Frank Curzio 00:00

We’re talking to Meb Faber, co-founder and the Chief Investment Officer of Cambria Investment Management. Meb, thanks so much for joining us on “Wall Street Unplugged.”

Med Faber 00:08

Great to be here, bud.

Frank Curzio 00:09

So, man, we’re becoming old-timers. I think I met you maybe 12 years ago, uh, through Stansberry, and we both spoke at that conference. I saw you speak at other conferences. I think back then you had a few ETFs, and, you know, we met, we played golf, I was like, yeah, this guy’s really smart, but he’s also pretty cool. And then today, when I look at your company,

Frank Curzio 00:30

4 billion in assets under management, I think you have 20 ETFs, 140,000 followers on X. Your Meb Faber podcast, or the Meb Faber Show, which is the podcast, is, uh, I think 10 years old. Man, I could see with everything going on, why you don’t talk to me anymore, man.

Med Faber 00:47

The biggest compliment you can give someone, not just in investing and money management, but also in life, entrepreneurship, is just you survived. It’s not like that you compounded at the highest rate, it’s not that, you know, uh, you crushed it on all these levels. It’s just, hey, you survived, and everything else is gravy over that point.

Frank Curzio 01:08

It shows you got good risk management, right? We see a lot of people get wiped out of the market sometimes, but, uh, that’s really cool. So, I love the data you do. I love you as an analyst, seriously. You always provide great data. Guys, I’m not just saying this. At Meb Faber, follow Meb. He’s just, you know, the people you interview in your podcast too, Jeremy Grantham’s and, uh, you know, Jim Graham’s, Tom Lee’s and stuff like that.

Frank Curzio 01:26

But I just love your analysis because it always challenges what I’m thinking, right? And I love that, right? And sometimes I’ll disagree or agree, you know, respectfully, but it’s always like, I love people who challenge me and take different, you know, sides on different things. And I guess we’ll start there with the markets because, you know, we’re seeing a market that is more confusing than I think I’ve seen in a very, very long time.

Frank Curzio 01:46

I mean, there’s a lot of risks. There’s also lots of positives, right? You have earnings, growth, but the risks are inflation, interest rates higher for long, and geopolitical risk, you know, valuations. We do have AI to tell them productivity. How do you navigate through this market? Because it seems like there’s two different markets. There’s one where technology’s on fire, but man, you’re seeing like household names, General Mills, McDonald’s,

Frank Curzio 02:05

even Oracle, like, 30, 40 percent off their highs, and you have four or five-year lows, some of these stocks. It just doesn’t feel like this roaring bull market, just in one sector. How do you navigate through it?

Med Faber 02:16

Well, you know, I’m always confused, which is why I’m a quant, and which is why I look to people like you in the tech world to give me CES updates. You know, uh, I like to put things in the context of history, right? And look back for as much history as we can for not just some analogs to what’s going on, but just to give us a foundation and a base case.

Med Faber 02:37

And so the first step back that I like to tell people, particularly the youngins listening to this, is what an amazing time it’s been this past 17 years, okay? It has been one of the best bull markets periods investing in history in the U.S. stock market. So you go back to 2009, stock market’s been a ten-bagger, right?

Med Faber 02:58

Stocks have done, um, only three other times in the past 150 years have they compounded at 15 percent per year for over a decade. And the other three times have names, right? The Roaring Twenties, Nifty 50 period, my favorite bubble, internet boom, and then whatever we’re calling this last period, COVID, meme stock, AI boom, I don’t know.

Med Faber 03:20

But the first thing to take a step back and say, wow, I’m thankful, I’m grateful, pat myself on the back for being invested in the U.S. stock market because it’s been an incredible place to be. But also take a step back and say, maybe I shouldn’t expect 15 percent per year. Maybe, you know,

Med Faber 03:39

I want to take a little sobriety and say the good times often follow the bad and vice versa too. Now, it doesn’t mean it has to stop tonight or tomorrow or even next year. It just means in general, this has been an incredible romping, stomping bull. And, um,

Med Faber 03:57

you know, you’re seeing signs of, uh, you know, different things going on at different parts of the cycle. And we can get into this. I think the one thing that we’re seeing that we haven’t seen in many moons in the United States is supply, meaning you’re starting to see these big IPOs come to market.

Med Faber 04:16

If you remember late 90s, companies were IPOing every day, right? Just boom, boom, boom. Now it’s a little different. You’re getting fewer companies IPOing, but they’re gigantic. SpaceX, potentially OpenAI, potentially Anthropic, Discord, on and on. So,

Med Faber 04:34

because you just have this big plumbing jam of all these late-stage private companies, and it’ll be interesting to see how the market absorbs that, um, or not. You know, SpaceX HQ down the road from us was in Hawthorne, and so we were joking for a while.

Med Faber 04:50

We said, you know, we need to go hang out at the brewery right next to SpaceX on IPO day and just get free beers all day. But also all these new cents of millionaires, uh, RIP, local housing affordability. Um, but I think there’s a lot of interesting takeaways. The first of which is, uh, just take a step back and really appreciate this run we’ve had,

Med Faber 05:11

which for many young people, right? 17 years is a career. You started when you’re 20. Guess what? You’re 37 now, and the only market you’d have experienced is a romper, stomper.

