Michael Mauboussin on Consuelo Mack WealthTrack

Simoleon Sense: Miguel Barbosa's Interview with Michael Mauboussin

My friend Miguel did a great interview with Michael Mauboussin.

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Michael Mauboussin: Was Harry Potter Inevitable?

Here are some conclusions from the discussion:

• Predictions are difficult in culturally biased realms, including media and investment ideas.Through a novel experiment, researchers showed an average song can become a hit or a clunker based on the principle of cumulative advantage.
  

• Investors should think probabilistically. However, they must show considerable caution incounterfactual thinking, an exploration of what could have been. Further, counterfactual thinking can lead to some suboptimal behavior.
  

• We often make up causes for the effects we see. Management tomes are filled withadvice derived from reverse-engineering the success of leading companies without awareness of how specious the claims are. As theories become more robust, they often rely more on circumstances than attributes.

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Michael Mauboussin: What You See and What You Get

Legg Mason's Chief Strategiest Michael J. Mauboussin discussses why cashflow is more important than earnings: "Cash is a fact, profit is an opinion."

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Michael Mauboussin: Turtles in Omaha

Most people like to be successful in their jobs. But few organizations are able to articulate the tangible and intangible attributes an employee needs to add value. This makes even more remarkable Warren Buffett’s plan to hire one or more chief investment officers to replace him at Berkshire Hathaway. As part of a succession strategy, Buffett clearly articulates the behavioral traits he believes are vital to long-term investment success.

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