Webinar Replay: Meb Faber - Navigating 2026
Summary
- The "2026" Macro Backdrop: The transcript is set in early 2026. The S&P 500 is at all-time highs with a P/E ratio of 40x, which Faber compares to the Japanese asset bubble of the 1980s.
- The Great Rotation: While US markets are expensive, a massive reversion occurred in 2025 where International, Emerging Markets, and Deep Value stocks outperformed significantly (some up 30-50%).
- Commodity Supercycle: In this timeline, Gold has breached $5,000/oz, Silver is over $100/oz, and Copper is over $6/lb.
- Fixed Income Warning: Corporate and Junk bond spreads are dangerously tight. Faber’s fixed income strategy is currently 100% in T-Bills, avoiding credit risk entirely.
- The Case for Trend: After a poor 2024, Trend Following strategies are having a "face ripper" year in 2026, capitalizing on the boom in non-US equities and commodities.
Trade Ideas
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.
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.
Meb Faber
Co-founder and Chief Investment Officer at Cambria Investment Management
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.
Meb Faber
Co-founder and Chief Investment Officer at Cambria Investment Management
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.
Meb Faber
Co-founder and Chief Investment Officer at Cambria Investment Management
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.
Up Next
This Meb Faber Show video, published February 05, 2026, features Meb Faber discussing SPY, QQQ, GVAL, FYLD, EYLD, GMOM, GLD, SLV, GDX, LQD, HYG. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Meb Faber · Tickers: SPY, QQQ, GVAL, FYLD, EYLD, GMOM, GLD, SLV, GDX, LQD, HYG