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Welcome, everyone.
A "Forbes" article about Meb Faber's book
begins with the question, how does an investment manager
reconcile all of the various prognostications
he hears on a daily basis?
His curt and brief response was, ignore them.
Over 70 years ago, Ben Graham and David Dodd
proposed valuing stocks with earnings
smoothed across multiple years.
Robert Shiller later popularized this method
with his version of the cyclically adjusted price
to earnings, or the cape ratio, in the late 1990s
and correctly issued a timely warning of poor stock returns
to follow in the coming years.
Our speaker today Mr. Faber applies this valuation metric
across his global investments.
He's a co-founder and CIO of Cambria Investment Management
and has authored numerous white papers and three books--
"Shareholder Yield," "The Ivy Portfolio," and "Global Value."
A frequent speaker and writer on investment strategies
who has been featured in the "Barons,"
"The New York Times," and "The New Yorker,"
he is here today to speak about his investing philosophy.
So without further ado, friends, let's welcome Mebane Faber.
MEBANE FABER: It's great to be here today.
This is a nice, intimate audience.
So I usually fly through this pretty quick.
So if I'm going too fast, I say something
you don't understand, just raise your hand and wave at me.
This is interesting.
Because this is probably the first time in my entire life
I've been the most dressed up person in the room.
You know, suits for me, it's normally weddings, funerals.
I live down in So Cal.
So casual is kind of our normal entire anyway.
So it's a bit humorous.
Anyway, all right.
So we're going to get started real fast.
Since I don't see too many familiar
faces, quick introduction.
Again, my name is Mebane Faber, although I go by Meb.
Mebs lately have had a lot of great press.
This is the Meb who just won the Boston Marathon.
And as one of my friends' moms on social media
said when I posted a link to this,
said I didn't even know you ran, I said, well,
I know if you've seen any photos,
but he's in much better shape, much skinnier than I am.
I grew up in Colorado before spending some time
in North Carolina.
I went to college at University of Virginia.
So if anybody is watching the College World Series tonight,
go Hoos.
We're playing Vanderbilt.
So pretty excited about that.
May have to make a last minute trip to Omaha
here if we win one of the first two games.
Actually studied engineering in biology so.
I feel like I'm in good company today.
Probably a lot of engineers here.
My first job out of college was in Washington, DC.
Worked as a biotech analyst for biotech stocks
and was going to grad school at the time
before moving to San Fransisco.
So I lived in the Bay Area for about a year and a half
and then a brief-- and actually lived
with an early Google employee.
So I was gravitating more towards the quant side
of the business of the time.
So moved away from the bench, from the science--
I was always really terrible at it anyway--
but more towards quantitative investing.
A brief stop in Lake Tahoe, where I can get away
in most of the country saying that I actually
had gainful employment there.
But most to you can see through that and say,
you're probably a ski bum.
As you know, there's probably not a lot
of high investment companies going on in Tahoe.
But an interesting side story was that when I did live there,
I managed to sneak my way into a really, really great Google
party.
And if any of you all have been around long enough--
this is probably 2004-- anybody here
that used to go to the parties they had at Squaw-- wow, OK.
We got a couple.
So, I mean, we're talking six stages--
this is probably pre-IPO days.
You could still get away with this.
Six stages and ice sculptures and fire.
And they flew almost everybody in from around the world.
And of course, I wasn't working at Google
but had a number of friends did.
So I managed to sneak my way in.
And I remembered as I was walking today.
I'd completely forgotten about this.
But they gave every Google employee two drink tickets
and then I think you had to buy the rest or something.
But the good news is, most of my friends
worked in travel employment up there.
So I had it from friends working the hotel front desk
setting up the tents with the guys.
One of the guy says, here, you want some drink tickets?
You know, because we're all obviously
sneaking into the parties.
And he said, sure.
You know, you only get one or two.
He goes, here's 50.
Needless to say, I managed to get kicked out
of the party later that night, or the after party,
but really had a great time there.
It was really a lot of fun.
Moved down to LA.
I guess this should be a Kings photo now.
But I've been in Manhattan Beach for the past seven years.
When I started my company Cambria Investment Adviser,
spent a lot of time learning how to surf.
But I'm pretty terrible.
Look like this and this.
And if you've see the videos on YouTube lately,
one of the benefits of having technology,
of course, the go pros of the world,
is you get amazing footage, right?
But also, you learn some things you really probably
didn't want to know.
So being a surfer in Manhattan beach
and all of a sudden realizing that, yes,
underwater there's a lot of great white sharks.
So you've been seeing a lot of these videos coming out lately
where stand up paddleboarders are just
watching these great whites swim through the line up.
I would rather just not know, of course,
that our friends are there.
But they're harmless, right?
A bit about my company-- we started in 2006.
We manage about 430 million, maybe 440 million now.
We do individual accounts.
We manage public funds.
The goal-- and I feel like this try to include a Silicon Valley
term-- disrupt traditional high fee investing.
I have 100% of my net worth invested in our public fund.
So this isn't a theoretical exercise
we're going to talk about today.
But this is what I do with all my own money.
Now, before we start, this is a fun little quiz
we're going to pass around.
It's anonymous.
So don't worry.
Nobody's going to see what you wrote down.
But asked a simple question is for those of you
invest in stocks-- so ignore bonds.
Ignore real estate.
Ignore commodities or whatever else you
may trade-- currencies.
And you have to be US resident.
Otherwise, you'll bias the data.
How much do you put in the US?
So let's say you have 80% in the US, 20% in Japan.
Write down 80%.
So there's a little piece of paper
that's going to go around.
Just write down a number.
And then when it gets to the end, raise your hand.
And we'll get back to this a little bit later.
You can find a lot of information that we write about
and publish.
Again, I have a blog-- Mebfabor.com.
My company's website-- Cambria Funds.
There's a third site called The Idea Farm, but all of which
we publish.
Most of it is free.
There's 1,500 articles I've written
on the blog, about a dozen white papers, three books.
And as a benefit of sitting here during a lunch break
or taking the time out today or if you're watching the webcast,