The Meb Faber Show - Better Investing

In episode 163, we welcome our guest, Albert Meyer. Albert begins with his backstory as an accountant and his time in academia with the ultimate transition to the world of investment management.He then gets into his early days in the investing world and the work he did that eventually became public, to uncover the Ponzi scheme at the Foundation for New Era Philanthropy. Meb then asks Albert what the path looked like when he decided to start his own firm, Bastiat Capital. Albert discusses the evolution from running a research service to having demand for him to manage assets.Albert follows with Bastiat’s investment philosophy, where he dives into his process, looking at company business models, financial statements, corporate governance, and why he gets into the details of items like equity based compensation.The conversation then turns to Bastiat’s portfolio, where Meb asks about portfolio positioning on a high level and where Albert sees opportunities today. Albert discusses positions in things like Microsoft, Google, and Apple, as well as some Chinese stocks. He also explains how through complicated accounting rules, it may actually be easier now than in the past to hide accounting shenanigans.As the conversation winds down, Meb and Albert discuss Albert’s ideas on social security and African development.Don’t miss jam-packed episode 163 full of this and more, including some of Albert’s incredible work uncovering some of the most famous financial frauds in modern history. Learn more about your ad choices. Visit megaphone.fm/adchoices

Last year when we published The Best Investment Writing Volume 2, we offered authors the opportunity to record an audio version of their chapter to be released as a segment of the podcast, and listeners loved it.This year, we’re bringing you the entire volume of The Best Investment Writing Volume 3 in podcast format.You’ll hear from some of the most respected money managers and investment researchers all over the world.Enough from me, let’s let Paul take over this special episode. Learn more about your ad choices. Visit megaphone.fm/adchoices

In episode 162, we welcome our guest, Chase Nobles. Chase kicks off the episode with some background, meeting his business partner, and how he went on to become the co-founder of Kush.com.He then gets into starting Kush Tourism as a resource for cannabis tourists during the early days of cannabis legalization in the state of Washington, showing them facilities, the industry, and educating them about cannabis and the business behind it.Next, Chase discusses the phase of the business where he and his co-founder realized the value of their business was the network they built. That spurred the idea for a wholesale marketplace.That evolution of the business ultimately led to raising funds and meeting angel investor, Jason Calacanis. Chase goes on to describe the platform, and how it has grown into the marketplace we know today as Kush.com.Meb then asks Chase to discuss the near-term hurdles for growth. Chase explains the backlog of applicants for the platform they are currently working through, and the work it takes to process them, as an example.As the conversation winds down, Meb asks about challenges in the industry. Chase talks about the issues with payment processing, and the hope that things will change in order to ease the burden on that front.All this and more, including Chase’s perspective of the greatest challenges of being a CEO, in episode 162. Learn more about your ad choices. Visit megaphone.fm/adchoices

In episode 161, we welcome our guest, Brandon Zick. Brandon begins talking about his background in farming, and the current ownership structure he’s seeing in the farm business; land ownership and operations are a generation or two removed, which creates a robust rental market, and what makes investment possible.Meb asks Brandon why investors should consider farmland in their investment portfolios. Brandon discusses the tangibility of owning a real asset such as farmland, the inflation hedge it provides, and its ability to diversify a portfolio.Next, Brandon gets into the structural inefficiencies of the farmland market, and the risk/return profile it can provide investors.Meb then asks about the ownership structure of their investments. Brandon talks about Ceres buying land from absentee land owners, their goal of partnering with top decile farmers, and putting more incentives in place for their tenants. He also mentions the farmer relationship and involving them in the underwriting process when looking at acquiring farms.The conversation then turns to some history on the farmland bust phase in the 80s, and how leverage in the system contributed to that environment, but has also influenced how people acquire and own farmland today.Brandon then goes on to explain why investors should embrace volatility, and how important it is as a land owner to have equity in land and cash in hand to be able to make acquisitions and grow.As the conversation winds down, Meb asks Brandon about his thoughts on technology and it’s impacts in agriculture. Brandon talks about it being an exciting development, allowing farming to be less labor intensive and freeing farmers to make higher value, broad scale decisions.Brandon wraps up with a discussion of Ceres’ fund, and what is on the horizon for Ceres.All this and more in episode 161, including a discussion about what keeps Brandon up at night and what he’s particularly excited about, as well as his most memorable investment. Learn more about your ad choices. Visit megaphone.fm/adchoices

Last year when we published The Best Investment Writing Volume 2, we offered authors the opportunity to record an audio version of their chapter to be released as a segment of the podcast, and listeners loved it.This year, we’re bringing you the entire volume of The Best Investment Writing Volume 3 in podcast format.You’ll hear from some of the most respected money managers and investment researchers all over the world.Enough from me, let’s let Jack take over this special episode. Learn more about your ad choices. Visit megaphone.fm/adchoices

In episode 160, we welcome our guest, John Huber. John begins with some background on his approach to investing, and the framework he relies on at Saber Capital Management. John modeled his strategy after the early years of Warren Buffett’s partnerships. At Saber Capital Management, he focuses on good businesses that are poised to do well over time, and a tactical approach to portfolio management.Next, Meb asks about the portfolio approach. John discusses his portfolio being concentrated and long only. He mentions he thinks diversification can be had in fewer positions than is commonly thought. He tends to have 5-6 stocks representing 80% - 90% of his capital.The conversation then shifts into details about what he looks for when researching companies for potential investment. He talks about compounders, and how looking for them has changed since the days of Graham and Dodd to now, where the focus on intangible aspects is much more important.John then gets deeper into his process. He reveals that he sees the investment landscape in two buckets. 1) companies increasing intrinsic value over time, and 2) companies eroding value over time. He tries to avoid companies that erode value over time. He notes that focusing on key variables can get him most of the way there, then he covers his final step, figuring out how much the company is worth, and how much to pay for it.He discusses the degree in which large cap stocks fluctuate between their 52-week highs and lows, and his weighting to them in his portfolio. He then gets into a couple of cases with Apple and Facebook, followed by a description of his sell criteria.All this and more in episode 160, including John’s most memorable investment. Learn more about your ad choices. Visit megaphone.fm/adchoices

