My guest this week is Michael Mauboussin, the head of consilient research at Counterpoint Global. Michael is an all-time favorite guest here on the show, and this is his fourth appearance. We discuss one of the biggest topics in the world of investing: the shift from public to private markets that has taken place over the last several decades. We explore the reasons for this shift, the biggest overall changes in capital markets, and what the future may hold. Along the way we explore other fascinating topics like the rise of intangible asset investments, employee-based compensation as a form of financing, and more. If you enjoy this conversation I urge you to read Michael’s paper on the topic which will be linked in the shownotes. Please enjoy this conversation with Michael Mauboussin.

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Show Notes

(2:27) – (First question) – Motivation for writing the book from public to private equity

(2:28) – Public to Private Equity in the US: A Long-Term Look

(3:02) – The Incredible Shrinking Universe of Stocks

(4:48) – Size of the public vs private markets

(7:20) – History and changes in the public to private markets

(12:00) – Public market vs venture capital returns

(16:48) – Persistence of returns

(20:01) – Role of price and EBIDTA on the returns of a buyout

(23:31) – How buyout forms are sourcing the debt

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Intro

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