Michael Mauboussin joins Andy and Kevin on this episode of the Value Perspective. Michael, a market strategist, professor and author, highlights techniques to help investors improve the quality of their decisions.

EPISODE NOTES:

1:09 Intro

2:37 What are the three most important tools an investor can have in decision making?

7:40 Tracking your decisions with precision

8:57 Do you think base rates are less usable than in the past due to mean regression?

11:44 How successfully have people integrated decision making tools into their process?

14:35 What should you capture in your 'decision journal'?

17:18 Updating your base theorems - how do balance the long and short term noise?

22:14 What does the ideal decision making environment look like?

27:20 Probabilistic thinking

31:14 What is risk?

35:09 How to overcome the fear of assigning numbers to risk

38:06 How to determine the difference between skill and luck?

44:41 The Santa Fe Institute approach

53:07 A bad decision being made over time

Book Recommendations:

Range: Why Generalists Triumph in a Specialized World by David Epstein

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