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14:01
Apr 10
Apr 10
XLV
XLF
SHOP
▾
Paul explicitly cited healthcare as an area of investment focus due to its "high regulatory barriers, data defensibility, [and] integration into complex legacy workflows." These characteristics create significant moats that protect companies from being quickly disintermediated by AI. Regulatory compliance and proprietary data are hard for fast followers to replicate. WATCH for investment opportunities, as the sector offers defensible niches where AI can augment rather than replace existing businesses. Changes in healthcare regulation or data privacy laws could lower these barriers. Additionally, AI-native competitors might find ways to navigate the regulatory landscape faster than anticipated.
XLV WATCH
Paul listed fintech as a key area, noting it relies on "proprietary data sets," "regulatory constraints," and "transactional behavior over time." These factors (data, regulation, embedded workflows) act as defensive barriers, making it challenging for generic AI solutions to quickly replicate and disrupt established companies or viable startups. WATCH for opportunities, as the sector's inherent moats can protect companies that effectively integrate AI into their defensible offerings. Aggressive new regulations or the emergence of AI agents that can bypass traditional financial intermediaries could undermine these defensive characteristics.
XLF WATCH
Alex stated, "I don't think anyone in e-commerce is going to be ripping out Shopify to save a few dollars," identifying it as a mission-critical system a business runs on. AI disruption primarily threatens non-essential software. Mission-critical applications that touch core operations, money, or regulation have high reliability requirements and switching costs, making them resilient to replacement. LONG because its position as essential infrastructure makes it defensible against AI-driven cost-cutting or displacement in the near to medium term. A fundamental AI breakthrough that allows for easy, reliable, and secure replication of its core e-commerce platform functionality could erode this moat.
SHOP LONG
14:00
Apr 03
Apr 03
PSP
XLV
▾
The speaker directly criticizes private equity's "volatility smoothing," calling it "lying" or "making up numbers," where reported prices are not tradable, especially during crises (e.g., Q1 2020). This accounting practice creates a misleading profile of high returns with low, smoothed volatility, which does not reflect true economic risk or liquidity constraints for investors. The traditional, illiquid private equity structure is unattractive because it obscures true risk and denies investors liquidity, especially compared to liquid public market alternatives that can replicate its factor exposures. If private equity funds can consistently generate alpha beyond replicable factor tilts and justify their illiquidity premium, the avoidance could be costly.
PSP AVOID
The speaker states that if AI leads to a future of material abundance where people work less, "there is an infinite demand for health and beauty," and concludes, "those seem like good areas to bet on." In a world of solved material production, human wants will shift towards non-material, experiential, and self-improvement domains, with health and beauty services being primary beneficiaries. The health and beauty sector is positioned to capture disproportionate demand growth in a post-scarcity economy driven by AI and automation, making it a compelling long-term investment. Technological change could radically alter conceptions of "beauty" or health delivery, disrupting incumbent business models. The thematic timeframe is also very long.
XLV LONG
14:01
Mar 27
Mar 27
PPLT
▾
Speaker states he has been telling clients to buy platinum for a couple of years because it is "too cheap." Notes it used to take 2.4 oz of gold to buy 1 oz of platinum, and now the ratio is inverted (approx. 2.4 oz of platinum to buy 1 oz of gold). He states it is "80 times rarer than gold" and mined primarily in South Africa and Russia. The extreme price dislocation relative to gold and its fundamental rarity creates a asymmetric value opportunity. Its industrial uses and constrained supply base support its strategic value. LONG. It is presented as a "very safe bet" and a "really good performer" within the metals complex, positioned for mean reversion against gold. Platinum prices could still decline in a broad market downturn, as with all commodities. Production could increase, or demand from automotive (catalytic converter) use could wane.
PPLT LONG
17:11
Mar 24
Mar 24
DBMF
VEA
▾
Speaker explicitly recommends a 10-20% allocation to trend-following strategies for most advisors, stating it is "about as close as you can get" to a magic free diversifier and is the "premier diversifier" to a buy-and-hold portfolio. Trend-following provides an asset-class and approach-agnostic source of returns that is historically uncorrelated to traditional equities, improving portfolio resilience. LONG because it is viewed as a high-conviction method to address a common portfolio construction mistake and improve risk-adjusted returns over the long term. Extended periods of underperformance (e.g., during strong, steady bull markets) and implementation costs.