Frank Curzio 05:24

Yeah, it’s had a few hiccups with COVID, 2022, but it’s so weird how when I look at this market, because I love looking at history as well, where, you know, the recession after dot-com, I mean, it was long. It was like three years of this Nasdaq-like, you know, terrible market. Just no matter what happened, even if it was good news, it was bad news.

Frank Curzio 05:43

It’s just, you know, when it came to the stocks and they went down. Now I feel like even, you know, you look at COVID or you look at even the credit crisis, the credit crisis was pretty quick, right? I mean, you’re looking at probably nine to 12 months. People forget that the market did come back in 2000, in late 2008 before it really, you know, fell again in early 2009 before it finally bottomed.

Frank Curzio 06:03

But the downside, it feels like it’s this rush and then this massive downside, and, you know, it’s a couple months later and it looks like, you know, you’re on your way. It’s so different where the market is today. And I guess that leads to my next question. As someone that looks back at history as well, and I love this, I’m going to talk about your amazing book in a minute that goes back, uh, you know, hundreds of years.

Frank Curzio 06:23

Uh, we always look at the past, right? And say, okay, here’s what happened in the past and how it could help us dictate the future.

Frank Curzio 06:30

But I’ve argued that right now we’re in unprecedented times where, I mean, the deficit spending is absolutely out of control, but more importantly is I feel like our government is fixed where we’re not allowed to have a recession when this is a normal course of action, right? You have these bull markets, you have this overspend, and you know better than me, I think it’s every six, seven years,

Frank Curzio 06:49

whatever, you know, we used to recession might have been less than that. But now I just feel like even with the administrations coming in, if it’s bailing out this bank or Silicon Valley Bank, if it’s, you know, after the credit crisis and throwing all this money into the system, is it different now? Because people always like say, you know, you shouldn’t say that’s really bad. I just feel like it is different when we have a government that you have to factor into your analysis now because if you’re not going to let anything fail,

Frank Curzio 07:09

there could be something coming down the road that’s worse, but you have to factor that in your analysis, right? Especially if you’re a bear where at any time we could see any administration come in and throw money into a sector or a stock and kind of change the dynamics that we used to, that we learned in the past.

Med Faber 07:25

Macro’s always hard. I think Charlie Munger had a phrase where he’s like, micro is what we do, macro is what we put up with. Meaning it’s always hard, these cross-currents, and you and I could sit together over a coffee or happy hour and chat about this for hours and hours, you know? And it’s always tempting to look back at analogs,

Med Faber 07:45

say, hey, well, this looks a little bit like the 90s, or maybe this looks a little bit like the railroad build-out from the 19th century, or maybe this on and on. And so, um, I think, uh, I think to be a good investor, you have to be part historian. So to at least understand what has happened, right? So if you look back in history,

Med Faber 08:04

you do realize that crazy things have happened in markets and even more so outside the U.S. As you mentioned, back in the early 2000s, Nasdaq went down over 80, 80 percent, right? That takes us 300 plus percent gain just to get back to even. And I think that the struggle with drawdowns is it’s like a power law with,

Med Faber 08:25

it’s very similar to earthquakes, you know, the Richter scale. It’s like every 10 percent down, it’s not 10 percent worse for investors. It’s like 10 times. You know, you lose 20 percent, people are like, whatever. 30 percent, 40, people start losing their minds, right? And so they behave very, very differently, particularly more than 50.

Med Faber 08:44

And you go back to the 1920s, S&P went down over 80. What would have been the S&P? Um, so I think, um, it’s always challenging, useful to look back at history, but also it’s almost like being a comedian because you say, okay, well, here’s what has happened, but then you know it’s going to be crazier in the future.

Med Faber 09:04

Example, just in our lifetime, the past, what, 10, 20 years, they didn’t teach us about negative yielding sovereigns in school when I was coming up. You know, they didn’t teach me about negative oil contracts, futures trading negative, uh, on and on. You can talk about some of these things we experience and,

Med Faber 09:24

um, break your brain a little bit, you know, but they, you know, what they did teach things like the small cap premium, which you look around today and you’re like, wait, where’d that go? You know, like, where’s this magical small cap premium that, you know, these stocks used to outperform the S&P because they’re riskier and yet what’s that? So there’s a lot that we kind of,

Med Faber 09:43

um, you know, look around, but I think it speaks to someone like yourself and, you know, I think the biggest challenge for a lot of people is they want to accept, you know, the only choice being S&P 500 or the U.S. stock market, but there’s thousands and thousands of stocks out there and even during 2000, 2003, U.S.

Med Faber 10:05

market was down 50, but there were plenty of categories that did just fine, right? That didn’t even have a bear market. So there’s always opportunity, extremely rare cases when something’s not going up, but almost always there’s ways to survive the chaos.

Frank Curzio 10:22

So I love digging into your brain a little bit because you’re brilliant when it comes to statistics and also historical. Uh, when you look at today’s markets, I would say, you know, I don’t know if our category is this category drives us right, saying you’re a value investor, you look at value, but, you know, you also look at the big picture as well. You know, what do you see here in terms of value,

Frank Curzio 10:43

um, with our marketplace where we were seeing, you know, earnings grow tremendously? Um, are you seeing opportunity in the U.S. markets? You also have funds that are created that, uh, I think when it comes to, you know, the international markets, you’re always looking at the international markets and maybe we could even go there with this where the international markets, what has changed, especially maybe over the past five, seven years?

