Episode summary
Meb Faber: The U.S. Market Can’t Keep Winning (The Chart That Shows It)
The Meb Faber Show
· · 47 min · Hosts: Meb Faber
Summary
Meb argues that the extraordinary run in U.S. stocks has pushed market-cap weighting to an extreme, with the S&P 500 ending 2025 expensive on both valuation and concentration measures. He points to the CAPE ratio near 40, a dividend yield around 1.1%, and the recent stretch in which U.S. stocks have repeatedly outperformed equal weight, while warning that history shows these style leadership cycles can reverse abruptly.
He makes the case that investors should be looking beyond the U.S. and beyond market cap. Foreign developed and emerging markets are much cheaper on standard valuation measures, and he says recent flows into non-U.S. assets suggest the market is already beginning to notice. In his view, equal weight, value, and fundamentally weighted approaches all look more attractive than concentrated U.S. benchmarks over the next 5 to 10 years.
The other major theme is real assets. Meb says gold, silver, copper, REITs, TIPS, and other hard assets belong in portfolios because they can help in regime shifts and inflationary stretches. He also argues that trend following remains the cleanest way to own these assets while having a systematic exit when the trend turns, making it a useful diversifier for both stocks and bonds.
Key takeaways
- Meb says the S&P 500’s CAPE near 40 and 1.1% dividend yield leave market-cap weight vulnerable after a long U.S. outperformance streak.
- Meb expects equal weight, value, and other non-market-cap approaches to outperform U.S. cap-weighted indexes over the next 5 to 10 years.
- Meb says foreign developed and emerging markets remain materially cheaper than the U.S., and recent flows suggest investors are starting to rotate global.
- Meb argues gold and other real assets have a durable role in portfolios, especially when equity valuations are rich and inflation risks rise.
- Meb says trend following can both reduce drawdowns and capture upside in gold, silver, and other real assets by providing a disciplined exit rule.
Notable quotes
“the most likely outcome is actually a plus 15 to 20% return which is what we had last year”
“we're ending the year at a PE of 40 on the cape ratio. It feels like a a potential turning point here in 2026”
“anything but market cap weight”
“trend following is a strategy that people are drawn to traditionally to reduce volatility and draw downs”
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 Camrian Investment Management or its affiliates. For more information, visit cambrianvestments.com.
What's up everybody? Welcome to the first radio show of 2026. We used to do these like once a month and you know and Jeff Rimsburg was the co-host and then we've had a few other in the seat and today we got a new Jeff Rimsburg 2.0. Colobby Donovan, welcome to the radio show.
How are you doing me with uh the recent depression of the Broncos? Once Bo got hurt, like reality set in. I don't think any Bronco fan was like, you know what, we're going to ride this with this backup to the promised land.
However, when he threw that first touchdown pass, I was like, oh, here we go. So, you were kind of resigned to, hey, we're not going to win with this backup QB, even though it was steady time. But I was definitely a little a little bummed.
My family knew to kind of leave me alone for the for the afternoon. But we moved on to Avalanche and Nuggets. and one day the Rockies.
I don't know. I don't even include them as a pro sport in Colorado at this point. So, on to bigger and better things.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market-cap weighted investing
- cape valuation extremes
- gold and commodities allocation
- equal weight value global markets
- trend following and real assets
Watch the episode
Watch “Meb Faber: The U.S. Market Can’t Keep Winning (The Chart That Shows It)” 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.
