Episode · Invest Like the Best · 2016-09-20
Patrick O'Shaughnessy & Michael Mauboussin: books mentioned on Invest Like the Best #02
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.
Patrick O'Shaughnessy recommended Contrarian Investment Strategies by David Dreman and The Nature of Value by Nick Gogerty, and discussed Expectations Investing by Michael J. Mauboussin and others and Margin of Safety by Seth Klarman. Michael Mauboussin recommended Thinking, Fast and Slow by Daniel Kahneman, and discussed Creating Shareholder Value by Alfred Rappaport, Outsiders, The by William N. Thorndike Jr. and others, Beat the Dealer by Edward O. Thorp, and Story of the Human Body by Daniel E. Lieberman.
Books mentioned, in the order they came up
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Contrarian Investment Strategies
Recommended“And so I went to the bookstore and bought a bunch of books, and the first two that I read, one was by David Dreamin called Contrarian Investment Strategies, which I still love to this day.”
Where to get it
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Expectations Investing
Discussed“And the second book was a book that you wrote with your mentor called Expectations Investing. And so we're going to get into that book today for sure”
Where to get it
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The Nature of Value
Recommended“Reminds me of a book called The Nature of Value by Nick Goerty. Have you read that book? Yeah, really interesting kind of intersection of biology and markets for those that are interested.”
Where to get it
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Margin of Safety
Discussed“So I believe that indexing will turn out to be just another wall street fad. When it passes, the prices of securities included in popular indexes will almost certainly decline relative to those that have been excluded.”
Where to get it
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Creating Shareholder Value
Discussed“And in the late 1980s, a colleague of mine handed me a copy of Al Rappaport's book, Creating Shareholder Value, had a lot of really cool ideas. But chapter seven, in particular, in the original book, was called Stock Market Signals to Managers.”
Where to get it
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Outsiders, The
Discussed“When I was an analyst many years ago, the company that was the poster child for me in that camp was Ralston Purina. And Ralston Purina is, by the way, Bill Stiritz, the CEO at the time, was a subject, one of the subjects of Will Thorndyke's book, The Outsiders, about capital allocation.”
Where to get it
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Beat the Dealer
Discussed“Okay, so probably the most famous user of this is Ed Thorpe. And Ed is famous for writing the book, Beat the Dealer about card counting back in the 1960s. And what's interesting about that is that Thorpe not only wrote about card counting techniques, which were quite novel at the time, but also described the Kelly system for betting.”
Where to get it
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Thinking, Fast and Slow
Recommended“I think I would go with, uh, Danny Conman's book, thinking fast and slow. And, you know, the reason I, uh, and maybe it's just a personal taste, but I'm very fascinated by our decision-making processes as people.”
Where to get it
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Story of the Human Body
Discussed“I'm reading Daniel Lieberman's book right now called the history of the human body. I don't know if you know that book, but it's sort of an evolutionary history of, of humans. And it's absolutely, it's a fascinating read”
Where to get it
Other mentions in this episode (1) — ad reads, self-promotion and passing references, never counted
“I do have a thought on this because I mean, I wrote about this in my book called Think Twice. And, and I've, and I have a fairly strong view on this, which is that intuition does exist, by the way.”