In episode 159, we welcome our guest, Ashby Monk. The episode kicks off with a discussion about the concept of saving planet earth and the important role that asset owner investors, the largest institutions in the world such as sovereign wealth funds that total approximately $100 trillion, now have.Meb then asks Ashby to get into the models behind large institutional investors. Ashby discusses some history, and boils it down to what he thinks are the three functions that drive success: people, process, and information.The conversation then gets into Ashby’s thoughts about insourcing vs. outsourcing. Ashby explains that both paths are viable, and the importance of starting with a rigorous understanding of what it costs to run investments internally vs. externally. Ashby notes that he thinks the institutions pursuing the highest quality inputs in terms of people, process, and information should receive recognition, independent of the model they’re running.Meb asks about trends in the industry. On the good side, Ashby discusses the push on fees and costs, and the positive effect it has on institutional investors as a catalyst for innovation. Ashby then talks about how being green and good stewards of the environment has delivered outperformance.The conversation then shifts into Long Term Stock Exchange (LTSE) and its mission.As the chat winds down, Meb and Ashby discuss the app he co-founded, Long Game, and the mission to engage people in their financial decisions in an entirely different way.All this and more, including what Ashby is particularly excited about and his most memorable investment in episode 159. Learn more about your ad choices. Visit megaphone.fm/adchoices

 In episode 158, we welcome back our gest from episode #77, founder of the Acquirers Funds, Tobias Carlisle. Toby begins by providing some detail about his new fund, The Acquirers Fund, a long/short deep value U.S. equity fund. He then spends some time talking about the short side of the portfolio, getting into the thoughtful approach he takes in considering positions including sizing, valuation, balance sheet factors, and stock price factors. He explains that the broad opportunity set looks good for short positions right now.Meb and Toby shift to talking about the long period of underperformance for value investing. Toby hits on the fact that French/Fama data shows value has had its worst 10 year period ever based on the price/book ratio, and notes value has underperformed for an extended period based on other valuation metrics as well.Meb then asks Toby about his process. Toby gets into some detail about his valuation process, and why he favors it vs. other valuation approaches.As the conversation winds down, Toby chats about his own podcast, The Acquirers Podcast, some interesting guests he’s hosted recently, and what’s on the horizon for him and Acquirers Funds.All this and more in episode 158. Learn more about your ad choices. Visit megaphone.fm/adchoices

In episode 157, we welcome back our guest from episode 83, Randy Swan. Randy and Meb kick off the conversation by getting into Randy’s new book, and what motivated him to write. Randy talks about having an opportunity to go back and write about how and why Swan operates the Defined Risk Strategy.In getting into the investing framework outlined in the book, Randy explains why he thinks investors face a “Dual dilemma,” forced to stick with conservative investments, or step out into riskier assets and sacrifice protection from their conservative investments. He goes on to state his thoughts on the evolution of democracy and the role debt has played in decision making in government and central banking.He then goes deeper into this dilemma by explaining the rationale behind his thinking about this problem, and his expectations for low returns in both equity and fixed income markets going forward.Meb asks Randy to discuss why it’s so important to focus on avoiding large losses and investor psychology. Randy follows up with thoughts on portfolio construction concepts he feels are important to add to the current thinking to seek return streams that are more in line with investor expectations.The conversation then shifts into the genesis behind Swan’s flagship, Defined Risk Strategy, the idea that correlation of returns is unreliable, especially in times of crisis, and the difficulty in defining risk in an investment portfolio. He then walks through the portfolio management process and covers some examples of the mechanics during bear markets.As the conversation begins to wind down, Meb asks in what periods this strategy is expected to shine vs. struggle. Randy walks through the desirable market conditions for Swan’s strategies.All this and more in episode 157. Learn more about your ad choices. Visit megaphone.fm/adchoices

In Episode 156 we welcome back our guest from episode #115, Steve Glickman. To get listeners up to speed, Steve starts with an overview of what Opportunity Zones are, some specifics about the design of the program, and some concepts behind how investors can actually put money to work in Opportunity Zones.Meb asks about additional insights since updated rules have been announced. Steve discusses clarity on items such as investing timelines on capital gains, and the length of time funds have to invest capital.When Meb asks about what kind of investments are available, Steve goes on to clarify that just about any asset class is available, but commercial real estate funds, energy, and infrastructure are areas he’s seeing utilized, among others.The conversation then gets deeper into what needs to happen with investments to qualify to meet the regulations, and what happens if companies no longer qualify under the rules. For real estate specifically, Steve describes the need for projects to fall under one of two categories, either 1) purchased for original use, or 2) must undergo substantial improvement. He then describes some of the rules surrounding other businesses, such as startups and existing businesses. Meb follows up with questions on qualifications of some specific examples from public stocks to REITs.On the back of details about investments, the pair get into the fund landscape, with Steve mentioning how much of the fund market will consist of professional money managers running funds in their respective industries.Steve then covers what he’s seen so far from the very early days of the program. He discusses much of what he’s seeing is in commercial real estate, but he’s seeing creative models of asset classes many people haven’t thought of yet. He then shares some thoughts about how some of the early rules may be revisited going forward, and some of the potential issues that could come up with the program.As the conversation winds down, Steve discusses his firm, and the things he’s working on.All this and more in episode 156. Learn more about your ad choices. Visit megaphone.fm/adchoices