DBMF LONG
Meb Faber
Co-founder and Chief Investment Officer at Cambria Investment Management
medium-term to long-term
Speaker states foreign and emerging markets had a "monster year" (e.g., +30%), and you could see an "extended move in foreign equities over the next few years." This is due to a combination of relative undervaluation, recent outperformance, positive momentum, and most investors being structurally under-allocated to non-US markets after a long cycle of US dominance. LONG because the shift away from US concentration and toward global diversification is believed to be in its early stages and could persist for years. A resurgence of US market strength and dollar momentum could halt or reverse the relative outperformance.
VEA LONG
14:01
Mar 20
Mar 20
XLY
XLB
XLE
GOLD
▾
Speaker highlights consumer discretionary as a sector coming out of a recession, benefiting from policy changes, deregulation, and pent-up demand. The sector is a direct beneficiary of the rolling recovery, wage growth for lower/middle-income workers, and potential Fed rate cuts. Long consumer discretionary to capitalize on the cyclical recovery in consumer spending and earnings revisions. A sharp, sustained spike in oil prices crushing discretionary consumer budgets.
XLY LONG
Speaker states he was "much more bullish on the metals and some of the materials than we were on energy" and currently thinks "the better trade now" is to fade energy and go back to materials/metals. Metals and materials are leveraged to global industrial recovery and infrastructure capex (e.g., Big Beautiful Bill), without the geopolitical supply shock dynamics currently plaguing oil. Long non-energy minerals (metals, materials) as a preferred cyclical exposure within commodities. A global recession halting the industrial recovery and commodity demand.
XLB LONG
Speaker explicitly states "you want to kind of fade energy a little bit" after its recent rally and prefers materials/metals. The energy rally is driven by a transient geopolitical shock; the trade is crowded and the logistical oil crisis is expected to be resolved under economic pressure. Avoid energy as a tactical call to reduce exposure after a sharp run-up driven by event risk. The Iran conflict escalates permanently, sustaining oil prices at recession-inducing levels ($150+).
XLE AVOID
Speaker advocates for a portfolio shift from traditional 60/40 to a 60/20/20 model, with the 20% alternatives allocation including gold as a defensive asset. In a fiscal-dominant, inflationary regime, gold protects against currency debasement and serves as a hedge when the defensive function of long-duration bonds is compromised. Long gold as a strategic, non-yielding asset for portfolio diversification and inflation hedging. A return to a Volcker-like Fed prioritizing inflation fighting above all else, driving real rates sharply higher.
GOLD LONG
14:00
Mar 13
Mar 13
QQQ
NVDA
IWM
▾
I got a bunch of Mac 7 and you know what? I can't take it anymore. I see some of these starting to underperform and now I realize they don't always outperform forever and I need to diversify. Wealthy investors and advisors are sitting on massive, highly concentrated gains in mega-cap tech. As momentum slows, there is a structural and urgent push to use complex tax vehicles (like Section 351 ETF seeding and 721 exchange funds) to offload this concentration risk. This creates a hidden, structural supply overhang for the market's biggest historical winners as early holders look for the exit. WATCH. The smart money is actively paying legal and structuring fees to figure out how to exit their massive mega-cap tech winners without paying taxes, signaling a desire to rotate away from top-heavy concentration. Mega-cap tech companies continue to post massive earnings beats, punishing those who diversify too early and forcing capital to remain in the market-cap weighted leaders.
QQQ WATCH
NVDA WATCH
The biggest Achilles heel of market cap weighting is people are kind of stuck in these positions and they get bigger and bigger. Theoretically, if you could sell out of them, recycle into for example small caps, smaller companies, that theoretically makes the ecosystem a little bit stronger. The current tax code creates a dead weight loss that traps capital in massive, appreciated mega-cap stocks because investors refuse to pay the capital gains tax to sell. As the financial industry scales tax-efficient diversification tools, this trapped capital will finally be unlocked and recycled down the market cap spectrum into under-owned, smaller companies. LONG. The proliferation of tax-efficient exchange funds and ETF conversions will systematically funnel capital out of the top-heavy indices and into broader, smaller-capitalization equities. The IRS cracks down heavily on Section 351 and 721 exchanges, keeping capital permanently trapped in mega-cap tech stocks due to the friction of capital gains taxes, or small caps continue to suffer from higher relative interest rates.
