The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets

• Publisher:   Wiley
• Number Of Pages:   240
• Publication Date:   2009-03-30
• ISBN-10 / ASIN:   0470284897
• ISBN-13 / EAN:   9780470284896

A do-it-yourself guide to investing like the renowned Harvard and Yale endowments.

The Ivy Portfolio shows step-by-step how to track and mimic the investment strategies of the highly successful Harvard and Yale endowments. Using the endowment Policy Portfolios as a guide, the authors illustrate how an investor can develop a strategic asset allocation using an ETF-based investment approach.

The Ivy Portfolio also reveals a novel method for investors to reduce their risk through a tactical asset allocation strategy to protect them from bear markets. The book will also showcase a method to follow the smart money and piggyback the top hedge funds and their stock-picking abilities. With readable, straightforward advice, The Ivy Portfolio will show investors exactly how this can be accomplished—and allow them to achieve an unparalleled level of investment success in the process.

With all of the uncertainty in the markets today, The Ivy Portfolio helps the reader answer the most often asked question in investing today - "What do I do"?

Mebane T. Faber, CAIA, CMT (El Segundo, CA), researches and manages a number of quantitative strategies at Cambria Investment Management, including equity and global tactical asset allocation portfolios.

Eric W. Richardson, JD (El Segundo, CA), is the founder and President of Cambria Capital, LLC, a FINRA member investment banking and securities brokerage firm.

All, This is a strategic good book for an intermediate to advanced investor during an unfavorable market trend. Faber excels at using text, combined with historical charts to explain his methodology. Call it coincidence or not, but I think I have recently seen Faber on CNBC as well as mentioned in an article on business week. It sounds like his philosophy is getting some traction. Regardless, the book is written at a level which intermediate investors can undetrstand. Faber's philosophy can be used by being an intermediate/advanced trend coder.

Faber and Richardson offer the best of two worlds in their new book "The Ivy Portfolio": a combination of accessible diversification similar to the well respected Ivy portfolios and common sence buy/sell rules using the 10 month moving average. If you are an investor, you will want to read this book and follow it's advice. Also, note that the core of this book stems from Faber's working paper titled A Quantitative Approach to Tactical Asset Allocation dated July 2006 which can be found on the web.

I ordered this book on April 23rd, today is May 27th and
I still have not received it. I have sent many e-mail's
and have not got a response.

An excellent book overall. It encourages investor to look beyond the general stock and bond portfolios and to consider real estate and commodity as assets classes in their portfolios. The recommended approaches are highly actionable. The methods worked well so far into 2009. Here are lists of minor complaints:
* It assumes that investors have a good knowledge about various ETF's, which may not be the case. It does not shows the holdings in VEU (FTSE All Word ex US ETF), which contain Nestle, BP PLC, Total SA, HSBC and Novartis etc. It does not show the composition of DBC (PowerShares DB Commodity Track) which contains 34% WTI crude oil, 17% gold, 17% heating oil, 14% wheat, 13% corn and 11% aluminium.
* Some of the recommended ETF's are very thinly traded. There are better alternative vehicles. For example, it recommends EWX (SPDR S&P Emerging Markets Small Cap) for emerging market small cap. EWX is trading about 7,000 shares a day and only has $7 million of assets. A better alternative is DGS (WisdomTree Emerging Markets Small Cap Div) which is trading around 22,000 shares a day and has $52 million in assets.
* 10 month moving average is not easy for average investor to obtain. A readily available alternative is 200 day moving average. 200 trading days equate to 9 months and 1 week. The information is available on Yahoo Finance Chart.

I have just finished the book and have to say their work is excellent. After a brief review of the Yale and Harvard endowments, the authors talk about how to implement similar asset allocation strategies using index-ETFs to achieve superior returns with limited risk and volatility. They then present a very simple timing strategy using technical analysis that can easily be implemented by the smallest investor. I would consider this a must-read for any index investor whose wants to apply some simple technical analysis/strategic asset allocation to limit their portfolio risk. I only wish I had the tools presented in this book before 2008--It would have kept me out of the market during the downturn. The strategy is extensively back-tested and all the data analysis/comparisons are presented clearly with charts and tables. I find this to be lacking in a lot of other investment books these days. There are a significant amount of pages dedicated to the hedge industry and private equity. I found that to be the least appealing part of the book. These are asset classes that are not really available to small investors. The authors do, however, show that investment in these asset classes is not necessary.

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