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Home > NewsRelease > Michael Mauboussin — How Great Investors Make Decisions, Harnessing The Wisdom (vs. Madness) of Crowds, Lessons from Race Horses, and More (#659)
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Michael Mauboussin — How Great Investors Make Decisions, Harnessing The Wisdom (vs. Madness) of Crowds, Lessons from Race Horses, and More (#659)
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Tim Ferriss - Productivity, Digital Lifestyles and Entrepreneurship Tim Ferriss - Productivity, Digital Lifestyles and Entrepreneurship
For Immediate Release:
Dateline: San Francisco, CA
Friday, March 3, 2023

 
Illustration via 99designs

“Wall Street, even to this day, is replete with lots of rules of thumb and sort of old wives’ tales and shorthands for how to do things. And some of these things, when I would sit there and listen to them and try to cobble it all together, just didn’t make sense. And so for me it was this idea of the beginner’s mind and really saying, ‘How does this stuff really work?'”

— Michael Mauboussin

Michael Mauboussin (@mjmauboussin) is Head of Consilient Research on Counterpoint Global at Morgan Stanley Investment Management.

Prior to joining Counterpoint Global, Michael was Director of Research at BlueMountain Capital, Head of Global Financial Strategies at Credit Suisse, and Chief Investment Strategist at Legg Mason Capital Management. Michael originally joined Credit Suisse in 1992 as a packaged food industry analyst and was named Chief U.S. Investment Strategist in 1999.

Michael is the author of The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing, Think Twice: Harnessing the Power of Counterintuition, and More Than You Know: Finding Financial Wisdom in Unconventional Places. More Than You Know was named one of “The 100 Best Business Books of All Time” by 800-CEO-READ, one of the best business books by BusinessWeek (2006), and best economics book by Strategy+Business (2006). Michael is also co-author, with Alfred Rappaport, of Expectations Investing: Reading Stock Prices for Better Returns. 

Michael has been an adjunct professor of finance at Columbia Business School since 1993 and is on the faculty of the Heilbrunn Center for Graham and Dodd Investing. He received the Dean’s Award for Teaching Excellence in 2009 and 2016 and the Graham & Dodd, Murray, Greenwald Prize for Value Investing in 2021.

Michael earned an A.B. from Georgetown University. He is chairman emeritus of the board of trustees of the Santa Fe Institute, a leading center for multidisciplinary research in complex systems theory.

Please enjoy!

Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Castbox, Google Podcasts, Stitcher, Amazon Music, or on your favorite podcast platform.

Brought to you by Athletic Greens’s AG1 all-in-one nutritional supplement, House of Macadamias delicious and nutritious nuts, and Shopify global commerce platform providing tools to start, grow, market, and manage a retail business. 

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#659: Michael Mauboussin — How Great Investors Make Decisions, Harnessing The Wisdom (vs. Madness) of Crowds, Lessons from Race Horses, and More

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Want to hear another episode with an investor of cutting-edge insight? Listen to my conversation with Benchmark’s Bill Gurley in which we discussed sell-side analysts versus buy-side analysts, financial models, repurposing good ideas for alternative applications, the conviction of network effects, undervalued competitive advantages, cultivating anti-tribalism, America’s future, and much more.

#651: Legendary Investor Bill Gurley on Investing Rules, Finding Outliers, Insights from Jeff Bezos and Howard Marks, Must-Read Books, Creating True Competitive Advantages, Open-Source Strategies, Adapting Mental Models to New Realities, and More

What was your favorite quote or lesson from this episode? Please let me know in the comments.

SCROLL BELOW FOR LINKS AND SHOW NOTES…

SELECTED LINKS FROM THE EPISODE

  • Connect with Michael Mauboussin:

Website | Twitter

SHOW NOTES

  • [07:12] Latin roots.
  • [09:14] No business education? No problem!
  • [12:15] The best food industry analyst.
  • [15:36] Consilience.
  • [19:58] Complex adaptive systems.
  • [23:26] Diversity.
  • [26:23] The wisdom of crowds.
  • [32:42] The minimum effective dose of cognitive diversity.
  • [36:02] Designing experiments.
  • [43:49] Against the Gods and Complexity.
  • [49:56] Value investing and the Santa Fe Institute.
  • [53:57] A brief 21st-century asset class tour.
  • [57:47] Base rates and horses.
  • [1:06:16] Good vs. great investors.
  • [1:13:22] Expanding options when making decisions.
  • [1:18:56] Favorite failures.
  • [1:20:35] Counteracting overreliance on experts.
  • [1:24:34] Intuition.
  • [1:34:15] Time management tenets.
  • [1:40:59] Parental resources.
  • [1:43:42] Perspectives gained by learning about complex adaptive systems.
  • [1:46:12] Recommended reading.
  • [1:47:32] Michael’s billboard.
  • [1:50:33] Parting thoughts.

MORE MICHAEL MAUBOUSSIN QUOTES FROM THE INTERVIEW

“Wall Street, even to this day, is replete with lots of rules of thumb and sort of old wives’ tales and shorthands for how to do things. And some of these things, when I would sit there and listen to them and try to cobble it all together, just didn’t make sense. And so for me it was this idea of the beginner’s mind and really saying, ‘How does this stuff really work?'”
— Michael Mauboussin

“How do I parse what I think would lend itself to where pattern recognition will be effective versus where it’s unlikely to be effective?”
— Michael Mauboussin

“What’s bad about young people is they don’t know anything. And what’s good about young people is they don’t know anything.”
— Michael Mauboussin

PEOPLE MENTIONED

The Tim Ferriss Show is one of the most popular podcasts in the world with more than 900 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.
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Name: Tim Ferriss
Title: Author, Princeton University Guest Lecturer
Group: Random House/Crown Publishing
Dateline: San Francisco, CA United States
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