Meb Faber Urges Rebalancing as U.S. Valuations Rise

Meb Faber, founder and chief investment officer at Cambria Investment Management, published Investing in America: The Rise of a 250-Year Bull Market on July 4, 2026. In a podcast interview he outlined the book’s central claims and offered asset-allocation advice for current market conditions.

The book traces U.S. equity returns over roughly 250 years and uses the example that $1 invested in America in 1800 would be worth about $200 million today to illustrate long-term compounding. Faber cited Charlie Munger’s maxim, “The first rule of compounding is don’t interrupt it unnecessarily,” to emphasize sustained ownership.

Faber traces early U.S. financial history to joint-stock ventures such as the Virginia Company and the Plymouth Colony, describing those ventures as early forms of investor-backed enterprise. He noted that about 55% of American households own stock and that the U.S., with roughly 5% of the world’s population, accounts for about two-thirds of global stock market capitalization.

On current market conditions, he pointed to valuation measures. The U.S. market trades at about 42 times its 10-year price-to-earnings ratio, near the second-highest level on record. Rather than recommend exiting equities, he recommended systematic rebalancing into a more global allocation because many portfolios remain heavily concentrated in U.S. stocks, with typical domestic exposure around 80% to 100%.

Faber cited recent relative performance to support geographic diversification. In 2025 the S&P 500 returned roughly 17%, while Cambria’s foreign deep value fund gained more than 50%. Through mid-2026 the S&P 500 rose about 10%; foreign value strategies returned between 15% and 20%, and U.S. small-cap value has gained more than 20%. He described the pattern as “bull market diversification,” where value and foreign pockets outperformed while large-cap U.S. stocks also posted gains.

On product innovation, Faber highlighted Cambria’s Section 351 conversion program, which allows investors to transfer concentrated stock positions into diversified ETFs without triggering immediate capital gains taxes. The firm has completed five conversions totaling nearly $1 billion in assets and expects another conversion this fall.

The book combines historical data and practical allocation recommendations. Faber advised investors to review concentration risk and consider increasing global exposure as U.S. market valuations sit near historic highs.