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Episode 50 is a return to our \u201cradio show\u201d format, in which we discuss current market news, Tweets Meb finds interesting, various research papers of note, and anything else on Meb\u2019s mind.\nBut first things first: A huge congratulations to new father, Meb Faber. His \u201cspin-off\u201d came in the early morning hours just a few days ago. In fact, this episode was recorded with Meb calling in from a spare room at the hospital.\nThe Meb Faber Show also just passed the one-million downloads mark. So a huge thank-you to everyone who has tuned in, listened, and recommended us to your friends. We\u2019re genuinely grateful to everyone for giving us their time each week.\nDiving into the financial content, we start with Meb discussing the need for investment literacy with kids and new investors. The problem is that most of us learn to invest incorrectly \u2013 generally, we learn about single stock valuation. As Meb tells us, the problem is that far more historical context is needed before even getting to this point. What have equity and bond investments averaged over the years? How cyclical are the markets? What does a bubble look like and how to you avoid one? In essence, there\u2019s so much to learn in order to be an informed investor before diving into the details of, say, a cash flow statement or a price-to-earnings ratio.\nThis ties into a conversation about expected returns going forward. Turns out, a recent source indicated that some investors are still expecting to make 8.5% per year going forward. Is this realistic? Not if you go by Bogle\u2019s formula. Meb explains in detail.\nNext, Meb made a recent change to his personal investment portfolio. Since he believes it to be important to be transparent about how he invests, he publishes this online. Meb tells us about his recent change, in which he added a tail risk hedging component. He expects it to be a drag on portfolio returns under normal circumstances, but it should provide him some protection if the U.S. equity market spikes lower. This bleeds into a discussion on bonds, and where they might going, since roughly 90% of Meb\u2019s new hedge investment actually is invested in 10-year Treasuries.\nNext up is a quote from John Bogle which Meb recently Tweeted. It\u2019s about risk, valuations, and indexing. It leads into a discussion about whether there\u2019s a valuation at which the risk of owning stocks outweighs the potential reward of remaining invested. We discuss market timing, and the possibility of exiting stocks due to absurd valuations \u2013 and potentially missing great gains as the market climbs higher, indifferent to your opinion that it was too overvalued.\xa0\nThe conversation takes another shift, gravitating toward active versus passive funds, the toxic effect of fees when buying active funds, and the problem of \u201cactive share.\u201d Active share references the degree to which a fund in which you\u2019re invested differs from its benchmark. If you want to invest in a smart beta fund, typically you want to see high active share (lots of difference) compared to a vanilla index fund \u2013 especially if the fund fees are high. Unfortunately, there are lots of funds out there claiming to be different, but they\u2019re actually \u201ccloset indexing.\u201d All you\u2019re doing is paying through the teeth for something you could buy much more cheaply. Meb discusses in detail.\nThere\u2019s lots more in this episode, including a \u201ccoffee can\u201d portfolio\u2026 the challenges of \u201clooking different\u201d when the market and/or your neighbors are doing better (even though over a longer investing horizon, you\u2019re positioned to be in better shape)\u2026 \u201cover-rebalancing\u201d toward global markets these days\u2026 why Europe has been a horrible investment for a decade and what its prospects might be going forward\u2026\nWhat are Meb\u2019s thoughts? Find out in Episode 50.\nLearn more about your ad choices. Visit megaphone.fm/adchoices