The View from the Office.

I met up with Meb Faber, founder and chief investment officer of Cambria Investment Management, at North End Cafe in Manhattan Beach. He had a salad. I had the Buddha Bowl.

Meb lives a few blocks from El Porto, which he says has arguably the best surf in Los Angeles outside Malibu or Topanga. His commute is a walk down the Strand and back. He rates his surfing ability in skiing terms as a blue run, not a double black diamond.

Meb grew up in Colorado and North Carolina and double majored in engineering science and biology at the University of Virginia. He worked in Washington as a biotech equity analyst, then moved to San Francisco and Lake Tahoe as a quant analyst before moving to California. 

Cambria turns 20 this year. It runs 20 ETFs and manages almost $5 billion, up from $500 million a decade ago. He said that like most founders he is impatient, and that some days he thinks the firm should already be at $10 billion or $20 billion.

Cambria’s three oldest shareholder yield funds cover the US, foreign developed and emerging markets and are top decile performers. The client base is mostly independent RIAs. 

The past two years he has focused on 351 exchanges, so called because of section 351 of the tax code which lets investors move appreciated stock into newly formed ETFs without triggering a big tax bill. Meb worked with Wes Gray of Alpha Architect on the project. Cambria has completed five conversions covering $1 billion. 

Meb has a hot take on the difference between active and passive ETFs, saying it’s largely lost its distinction. Years ago passive meant a low-cost, cap-weighted index. Now you can base an ETF on almost anything. Some of his active funds cost less than passive funds in their category.

On July 4th, Meb published his eighth book, Investing in America: The Rise of a 250-Year Bull Market. He said he wrote it to help educate a generation of young investors who are learning some dubious lessons through meme stocks and predictive markets. 

Cambria had limited sales and marketing for its first 15 years. Instead the firm was promoted by creating content, including a podcast.

The Meb Faber Show has surpassed 600 episodes since 2016. Guests have included Ed Thorp, Howard Marks, Jeremy Grantham, Aswath Damodaran and Carson Block.

He also publishes The Idea Farm, a weekly email of research with about 150,000 subscribers. It has a 50% open rate. It used to cost $500 a year but is now free because it’s more effective as a way to raise visibility.

Meb and his team loaded that archive of his writing, videos and tweets into an LLM model that answers portfolio questions in his voice. He said the model gets it right 80% of the time. 

You can connect with Meb via LinkedIn or DM me for a warm intro.