Frank Curzio 11:03

And when you’re doing analysis, is it just value? Do you look at, you know, what, say, you know, the current administration’s doing where maybe it’s more isolation, maybe it’s tariffs that open up the doors and people selling, you know, trying to buy more gold, weaning themselves with the dollar. I mean, how does your thought process work in terms of looking at that as the market is changing and, you know, it could change drastically sometimes depending on administrations?

Frank Curzio 11:24

And it doesn’t matter if you’re Democrat or Republican, but it does factor into what international markets you’re investing in, right?

Med Faber 11:30

For sure. So I’d characterize us as kind of a systematic investor and half the brain is sort of value and the other half is sort of trend. But we wrote a paper a few years ago called The Bear Market and Diversification that was speaking to this concept that the U.S. stock markets creamed everything else. And arguably, if you go back well over 150 years,

Med Faber 11:49

compared to any asset allocation model, so if you do 60-40 or risk parity or endowment style, any allocation model, um, U.S. stocks have outperformed those in terms of magnitude in years in a row. It’s like 15 of 17 years, right, that U.S. stocks would have outperformed a broad allocation. Um,

Med Faber 12:09

the only comparable period is post-World War II. So a truly exceptional period, but I think that’s changed in the past two years. I don’t think many people are noticing it because the U.S. stock market is still performing. So we did 17 last year, up again this year, but very quietly, you’ve seen things like foreign stocks outperform last year.

Med Faber 12:29

They’re outperforming again this year. Um, you’ve seen things like, uh, well, gold and precious metals were doing well and they’ve kind of tapered off a little bit, but you’ve seen other assets, uh, value this year, even small mid-caps start to catch a bid.

Med Faber 12:46

So all of a sudden, you’re seeing other things start to perform again, which I think is a big story because I do believe the broad U.S. market is expensive, but that’s got an asterisk, which is just called, so what? It doesn’t really matter, you know, as long as it’s going up, um, as long as the earnings are there,

Med Faber 13:05

as long as, you know, you could though walk forward mentally and come up with a scenario that would say, hey, I’m going to plan out how this kind of ends and write a postscript, and you could come up with that scenario, but you could also come up with a scenario where that doesn’t happen, right? And so I think to me, it’s always being thoughtful about, hey, what does the global portfolio look like?

Med Faber 13:26

You know, U.S. is two-thirds of world market cap. That means the default is you should put at least a third in foreign, and nobody does. And the good news is, and, um, with the foreign securities, like there’s, uh, our, so our largest fund is a U.S. stock fund. So I’m not just talking my book here, but it owns very few tech stocks,

Med Faber 13:47

but our emerging market fund, tech is one of the biggest sectors. And so you’ve started to see, you know, a lot of big returns come out of many of these foreign markets, uh, that are starting to participate. I mean, my God, the South Korean cowboys make our YOLO, uh, meme stock traders look like, you know, little pikers over here just playing around on their e-trade account.

Med Faber 14:07

My goodness, that market every day goes up or down 10 percent, but, um, so I think it’s a world of opportunity. I think there’s no reason to look just kind of, uh, at one choice versus the S&P. It’s like even within the U.S., there’s thousands of choices out there that I think look pretty great.

Frank Curzio 14:23

So what would you say in terms of you’re so dialed into international markets and maybe we talk about, you know, Cambria here a little bit because you have, uh, you know, all your funds and again, you’ve been doing this for such a long time and your ETFs and, you know, when I’m looking at them, say if we go into, uh, you know, your global, these are all actively managed, right? I mean, you’re actively managing these, right? That’s not passive?

Med Faber 14:43

Yeah. I would, well, that’s a complicated question in 2026. Um, we would describe what we do as systematic. So in-house indexing, but it’s all active, it’s quote active, right? So the reason we don’t publish the indexes like the S&P, and you’re seeing a very good reason today with the SpaceX IPO,

Med Faber 15:04

is that when a lot of these indexes rebounds, people know what’s coming in and they know what’s coming out. I mean, you probably remember people always talking about the Russell 2000 rebounds. And so you say, look, these 10 stocks are coming in. We can pretty much know that they’re, so we’re going to go buy all of them and it becomes a real cost to index investors.

Med Faber 15:25

You know, the ones that are coming out. So we do it, but we do it in-house. So yes, we’re active, but it’s more of an in-house systematic indexing than anything.

Frank Curzio 15:36

So when I look at, you know, some of your funds too and say, you know, this is a global, this is the Cambria Global and I’m just picking one out. Uh, and, you know, so all these obviously have exposure, um, you know, international exposure, but what about when it comes to country specific? I mean, is there anything you look at certain countries where you’re like,

Frank Curzio 15:55

well, people need to start paying attention to this because they’re not and maybe filter it down, not only just the country, but is that how you, you know, since they’re actively managed, are you looking as top down and saying, hey, this country looks great based on, based on, you know, all these metrics, hey, let’s find the best stocks within it, or is it just like, hey, let’s buy an ETF,

Frank Curzio 16:14

uh, you know, around this country because, you know, it just, uh, you know, is it 20 stocks that they’re representing that are going to do very well?

Med Faber 16:21

Let’s talk about it two ways. The first way is we’ll just describe our flagship. We have five funds that are shareholder yield ETFs. This is a book we wrote over a decade ago. It’s free online, um, on my blog. You can find it, uh, this book. We just did a second edition, but you can see across the top row there, SYLD, FYLD, EYLD, on and on.

Med Faber 16:41

And the concept is you’re looking for good, high-quality companies. This is very Buffett-esque that are paying out large cash dividends and/or stock buybacks. So we’re looking at the holistic measure because, as we know, companies really starting in the late 90s started buying back more shares than they started paying out in cash dividends. By the way, S&P fact listeners,

Med Faber 17:02

uh, S&P just hit an all-time low dividend yield, 1.05 percent. It’s almost crossed below 1 percent dividend yield, which feels insane, but part of it is people are pulling their hair out saying, oh my God, the S&P is so expensive. And that’s a little bit true, but it’s also because companies have shifted to buybacks. And so, uh, which are much more efficient dividends,

Med Faber 17:23

much more flexible dividends. And so we run this strategy the same way in U.S., foreign, emerging, we have a small cap, we have a large cap. And despite the exact same methodology, it ends up in different places. Three of these funds have a tenure track record next month, SYLD being the oldest one.

Med Faber 17:44

And it’ll lead you to different places during different times depending on what’s going on in the world. So the U.S. fund tends to skew a little more mid-cap-y, um, but it owned Apple for a decade, right? Apple poster child for paying out dividends and buybacks. But we mentioned the emerging market fund, and I’ll give you an example. So it’s country agnostic, size agnostic, sector agnostic.

Med Faber 18:05

Now it puts caps. So we’re saying we’re not putting more than a third in one country or sector, but for a long time, the emerging market fund owned very little to no China because China for many years is the poster child of boom bust as far as valuations. In 2007, if you remember, only thing anyone was talking about, because the U.S.

Med Faber 18:26

stock market had been terrible for seven years. Only thing people wanted was emerging markets in the BRICS, Brazil, Russia, India, China, which is like the Mag 7 of 2007. China hit a cape ratio, PE ratio over 50, okay, higher than the U.S. in ’99. And then since it had horrible returns,

Med Faber 18:46

there was one point, I’m losing track of the years, let’s call it two, three years ago, where China hit arguably the lowest valuation it’s ever been. So it was maybe like eight or ten on the cape ratio. Zero stock market returns in China for 30 years, right? Just horrible.

Med Faber 19:03

Um, and so then our EYLD fund went from a near zero allocation to now essentially a market weight allocation. So depending on your index, China and emerging markets is like a third. But it’s interesting because Taiwan and other countries have bubbled up, you know, um, and so Taiwan is kind of in line with China.

Med Faber 19:22

They may merge one day, we’ll see. But the point being is that you found opportunities there where the average stock making it into any of these funds on shareholder yield has roughly a double-digit shareholder yield. So think about that for a second. S&P yields 1 percent. So where in the world does that come? In the U.S., it comes mostly from buybacks.

Med Faber 19:43

In foreign, developed, and emerging, it’s about half and half. They haven’t had as much of a culture of buybacks as the U.S., though it’s changing massively in the last five to ten years. If you look at countries like Japan, China, even UK, it’s a hockey stick on buybacks. And so you’ve seen behaviors like in South Korea,

Med Faber 20:03

uh, where they, if you have any, um, if you’ve ever been to Asia, you know, one of the emotions that is the, the, the triggers the most, um, uh, is shame, right? And so the country, the government is like, look, companies, you better get your stock prices up. You’re trading at 0.5 times book.

Med Faber 20:22

We’re going to print your name in the newspaper and embarrass you until you essentially, it’s like this name and shame program. And it worked, right? Like, so all of a sudden, these companies, they started being a lot more corporate, uh, um, friendly as far as shareholder friendly. And we’ve seen it play out in the data. And so you’ve had some pretty explosive returns.

Med Faber 20:42

I don’t think the average listener, if you ask them, say, hey, what do you think the South Korean market has done in the past year? And the answer is it’s tripled, right? You know, it’s just a crazy, um, you know, but you can have these explosive returns. Foreign markets have gone nowhere, most of them for the past 17 years relative to the U.S.

Med Faber 21:04

So all of a sudden, they’re starting to get a little, uh, acceleration over the past year or two, and I think it very likely could continue.

Frank Curzio 21:12

Does that have to do with policy? Because we obviously see politics, and again, I want to take politics out of it, but we have to look to, I mean, it’s definitely a variable that, you know, guys like us have to take into account because when it’s more isolationism, more tariffs, it’s more people going off the dollar. I mean, things change, right? The dynamic changes, you know, if it’s China getting more and saying, hey, we’ll take it even more control, rare earth minerals.

Frank Curzio 21:33

Again, it causes so many different, you know, things to happen where, you know, we have to find it in other places and sign different deals and stuff. So, I mean, does that change in the allocations with, you know, a Trump presidency compared to Biden and maybe, you know, Biden has, you know, favorable countries that he deals with, or is it, you know, again, that’s the macro part.

Frank Curzio 21:51

I just, I love to see like how you’re thinking and investing because it has changed in the past couple of years, definitely, I think. And you said it’s been ignored for such a long time, but it seems like, uh, now it’s getting exciting.

