Cambria Investment Management's Meb Faber shared his views on the market, cryptocurrencies and quantitative investing in an exclusive interview for CNBC PRO with Mike Santoli.
On investor behavior: "Chasing and herding is one of the most time tested terrible things that people do …We remember the 90s dotcom (bubble) and then people getting fascinated with BRICS, all the emerging markets and the mid-2000 commodities. And it's just kind of 'rise and repeat.' We're seeing a lot of that behavior right now with the cryptocurrency space. I don't think our funds, in many cases, are immune to that."
On value investing mistakes: "Dividends and buybacks are the exact same thing. If you ignore taxes and you ignore the valuation of the business dividends and buy backs are literally – Finance 101 – the same thing … It's really important to include net buybacks meaning stock that's been issued, because a lot of tech companies or companies that have options issuance will simply issue a ton of stock and buy it back on the other hand to mop it up."
Faber is the chief investment officer and co-founder of Cambria Investment Management, which oversees around $850 million in assets. He is also the manager of Cambria's ETFs and separately managed client investments accounts. His firm invests in ETFs using quantitative analysis.
The Cambria's Global Value ETF, a fund based on Faber's quantitative screen for cheap international stocks, posted 33 percent return for the 12-month period ending June 30. The S&P 500 is up 14 percent and the MSCI World Index is up around 12 percent so far this year.
He also discusses:
- Rules-based quantitative portfolio management
- Advantages of investing overseas
- Faber's criteria for launching an ETF
The interview is exclusively for CNBC PRO subscribers.