Michael Mauboussin: Warren Buffett Says – When You Find Yourself In A Hole, The First Thing You Do Is Stop Digging

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In his recent interview with WHG Clube do Livro, Michael Mauboussin discussed one example of how companies destroy wealth. Here’s an excerpt from the interview: Mauboussin: The third observation is that if you’re not earning your cost of capital, growth is bad. The faster you grow the more wealth you’re … Read More

Michael Mauboussin: Investors Should Pay More Attention To Management’s Actions Regarding Buying And Selling Company Stock

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In his latest paper titled – Wealth Transfers: Redistribution of Value via Capital Allocation, Michael Mauboussin explains why investors should pay more attention to management’s actions regarding buying and selling the company’s stock. Here’s an excerpt from the paper: Companies can affect wealth in a couple of ways. First, they … Read More

Michael Mauboussin: How To Use The Expectations Investing Process

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In their book – Expectations Investing: Reading Stock Prices for Better Returns, Michael Mauboussin and Alfred Rappaport discuss how to use the expectations investing process. Here’s an excerpt from the book: THE EXPECTATIONS INVESTING PROCESS In the following chapters, we’ll walk you carefully through the three-step process of expectations investing. Step … Read More

Michael Mauboussin: Reclassifying Cash Flow Items Provides Investors With Greater Insights

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In his latest paper titled – Categorizing for Clarity, Michael Mauboussin shows how reclassifying certain items in the cash flow statement can substantially improve the description of a business, without impacting the integrity of the cash flow statement. Here’s an excerpt from the paper: Understanding the magnitude and prospective return … Read More

Michael Mauboussin: Everything Is a DCF Model

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In his latest paper titled – Everything Is A DCF Model, Michael Mauboussin discusses DCF models, and why they still remain relevant today. Here’s an excerpt from the paper: A Mantra for Valuing Cash-Generating Assets We suggest the mantra “everything is a DCF model.” Whenever investors value a stake in … Read More

Michael Mauboussin: The Economics of Customer Businesses

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In his latest paper titled – The Economics of Customer Businesses, Calculating Customer-Based Corporate Valuation, Michael Mauboussin discusses a robust framework called ‘customer based corporate valuation’ (CBCV), which was developed by professors of marketing, Daniel McCarthy and Peter Fader, that links customer economics to corporate value. This allows investors to … Read More