- Paperback: 80 pages
- Publisher: Mebane Faber; 1 edition (March 17, 2014)
- Language: English
- ISBN-10: 0988679914
- ISBN-13: 978-0988679917
- Product Dimensions: 8.5 x 0.2 x 11 inches
- Shipping Weight: 9.3 ounces
- Average Customer Review: 126 customer reviews
- Amazon Best Sellers Rank: #1,075,680 in Books (See Top 100 in Books)
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Global Value: How to Spot Bubbles, Avoid Market Crashes, and Earn Big Returns in the Stock Market Paperback – March 17, 2014
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My take on Cambria, and Meb individually, is that they are an investment company that is constantly striving for optimum, risk-adjusted value. With the Global Value strategy in particular, Meb explores the most reliable valuation metrics, such as CAPE (or P/E 10), and applies that metric across the globe, so the study includes both domestic and foreign markets, and emerging markets as well. What Meb found, using back-testing analysis, is that more cheaply valued, single-country markets exhibit significantly higher growth when measured from a multi-year perspective – so at least 3-5 years out. From a scientific point of view, this is hardly a surprise. I suspected this is exactly what Cambria expected to see and, as it turned out, there was an approximately 50% increase (~ 15% vs 10% for EAFE) in return over periods longer than 20 years (1980-2013) when comparing the cheapest 25% countries vs. a total world index based on the back-tested analysis.
You might be thinking, well that sounds reasonable enough, but from an application standpoint, how would the individual investor be able to afford, let alone manage, buying 100 or so stocks in only the cheapest 25% countries of the world? On your own, such a feat would probably range somewhere between very cost prohibitive to outright unfeasible. But again, this is where Cambria has you covered. They appear to have concurrently launched an ETF (GVAL) with the release of this book, that appears to execute the exact strategies discussed in this book. And even better yet, the expense for this ETF is very reasonable (0.69% annual) given the unique nature of the investment strategy.
Personally, I have been waiting for years for someone to develop an index based strategy that would apply the CAPE ratio from a global perspective in order to invest in only the cheapest countries, rather than all of them (which would also include the most expensive ones). And when one considers that total index funds/ETFs tend to use a market-cap weighted approach, then on average the total index will always be top heavy with more expensive countries. With Global Value, however, now you have both the strategy and data to back up expected alpha-like return, and an easy, cost effective means to deploy the strategy (GVAL).
At least I think that could provide a list of the web addresses for the links. It is kind of like a blog put onto paper, but where the blog was specifically written to be read on something with internet access.
Negatives: As the book is centered around the one idea of CAPE value investing, it would have been great to go a bit deeper into the rabbit hole, meaning more detailed analysis/data (minus 1 star). Second, as great as the cover may look, the layout within the book could have been done way better (minus 1 star).