Category Archive

In this recent presentation at Columbia Business School, Michael Mauboussin discusses expectations investing and why you have to earn the right to use multiples. Here’s an excerpt from the presentation: Mauboussin: I would always like to say, by the way it’s got two sides of the factor. You have to … Read More

In Michael Mauboussin’s book – Think Twice, he recommends one of the best ways to make better decisions, which is particularly relevant to investing decisions, is to seek out dissenting views. Here’s an excerpt from the book: Much easier said than done, the idea is to prove your views wrong. There … Read More

In his latest paper titled – Turn and Face the Strange – Overcoming Barriers to Change in Sports and Investing, Michael Mauboussin discusses the reasons why sporting organizations and investors won’t make good decisions. The main reason is that even though their decision may be the correct one, the outcome … Read More

In this interview with Outlook Business, Michael Mauboussin discusses the three big behavioral mistakes that investors make. Here’s an excerpt from the interview: Mauboussin: Investors make a lot of behavioral mistakes but I’ll mention three I think are particularly prominent. The first is this notion of overconfident. People tend to … Read More

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

In his latest paper titled – The Impact of Intangibles on Base Rates, Michael Mauboussin discusses how the dominance of intangibles will lead to higher growth and more dispersion in base rates. Here’s an excerpt from the paper: Accurate forecasts combine causal and statistical thinking in proper measure. Statistical thinking … Read More

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

In his latest paper titled – Market-Expected Return on Investment (MEROI), Michael Mauboussin explains why MEROI, which measures the return at which the present value of a company’s profits equals the present value of the investments a company makes, is a better measurement of corporate returns that the traditional measurements … Read More

Some years ago, Michael Mauboussin wrote a paper titled Animating Mr Market, in which he discussed Ben Graham’s Mr Market metaphor saying, “One way to animate Mr. Market is to consider the wisdom of crowds. What’s key is that crowds are wise under some conditions and mad when any of … Read More

In his recent interview on the Decision Education Podcast, Michael Mauboussin discussed the importance of utilizing base rates in investing. Here’s an excerpt from the interview: Mauboussin: Yeah, thanks for slowing that down a little bit. So, as I mentioned, rather than thinking about your problem as unique to you, what … Read More

Some years ago Michael Mauboussin and Alfred Rappaport released a great paper titled – The Trouble with Earnings and Price/Earnings Multiples, in which they discuss the shortcomings of traditional valuation metrics ROE, and P/E. Here’s an excerpt from the paper: Wall Street is a world filled with rules of thumb … Read More

Several years ago, Michael Mauboussin and his colleagues wrote a great paper titled – Corporate Longevity – Index Turnover and Corporate Performance, which provides some great insights on why some companies manage to successfully survive over time while others capitulate. Here’s an excerpt from the paper: Why Companies Die Imagine … Read More

In Michael Mauboussin’s book – More Than You Know – he shares a great story about Paul DePodesta and Michael Lewis at a Vegas casino and the lessons investors can learn about getting positive expected value on your side. Here’s an excerpt from the book: Hit Me Paul DePodesta, a … Read More

Michael Mauboussin recently wrote an article in The Financial Times titled – Why value investing still works in markets, in which he discusses why value investing i.e., finding large gaps between price and value, still works today as well as it ever has. The problem as he sees it is … Read More

Michael Mauboussin recently released a paper titled – One Job: Expectations and the Role of Intangible Investments in which he discusses the impact of intangibles in company valuation. The paper focuses on three aspects of intangibles – measurement, characteristics, and the implications for investors. Here’s an excerpt from the paper: … Read More

During his recent interview on the Invest Like The Best Podcast, Michael Mauboussin was asked his advice for young investors who want to get started in the market. Here’s his response: Mauboussin: I think one of the answers to that is, if you’re serious about making a long-term career, is … Read More

Michael Mauboussin recently released his latest report on – “Public to Private Equity in the United States: A Long-Term Look.” A multi-decade look at public equities, buyouts, and venture capital in the U.S. Over the past quarter century there has been a marked shift in U.S. equities from public markets … Read More

In his recent interview with Sean Delaney on the What Got You There podcast, Michael Mauboussin discusses behavioral economics and makes the point that human nature, as it relates to investing, is unlikely to change anytime soon. Here’s an excerpt from the interview: If you go back and circle around … Read More

In Michael Mauboussin’s book, Think Twice: Harnessing the Power of Counterintuition, there’s a great passage on how investors can make better investment decisions using what he terms a ‘premortem’. Here’s an excerpt from the book: Many people are familiar with a postmortem, an analysis of a decision after the outcome is … Read More