Making Markets · Colossus | Investing & Business Podcasts

Meb Faber: Taxation and Diversification - [Making Markets, EP.54]

·55 min·3 clips

Faber says 351 is “not a tax dodge” and “merely a deferral.”

Eric Golden starts with the show's core premise: markets are shaped by psychology and structure. He sets the episode around what really happens when money changes hands. Meb Faber joins as the guest. He is introduced as the co-founder and CEO of Cambria Investments, an RIA that manages over $2 billion in assets. The conversation starts with taxation. It quickly turns into a discussion of how taxes change the practical value of different portfolio structures. One example is the tax treatment of ETF management fees versus separate-account fees. That distinction matters because direct indexing and similar products can look different once the tax bill is included. The episode treats after-tax return as a real investment variable rather than an afterthought. It also moves into the tradeoffs between plain long-only portfolios and more flexible quantitative approaches. Those approaches use a wider toolkit. Leverage and shorting come up as part of that toolkit. Breadth is presented as a serious advantage. The discussion does not treat breadth as a slogan. It links breadth to more consistent ways of pursuing returns across many holdings. Direct indexing gets a practical airing. The episode notes that the client-facing burden can be heavy when the position list is large and the tax filing becomes complicated. That complication helps explain why tax-focused ETF launches draw unusual interest. The appeal is straightforward for taxable investors. Low- or no-dividend exposure can reduce current tax drag while keeping market exposure intact.

As heard by us

A practical look at how taxes, structure, and breadth change the after-tax math of investing.

Taxation is the thread running through this episode, and the conversation keeps circling back to how portfolio construction changes once after-tax math is taken seriously.

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Why you'd press play

You want the tax math behind portfolios, not a generic market pep talk.

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