Med Faber 22:01

There’s a few things. Um, the first one is if you look at some of these long-term valuation charts and we publish these on the IdeaFarm every quarter for 45 countries around the world. And it’s not just price earnings. We look at dividends, book, cash flow, but really since 2009, it’s like an alligator jaw, just getting bigger where everything was cheap in 2009.

Med Faber 22:22

Low teens, cape ratios for the U.S. as well as these foreign markets. The difference is the U.S. went from 12 to 42 today, whereas most of these foreign markets didn’t. They just kind of bubbled up and hung out in the mid-teens. And so you have foreign developed being maybe low 20s,

Med Faber 22:41

emerging markets being high teens, but you have plenty of countries that are down in the low teens, uh, as well. And so part of that is just what we would call kindling, right? You have a market that’s just simmering, has gone nowhere. Everyone hates it. Our old buddy Steve Sugarwood would say his favorite investment is something cheap, hated, and then turning into an uptrend, right?

Med Faber 23:02

And you have all three of those happening in a lot of these foreign markets today. People forgot about them. Like no one, you talk to the average financial advisor for many years and say, hey, do you own emerging markets? And they would just look at you with disdain. They’d be like, what are you talking about? Like, oh, like don’t even bring it up. Um, and then now over the last year, you’re starting to see it shift a little bit where they say,

Med Faber 23:24

ah, yeah, I know I need to buy some. Like I just haven’t gotten around to it. And so you’re seeing the vibe change a little bit. Part of it, the U.S. dollar, right? Um, and this can be both a tailwind, but also a headwind. And so for many years, if you were investing outside the U.S. because the dollar was going up, that was a headwind, but now it’s come down in some places.

Med Faber 23:43

Uh, so that comes, ends up being a tailwind as well. So there’s a number of factors going on. Um, but overall, I think, I think the simplest description would be valuation, uh, ex-U.S. and just something that just has been forgotten and hated for over a decade now.

Frank Curzio 24:04

I mean, it makes sense. It’s so hard to buy that though, right? It’s so hard to buy. Like people don’t like buy hating, especially in today’s market with social media. It’s like, you know, every 10 seconds you got to be entertained. It’s, you know, even with companies when they’re not putting out news, right? It’s so hard to buy something that’s hated and so out of favor is, you know, again, buying McDonald’s today, right?

Med Faber 24:20

Here’s an example. We went on, um, Bloomy a couple of years ago, and I said, all right, you guys, all you do all day long, you talk about Nvidia, Nvidia, Nvidia, Nvidia. And I’m like, well deserved, by the way, you know, could be the world’s first $5 trillion company, amazing story.

Med Faber 24:37

I’m like, I got a semiconductor company that’s outperformed Nvidia over the last one, three years, and they kind of lean in. And I’m like, you guys have not mentioned it once this year. It’s been mentioned on Twitter once. And again, I’m a quant. So half the time, I don’t even know the stocks in our portfolios, right? And then the foreign ones, like Japan, it’s just like numbers.

Med Faber 24:56

Um, and so I’m like, how many times do you guys mention Hanmi? And they’re like, what are you talking about? Did you sneeze med? What is that? And I’m like, yeah, it’s a South Korean company, you know, it’s in the semiconductor ecosystem. And I’m like, it’s outperforming Nvidia. This is two years ago. I went back on the show maybe like a month or two ago, and I said, hey guys, and I’m like,

Med Faber 25:15

by the way, I’m like, do you remember that stock we talked about? And they’re like, no, of course not. But I said, it went from 75,000 to 300,000, right? So in the interim, since when we talked about it, it’s tripled, quadrupled, whatever it did. And, um, but still, like it’s not in the discourse,

Med Faber 25:35

like it’s not something that, you know, is really, you know, you don’t have the euphoria feeling. So I think there’s a lot of opportunity all around the world. I mean, you got to remember, U.S. as a percentage of world GDP is only a quarter. And so there’s a pretty big, you know, spread between market cap, which is two-thirds, and, um, and, and, and GDP on and on.

Med Faber 25:57

I mean, look, we think the U.S. is exceptional, but I definitely think you should have most of your money in the U.S., but there’s a world of opportunity beyond our shores as well.

Frank Curzio 26:06

Now, before we get to your book, I want to talk about your podcast. Uh, you know, you’ve been with 10 years. I’ve been around doing it for, wow, I think, uh, I think it’s close to 17 now. Uh, I didn’t.

Med Faber 26:15

You and Rogan.

Frank Curzio 26:17

I didn’t believe, you know, I didn’t understand the value of it when I first started compared to now where, you know, it goes out to 130 countries. Uh, you know, I know your podcast is huge as well where, you know, the information that you.

Med Faber 26:30

It actually goes out to 131 countries.

Frank Curzio 26:33

I’m sure it goes to more than that. Uh, you know, it’s, and the point wasn’t even to pat myself on the back. The point is, you’re getting perspectives from real people in industries all across the world in real time. And the value of that to me who looks at individual stocks and investing, like no matter how much we analyze, we don’t have that perspective.

Frank Curzio 26:55

And having that perspective now with the podcast, for me, it’s been unbelievable. People say, well, you know, you do a free podcast. Well, it allowed me to build my business over the past 10 years, but it’s, you know, the feedback and the network has been incredible. What are some of the things that you realize doing a podcast? Because some people, I think everybody, everybody has podcasts now and they want to do them and they do them for a couple of months because they get the best people on and they’re done.