IWM LONG
15:01
Mar 06
Mar 06
BX
CG
KKR
ARES
EQIX
▾
"Private equity firms are stuck with assets that are now going on kind of seven years... Secondary funds have the ability to step in and really capitalize on this current dynamic." The "Liquidity Crunch" in private equity forces GPs and LPs to sell stakes at discounts. The largest players in the Secondaries market (Blackstone's Strategic Partners, Carlyle's AlpInvest, Ares' Landmark, KKR) are the buyers of choice. They get assets at a discount and are the solution to the industry's liquidity problem. Long the alternative asset managers with dominant Secondary platforms. A severe recession could mark down the underlying portfolio values (NAV) of the assets they are buying, regardless of the entry discount.
BX LONG
CG LONG
KKR LONG
ARES LONG
"A lot of the infrastructure needs are currently being driven by some of our technology innovations... whether it's more power that we need for data centers, right, data center construction." "Infrastructure" is now a derivative trade on AI. To support LLMs, you need physical Data Centers (EQIX, DLR) and massive amounts of electricity/power generation (VST, CEG). These "Real Assets" have inflation-linked contracts and secular demand growth. Long Data Center REITs and Power Producers/Utilities. Regulatory pushback on power consumption or a slowdown in AI capex spending.
EQIX LONG
DLR LONG
VST LONG
CEG LONG
Meb Faber
Co-founder and Chief Investment Officer at Cambria Investment Management
Short-term (Tactical)
"You got funds like DXYZ... It'll be curious to see how these in my mind this mismatch of liquid illquid gets handled... Do you think the Robin Hood fund is going to hit a 25% premium or discount first? I imagine it'll do both." Closed-end funds holding private assets (like SpaceX or OpenAI) often trade at massive dislocations to their Net Asset Value (NAV). Meb highlights the extreme volatility and "strangeness" of these vehicles. Watch for extreme dislocations (deep discounts to buy, massive premiums to sell/short), but avoid as a passive hold due to premium risk. Buying at a 100%+ premium (as seen historically) guarantees underperformance relative to the underlying assets.
DXYZ WATCH
"Concerns around how AI is going to potentially, you know, disintermediate and disrupt, you know, traditional software investing that was happening in the private markets." The traditional Private Equity playbook (buy a B2B SaaS company, optimize margins, sell) is under threat. AI agents may replace seat-based software licenses. This creates a headwind for legacy Software/SaaS baskets. Watch/Neutral on broad software indices; be selective against companies easily disrupted by AI automation. AI adoption might be slower than expected, allowing legacy software companies to pivot and integrate AI successfully.
IGV WATCH
16:12
Mar 03
Mar 03
SYLD
MDYV
IJJ
IVOV
SPY
▾
"SYLD... has struggled recently, placing it in the bottom 11% versus its category in 2025... P/E for SYLD was 12.52... S&P a whopping 27.61." The fund has underperformed for two consecutive years (2024-2025), creating negative sentiment and outflows. However, the underlying holdings are trading at less than half the valuation of the broad market (12.5x vs 27.6x). Historically, buying quality strategies during periods of peak pessimism and low valuation leads to significant mean reversion and outperformance. Long positions are warranted to capture the valuation gap as the "rough patch" normalizes. The "value trap" dynamic could persist longer than expected; the strategy is actively managed and may deviate significantly from benchmarks.
SYLD LONG
"For the category, which is Morningstar Midcap Value, [the P/E was] 17.86." While the speaker is pitching a specific active fund (SYLD), he explicitly benchmarks it against the Midcap Value category. He notes this entire category is trading at a massive discount to the S&P 500 (17.86x vs 27.61x). Investors who prefer passive exposure over active management can still capture this thematic "value spread" by buying the index tracking the Midcap Value sector. Long Midcap Value as a sector rotation play away from expensive large caps. Economic recession could hurt mid-cap companies more than diversified large caps.
