Global Value: How to Spot Bubbles, Avoid Market Crashes, and Earn Big Returns in the Stock Market Paperback

The book, Global Value, couldn’t have come at a better time. U.S. investors are currently up over 250% since 2009 as measured using broad-based market indexes. And as a result, the U.S. Market has gone from approximately fair market value to considerably high valuations when measured by almost all popularly used valuation metrics including, but by no means limited to, the CAPE ratio.My take on Cambria, and Meb individually, is that they are an investment company that is constantly striving for optimum, risk-adjusted value. With the Global Value strategy in particular, Meb explores the most reliable valuation metrics, such as CAPE (or P/E 10), and applies that metric across the globe, so the study includes both domestic and foreign markets, and emerging markets as well. What Meb found, using back-testing analysis, is that more cheaply valued, single-country markets exhibit significantly higher growth when measured from a multi-year perspective – so at least 3-5 years out. From a scientific point of view, this is hardly a surprise. I suspected this is exactly what Cambria expected to see and, as it turned out, there was an approximately 50% increase (~ 15% vs 10% for EAFE) in return over periods longer than 20 years (1980-2013) when comparing the cheapest 25% countries vs. a total world index based on the back-tested analysis.You might be thinking, well that sounds reasonable enough, but from an application standpoint, how would the individual investor be able to afford, let alone manage, buying 100 or so stocks in only the cheapest 25% countries of the world? On your own, such a feat would probably range somewhere between very cost prohibitive to outright unfeasible. But again, this is where Cambria has you covered. They appear to have concurrently launched an ETF (GVAL) with the release of this book, that appears to execute the exact strategies discussed in this book. And even better yet, the expense for this ETF is very reasonable (0.69% annual) given the unique nature of the investment strategy.Personally, I have been waiting for years for someone to develop an index based strategy that would apply the CAPE ratio from a global perspective in order to invest in only the cheapest countries, rather than all of them (which would also include the most expensive ones). And when one considers that total index funds/ETFs tend to use a market-cap weighted approach, then on average the total index will always be top heavy with more expensive countries. With Global Value, however, now you have both the strategy and data to back up expected alpha-like return, and an easy, cost effective means to deploy the strategy (GVAL).

I liked this better than Faber's other "pamphlet" that I read. As others have mentioned, this is not much more than a series of blog posts that you can pay $3 to read. I'm actually okay with that, since I don't mind paying reasonably prices for content, provided it is new & interesting & not widely available for free.The conceit of the book is straightforward: introduce CAPE and then suggest using it to decide when to enter and exit national markets. (e.g. "CAPE says Greece is undervalued so buy a Greek index")Faber does a good job of surveying CAPE and several of the recent papers arguing over its flaws. And he has some interesting charts showing "all" countries ranked by CAPE. (Well, all the countries that he can get CAPE data for, at least.)To be fair to Faber, he says this isn't for short-term tactical allocations. He suggests a large basket of countries (10+), only reconstituting the index every year, and expecting it to take about 10-years to show out-performance. Here's where the book could have been a bit better. Because essentially he's suggesting you either invest in Cambria Global Value ETF or handroll a similar ETF yourself. And I don't think he does enough to show what possible returns for such an investment strategy would look like in real life.All you really get is Figure 26, which shows CAGR, Volatility, Max Drawdown, and the Sharpe Ratio for a "Top 25% CAPE with Filter" from 1980-2013. I'm not expecting him to estimate losses due to taxes or trading costs. But what does turnover look like? How many years does this underperform a market-cap weighted index? What do 1-, 3-, and 5-year returns look like? How about just a chart showing annual returns for that 33-year period?Unlike many pundits, Faber puts his money where his mouth is. Well, at least he puts other people's money where his mouth is: he's created an index fund based on this book. I give him credit for that. The problem is that the returns haven't been very impressive. Yes, it has only been 2-years and Faber suggests a timespan of 10-years might be the right one to consider. But GVAL is -9.56% since inception. It is doing dramatically worse than VXUS, a market-weighted international index. But that's exactly the kind of tracking issue I think the book should have spent more time on.Small peeve: the author cites many papers by GMO, which are difficult/impossible to find. GMO seems to have either taken them off the web or put them behind some signup form or something.

I've read all of Dr. Faber's books and they all have several things in common. The first of these is that they are brief and concise. They take about an hour or so to read. The second one is that he takes very complicated subjects and presents and in a way that many people can understand. This does not mean that you don't have to do some work, but the work pays off. The third one is that they are full of resources and references to other great investment material. Just this last aspect of the book is worth much more than the price. The fourth one is that he writes these about every year or two which is great, because it allows me to integrate his ideas and develop them as time goes by. I do wish that there were more ETF's that would percent their P/E ratios but most of the charting programs I have seen don't do that. Summarily, a great collaboration on some of Dr. Faber's previous ideas and a great reference source.

This book provides usable information about the CAPE ratio. A ratio that can help any investor see if the market, they are interested in, is overvalued. Anyone looking to invest in the stock market should read this book.

Interesting study with comparisons of global equity markets according to different metrics.It seems this book lacks to take earnings growth into account. When you compare two countries , the first one, A, with let's say 2% annual growth and another one B with 0% growth, valuation metrics used in the study may select B as less expensive when A would be selected if you incorporate earnings growth.I would very interested to see Mr Faber, who has done a very thoughtful work in this book, perform this new study and compare the results with his former conclusions.

A charming, humble little book that every investor should read, and if the ground covered is unfamiliar, continue on with the reading list at the end and especially Meb's websites and newsletters. Don't expect get rich quick formulas or complex theories, or 7 step guides to riches. The book offers an extremely simple yet powerful piece of kit for assessing value in stock markets, something most investors and talking heads seem to think is irrelevant. At the end of the day, value is the ONLY thing investors should be concerned with (i.e. that the value of what you buy should be more than the price you pay for it) and this book helps in no small way to guide investors down the road towards sanity.

As usual from Meb Faber, a succinct read. All the key points included and no superfluous babble. Could have expanded on trend following filters a bit more, with some results (e.g. investing in bottom 10 CAPE markets but only if above 10 MMA)

I bought the book to learn more on global valuation and it was not a dissapointment. Subequently I bought the ETF as well. Good luck Mebane.

Excellent analysis of the pitfalls and benefits of asset allocation and how to do it intelligently.

This short book analyzes the historical data of several countries valuations. The scope is to get a simple tool to filter countries as a first step to build an international stock portfolio.Basically, it used CAPE (aka PE Shiller or PE10) and analyzes mean and median values, so you can get a clue of the over/undervaluation degree in a market.I like a lot this kind of short books, which go straight to the point and provide simple and useful ideas. Although these ideas aren't a big deal, they help to improve your returns.