Transcript
Introduction
Patrick
My guest this week is Meb Faber, who started the podcast similar to this one right before mine and was a big reason I was open to the idea in the first place. Meb is a quantitative research whose firm Cambria has been behind many interesting investment strategies that break the Wall Street mold. We talk about investing factors, dividends, angel investing, podcasts and more. This was a fun catch up with a close friend in the industry who has been a leader in using data to explore the best potential active strategies in a variety of different asset classes. Please enjoy our conversation, which begins with a factor draft.
Quant Factor Draft
Patrick
Okay, Meb, so now after a year of doing this together in LA, unfortunately, we're remote, and this time I get to host. It'll be a conversation, but I'll try to skew it in your direction at least a little bit, as you did for me a year ago. And we'll start with a draft for quant factors. The rules of the game are we're each going to pick 5. The rules of the game just back and forth, snake draft, not on auction. And a factor would be defined as say price to earnings ratio, not value as a category. It's got to be a specific factor. And the idea is that you can use these 5 factors in a model however you see fit. Maybe we'll talk a little bit about how we might do that afterward, but that it's over the next 10 years. You're trying to earn the most excess return let's say, in the US all cap market using 5 factors. Since you're the guest, I'll let you pick first.