Frank Curzio 27:15

And they’re like, oh, this is too much work. You’ve stuck with it. You have great guests on. You know, what have you learned from the podcast? What are some of the surprises? And, uh, you know, hopefully you’re going to continue to do for a long time.

Med Faber 27:26

I mean, where else do you get the opportunity to email or call someone and say, hey, you want to hang out for an hour? You know, in any other scenario, they’d be like, you know, pound sand. No, like what are you talking about, creep? Uh, but you’re like, but, ah, by the way, I have a podcast. They say, sure, let’s hang out. You know, Nobel laureates, you know, famous hedge fund managers, historians, like sure, why not?

Med Faber 27:48

Um, but I think it’s, it’s helpful and grounding too. You know, I love, uh, the feedback and I don’t get as much as I used to, but it used to get quite a bit of creative haters, uh, you know, um, and, uh, say, hey, man, you ding dong, what are you talking about? Uh, but, you know, I think it’s fun to get the feedback.

Med Faber 28:07

Um, but more than anything, it’s used to just talk to people. And I think, um, you know, would I still do it even if it wasn’t published? Like probably, you know, be able to just be able to have like a, it’s like the old salons back in the day. You want to come have tea for an hour and discuss politics late in the night and drink some sherry or cognac, whatever people drank 200 years ago.

Med Faber 28:27

I don’t know. Um, and, uh, you know, it’s more than anything, it’s fun. And it generates more ideas for me than anything. Honestly, I get more, more, um, you know, and it’s optimistic. I mean, so much in our world is just constant negativity. It’s fun to talk to people. That’s, it keeps, keeps me going.

Frank Curzio 28:45

No, me too. Me too. I really love it. So, all right, let’s get set to really cool stuff because you have a new book that just was published in July 4th, Investing in America: The Rise of a 250-Year Bull Market. Uh, I want to say, is this your ninth book that you published?

Med Faber 29:01

Eighth.

Frank Curzio 29:02

This is the eighth book that you’ve published. Wow. That’s a good, and I got to say, if I had to guess, and I might be wrong on this, knowing you and just, you know, your background analytics and, and breaking this up into chapters where you look at 250 years, you break it up by decade, by chapter, right? Uh, you probably had a lot of fun looking back at the markets and looking back at everything, right?

Frank Curzio 29:21

And did the research for this project. I would say more fun than any other book. Maybe I’m wrong on that, but talk about it because it is fascinating to really see the history behind it and where we came from, where we are today. And I don’t think there’s a lot of people that talk about it really going back that timeframe, but, uh, you know, I found it really incredible.

Med Faber 29:38

Yeah. I was talking to my son, uh, before I started this. I said, you know how many books I wrote before you were born? And it’s like, how many? It’s like seven. I said, you know how many I’ve written since? He’s like, how many? I’m like zero. Uh, and he’s nine now. And so this is the first one in a decade. And, um, but you know, it, it, I probably spent $5,000 on financial history books,

Med Faber 30:00

um, and had so much fun just digging through, and we have a reading list in there, but digging through, uh, old books that I’d never heard of that, you know, um, you know, on the 1873 and the panic of 1720 and on and on. And, you know, the origin story for this book was, uh, when we were sitting around during COVID,

Med Faber 30:20

you know, if you guys remember, couldn’t do anything, couldn’t go to the beach, couldn’t, uh, socialize. And also they cut off sports and Americans’ favorite pastime is wagering. And so if you couldn’t bet on sports, what could you bet on? Well, all of a sudden you had this entire generation of young people getting interested in the stock market,

Med Faber 30:39

which A is great and B is somewhat terrible because they, they kind of got led through the casino doors, right? So they start trading meme stocks and zero day options and prediction, now it’s prediction markets and just kind of YOLOing into all this DJIN behavior. And I kind of want to strangle them and say, no, you don’t understand.

Med Faber 30:58

All you have to do is, uh, make a little money, save a little money, put it to work and forget about it. And, you know, ride this amazing, uh, train of American capitalism and pretty soon you’ll be rich in 10, 20, 50 years. You know, if you just do the math, 50 years on average, and I’m rounding a little bit here, uh, you have a hundred extra money.

Med Faber 31:19

So, you know, you scrape up 10 grand, 50 years from now, that’s a million dollars. Like that, that isn’t, that is the biggest, most amazing magic trick that, you know, would make David Blaine blush, right? But, um, so, so that was the origin of the frustration. And then, you know, I’m a visual learner, you know, me, despite being a quant, all my books are like charts, graphics, tables.

Med Faber 31:41

Um, by the way, listeners, all my books are free on my blog. Um, you know, the eBooks, uh, got into a fight with Bezos years ago. So, uh, you can, you can download those for free. But this one, you know, I wanted to make it beautiful. I wanted to make something people could flip through, but every financial advisor listening to this, you probably are going to laugh because in your office,

Med Faber 32:02

90% of them have that long-term chart of the U.S. stock market going back to 1900. And it’s just this amazing, you know, zigzag up and all the crisis events. It’s, you know, Vietnam, World War I, Spanish flu. And despite all that, you just had this relentless march up. And I said, so originally, and,

Med Faber 32:22

and this is a secret, Frank, I’ve actually written two coffee table books. Um, but this one was, this one was more timely because I was like, oh shit, we got a birthday coming up. Happy birthday, America. But I need to get this out before, uh, before July 4th. And so we wanted to write the U.S. version first, but we actually have a global version.

