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b'In Episode 52, we welcome Jason Hsu, joining us all the way from Taipei. We start with a bit of background on Jason and his company, Rayliant, which is a spinoff off Research Affiliates. Listeners might recognize the name Research Affiliates, as it was co-founded with another Meb Faber Show guest, Rob Arnott. Rob and Jason decided to spin off Rayliant to enable Jason to focus on his investing passion, China.\\nAs the conversation naturally led to China, Meb decides to run with it. He brings up how a prior Meb Faber Show guest (Steve Sjuggerud) is incredibly bullish on China. Meb asks Jason for a \\u201cboots on the ground\\u201d perspective. Does Jason agree with Steve\\u2019s bullishness?\\nIn short, absolutely. Jason has two hypotheses as he evaluates China: One, as China continues moving toward, and eventually becomes, the world\\u2019s largest economy, investors will realize they\\u2019re underexposed to this market. Given this, there will be major rebalancing into Chinese equities; Two, Jason tells us that approximately 80-90% of Chinese daily trade flow comes from retail investors (here in the U.S. this percentage is significantly lower). This means more market inefficiencies, so the probability for \\u201calpha\\u201d for managers is greater. Both these factors make China a market that should be on investors\\u2019 radars.\\nThe China discussion dovetails into investor sentiment on China, and how emotionally-driven we are, which typically ends in underperformance. This leads Meb to ask pointedly, why are people so bad at investing?\\nJason gives us his thoughts, which tend to reduce to \\u201cflow chases short-term performance.\\u201d He goes on to say how oftentimes, investors get crushed as they buy in at the peak of a style or asset class cycle.\\nMeb asks how investors should combat this. Jason has a classic response: \\u201cWhatever you think is a good idea\\u2026 do the opposite and you\\u2019re going to be more successful.\\u201d The reason this tends to work is because \\u201cThis is a market where the average human tendencies are precisely the wrong thing to do.\\u201d\\nThis prompts Meb to bring up a study idea he wants a listener to undertake for him regarding historical news headlines and investor sentiment. Listen for the details. Anyone up for the project?\\nThe guys stay on the topic of behavioral challenges, with Meb pointing toward one of Jason\\u2019s papers about how investors prefer complexity to simplicity. It\\u2019s a fascinating look into our wiring as humans and why investing is such a challenge for us.\\nNext, the guys move on to smart beta and factor investing. Meb asks Jason to provide an overview, and any main takeaways for investors implementing smart beta strategies.\\nJason gives us his thoughts, including revealing his personal favorite factor: value. This leads the guys into a discussion of Warren Buffett and his true alpha being his ability to stick to his style and not abandon it at precisely the wrong time, as most of us do. The guys then discuss manager performance and underperformance, and the tendency to always be chasing.\\nThere\\u2019s far more in this episode: Meb\\u2019s \\u201cforever fund\\u201d idea (which most people he\\u2019s discussed it with actually hate)\\u2026 Why hedge fund lockups and opaqueness can actually be a good thing\\u2026 The unique \\u201cvalues\\u201d which Jason created for Rayliant, and how they\\u2019re so different than those of most other money managers\\u2026 Jason\\u2019s most memorable trade\\u2026 And lastly, his final takeaway for listeners looking for better market performance.\\nWhat is it? Find out in Episode 52.\\nLearn more about your ad choices. Visit megaphone.fm/adchoices'