MDYV LONG
IJJ LONG
IVOV LONG
"S&P [P/E was] a whopping 27.61... Valuation metrics offer little insight into potential short-term market movements, they have historically exhibited explanatory power over extended horizons." The speaker uses the S&P 500's high valuation as a cautionary benchmark. A P/E of 27.6x implies future returns are "constrained by starting prices." The logic suggests that capital should be reallocated from the expensive broad index into cheaper pockets of the market (Value/Shareholder Yield). Avoid or underweight broad large-cap indices due to compressed equity risk premiums and high multiples. Momentum in large-cap growth/tech could continue to defy valuation gravity in the short term (irrational exuberance).
SPY AVOID
VOO AVOID
IVV AVOID
15:01
Feb 27
Feb 27
TSLA
NVDA
AMZN
CRM
ORCL
▾
"I shed my Tesla fairly early in the year [2025]... Tesla became a political investment... when people think about whether they buy your car based on what their political standing is, you're in trouble as a business." The brand has become polarized. A consumer goods company cannot sustain growth if 50% of the addressable market alienates the product due to the CEO's political affiliation. Damodaran sold his position; the stock is now driven by political sentiment rather than fundamentals. Tesla succeeds in robotics/AI (Optimus) detached from car sales.
TSLA AVOID
"In 2025 I unwound the rest of my Nvidia... the bulk of the AI architecture wave Nvidia's already ridden... I'm not [sure] that there's that much extra growth left to justify the pricing there." The market is extrapolating the initial AI infrastructure build-out indefinitely. As the build-out phase matures, growth rates will normalize, causing multiple compression. He has fully exited the position. A "second wave" of AI hardware demand larger than the first.
NVDA AVOID
"Amazon probably has the broadest business that it can go after because it's a disruption machine... it is the company probably that has the greatest capacity to get to 10 trillion." Unlike Nvidia (pure chip play), Amazon's infrastructure and logistics allow it to disrupt multiple sectors simultaneously, giving it the highest total addressable market (TAM) ceiling among the Mag 7. Amazon is the most likely candidate to reach the next market cap milestone ($10T). Regulatory breakup or slowing AWS growth.
AMZN LONG
"Software had the highest margins... AI is actually taking much of what used to take them people and resources to do and doing it almost effortlessly... They have too much to lose... [It's] the innovator's dilemma." Legacy SaaS companies (Salesforce, Oracle) rely on high-margin, sticky seats. AI allows cheaper, automated alternatives. These incumbents cannot pivot to cheap AI solutions without destroying their own lucrative business models. Avoid legacy software firms that are "in denial" or unable to cannibalize their own high margins. Successful pivot to AI-agent based pricing models.
CRM AVOID
ORCL AVOID
"My concern is the other companies that are investing in this AI architecture... borrowing through private credit... when that correction hits it's not just the companies that are going to go under it's the lenders." While Big Tech uses cash for AI capex, smaller players are using high-interest private debt. If the AI ROI isn't immediate, defaults will spike. The risk sits with the lenders (BDCs and Private Credit funds). Avoid exposure to private credit vehicles that have funded the speculative AI build-out. AI generates immediate cash flow for borrowers, preventing defaults.
ARCC AVOID
BXSL AVOID
GBDC AVOID
"Gold prices are up almost 70%, silver price are up 150% [in 2025]... difficult phenomenon to explain unless you argue that there's a loss of trust." Investors are losing faith in central banks and government fiat management (institutional trust). This drives capital into non-sovereign stores of value, regardless of inflation rates. Momentum in precious metals is driven by a structural shift in sentiment (trust), not just inflation data. Restoration of faith in central bank policy or a deflationary crash.
GLD LONG
SLV LONG
"I am holding back because the market is richly priced... holding back a little idle cash into US stocks... hanging out in T bills." With the Equity Risk Premium at ~4% and potential global economic transitions, the risk/reward favors holding a cash buffer (T-Bills) over full equity deployment. Maintain a cash buffer for optionality and protection. Market melt-up (missing out on gains).
BIL LONG
SGOV LONG
"They become trophies for billionaires... As long as the number of billionaires exceeds the number of professional sports franchises, there's no correction coming." Valuation metrics (P/E, Cash Flow) are irrelevant for sports teams. They trade on scarcity value (Ego/Status). Publicly traded sports holding companies trade at discounts to private market "trophy" values. Long sports assets as they are immune to traditional valuation corrections. A global recession that significantly reduces the billionaire population.
