The Meb Faber Show: “This Billionaire Was the Worst Performing Manager for 9 Years – And Never Quit”
The Meb Faber Show: “This Billionaire Was the Worst Performing Manager for 9 Years – And Never Quit”
Today’s guest is David Booth, founder of Dimensional Fund Advisors, which now manages over $1 trillion. He studied under Eugene Fama at Chicago and helped build one of the first index funds at Wells Fargo.
In today’s episode, David traces Dimensional’s arc from indexing’s earliest days at Wells Fargo to crossing $1 trillion in AUM this year. He shares what Gene Fama said when he got the call, the story of driving a client to Chicago to walk through the Fama-French paper, and why AI investing looks like the California gold rush.
To close, David makes the case for judging yourself by decisions, not outcomes.
Get David’s book, Stay Calm: Learn to Embrace Uncertainty in Investing and Life: https://amzn.to/4zx3rDm
To see links or read the transcript of the episode, visit us at: https://www.themebfabershow.com/episo…
00:00 David Booth on Investing and Uncertainty
02:26 How the Index Fund Was Born
05:35 Why Dimensional Started With Small Caps
06:35 The Small-Cap Premium’s Worst 9 Years
09:55 Why Investors Struggle With Long-Term Performance
11:12 How to Invest Without Predicting Markets
12:19 When Should Investors Sell a Strategy?
13:28 Judge Investment Decisions, Not Outcomes
14:29 How Fama-French Changed Factor Investing
17:27 Why Dimensional Leads With Investor Education
19:59 Small Caps vs. the Magnificent Seven
21:11 How Investing Costs Have Changed
21:52 The Rise of Tax-Managed Investing
22:14 How Should Investors Approach the AI Boom?
23:39 Why Diversification Beats Stock Picking
25:04 The Power of Long-Term Compounding
26:38 Why Staying Invested Matters
27:57 Stocks vs. Gold: The Cost of Missing Equities
29:06 Why Investors Keep Chasing Market Fads
29:32 The Case for Better Financial Education
35:25 Building an Investment Firm for the Long Run
36:09 Why Long-Term Conviction Matters
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Pre-order Investing in America: The Rise Of A 250-Year Bull Market https://amzn.to/4dNRKOt
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