Michael Mauboussin: Trusting Your Hunches: Beware the Hidden Traps of Pattern Recognition

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In this interview with Capital Allocators, Michael Mauboussin explains that while pattern recognition is natural, it’s crucial to be aware of our biases and apply it cautiously to avoid making decisions based solely on subjective impressions. Here’s an excerpt from the interview: Mauboussin: I think this is very common that’s why I … Read More

Michael Mauboussin: Beyond Market Efficiency: Diversity, Incentives, and the “Wisdom of Crowds”

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In his recent interview with Bloomberg, Michael Mauboussin compares market efficiency to a “wisdom of crowds” phenomenon, where diverse perspectives, information aggregation, and proper incentives lead to good collective decisions. However, there’s also a “madness of crowds” lurking when these conditions are violated. The most likely culprit? Lack of diversity … Read More

Michael Mauboussin: Independent vs. Cumulative Luck: How Both Influence Your Investment Journey

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During this interview with MIB, Michael Mauboussin argues that most successful investors acknowledge the role of luck in their achievements. He cites a study that found that successful mutual fund managers attributed their success to internal factors 59% of the time, while attributing poor performance to external factors 83% of … Read More

Michael Mauboussin: Investors Should Always Compare Opportunities With Appropriate References

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During his recent interview with Tim Ferriss, Michael Mauboussin explained why investors should always consider comparing opportunities with appropriate references. Here’s an excerpt from the interview: Mauboussin: But the broader lesson is that no matter what you’re thinking of doing, moving to a new city, taking a new job, anything … Read More

Michael Mauboussin: Investors Must Look Past Simple Measures Of Profits To Understand A Business’s True Ability To Create Value

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In his latest paper titled – Good Losses, Bad Losses, Michael Mauboussin explains why investors must look past simple measures of profits to understand a business’s true ability to create value. Here’s an excerpt from the paper: Accounting is the language of business that allows a company to share its … Read More

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