MSGS LONG
MANU LONG
"You don't hold cash to make money. You hold cash to stabilize the process... even in your best case scenario of Bitcoin being a good investment, I don't want companies holding Bitcoin." Corporate treasuries holding volatile assets (Bitcoin) instead of cash fail their primary duty (stability/liquidity). This introduces unnecessary existential risk to the operating company. Avoid companies that treat their balance sheet like a hedge fund (specifically referencing the MicroStrategy model). Bitcoin price skyrockets, justifying the gamble in the short term.
MSTR AVOID
15:00
Feb 13
Feb 13
GLD
RSP
VEU
VXUS
EWU
▾
Jim notes that since the world moved to a fiat currency system in 1971, money is "backed by nothing" and authorities respond to crises by printing money. Gold has been the best-performing asset of the 21st century. In a regime of fiscal dominance and monetary debasement, hard assets act as the only true hedge against the erosion of purchasing power. Unlike the pre-1971 era, gold is now unchained from currency pegs, allowing it to reprice fiat instability. Long gold as a hedge against inevitable future monetary expansion and inflation. A return to strict monetary discipline or a deflationary bust where cash outperforms hard assets.
GLD LONG
The US market is extremely concentrated (Mag 7 are ~35% of S&P). Current valuations are at historical extremes (CAPE ratio near 2000 levels). Following the 2000 peak, the S&P 500 went sideways for 13 years, while the Equal Weight index doubled. Market cap-weighted indices are currently a bet on momentum and extreme valuation expansion continuing. Equal weighting removes the concentration risk of the "Mag 7" and increases exposure to cheaper, average stocks that historically outperform when bubbles unwind. Long Equal Weight S&P 500 to maintain US exposure while mitigating valuation and concentration risk. The "Mag 7" continue to compound earnings faster than the broad market, driven by AI productivity gains.
RSP LONG
Global investors are maximally overweight US equities. US valuations are stretched, while international markets trade at wide discounts. History shows winners rotate; US exceptionalism is not permanent. Mean reversion in valuations and a shift in capital flows away from the crowded US trade will benefit international indices. The "Rest of the World" offers a margin of safety that the US does not. Long Global ex-US Equities to capture valuation mean reversion. The US economy continues to significantly outgrow global peers due to tech dominance and demographics.
VEU LONG
VXUS LONG
Jim describes the UK as having a "PR problem." Despite being one of the faster-growing G7 economies with decent frameworks for capitalism, global investors view it as a "basket case," leaving valuations depressed. When sentiment is disconnected from economic reality, it creates a value opportunity. As the political noise settles and investors look for non-US value, the UK's low multiples become attractive relative to its growth profile. Long UK Equities as a deep value contrarian play. Continued political instability or post-Brexit structural economic drag.
EWU LONG
Meb points out that European banks have quietly outperformed the "Mag 7" and the S&P 500 over the last 1, 3, and 5 years. This performance divergence signals a regime shift from growth/tech to value/financials that the broader market has largely ignored. The trend is established but sentiment remains bearish/neutral, offering a "wall of worry" to climb. Long European Financials to chase established momentum in a neglected sector. A European recession or ECB policy error cutting rates too aggressively, hurting bank net interest margins.
EUFN LONG
Jim argues that in a high-inflation fiat world, government bonds (low yield) are dangerous. However, he notes that credit defaults historically never erode the extra spread you get over government bonds. To make a 60/40 portfolio work today, the "40" (bonds) must work harder. By moving down the capital structure into corporate credit (Investment Grade or High Yield), investors gain a yield buffer that protects against inflation, which government bonds fail to provide. Long Corporate Credit (IG/HY) over Sovereign Treasuries. A severe credit event or recession causing a spike in defaults beyond historical norms.
LQD LONG
HYG LONG
15:01
Feb 06
Feb 06
CHNA
XBI
IBB
KURE
EWJ
▾
Big Pharma is increasingly buying early-stage assets from China (30-40% of acquisitions vs. single digits previously). Clinical trials in China are significantly cheaper and faster. China has successfully built a biotech infrastructure that is now integrating into the global supply chain. As US/EU firms outsource early development to China for speed/cost, Chinese biotech firms become prime M&A targets or dominant players in early-stage discovery. LONG. This is a contrarian play on Chinese innovation capabilities rather than just consumer demand. Geopolitical tensions; regulatory changes regarding data acceptance (though currently improving); US restrictions on Chinese biotech.
