54:45 – Why it’s a great time to be an investor 55:25 – Personal finance vs. investing 56:45 – How about TIPS? 58:55 – WWIII investment planning 60:00 – Final thoughts portfolios for the futures If you enjoyed this episode, do us a favor and share it! Also if you haven’t already, please take a minute to leave us a 5 star review on iTunes and claim your bonus here! Copyright 2016. All rights reserved. Read our disclaimer here.