BlueMountain Capital Management

Head of Consilient Research

Invest Like the Best with Patrick O'Shaughnessy/Dec 20, 2022/1h 9m

Michael Mauboussin - Sharpening Investor & Executive Toolkits - [Invest Like the Best, EP.308]

My guest this week is Michael Mauboussin. Many of you will know Michael and his work well. He’s Head of Consilient Research at Counterpoint Global, one of the sharpest investment minds I know, and a frequent guest on this show. In this discussion, we go deep into his recent work on market share, returns on capital, and capital allocation - all of which are coming under increasing scrutiny for different reasons. Please enjoy this great conversation with my friend Michael Mauboussin. Listen to Founders podcast Founders Episode #136 A Success Story: Estee Lauder Invest Like the Best with David Senra: Passion & Pain For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus streamlines the investment research process so you can get up to speed and find answers to critical questions on companies faster and more efficiently. The Tegus platform surfaces the hard-to-get qualitative insights, gives instant access to critical public financial data through BamSEC, and helps you set up customized expert calls. It’s all done on a single, modern SaaS platform that offers 360-degree insight into any public or private company. I’ve been so impressed by the platform that my firm, Positive Sum, recently made an investment in Tegus. We did so because we feel that Tegus will be the gold standard platform for investing research for decades to come. As a listener, you can take Tegus for a free test drive by visiting tegus.co/patrick. ----- Today's episode is brought to you by Brex. Brex is the integrated financial platform trusted by the world's most innovative entrepreneurs and fastest-growing companies. With Brex, you can move money fast for instant impact with high-limit corporate cards, payments, venture debt, and spend management software all in one place. Ready to accelerate your business? Learn more at brex.com/best. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes [00:03:46] - [First question] - Overview of Michael’s recent research on market share [00:05:48] - Market share dynamics in modern history [00:08:43] - How market share data is useful for investors [00:12:30] - Investing in early breakout companies from low-concentration markets [00:14:34] - Surprises from his recent research project [00:15:29] - Using the value stick for stakeholder satisfaction [00:19:12] - Examples of value creation using the value stick [00:23:33] - Market power in relation to markups and willingness to pay [00:32:00] - Identifying a company’s real ROIC numbers [00:44:00] - How important absolute ROIC is when picking investments [00:47:07] - Research on capital generation and allocation trends [00:54:25] - Characteristics of great capital allocation strategies [00:59:26] - Surprises in the market since his deep-dive research [01:02:54] - Artificial intelligence and other sources of disruptive innovation

Head of Consilient Research

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch/Nov 4, 2022/49m

20VC: Michael Mauboussin on Good vs Bad Investment Decision-Making Processes, How To Improve Your Process, How To Know When it Needs Improving and The Single Biggest Mistakes People Make In Their Decision-Making Process

Michael Mauboussin is Head of Consilient Research at Counterpoint Global. Previously, he was Director of Research at BlueMountain Capital, Head of Global Financial Strategies at Credit Suisse, and Chief Investment Strategist at Legg Mason Capital Management. He is also the author of three incredible books, including More Than You Know: Finding Financial Wisdom in Unconventional Places, named in The 100 Best Business Books of All Time by 800-CEO-Read. Michael has taught at Columbia Business School since 1993 and received the Dean's Award for Teaching Excellence in 2009 and 2016. In Today's Episode with Michael Mauboussin We Discuss: 1.) Entry into Venture and Finance: What does Michael actually do as "Head of Consilient Research"? What does Michael know now that he wishes he had known when he entered finance? How did Michael and Bill Gurley meet in business school? What does Michael believe makes Bill such a special investor today? 2.) Booms and Busts: How This Compares? How does the current macro downturn compare to prior crashes Michael has worked through? What is the same? What is different? How do political and health events impact the macro? Why was 1987 the end of the world at the time? How did the recovery take place? How does Michael analyze the duration of bull markets vs the duration of recovery time? What advice does Michael give to young people today questioning if they are good investors? 3.) The Investment Decision-Making Process: How does Michael advise on the structuring of your decision-making process? What makes a good process vs a bad process? What can be done to remove politics from the decision-making process? What can be done to ensure all people, regardless of hierarchy feel safe in the process and feel they can share their thoughts without repercussions? What are the single biggest mistakes Michael sees people make in their decision-making process? How do you know when is the right time to change your process? 4.) Everything is a DCF: What does Michael mean when he says that "everything is a DCF"? How does Michael advise and apply this thinking to early-stage venture investors? How does Michael think through highly diversified portfolios vs super concentrated portfolios in venture? Items Mentioned in Today's Episode: Michael's Favourite Book: Consilience: The Unity of Knowledge by E.O Wilson

Head of Consilient Research

Acquired/Oct 5, 2021/1h 25m

Michael Mauboussin Master Class — Moats, Skill, Luck, Decision Making and a Whole Lot More

We sit down with the one & only Michael Mauboussin to dive deep into his incredible body of work: untangling skill and luck, measuring moats, persistence of returns in venture capital, decision making and — particularly timely — expectations investing and how to think about valuations in the current 2021 market environment. (!!) Michael's work is maybe our most frequent carve out on Acquired, so we're pumped to finally have a chance to interview the man himself. Big thank you to Patrick O'Shaughnessy and Brent Beshore for introducing us all at Capital Camp this year! Sponsors: Anthropic: https://bit.ly/acquiredclaude25 Sentry: https://bit.ly/acquiredsentry WorkOS: https://acquired.fm/unpluggedPlaying Cards: https://bit.ly/workOSshop (Code: ACQDECK) Statsig: https://bit.ly/acquiredstatsig26 More Acquired! Get email updates with hints on next episode and follow-ups from recent episodes Join the Slack Subscribe to ACQ2 Merch Store! © Copyright 2015-2026 ACQ, LLC Links: Michael's wonderful talk at Google: https://youtu.be/1JLfqBsX5Lc The new revised edition of Expectations Investing: https://www.amazon.com/Expectations-Investing-Reading-Returns-Heilbrunn/dp/0231203047/ The Success Equation: https://www.amazon.com/The-Success-Equation-Untangling-Investing/dp/1422184234/ Measuring the Moat: https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&sourceid=csplusresearchcp&document_id=1066439791&serialid=4uA2wHojCvFKzqWfwIyDvkSN1pkXRpb43LvyclLcJsk%3D&cspId=null Public to Private Equity: https://www.morganstanley.com/im/publication/insights/articles/articles_publictoprivateequityintheusalongtermlook_us.pdf ‍Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.

Head of Consilient Research

Odd Lots/Nov 5, 2020/43m

Michael Mauboussin On Valuing Intangible Assets

Measuring a company's book value is a classic practice among investors seeking to understand how much a firm's actual assets are worth. But what happens when a firm's assets are not things like buildings, factories, and land, but intangible assets, such as intellectual property and brand value? How does that change the task of analyzing a company's intrinsic worth? On this episode, we speak with Michael Mauboussin, Head of Consilient Research at Counterpoint Global (part of Morgan Stanley) about valuing these assets, and how investors can use this information to get a better read on their investments. See omnystudio.com/listener for privacy information.

Head of Consilient Research

Invest Like the Best with Patrick O'Shaughnessy/Sep 1, 2020/1h 2m

Michael Mauboussin – Great Migration Public to Private Equity - [Invest Like the Best, EP.189]

My guest this week is Michael Mauboussin, the head of consilient research at Counterpoint Global. Michael is an all-time favorite guest here on the show, and this is his fourth appearance. We discuss one of the biggest topics in the world of investing: the shift from public to private markets that has taken place over the last several decades. We explore the reasons for this shift, the biggest overall changes in capital markets, and what the future may hold. Along the way we explore other fascinating topics like the rise of intangible asset investments, employee-based compensation as a form of financing, and more. If you enjoy this conversation I urge you to read Michael’s paper on the topic which will be linked in the shownotes. Please enjoy this conversation with Michael Mauboussin. This episode of Invest Like The Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis. If you’re a professional equity investor and haven’t talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick. For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag Show Notes (2:27) – (First question) – Motivation for writing the book from public to private equity (2:28) – Public to Private Equity in the US: A Long-Term Look (3:02) – The Incredible Shrinking Universe of Stocks (4:48) – Size of the public vs private markets (7:20) – History and changes in the public to private markets (12:00) – Public market vs venture capital returns (16:48) – Persistence of returns (20:01) – Role of price and EBIDTA on the returns of a buyout (23:31) – How buyout forms are sourcing the debt (29:31) – Transition to businesses relying on intangibles (29:42) – Capitalism without Capital: The Rise of the Intangible Economy (30:13) – Endogenous Technological Change (30:36) – Should Intangible Investments Be Reported Separately or Commingled with Operating Expenses? New Evidence (34:18) – Explaining the Recent Failure of Value Investing (36:21) – Superstar firms and increasing returns (42:38) – Role on monopolies in creating network effects (4:52) – The allocators perspective in these investments (49:16) – How does this all impact public market active management (51:54) – Advice to young people getting into the investment industry (52:30) – Jeremy Grantham Podcast Episode (53:30) – Other areas he is researching/looking into (55:44) – How investment work and Santa Fe research influence eachother (56:54) – Investors to learn from (57:15) – John Collison Podcast Episode Learn More For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag

Head of Consilient Research

Invest Like the Best with Patrick O'Shaughnessy/Mar 26, 2019/1h 10m

Michael Mauboussin – The Four Sources of Alpha - [Invest Like the Best, EP.126]

My guest this week for the third time is Michael Mauboussin. If there is a major question about markets and investing, Michael has usually written one of the best pieces of research on that topic. Today’s conversation is a mix of several of his research pieces, but focuses on the sources of alpha. The framing of the conversation is the brilliant question “who is on the other side” of a given trade. If you are buying, who is selling, and why? Knowing the answer to this question is one key to understanding where excess return comes from. As is usual with Michael, we also explore tons of other interesting ideas that will serve as food for thought. Please enjoy. For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag Show Notes 1:23 - (First Question) – An outline of the syllabus for the course he teaches 4:02 – What are smart people missing when it comes to decision making 5:33 – Why Michael went down the path of defining major investing concepts 7:41 – On the impossibility of informational inefficient markets 9:14 – Beware behavioral finance 12:03 – What are the behavioral errors that people can take advantage of in a trade 15:14 – Timing opportunities 17:25 – Modest Proposal Podcast Episode 17:47 – Where the analytical edge comes from 21:16 – Is there an advantage to exhibit time arbitrage 23:53 – Technical arbitrage 29:34 – What impact do flows into ETFs play on the market 32:25 – Informational edge and how you source that edge 36:39 – Biggest changes that he has seen on the buy side 43:18 - How would Michael apply this as a sports GM 48:35 – His views on stock buybacks 51:02 – The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success 52:55 – EBIT to EBITDA paper 54:43 – What Does a PE Multiple Mean? 59:28 – The concept of benign myths 1:02:06 – What the future holds of Michael 1:04:17 – The Myth of Capitalism: Monopolies and the Death of Competition Learn More For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

Head of Consilient Research

Invest Like the Best with Patrick O'Shaughnessy/May 16, 2017/1h 32m

Michael Mauboussin - Man + Machine, Moats, and Power of the Outside View - [Invest Like the Best, EP.37]

My guest today is Michael Mauboussin, who is the head of global financial strategies at Credit Suisse and is on my short list of must read writers on all things investing. If you read his entire catalogue, Howard Marks's memos, and Buffett's shareholder letters, you be sitting pretty. Michael was also a big reason for the early success of this show appearing as my second guest and now my 37th. He and his team have been prolific in the last six months, publishing several long research reports on the most interesting aspects of the investing landscape. In this conversation, we talk about business moats, industry analysis, and how to combine man and machine when building an investment strategy and portfolio. As I tell Michael at the end, you won't be able to listen to this episode at two times speed, because we go deep quickly. For comprehensive show notes on this episode go to http://investorfieldguide.com/michael For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag

Head of Consilient Research

Odd Lots/Feb 17, 2017/30m

How Poker Explains the Battle of Passive and Active Investing

Among the biggest trends in the world of markets is the rise of passive investing. Rather than pay high fees to active mutual fund managers (who often fail to beat the market), people are pouring money into passive strategies that track major indices, but with little cost. So what are the ramifications of this trend for investors who choose to remain active? On this week's Odd Lots podcast, we speak with Michael Mauboussin, who heads global financial strategies at Credit Suisse and is not just an expert on the world of investing, but also on the role of luck in success. As he sees it, trading is like a game of poker, and in poker you want to play against weaker, less-skilled players. But as more and more of those less-skilled players opt not to trade (choosing passive strategies) then the game gets harder. See omnystudio.com/listener for privacy information.

Head of Consilient Research

Invest Like the Best with Patrick O'Shaughnessy/Sep 20, 2016/1h 37m

Michael Mauboussin – Active Asset Management - [Invest Like the Best, EP.02]

Michael Mauboussin, Managing Director and Head of Global Financial Strategies at Credit Suisse, joins Patrick to discuss the current state of the asset management business, explore all of the stages of the investment process, and what edges might exist for those trying to beat the market. For comprehensive show notes on this episode go to investorfieldguide.com/mauboussin/ For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

Head of Consilient Research