Podcasts Business Investing The Meb Faber Show #43 - Learning to Play Offense and Defense

#43 - Learning to Play Offense and Defense

Published: March 15, 2017, 3:57 p.m.

Episode 43 finds us revisiting the “solo Meb” show. This time, he walks us through his research paper, Learning to Play Offense and Defense: Combining Value and Momentum from the Bottom Up, and the Top Down. If you’re on-the-go, then this episode is perfect for you as it’s a bit shorter.

Sorting stocks based on value and momentum factors historically has led to outperformance over the broad U.S. stock market.  However, any long-only strategy is subject to similar volatility and drawdowns as the S&P 500. And as we all know, drawdowns of 50%, 60%, or even 90% make a buy-and-hold stock strategy incredibly challenging.  Is there a way not only to add value on your stock selection, but also to reduce volatility and drawdowns of a long only strategy with hedging techniques?

In Episode 43, Meb examines how we might combine aggressive offense and smart defense to target outsized returns with manageable risk and drawdowns.