Med Faber 32:42

But I said, I want to take that chart back to 1600. I want to take that back to the founding of the joint stock companies in Amsterdam. And in this case, in the U.S., it goes back to 1800. So the founding of our republic, the button tree, uh, buttonwood agreement, um, which I learned is just a sycamore tree, by the way. Uh, you know, and so, but you learned a lot.

Med Faber 33:01

And so one of the things that I think I really wanted to drive home is that even from the founding, there’s something special about America, right? You have this entire country of immigrants and risk takers, and it’s something in the water, something in our blood, something just in, uh,

Med Faber 33:20

the laws and the rules and the systems that is not replicated around the rest of the world. And there’s a bunch of sidebars in the book that talk about the percentage of Americans that own stock versus other countries. And it’s an order of magnitude higher than other countries. You got things like if you ask Americans, is it a good idea to start a business?

Med Faber 33:39

It’s like 95% say yes. But if you ask your average Japanese or Brit, it’s like 10%. They’re like, oh hell no. Like, like, why would anyone do that? On and on. And so, but it’s from the founding. If you actually go back to the 1600s when a lot of the, the original boats were coming over, the Mayflower, right? A lot of people,

Med Faber 33:58

they say, oh no, no, well, that was because of they were escaping religious persecution. They were interested in freedoms on and on. I say yes, but asterisk, a lot of these were funded by joint stock companies. And so the original concept was a profit motive, right? So if you were a merchant back in the,

Med Faber 34:17

and they actually called them adventure merchants, which by the way, became the phrase venture capitalists. If you look back to the 1600s, you financed one voyage. Guess what? Your boat sinks, you’re out. Zero. You know, pirates take over that boat, zero. So not many people could afford to say, hey, I’m going to pay for 10 voyages, but you know who could,

Med Faber 34:38

distributing the risk across shareholders in a joint stock company. And so all of a sudden you had this with the Plymouth colony with the Mayflower. You had this with, you know, people say the devout Puritans of, of the Massachusetts Bay colony, joint stock company for profit on and on. You had it, not just the Brits, it was Dutch, had New Netherlands, uh, with the West India Company.

Med Faber 34:59

You had the Swedes with New Sweden. You had things like, hey, the Virginia Company, which was famously, uh, you know, struggled in Jamestown, but then they had the quote, product market fit shift, right? Which turned out to be tobacco, not gold. So on and on. So even the founding of the country was capitalism and risk takers and profit motive,

Med Faber 35:21

which, you know, as you walk forward, just kind of the genesis of U.S. too, a lot of it was also acquired. You know, you got all this saber rattling about Greenland, but you’re like, oh, by the way, Louisiana purchase, Alaska, on and on. And so it’s a celebration of just kind of, hey, um, I, I, I kind of triggered people a little bit on socials recently where I said,

Med Faber 35:41

hey, you know, if you would put a dollar in the stock market, which, you know, you couldn’t do in 1800, because like 0.1% of people invested and there was like two stocks, but just bear with me, the visualization, you know, and you walk forward 225 years, 250 years, um, that dollar turns into like 200 million.

Med Faber 36:01

And that’s less about anything other than compounding and investing in businesses in the stock market. So I think it’s a really interesting, um, exercise in, in thinking long-term versus long-term for, you know, some of these DJINs is hours and minutes versus years and decades.

Frank Curzio 36:19

Yeah, it’s really great. I mean, I have a quote from you where you say, since 1800, stock markets in the United States have returned on average about 7% per annum after inflation, while stock markets in the rest of the world have returned 5%, right? And people look at that and go, well, okay, that’s at 2%. And then you put in perspective, it means $1 at 1800 grew to 51,000 in the rest of the world, uh, by 2025, but over 4 million in the United States, right?

Frank Curzio 36:41

Just 2%, right? When you look at your numbers and you’ve been talking about that earlier, and this goes back, which I love, it’s Alexander Hamilton, it’s Louisiana purchase, right? And then you, you know, next thing you know, you’re into, you know, the 2000s and people forget, it’s the same decade where the credit crisis and the dot-com crash, right? And September 11th, I mean, what a decade, but just going through the history of it. I was saying, you probably had a lot of fun just going back and like you said,

Frank Curzio 37:00

like, oh, I, you’re going to learn so many different things that you didn’t realize when you’re going back in history and really, really a lot of books, but the research you did with this is probably incredible.

Med Faber 37:10

One of my favorites is the quotes, the sidebars, right? Um, there’s so many just, uh, there’s so many, like you get that patriotic feeling on some of these. So you got one from the beginning, Americans have been anticipating and projecting a better future. From the beginning, the land of democracy has been figured as the land of promise on and on. And there’s like,

Med Faber 37:29

um, Emerson, America is the country of the future is a country of beginnings of projects, of vast designs and expectations. And so you read through a lot of the history about the railroads and the canals. And then, you know, fast forward the automobile, the microprocessor, even today, AI rocket build out, right? America across any metric has been leading the world,

Med Faber 37:50

R&D, venture capital funding, Nobel laureates on and on, right? And so it’s, it’s part celebration and, and the book pulls no punches. It’s like, look, we also have a past that is full of, you know, struggle too, right? You know, many types of people, uh, were omitted from part of this, you know, American experiment in, in various times.

