My guest this week is a version of me—a funnier, cooler version who has a PhD and served as an active duty marine. Lots of you will already be familiar with Wes Gray, and those of you who are not are in for a treat. Wes is the founder of Alpha Architect, a firm which manages quantitative equity strategies for clients using factors like value and momentum. He also advocates for a more concentrated, pure approach to factor investing, which listeners know is music to my ears. While we share a lot of the same views on markets and investing, you will still find this refreshing. The conversation was easy to structure--I just took all the questions clients and prospective investors always ask of me and my firm, and turned them on Wes. These range from very specific questions on quant investing to big existential ones. I listened to this on a long drive home and laughed out loud in the car at least 5 times. You are going to love it all. I close this introduction by offering you an opportunity which is not for the faint of heart. On September 16th, I will be joining Wes and his crew on a 28-mile trek called “March for the Fallen” which is a small but important way of honoring those who have given their lives in service of our country. Wes and I invite you to join as well. If you are interested, check out the post on Wes’s site with all the details. I will link to it in the shownotes at investorfieldguide.com/wes. If you are still interested, then email me with the subject heading “March for the Fallen.” I told you Wes is a much cooler version of me, and true to form he will be doing the hike with a 40-pound rucksack. I will be doing the version without a rucksack. Either way, it will be a day of comradery and remembrance that we won’t soon forget. Join us. Books Referenced The Devil Dogs at Belleau Wood: U.S. Marines in World War I Thinking, Fast and Slow Online References The Limits of Arbitrage Show Notes 3:07 – (First question) – Exploring the mindset that is ingrained into Marines 3:16 – The Devil Dogs at Belleau Wood: U.S. Marines in World War I 5:27 – Most memorable experience growing up in the mountains of Colorado 6:29 – What experiences in the military have transferred to what Wes sees in the public markets 6:48 – Thinking, Fast and Slow 7:51 – Wes’s first foray into stocks 10:51 – What was the transition into the quantitative investing space 12:29 – How Wes would describe quantitative investing and what the landscape looks like today 17:10 – What is the nature of the strategies Wes uses, like high-frequency and market-making, and what makes them stand out in those 20:57 – What about the human capital arms race in this space and how different firms are attracting the top talent 23:21 – What the approach is for Wes and what his research suggests is the best predictor of performance in stocks 25:36 – Wes’s approach to portfolio construction 33:19 – What is the thinking behind the number of and the size of names in the QVAL ETF 36:20 – Why the data suggests momentum is the better pick 37:36 – Why price-to-book sucks relative to other value factors 39:55 – What things worry Wes about the future of this strategy 44:39 – How does Wes think about research and what to explore next. 50:05 – Who would Wes have manage his money since he thinks Vanguard is not the best choice 57:01 – Exploring his firm Alpha Architect, how it started and has evolved since launch 57:39 – The Limits of Arbitrage 1:08:15 – How the influx of people to passive investments are impacting the overall market, especially for active investment strategies 1:13:13 – Wes’s most memorable day of his career both in the military and as an investor 1:17:19– Kindest thing anyone has ever done for Wes Learn More For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

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“What did the council decide on item 42?” — answered with the speaker and the moment.