Episode summary
Meb Faber’s Mid-Year Market Review
The Meb Faber Show
· · 50 min · Hosts: Meb Faber
Summary
Meb Faber used the webinar to frame his new book, Investing in America, as a long-run case for owning U.S. equities while warning that near-term U.S. valuations are stretched. He argued that American stocks remain expensive on every major valuation measure, with the CAPE ratio around 42 and dividend yield near 1%, and said history shows no market that ended a year at a CAPE near 40 went on to produce above-average 10-year returns.
At the same time, he said the opportunity set outside the U.S. has improved and that many global and non-U.S. markets still screen far cheaper than the S&P 500. He emphasized shareholder-yield strategies, small-cap and value tilts, and a broader role for trend following in portfolios, especially as a diversifier when equities struggle.
He also made a non-consensus case for fixed income, arguing that T-bills still look superior to taking duration or credit risk in much of the bond market. Across the Q&A, he repeatedly returned to the idea that investors should use valuation, trend, and global diversification together rather than relying on a U.S.-only market-cap portfolio.
Key takeaways
- Meb Faber said U.S. stocks are expensive on every major metric, with the CAPE ratio around 42 and a 1% dividend yield.
- He argued that markets ending a year near a CAPE of 40 have historically produced zero above-average 10-year returns.
- Faber said the starting global allocation should be about 60% U.S., 30% developed foreign, and 10% emerging markets.
- He said trend following should be a meaningful portfolio sleeve, not a token diversifier, and that it helped during drawdowns like 2022.
- Faber argued T-bills are still the best fixed-income choice when bond spreads do not compensate investors for risk.
Notable quotes
“US stocks are expensive. But as we've long learned throughout history, there's no ceiling on valuation”
“Not once have we found in history that the a market that ends the year at a cape ratio of 40 has above average returns the next decade”
“the two things I'll say today that are extremely non-conensus, that was not one of them”
“my answer to that is T- billills”
How the episode opens
The biggest topic, you guys should already be familiar with us, so you know where to go. Camry Funds is our ETF site. The the new and redesigned idea farm, y'all.
We're going to send out our global valuation summary very shortly. It is a new and curated site. It is awesome, y'all.
You can go in and see the archives for every single piece we've sent out for the past decade. You can see every single podcast we've sent out. You can search them by company, by um playlist, all sorts of awesome stuff on there.
It's it's sort of my daily newspaper now. Um so, make sure to sign up there. Obviously, Twitter, I still can't call it X.
And then, uh the podcast, you know, it's sort of crazy as the years peel peel off. I don't know if y'all feel this way. I look back, we're celebrating, we'll probably do one in the fall time.
This company Cambria has had a 20 year anniversary this year and uh you're hitting a lot of other milestones. I think the podcast is 10. We got a bunch of ETFs that are 10 plus years old now.
We have um the idea farm is 10 years old. The old quantitative approach tactical ass allocation paper that hits a 20-y year anniversary. I imagine a few of you all read that over the years.
So, we got to update a bunch of these uh and have a little party at some point, but but for now, the party is a new book. First one in a decade, you guys. Uh haven't haven't put pen to paper since my my child was born and he's nine.
So, um investing in America hot off the presses. Well, sort of hot off the presses.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- mid-year market review
- investing outlook
- long-term bull market
- cambria etf conversions
- book launch
Companies and tickers mentioned
- Cambria Investment Management, LP
- ALPS Distributors Inc.
Watch the episode
Watch “Meb Faber’s Mid-Year Market Review” 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.
