I recently finished three short books by Meb Faber, entitled Global Value, Global Asset Allocation and Shareholder Yield.
There are many talking points from these, however I’d like to focus specifically on Global Value today. The book is as its title suggests, focussed on identifying value outside of his home country, the US.
Home Country Bias
One bizarre, yet predictable problem most individual investors have is something called “home country bias”, the tendency to invest most of your assets in the country and markets in which you live. I myself am guilty of this (just look at the portfolio) and it is something I am attempting to move away from over time.
I do however remain a “bottom-up” rather than “top-down” investor. I look to find undervalued companies and then look at broader market conditions, rather than the other way around. I also have in my favour the fact that the CAPE ratio for the UK is historically below-average. Aah, but what is the CAPE, I hear you ask (hopefully!).
Continue reading “Finding Value in a Global Environment”