The Best Investment Writing Volume 4: Rob Arnott, Research Affiliates – Bubble, Bubble, Toil and Trouble
Last year we brought listeners the entire volume of The Best Investment Writing Volume 3, in audio format, right here on the podcast. Listeners loved it, so we’re running it back again this year with The Best Investment Writing Volume 4. You’ll hear from some of the most respected money managers and investment researchers from all over the planet. Enough from me, let’s let Rob take over this special episode.
Key Points
- Rob Arnott discusses the concept of "smart beta" and asset allocation, emphasizing the importance of severing the link between a stock's price and its weight in a portfolio to avoid overvaluing overpriced companies.
- Arnott provides a formal definition of a market bubble, which is identified by an asset's prices being higher than valuation models can justify and a marginal buyer's disregard for these models, expecting to sell at higher future prices.
- The episode explores the idea of "anti-bubbles," where assets are undervalued and require implausibly pessimistic assumptions to not deliver a solid risk premium, suggesting that investors should focus on these opportunities.
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For detailed show notes, click here: https://mebfaber.com/2020/10/19/the-best-investment-writing-volume-4-rob-arnott-research-affiliates-bubble-bubble-toil-and-trouble/
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Chapters
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Transcript
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