Tag Archive

In his book – More Than You Know, Michael Mauboussin explains that in probabilistic endeavors, such as investing, the frequency of being right is less important than the magnitude of success when you’re right. A portfolio manager, despite having a poor percentage of winning stocks, achieved strong overall results due … Read More

During his recent interview on the Meb Faber Podcast, Michael Mauboussin discusses modern value investing, emphasizing the importance of buying assets for less than their intrinsic value while considering the expectations priced into stocks. He stresses flexibility in identifying opportunities and the challenge for value investors in recognizing unexpected growth. … Read More

In his latest interview with Bill Gurley on the Invest Like The Best Podcast, Michael Mauboussin outlines a typical pattern in how companies adopt new technologies. Initially, technologies are integrated into existing workflows to boost productivity in specific areas without major changes to core processes. Over time, as the benefits become … Read More

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

In his paper titled The Babe Ruth Effect, Michael Mauboussin discusses expected value vs probability. He cites Nassim Taleb who predicted a 70% chance the market will go up slightly, yet shorts the S&P 500. Taleb’s reasoning through ‘expected value’: Up move has low payoff and high probability (70%) Down … Read More

In this interview with Morgan Stanley, Michael Mauboussin discusses a number of ways to take the emotion out of investing decisions. He explains how stress affects decision-making, both in biology and in finance. Just like a zebra reacts to danger with a short-sighted focus on survival, stressed investors tend to … Read More

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

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

During his recent interview on the Money Maze Podcast, Michael Mauboussin discussed the qualities of superstar companies and the challenges of finding them. He noted that many of these companies have undergone substantial drawdowns at some point, and how it can be very difficult for investors to stay the course … Read More

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

In this interview with Trend Following Radio, Michael Mauboussin discusses why investors should focus on those things that they can control. Here’s an excerpt from the interview: Mauboussin: I think many traders think about this way too which is do everything you can within your power to succeed and then … Read More

In this interview with Invest Like The Best, Michael Mauboussin explains how to use a ‘value stick’ framework. Here’s an excerpt from the interview: Mauboussin: Imagine a vertical stick from top to bottom. At the very top, you have willingness to pay. Below that is price, then cost, and at … Read More

In his latest paper titled – Capital Allocation – Results, Analysis, and Assessment, Michael Mauboussin discusses five principles of good capital allocation that can be used as a benchmark to assess management. Here’s an excerpt from the paper: 1. Zero-based capital allocation. Two empirical observations from the prior discussion are … Read More

During his recent interview on the 20VC Podcast, Michael Mauboussin explained how to build your investment process. Here’s an excerpt from the interview: Mauboussin: One thing I would just say Harry about building a process is the first thing to think about and think about deeply is actually what you’re … Read More

In his recent interview with Motley Fool Money, Michael Mauboussin explains why investors should look for businesses that have ‘option value’. Here’s an excerpt from the interview: Michael Mauboussin: I think there are two big things to think about, and I’m sure this is what you guys are thinking about when … Read More

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

In his recent interview on the Capital Allocators Podcast, Michael Mauboussin discussed the best time to invest after a 20% market drawdown. Here’s an excerpt from the interview: If you’re taking a longer term point of view I think it does become a margin of safety concept and just figuring … Read More

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

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

In his latest paper titled, Intangibles And Earnings – Improving The Usefulness of Financial Statements, Michael Mauboussin explains why one size does not fit all when it comes to financial statements. Here’s an excerpt from the paper: The goal of accounting, the language of business, is to provide financial information … Read More