Episode summary
Meb Faber: Investors Are Repeating The Stock Market's History
The Meb Faber Show
· · 41 min · Hosts: Meb Faber
Summary
Meb Faber argues that investors overrate home-country bias and underestimate how quickly leadership changes across markets. He points to Korea’s nearly 200% one-year surge and Japan’s decades-long round trip as reminders that “the next big winner” can come from outside the U.S., while the U.S. can still be expensive after a long run. His core case is that diversification across countries reduces risk and drawdowns without giving up the long-run rise of capital markets.
He also pushes back on the idea that dividends alone define shareholder returns. Meb says investors should think in terms of shareholder yield, which combines dividends with net buybacks and also accounts for dilution from issuance. In his view, buybacks are often ignored even though they can be a major source of return, and tax efficiency matters more than chasing headline yield. He contrasts that with the common mistake of focusing on stock price moves instead of how companies allocate cash.
More broadly, Meb stresses that the biggest investing edge is behavior: have a plan, stay invested, and avoid leverage and emotional decisions. He says the market’s recurring booms and busts are normal, not a bug, and that young investors in particular benefit when prices fall because they can compound for decades ahead.
Key takeaways
- Meb Faber says home-country bias is usually a “horrible” idea because global diversification can lower risk and drawdowns while preserving upside.
- He says Korea’s near-200% move and Japan’s long valuation reset show how quickly hated markets can re-rate after long periods of weak performance.
- Faber argues shareholder yield is more useful than dividend yield alone because buybacks and share issuance materially change what owners receive.
- He says tax alpha is often more important than trying to beat the market by a small margin, especially inside tax-advantaged ETF structures.
- Faber’s main behavioral advice is to have a plan, stay invested, and avoid leverage because the real risk is getting taken out of the game.
Notable quotes
“The point being is that compounding that gap widens over time”
“The US is the world's premier capital market and economy. twothirds of the world market cap but only 25% of world GDP”
“it's usually historically speaking a horrible, terrible, no good, very bad idea”
“what are you trying to get when you're investing”
“tax alpha swamps all the other out”
How the episode opens
Welcome to the Met Favor Show, where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.
Met Faber 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 Camri Investment Management or its affiliates. For more information, visit cambrianvestments.com.
Portfolios don't usually get messy overnight. It happens slowly. A few new positions here, an ETF added there, grandma's trust holdings with zero basis, stock picks from your favorite TV host that turned out better than expected.
Before long, you're managing a ton of holdings, have overlapping exposures, and a long tax bill that keeps everything stuck in place. A section 351 exchange may offer a different path. It may allow investors to consolidate their qualifying holdings into a single ETF and access professional management services, all without triggering capital gains at the time of exchange if specific rules and tests are met.
Our friends at Alpha Architect have worked directly on multiple 351 Exchange launches and helped advisers navigate through these exact challenges. That experience is now available in the Alpha Architect 351 Education Center, a dedicated hub featuring videos, walkthroughs, and resources designed to help investors stay informed on the latest 351 exchange insights. To learn more about 351 exchanges and their various portfolio applications, visit funds.alphaarchchitect.com.
alphaarchchitect.com 351 education center or click on the link in the show notes. Hey everyone, Meb here. Quick note from today's episode is a little bit different.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- home country bias
- shareholder yield
- etf industry
- tax alpha
- global diversification
Companies and tickers mentioned
- Alpha Architect
Watch the episode
Watch “Meb Faber: Investors Are Repeating The Stock Market's History” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from The Meb Faber Show
-
How to Get Out of a Bubble Without Selling Too Early: Jeff deGraaf Explains -
The AI Narrative Is Hiding a Much Bigger Problem -
Vincent Deluard: Why the Stock Market Is More Fragile Than You Think -
It's a Bubble. So Why Is Citi's Dirk Willer Buying? -
36% of Your Portfolio Just Disappeared In the Last 30 Years (Andrew Ang Explains How) -
The Asset That Could Be the Market’s Biggest Mispricing
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.
