ReSolve's Riffs

Our guest this week was none other than Meb Faber (co-counder and CIO of Cambria Investment Management), a well-known quant and prominent member of the FinTwit community. In addition to being an asset manager, he is an entrepreneur and venture capitalist, not to mention host of a popular podcast – and therefore an entertainer at heart.

he year that saw the fastest decline, followed by the steepest recovery in market history has left one topic top of mind for most investors – volatility. Though down from its eye-watering spike in the first quarter, the VIX (CBOE Volatility Index) has remained significantly higher than in previous years, and not without good reason.

Readers of our research (as well as any student of history) will know that stocks and bonds can go through prolonged periods of synchronized underperformance, while Risk Parity can navigate virtually any form of inflationary or growth shock. But when executed properly, with periodic rebalancing, Risk Parity can benefit from a substantial tailwind, as we showed in our recent paper – Maximizing the Rebalancing Premium.

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day. The conversation then turns to coaching, where Kevin describes how the best coaching relationships arise when coaches and trainees share the same goals with candor and humility. We discuss the utility of psychological profiling to ensure compatible personality types and how incompatible personalities can lead to trouble down the line.

In an upside-down market it’s hard to know which way is up. Many investors rely on Kevin Muir, otherwise known as the Macro Tourist, to help them navigate these uncharted waters. Kevin is a pragmatic macro analyst and trader who is focused on trading markets as they are, rather than how you might wish they were. Modern Monetary Theory (MMT) was the center of gravity for the conversation.