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Michael Mauboussin Biography

Michael J. Mauboussin (born February 1964) is managing director and head of Global Financial Strategies at Credit Suisse, where he advises clients on valuation and portfolio positioning, capital markets theory, competitive strategy analysis, and decision making. He is also an adjunct professor of finance at the Columbia Business School and chairman of the Board of Trustees at the Santa Fe Institute.

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Michael Mauboussin Quotes

Humans have a strong desire to be part of a group. That desire makes us susceptible to fads, fashions, and idea contagions.

Contagions, Fashion, Fashions, Ideas, Part, Strong

A thoughtful investment process contemplates both probability and payoffs and carefully considers where the consensus - as revealed by a price - may be wrong. Even though there are also some important features that make investing different than, say, a casino or the track, the basic idea is the same: you want the positive expected value on your side

Expected, Idea, Ideas, Though, Thoughtful, Your Side

We have no control over outcomes, but we can control the process. Of course, outcomes matter, but by focusing our attention on process, we maximize our chances of good outcomes.

Attention, Chances, Good, Matter, Outcomes

Onlookers frequently confuse edge with style. . . Edge means generating excess returns because of mispricing. Style suggests being in the right place at the right time. Sometimes edge and style overlap, sometimes they don't.

Excess, Frequently, Mean, Overlap, Place, Style

At the core of an analytical edge is an ability to systematically distinguish between fundamentals and expectations. Fundamentals are a well thought out distribution of outcomes, and expectations are what's priced into an asset. A power metaphor is the [pari-mutuel] racetrack. The fundamentals are how fast a given horse will run and the expectations are the odds on the tote board. As any serious handicapper knows, you make money only by finding a mispricing between the performance of the horse and the odds. There are no 'good' or 'bad' horses, just correctly or incorrectly priced ones.

Core, Given, Horse, Horses, Odds, Running

The plural on anecdote is not evidence

Anecdote, Anecdotes, Evidence, Plural

Emphasising what's in your control allows you to adopt an attitude of equanimity toward luck. You've done what you can, and from there you have to live with the results - good or bad

Attitude, Done, Good, Luck

People are, by and large, quite poor at judging correct absolute values but are astute about determining relative values. Psychologists call this coherent arbitrariness, which suggests that individuals are coherent when they compare prices on a relative basis but arbitrary when those prices are considered versus fundamental value.

Arbitrariness, Judging, People, Prices, Relative Value

Edge also implies what Ben Graham. . . . called a margin of safety. You have a margin of safety when you buy an asset at a price that is substantially less than its value. As Graham noted, the margin of safety 'is available for absorbing the effect of miscalculations or worse than average luck. '. . . Graham expands, "The margin of safety is always dependent on the price paid. It will be large at one price, small at some higher price, nonexistent at some still higher price. "

Average, Luck, Safety, Substantially, Worse

John Krasinski

John Krasinski

Haley Bonar

Haley Bonar

Gardner Dozois

Gardner Dozois

Gyorgy Lukacs

Gyorgy Lukacs

Ron Kauk

Ron Kauk

Leonard Cohen

Leonard Cohen

John McEuen

John McEuen

El-P

El-P

Bryan Brown

Bryan Brown

Butch Walker

Butch Walker

Ian Axel

Ian Axel

Verner Panton

Verner Panton