Top Podcasts of the Week

Below is our “Top Podcast” episode with our new curator, Colby Donovan! Holler with any feedback!

Today we have Rob Arnott explaining why he’s still long emerging market value, an episode with a financial advisor to professional athletes, a Stanford professor on how to encourage minor positive changes in others, and a couple of episodes on yield curve inversions.

  • The Long View: Rob Arnott: Don’t Sleep on Value Investing (Especially Emerging-Markets Value). Arnott is partner and chairman of the board of Research Affiliates, and popularized smart beta. In this episode, he compares today’s market with the 2000 tech bubble, offers his thoughts on the underperformance of value and why he’s staying long (especially in emerging markets), and discusses multifactor investing and what factors look cheap and expensive. [August 21, 2019–53 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link


The dollar weighted return of mutual funds is ~2% lower than time weighted return (investors underperform actual returns of all mutual funds by ~2% per year).


  • Superinvestors: #29: Louis-Vincent Gave On Staying One Step Ahead Of The Markets. Louis-Vincent Gave is a co-founder of Gavekal, a global macro fund. In this episode, he talks about some of the key themes driving his current views on the global markets (including currencies and the U.S. dollar), why he thinks the market is ignoring the U.S. debt levels, why he thinks we’re shifting towards de-globalization, and why he thinks energy stocks are a good hedge vs. an inflation shock. [August 14, 2019–55 minutesiTunes Podcast | Overcast | Breaker | Website Link


  • Animal Spirits Podcast: Talk Your Book: Invest like a Hedge Fund with Titan. This episode features Clay Gardner of Titan Invest whose mission is to democratize hedge fund investing. His firm essentially runs a 13-F replication strategy (similar to the ideas discusses in Meb Faber’s book Invest With The House). He explains the difficulties with running that type of strategy, how he picks managers, why he believes the strategy can outperform the market, and how it works for individual investors. [August 19, 2019–37 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link


  • Odd Lots: John Hempton on What’s Ailing Bank Stocks. Hempton is the co-founder of hedge fund Bronte Capital and a famed short-seller. He talks mostly about how the world’s stock market is expensive while bank stocks are trading at 30-year lows, which he describes as “one of the great puzzles of the world.” He mentions the impact of low (and negative rates) on profit margins and how regional Japanese banks are actually losing money before accounting for charge offs. He also talks about what he sees in the market, lessons learned from the 2000 tech bubble, and evaluating the capital allocation of companies, both good (Phillip Morris) and bad (GE). [August 19, 2019–49 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link


The average interest rate on a new loan Japanese regional banks YTD is 68bps, so on current business, Japanese banks are loss making before credit losses.


  • Invest Like the Best: Joe McLean — How to be a Pro’s Pro. McLean is the founder of Intersect Capital, which provides financial advisory services to a variety of clients, including a number of NBA players. He was also recently featured in a NY Times article here. He begins with his background, which includes playing basketball at the University of Arizona and later playing professionally overseas. He later became a financial advisor and interestingly enough has standards for his athletes, requiring them to save between 40%-70% of their paychecks. He explains his value proposition, how he ensures his clients are a good fit, and the difficulties that come with his job since he may be the only person who says no to some of his clients. [August 20, 2019–52 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link


  • a16z Podcast: Software has eaten the world…healthcare is next. In 2011, a16z co-founder Marc Andreessen published an op-ed in the WSJ called Why Software Is Eating the World. This episode gives some background on where the thesis came from and how the thesis has played out with examples from the auto, education, and music industries. The talk then turns to healthcare and issues that software can solve, from patients complying with doctors directions and prescriptions to operations like handling medical records or management services. He also discusses how his firm has pivoted to investing in biotech firms and why he believes that’s been an untapped market. [August 19, 2019–46 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link
The Rest
  • The Knowledge Project: #64 The Big Impact of Small Interventions with Stanford’s Greg Walton. Walton is a Associate Professor of Psychology at Stanford University. The episode is about what he calls interventions — not the life-changing “intervention” that may come to mind, but what he describes as small daily interactions that have the potential to change act or feel. For example, it may be a mother less likely to abuse their child or a father getting their child to go to bed on time. This is a great listen for a teacher, coach, or leader to be help create stronger relationships, remove obstacles that are preventing us from reaching our goals, and promoting the growth mindset within others. [August 20, 2019–51 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link
Throwback Episodes — Inverted Yield Curve

The yield curve inversion has been all over the news lately, so there are a couple good episodes on the topic below.

  • Planet Money: #934: Two Yield Curve Indicators. This is a two part episode. The first half is with Campbell Harvey, who is a professor at Duke and the first person to write about the yield curve acting as a recession predictor. Then the episode turns toward a discussion on where the yield curve is now and what it means going forward. [August 22, 2019–18 minutesiTunes PodcastSpotifyOvercast | Breaker | Website Link


  • The Curious Investor: Inverted Yield Curves. The episode covers what the yield curve is, why it is upward sloping and that although it has been a strong predictor of recessions in the U.S., it hasn’t been in other places such as Japan and Australia. They also explain why there is a difference between a yield curve inversion that starts at a high level of rates compared to one that starts at a low level of rates (the former is a better predictor of a recession). [June 26, 2019–22 minutesiTunes PodcastSpotifyOvercast | Breaker | Website Link


From 1966–2018, the U.S. yield curve was upward sloping 89% of the time.

Here’s ours:

Episode #171: Raoul Pal, “Buy Bonds. Buy Dollars. Wear Diamonds.”

The Best Investment Writing Volume 3: Corey Hoffstein – Factor Fimbulwinter

Good investing,
Meb Faber