I recently sat down with quantitative fund manager Meb Faber for an interview…
If you’re not familiar with Meb, he runs The Meb Faber Show podcast. And he’s closing in on 100,000 Twitter followers. (If you’re a Twitter user, you can find him right here.)
Meb’s “day job” is managing 12 publicly traded exchange-traded funds though Cambria Funds. And he directly manages investor money through Cambria Investment Management as well.
But Meb’s exploits don’t stop there… The guy is a quantitative finance enthusiast. He has published multiple “whitepapers” and books on the topic.
So I was thrilled when Meb asked me to join him on the podcast.
The content that follows is an edited excerpt from our interview. In fact, you’re getting a sneak peek… The full interview will publish on Meb’s website at 1 p.m. Eastern time today.
You can get access to the interview as soon as it publishes right here. You can also find The Meb Faber Show on Apple Podcasts, Spotify, or your preferred podcast streaming app.
Here’s your sneak peek…
Meb: You started on Wall Street at a time really before the widespread adoption of computers and quantitative analysis. So how’d you get started in this crazy business of ours?
Marc: I got registered as a stockbroker the day the bear market ended in 1966. That was October 7, 1966. And it felt like every day of my early career was an uptick.
That lasted for two and a half years…
Then, in 1969, the first bear market I encountered reared its ugly head. And I quickly realized that fundamental research was not going to cut it.
I was with a really fine research firm – Shearson, Hammill & Co. – at their main office on 14 Wall Street. And I got to know the analysts and the market strategists…
Those relationships worked great as the market made new highs. But pretty quickly, I realized that analysts put their feet in cement just like individual investors do.
By that, I mean they get stubborn about their picks. They double down as stocks are falling. And finally, near the bottom of the bear market, they throw their hands up, throw in the towel, and tell you to sell.
So, I began what turned into a lifelong pursuit of technical analysis as a way to supplement fundamental research.
Meb: Who were some of your early influences?
Marc: There were a couple key early influences.
One was George Chestnutt… He ran a mutual fund out of Greenwich, Connecticut. I was introduced to him by a fellow broker.
George ran his fund based on industry group relative strength. That means he looked for the strongest stocks in the strongest industry groups.
This was in the mid-1950s. He was doing this work at his kitchen table… [with] no personal computer to aid him.
I liked that approach so much that I actually invested my two sons’ money into that fund. And that fund was up 300% over 10 years.
Now, let’s fast-forward to 1968 and look at another big influence of mine… Bob Levy.
He had just published his PhD thesis. And we had a bookstore downstairs, below my office, called Doubleday Wall Street. Well, I bought the book… And it changed my life.
That’s when I became a firm believer that relative strength combined with fundamental analysis is truly the key to successful investing.
Editor’s note: In the full episode, Marc discusses some of the exact setups he sees in today’s market. You won’t want to miss it. And again, the full episode will publish at 1 p.m. Eastern time today. After that, you can listen to it for free right here.
