MI364: Lessons From Michael Mauboussin w/ Shawn O'Malley
The Intrinsic Value Podcast - The Investor’s Podcast Network
Emotions and Social Influence in Investment Decisions
This chapter examines the impact of emotions on investment decisions, illustrating how personal biases can skew perceptions of risk and reward. It also highlights the effect of social influence and collective behavior in shaping market trends and potential bubbles.
In today’s episode, Shawn O’Malley (@Shawn_OMalley_) shares his favorite insights from Michael Mauboussin’s excellent book, More Than You Know.
You’ll learn how the stock market is like a complex adaptive system, the importance of having a clear investment philosophy, the psychology of investing, how innovation and competition affect stock returns, how Mauboussin uses complexity theory as an investor, plus so much more!
IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
02:00 - Why multi-disciplinary thinking matters so much to investors
03:55 - What a good investment process looks like and how to build one
05:39 - Why results can be so blinding to investors
08:39 - Why the magnitude of returns can matter more than frequency
10:13 - What are the commonalities between top investors
19:04 - How stress and other biases distort our thinking
25:57 - What the original Dow Jones index looked like
29:07 - How the boom and bust cycle for new industries unfolds
30:57 - Why companies’ assets don’t last as long as they used to
36:29 - Why using historic P/E ratios can be fraught
44:28 - How the wisdom of the crowds works
45:04 - How extreme events shape markets and the St. Petersburg paradox
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
- Michael Mauboussin's book, More Than You Know.
- Nassim Taleb's book, The Black Swan.
- Richard Foster and Sarah Kaplan's book, Creative Destruction.
- Chris Zook and James Allen's book, Profit to the Core.
- Pulak Prasad's book, What Darwin Taught Me About Investing.
- Check out the books mentioned in the podcast here.
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