Michael Mauboussin: Many Investors Are Not Congruent With What They’re Ultimately Trying To Do

Here’s a great interview with Patrick O’Shaughnessy and Michael Mauboussin on ways to improve processes at Capital Camp 2019. During the interview Mauboussin discusses one reason why many investors underperform saying:

“Many people sort of think that they’re doing one thing but if you watch… you kind of roll back the curtains and see what they’re doing all day, they’re not congruent with what their ultimately trying to do.”

Here’s an excerpt from the interview:

One thing I’ll just say in an investing context, and I think everybody here in this room probably gets this but, I think one of the big issues in investing and why people sometimes don’t do as well as they could is they’re just… There are like a wide range of strategies that probably allow you to do well from let’s call Jim Simons and Renaissance Technology, trading all the time, to Warren Buffett right! And everything in between.

The key is just to have your process be congruent with what you’re trying to do. So really understand what you’re trying to do and make your process congruent. I think one of my observations in many years at doing this is many people sort of think that they’re doing one thing but if you watch… you kind of roll back the curtains and see what they’re doing all day, they’re not congruent with what their ultimately trying to do.

So that’s another thing I would just say is that to the degree to which you can be congruent in what you’re trying to achieve and you’re actual day-to-day activities, that’s a really powerful positive thing. Then when it goes off the rails, that’s usually not doing that.

You can watch the entire interview here: