Michael Mauboussin famous quotes
50 minutes ago
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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.
-- Michael Mauboussin -
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.
-- Michael Mauboussin -
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
-- Michael Mauboussin -
The plural on anecdote is not evidence
-- Michael Mauboussin -
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."
-- Michael Mauboussin -
Humans have a strong desire to be part of a group. That desire makes us susceptible to fads, fashions, and idea contagions.
-- Michael Mauboussin -
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
-- Michael Mauboussin -
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.
-- Michael Mauboussin -
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.
-- Michael Mauboussin
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Pay attention to where you are going because without meaning you might get nowhere.
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A little bit of attention and kindness can totally change a whole life, and a lack of that can do the same.
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When we do things that are controlling, whether intentional or not, we are not going to get those long-term outcomes.
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Our bodies change our minds, and our minds can change our behavior, and our behavior can change our outcomes.
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The most generous part of your philanthropy could be the time you put in to procure the same results and same outcomes and same returns you demand in business.
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If we seek a positive outcome, we must begin with a positive attitude.
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Perhaps... some day the precision of the data will be brought so far that the mathematician will be able to calculate at his desk the outcome of any chemical combination, in the same way, so to speak, as he calculates the motions of celestial bodies.
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The selection of a book-plate is such a serious matter.
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No matter how hot the fire burns, a Protea always survives
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No matter where I am, I will always be there when you need me.
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