CHNA LONG
KURE LONG
Biotech is the most uncorrelated sector with the highest dispersion. 70% of unprofitable biotechs lose money, but the sector has experienced a massive drawdown (historically followed by massive recoveries). The "baby has been thrown out with the bathwater." A systematic approach filtering for "Quality" (owned by specialists) and "Value" (low Market Cap relative to R&D Spend) identifies winners in a sector where generalist capital has fled. LONG. The sector offers "lottery ticket" positive skewness after a deep cyclical bottom. High failure rate of individual clinical trials; interest rate sensitivity for unprofitable companies.
XBI LONG
IBB LONG
The median Japanese company holds ~7 years of net income in assets (vs. 1 year for US companies). Corporate governance reforms are pressuring these companies to increase payouts (dividends/buybacks). There is a massive "value unlock" potential as these unproductive assets are distributed to shareholders. The return of inflation signals nominal GDP growth, breaking the deflationary mindset. LONG. It is a deep value play with a specific catalyst (governance reform) that does not rely on massive tech innovation. Cultural resistance to rapid change (slow-moving consensus); currency volatility (Yen weakness).
EWJ LONG
DXJ LONG
DFJ LONG
US valuations are high, but the US is undergoing a "unique in history innovation wave" (Cloud, AI). Unlike other markets, US companies have actually grown into their high multiples through tangible technological revolutions. Betting against US innovation has historically been a losing trade. LONG. High valuations are a feature of high innovation, not necessarily a bubble. Mean reversion in profit margins; regulatory crackdowns on Big Tech.
QQQ LONG
SPY LONG
Global balance sheets have expanded 5x over 60 years, largely driven by asset price inflation and corporate profits. Corporate profits are being structurally supported by government deficits (Govt borrows -> pays entitlements -> recipients spend at Corps). This cycle supports real assets and equities over cash. LONG. Real assets and equities are the hedge against the "deficit-profit" loop. Fiscal austerity (unlikely); major recession curbing consumer spending.
USO LONG
XLE LONG
16:24
Feb 05
Feb 05
GVAL
FYLD
EYLD
GMOM
GLD
▾
Faber notes that while the US is trading at a "nosebleed" 40x P/E (implying near-zero real returns for the next decade), Foreign Developed markets are in the low 20s, and Deep Value/Emerging markets are in the low teens. This valuation spread is as wide as it was in the 1980s (Japan vs. World). The mean reversion trade has already started (2025 was a monster year for ex-US), and momentum is favoring the cheapest global assets over the expensive US market cap leaders. Long Global Value and International Shareholder Yield to capture the continued rotation out of the US. A "melt-up" continuation in US tech/growth that defies historical valuation gravity.
GVAL LONG
FYLD LONG
EYLD LONG
Faber states that Trend Following is having a "face ripper" year in 2026 after a difficult prior period. His trend fund is heavily allocated to ex-US stocks, value companies, and precious metals. Most investors lack exposure to "Real Assets" (Gold/Commodities) and "Deep Value." Trend following strategies automatically rotate into these winning sectors without the emotional bias of the investor, capturing the "Right Tail" of the distribution (e.g., the move in Gold to $5k). Long Trend/Momentum strategies as a vehicle to access the performing asset classes (Commodities/Foreign) that traditional 60/40 portfolios miss. A sharp, choppy market reversal (whipsaw) where trends fail to sustain, causing the strategy to get stopped out repeatedly.
GMOM LONG
In this 2026 scenario, Faber highlights that Gold is over $5,000 and Silver is over $100. He notes that Costco and Walmart selling gold bars was a sentiment signal that retail demand is structural. Despite US stocks being at highs, Gold has outperformed stocks for the century. The "Real Asset" bucket is historically under-owned by US investors. The trend is explicitly higher in precious metals and miners. Long Precious Metals and Miners (via ETFs or Trend strategies) to participate in the ongoing commodity breakout. A deflationary bust or a sharp strengthening of the US Dollar that suppresses commodity prices.