Med Faber 38:11

Um, but every chapter has, does something that was the kind of the whole point of the book. Um, our buddy Morgan Housel had a tweet that helped inspire this where he’s like, there’s someone should write a book where every page is just a picture of the long-term returns of the stock market. And the name of the book is just called Shut Up and Invest. And what I did is I said,

Med Faber 38:30

every, every decade, we zoom into the decade and look how crazy it was. We’re like, oh my God, look this, that and the other crashes, geopolitical. And then it zooms out and shows where that decade was on this long-term line. And half the time, even the Great Depression, even 2000, even 2008, they look like little blips on,

Med Faber 38:50

you can’t even find, by the way, 1987, right? It’s like hard to find on the long-term chart.

Frank Curzio 38:56

Long-term, yeah. And it was huge.

Med Faber 38:58

Yeah. And then you zoom out on the long-term, every single chart has, okay, this is what happened this decade, but guess what? Here’s what happened the next 10 years and here’s what happened the next 50. And you see that over time, you know, it works out. And so even all the hand-wringing today, what, where I talk about it, like U.S. stock market’s super expensive, blah, blah, blah, blah, blah,

Med Faber 39:16

blah, blah, blah, over the next 20, 50 years, it doesn’t matter. And there’s an interesting kink that happens at about year 20. Year 20, rolling stock returns become less volatile than bonds. Rolling stock returns are higher than bonds. The best case, the worst case scenarios are all better than bonds.

Med Faber 39:33

And so you de-risk this possibility of investing in stocks if you just hold them long enough. The problem is how many of us can look out to the future, you know, 20 years, it’s hard, right? It’s, it’s a, it’s a hard exercise, um, to have empathy with the future us and say, no, I’d just rather go spend it on vacation in Cabo today.

Med Faber 39:52

I don’t need to save it. I, I, you know, I’m going to go buy a new car. I’m going to go spend it on whatever. Um, but in reality is, you know, you, you can transform that into much higher, uh, val value of your portfolio in, uh, 20 years.

Frank Curzio 40:05

No, no, it makes a lot of sense. And, and, and listen, it’s, uh, I’m excited for this because, uh, you know, I love history. I love, uh, you know, analytics. I love that you go through decade by decade is very smart, right? Just it, it, it pieces by piece. It just, it flows really, really well when you do that. And just, it just reminds you of some of those periods that you don’t even remember. Like I, I really didn’t, you know, of course, you know, the dot-com, right?

Frank Curzio 40:26

Of course, you know, uh, you know, the credit crisis, but then you look at it, wow, it’s the same decade, you know, like a lot of the stuff that happened and, uh, just going through these big market events and how you cover them is really, really cool. So, uh, yeah, listen, good luck with it. I think you’re going to sell a ton of this. I mean, you have such a big following right now. I’m so I sound like, uh, yeah, I sound a little weird saying this, but being proud, man. I’m, I’m really am.

Frank Curzio 40:44

I know how hard you work, man. I see you behind the scenes, uh, even when it stands very conferences, which I actually really miss because, uh, people who don’t know these were editor conferences. And what Porter did is he had, you know, like all of our editors and he invite guests, right? Like you, Rick Rule and Doug Casey and stuff like that. It was great. Uh, the problem is the conference was from like nine to four.

Frank Curzio 41:04

And then afterwards you can go golfing. We went golfing to hang out and everybody drinks and then you go out, it’s a nice dinner. And so the time we got to do our speech the next day, we’re all kind of wrecked, right? We’re all like just hoping that we’re not at the, the 8:00 AM, 9:00 AM spot and mostly in the afternoon.

Med Faber 41:18

Yeah.

Frank Curzio 41:19

But the networking, I wish he should have a reunion because of networking and just meeting everyone was really cool. And, uh, you know, that’s what the idea is. But, uh, listen, invest in America, the rise of a 250-year bull market, uh, man, this is going to be really good. I think you’re going to sell a lot of copies and, uh, yeah, really, really great.

Med Faber 41:35

And by the way.

Frank Curzio 41:35

Podcast too, man.

Med Faber 41:37

It’s been a blessing, buddy. I love hanging out with you. By the way, listeners, don’t get too upset at the price. It was an honor of 1776. All the proceeds go to the New Invest America charity, which is funding the accounts of, uh, people born in the U.S. So the more books you buy, uh, the more, uh, the more Invest America gets.

Med Faber 41:56

And, um, if anyone is a, is a book writer, you know, that’s probably not going to be a whole lot, but we’re hopeful that one day we can, uh, we can cut them a big check, but it’s been a lot of fun hanging out with you, buddy. I appreciate it. We got to do it again sometime.

Frank Curzio 42:09

Sounds great. Sounds great. And guys, uh, you follow meb@mebfaber, uh, Cambria, all the funds and everything. So, so really great having you on the podcast and, uh, we’ll definitely get together soon.

Med Faber 42:20

Happy birthday, America.

Frank Curzio 42:22

Happy birthday. All right, buddy. I’ll talk to you soon, man.

Announcer 42:25

Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, and your responsibility.