Episode summary
Everything You Know About Investing Comes From One Weird Era
The Meb Faber Show
· · Hosts: Meb Faber · Guests: Joseph Moore
Summary
Joseph Moore argues that most modern investing advice was forged in a very specific inflationary era, not across all of American history. He says the old rule of thumb was often the opposite of today’s advice: money was unreliable, so families were urged to convert cash into tangible assets quickly, while real estate, stocks, and bonds each behaved very differently than they do now.
A major theme is that real estate has been misunderstood. Moore says it was usually a way to build a modest fortune by using leverage and paying down a durable asset, not a simple “buy and hold because it always goes up” trade. He cites examples showing that many U.S. homes barely appreciated in real terms for decades, and that his own landlord experience taught him to treat property like an operating business rather than a passive asset.
On stocks and bonds, Moore says the familiar belief that stocks always beat bonds is historically false. He argues that stocks became the default advice only after World War I, when inflation and income taxes changed the game and pushed investors away from cash and into equities. His broader lesson is that investors should focus less on beating benchmarks and more on solving real problems, taking intelligently sized risks, and using assets to meet life goals.
Key takeaways
- Moore says the modern “stocks beat bonds” story emerged after World War I, when inflation and income taxes forced investors to seek returns outside cash.
- Moore argues real estate is usually a way to build a modest fortune through leverage and discipline, not a guaranteed path to outsized appreciation.
- Moore says everyday investors often should not spend years trying to beat the market when the extra return is small relative to the time cost.
- Moore’s core wealth lesson is to solve other people’s problems, because that is where the biggest money is made.
- Moore says optimism, mobility, and marrying well have been durable financial advantages across eras.
Notable quotes
“Now, I want you to understand, grandson, never save money." Like, get it out of your hands as fast as you can”
“Real estate is a great way to build a modest fortune. It is not the way to build a great fortune”
“Now, we have this idea that stocks always beat bonds. And recently, some academics have gone back and put together the real databases for this and found out that is not true”
“you could beat the market, but why in the world would you want to”
“most financial advice focuses on you and your problems. You know, should you buy a latte? Should you buy this asset or that”
How the episode opens
In the book, I quote a grandfather sitting his grandson down and saying, "Now, I want you to understand, grandson, never save money. Like, get it out of your hands as fast as you can. Real estate did not always go up.
A residential home in Pittsburgh, in Atlanta, in Houston, in most American cities, cost the same inflation adjusted in the 1990s as it had in the 1890s. Human traffickers moved into the house. Uh, we had hoarders with rats in one of the apartments.
The hoarders pulled a pulled a shotgun on me. I had to leap out off the deck to try to run to my my car to get away. It was like, oh my gosh.
We have this idea that stocks always beat bonds. And recently, some academics have gone back and put together the real databases for this. And found out that is not true.
While I am having Jim Kramer yell at me like I am a child, I hear my wife holler, "Come quick. She's doing it. And I missed my daughter's first steps.
Welcome to a special series of the Meb Faber Show on the past, present, and future of America. I'm sitting down with some of the most notable historians, thinkers, investors in US Financial History, all tied to my new coffee table book, Investing in America, the rise of a 250year bull market out July 4th. Metab is the co-founder and chief investment officer at Camry Investment Management.
Due to industry regulations, he will not discuss any of Camry's funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Camrian Investment Management or its affiliates. For more information, visit cambriavestments.com.
Welcome back everybody. Happy summertime. Hopefully you're surviving the heat.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- investing advice history
- diversification
- bonds vs stocks
- real estate appreciation
- bitcoin in a portfolio
Watch the episode
Watch “Everything You Know About Investing Comes From One Weird Era” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Meb Faber Show, this episode and its artwork belong to The Idea Farm. Octagon is not affiliated with the show; this page is an independent summary.
