Excess Returns The Most Powerful Investing Tool You Aren’t Using | Four Lessons from Michael Mauboussin
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Nov 9, 2025 
Michael Mauboussin, a prominent investment strategist and author, shares his insights on overlooked but vital investing concepts. He highlights the importance of base rates for making grounded decisions in investing and life. Mauboussin explains his expectations investing framework, emphasizing how to reverse-engineer stock prices. The discussion also delves into the paradox of skill, detailing how increasing skills can heighten the role of luck. Listeners gain practical takeaways applicable across various fields, showcasing how to make more informed and rational choices.
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Start With Base Rates
- Learn and apply base rates before making forecasts or judgments.
- Use reference classes to ground expectations and avoid overweighing your inside view.
Test Growth Against History
- Use base-rate comparisons for high-growth firms to judge sustainability.
- Check how many firms with similar growth rates historically sustained that growth.
Price-First Expectations Investing
- Reverse engineer the stock price to reveal the expectations embedded in it.
- Convert those expectations into probabilistic scenarios and weight them to get expected value.
