The chapter delves into the performance of public markets and the concentration of wealth creation among a small percentage of companies since the 1920s. It discusses the power law of compounding, indexing, fundamental investing, and challenges of managing superstar companies in a portfolio. The chapter also explores the dynamics of wealth creation in companies over different time horizons and the importance of focusing on percentage returns.
Michael Mauboussin is the Head of Consilient Research at Counterpoint Global, a $70 billion equity manager. Michael is renowned for his ability to articulate important investment concepts backed by academic research. His first of three prior conversations on the show is replayed in the feed. You can find the rest at capitalallocators.com.
Our conversation explores Michael’s most recent piece on pattern recognition, including when it works and when it doesn’t. We then transition to discussing the changing nature of public markets, inspired by another of Michael’s recent research reports entitled Birth, Death, and Wealth Creation.
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