GLD LONG
SLV LONG
GDX LONG
Faber explicitly states that the vast majority of the fixed income landscape is "extremely dangerous." He notes that investors are not getting enough yield pickup in corporate or junk bonds to justify the risk. Because credit spreads are too tight, the risk/reward for holding corporate debt is poor. Consequently, his own fixed income fund (TYLD) has moved 100% into T-Bills. Avoid Corporate and High Yield Bond ETFs; prefer short-duration government paper (T-Bills) until spreads widen. A "Goldilocks" economic scenario where defaults remain near zero and yield-hungry investors continue to compress spreads further.
LQD AVOID
HYG AVOID
Faber compares the current US market (40x P/E) to the 1999 dot-com peak and the 1980s Japan bubble. He cites data showing that buying at these valuations historically leads to 0% real returns over 10 years. The "Market Cap Weighted" approach forces investors to be overweight the most expensive assets (US Tech). To generate returns, one must break the link to market cap weighting (e.g., via Equal Weight or Shareholder Yield). Avoid or reduce exposure to passive US Market Cap weighted indices in favor of active value or global diversification. The US market could continue to "irrational exuberance" levels (e.g., Japan reaching 90x P/E in the 80s) before correcting.
SPY AVOID
QQQ AVOID
15:00
Feb 03
Feb 03
RSP
VXUS
EFV
EWZ
GLD
▾
Meb notes that the S&P 500 is trading at a CAPE ratio of 40+, while the spread between Market Cap Weight and Equal Weight is extreme (7th percentile on a 5-year basis). He explicitly advocates for "ABMCW" (Anything But Market Cap Weight). When the largest stocks (Mega Caps) become historically expensive, the index becomes top-heavy. Equal Weight indices (RSP) rebalance away from overvalued giants into the average stock, offering a valuation safety net and mean-reversion potential. Long Equal Weight S&P 500 to capture US exposure without the valuation risk of the "Mag 7" successors. Momentum in Mega Caps continues irrationally (the "melt-up" scenario).
RSP LONG
Meb highlights that while the US is at ~40x PE, the rest of the world is in the "teens" or "single digits" (specifically mentioning Brazil). He notes "European banks outperforming Mag 7" and a rotation into value. Valuation spreads this wide historically lead to a rotation. Investors seeking yield and reasonable entry points will flow from the expensive US market to cheap International Value and Emerging Markets. Long International Value (EFV) and specific cheap EM countries like Brazil (EWZ). A global recession drags down all equities regardless of valuation; US dollar strength.
VXUS LONG
EFV LONG
EWZ LONG
Meb confirms Gold, Silver, and Copper are hitting all-time highs (Silver broke $120). He notes that trend followers are "chock full" of these assets and that "normal" investors have zero exposure (under-owned). This is a classic Trend Following setup. The assets are breaking out to new highs, institutional ownership is low, and the "fear of missing out" (FOMO) phase hasn't fully hit the retail public yet. The breakout signals a continuation of the trend. Long Precious Metals and Industrial Metals via liquid ETFs. A sharp reversal in inflation expectations or a liquidity crunch causing a sell-everything moment.
GLD LONG
SLV LONG
CPER LONG
Meb states that Trend Following (Managed Futures) solves portfolio problems by capturing "right tail" events (like the massive move in commodities) while chopping off the "left tail" (drawdowns in stocks). He mentions these strategies are up double digits year-to-date (Jan 2026). In a world where stocks are expensive and commodities are volatile/trending, traditional 60/40 portfolios fail. Managed Futures automatically adapt to go long commodities and short bonds/stocks if trends dictate, acting as a necessary diversifier. Long Managed Futures strategies to hedge against US equity valuation compression. Whipsaw markets (trendless volatility) where the strategy bleeds slowly.
DBMF LONG
KMLM LONG
Meb compares the current US market dominance (23% of global GDP but a massive chunk of market cap) to the Japanese bubble of the late 1980s. He cites the CAPE ratio of 44 as a "potential turning point." At 44x CAPE, future returns are mathematically destined to be low or negative. The risk/reward for holding passive, market-cap-weighted US indices is historically poor compared to every other asset class mentioned. Avoid or reduce exposure to Market Cap Weighted US Indices. "Animal spirits" push valuations even higher (e.g., CAPE 50) before the crash.
SPY AVOID
QQQ AVOID
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