Mebane Faber is a co-founder and the Chief Investment Officer of Cambria Investment Management. Faber is the manager of Cambria’s ETFs, separate accounts and private investment funds. Mr. Faber has authored numerous white papers and several books: Global Asset Allocation, Shareholder Yield, The Ivy Portfolio, Global Value, and Invest with the House. He is a frequent speaker and writer on investment strategies and has been featured in Barron’s, The New York Times, and The New Yorker. Mr. Faber graduated from the University of Virginia with a double major in Engineering Science and Biology.
Five Good Questions: Mebane Faber – Invest With The House
Invest with the House – Description
Invest with the House by Mebane Faber
Picking stocks is hard—and competitive. The most talented investors in the world play this game, and if you try to compete against them, it’s like playing against the house in a casino. Luck can be your friend for a while, but eventually the house wins. But what if you could lay down your bets with the house instead of against it? In the stock market, the most successful large investors—particularly hedge fund managers—represent the house. These managers like to refer to their top investments as their “best ideas.” In this book, you will learn how to farm the best ideas of the world’s top hedge fund managers. You will learn who they are, how to track their funds and stock picks, and how to use that information to help guide your own portfolio. In essence, you will learn how to play more like the house in a casino and less like the sucker relying on dumb luck.
Invest with the House – Review
A great introduction to basic cloning technology
[drizzle]If you are unfamiliar with cloning, and want an introduction to the subject, Invest with the House is a great place to start. The book has some fun stories and insights into some of the famous hedge fund personalities and how to clone their portfolios. Definitely worth a read if you are interesting in exposure to “hedge fund stock pickers” at the wonderful price of “free.” — by Wesley Gray (Alpha Architect Blog) on January 8, 2016
Discover What Stocks the Top Hedge Fund Managers are Investing In, Without the Big Fees
Did you know that 64% of stocks fail to beat the market? Which explains why only a small number of top money managers outperform the market over the long term.
Would like to find out what these top investors are investing in now? Did you know there’s simple way to find out what top hedge fund managers are betting on for free?
Invest with the House gives instructions on how to find out the favorite stocks of the world’s most successful money managers.
Meb Faber researched the top 20 money managers and 16 up and coming “tiger cubs”. He researched their stock picks from 2000 and tracked their results. He also reveals the current top 10 holdings of each of the managers as of November 2015. These managers are backed by companies filled with the smartest minds in investing, and the most resources dedicated to outperforming the market.
His method is to search through publicly available 13-F fillings that managers are required to file within 45 days, each quarter. While he acknowledges the limitations of this time lag, for managers taking long term positions, it is still a very useful way to find out what they are investing in.
Meb also describes each manager’s background and their investment philosophy. Almost all of the managers he profiled are value oriented and they focus largely on U.S. companies. You will find a lot of familiar names. Some managers have very concentrated positions in their top 5, while others hold hundreds of stocks.
I love numbers, so what I most enjoyed about this book is seeing the year by year track record for each of these managers. Many are spectacular. But none of them got through 2008 unscathed. They are all human!
It is interesting to find out that the biggest holdings weren’t the best performers. Meb also offers up a scenario of investing in these portfolios while hedging the market. This allows you to get most of the return with much less risk and a fraction of the draw down. Very intriguing!
Perusing through list of stocks, I was struck by many familiar names and commonalities among the portfolios. But there’s also quite a few, under the radar, stocks that I haven’t heard of. The profiled managers are prefer value and contrarian plays. So perhaps the best stocks are likely to be the ones that are still currently trading at cheap valuations. These are the stocks that the brightest investing minds are investing millions of dollars in.
One thing I would have liked to see is when these investments first appeared on their radar. Meb is quick to point that the biggest holding isn’t always the best idea, just the one that has appreciated the most. So I looked at all 36 portfolios and took out the top holdings. I found the second most commonly held stock is Priceline.
What is the most common? Check out the book! I highly recommend it. — by Hanea A El-hizawi on January 21, 2016