Value Investing with Legends

Modern value investing emphasizes investing in resilient franchises and letting the compounding do the work for you. Today’s guest, Jan Hummel, is a fantastic expositor of this subject and a friend of the Center who has been part of many of our events over the years. In 2007, Jan launched the Paradigm Capital Value Fund with Bruce Greenwald, the founder of the Heilbrunn Center and Columbia Business School alumnus, Mario Gabelli. Paradigm’s investment philosophy is built around a focus on mispriced securities in the small- and mid-cap space within Europe, deep fundamental research, a concentrated portfolio, and hedging of the portfolio through non-equity investments and derivatives. I've often mentioned that I think the opportunities in Europe for value investors are enormous and with Paradigm’s focus on making investments within the European Union, Jan is the perfect person to explore this topic with us. On this episode, Jan and I discuss the advantages of real-world experience, combined with deep fundamental research and tenacity. We talk about how Jan’s early years in Sweden have shaped his whole life, what it was like to make the move from financial economics to business school, making the transition from 15 years of turnaround recovery to running a fund, the key traits of a great analyst and an entrepreneur, and so much more!   Key Topics: How Jan’s childhood in Sweden has colored his life (2:37) Jan’s unconventional experience buying shares at 16 (4:06) Studying financial economics at the Stockholm School of Economics and Stanford (6:26) The first steps of Jan’s finance career as a Junior Analyst (7:33) How Jan went from studying under Bruce Greenwald at Harvard to working together (9:16) How business school broadened Jan’s experience (9:56) Jan’s unorthodox path in asset management (12:07) Why Jan became interested in turnaround restructuring (13:08) How Jan’s 15 years of business experience has helped him as an investor (14:29) The Swedish banking crisis of the early 90s (16:24) Competitive dynamics of the 80s and 90s (18:03) The powerful combination of deep knowledge and a favorable market environment (19:19) Events that led to the launch of Paradigm Capital (20:44) The experience of founding a fund right before the 2008 economic crisis (23:09) Creating an information edge through research (24:37) Advantages of a having concentrated portfolio (26:22) Paradigm’s layered approach to sizing positions in their portfolio (29:05) Why Paradigm is country-agnostic when it comes to portfolio construction (30:57) How Paradigm hedges currencies as part of their risk management (31:50) Navigating the tricky waters of figuring out when to exit a position (35:48) What I like about Paradigm’s flexible approach to engaging with management (38:55) Why data is always foundation for identifying potential investments (39:59) What Jan is looking for in companies’ return on capital employed (41:05) Why Jan believes we’ll see an increase in passive investing in Europe in the future (45:32) Opportunities for value investors in Europe (47:04) Building strategy around the improvement of operational practices (48:51) What makes a great analyst (51:32) The tenacity of an entrepreneur (53:01) And much more!  Mentioned in this Episode: Value Investing with Legends Podcast | Season 4 Episode 4: The Multi-Faceted Future of Value Investing with Henry Ellenbogen and Anouk Dey Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

The most successful investors combine a profound analytical understanding of financial markets and the economy at large with the ability to act on those ideas. My guest today has these two attributes in spades. Today’s conversation is with Howard Marks, the Co-Founder and Co-Chairman of Oaktree Capital Management, which is one of the largest credit investors in the world and certainly the largest investor in distressed securities. Howard started his career at Citicorp as an equity research analyst and then Director of Research, Vice President, and Senior Portfolio Manager overseeing convertible and high yield debt. After leaving Citicorp, he moved to The TCW Group, where once again, he was responsible for investments in distressed debt, high yield bonds, and convertible securities. In 1995 he and another group of partners from TCW founded Oaktree, where he remains today. Howard is known for his penetrating mind and his memos are a must-read for any serious student of the market and I can’t think of anyone better than him to discuss the many complexities of markets and the economy of today.  On this episode, Howard and I discuss how he ended up in the high yields space, why running research at Citicorp was a low point in his career, the concept of “efficientization”, why Graham and Dodd called bond investing a negative art, why complexity and early adoption are your friends, the dominant challenge for investors today, Howard’s prolific writing, and so much more!   Key Topics: Howard’s early life from working adding machines in an accounting office to studying finance at university (3:30) How Howard ended up working at Citicorp for his first job out of school (5:39) Why running research at Citicorp was an extremely unsatisfactory role for Howard (7:25) Howard’s involuntary transition from analyst into the high yield space (9:01) The big difference between the market being efficient and being right (11:37) The concept of “efficientization” (13:14) Two main causes of mistakes in the market? (14:04) Howard’s holy grail in investing (15:12) Why Howard doesn’t use macro forecasting in his decision making (17:24) The dawn of the high yield bond era (18:55) Different approaches to the analysis of equities versus high yield bonds (20:07) Why Graham and Dodd called bond investing a negative art (21:03) Howard’s early days at The TCW Group (23:18) Complexity and early adoption as an investor’s friends (24:53) Why you must work at a firm that is in alignment with your investment philosophy (28:05) Howard’s love for writing (31:49) Using memos to shape the company culture (33:30) Why you should analyze your winners (34:47) The “I know” school versus the “I don’t know” school (36:01) The dominant challenge for investors today (38:46) What Howard thinks is behind consistently low yields (42:13) What surprises me about the politics of populism and financial markets (46:43) The rise of populism as a response to the shifting beliefs of the working class (48:16) And much more!   Mentioned in this Episode: Oaktree Capital Management Memos from Howard Marks Howard Marks’ Book | The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor Benjamin Graham & David Dodd’s Book | Security Analysis Howard Marks’ Memos: Us and Them Coming into Focus Mysterious Economic Reality Political Reality Political Reality Meets Economic Reality   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Today’s conversation is with Henry Ellenbogen and Anouk Dey from Durable Capital Partners. Henry founded Durable in 2019 and serves as Managing Partner and Chief Investment Officer. Before that, he was a Vice President of T. Rowe Price, T. Rowe Price Group Chief Investment Officer for U.S. Equity Growth, the lead Portfolio Manager for the U.S. Small-Cap Growth Equity Strategy, and the Portfolio Manager for the New Horizons Fund. Anouk is a Partner of Durable who joined the firm at its inception in 2019. Before joining Durable, she was also a Vice President of T. Rowe Price Group, where she was an investment analyst in the U.S. Equity Division, focusing on small-cap growth stocks. Anouk also co-teaches the Compounders Independent Study at Columbia Business School. My students have heard me say many times that the future of investing must be one that combines exposure to private and public markets and that is flexible in its valuation approach and ideas, and that embraces disruption. That type of investing requires partners that are willing to commit capital for the long haul while being able to withstand the volatility of the market. That’s where Durable Capital Partners stands out. On this episode, Henry, Anouk, and I discuss how Henry developed his investment philosophy, how a liberal arts background gives you an advantage in the investment industry, Henry and Anouk’s lessons from their time at T. Rowe Price, Durable’s commitment to long-term relationships with the companies they invest in, their unique approach to knowledge acquisition, and so much more!   Key Topics: How Henry started his career in investing after exploring different fields (3:41) The beginnings of Henry’s investment philosophy (6:04) Major lessons from Henry’s study of the history of technology (8:53) The benefits of a liberal arts background (9:41) Why crisis is the true test of an investor (11:00) The stroke of luck that took Anouk from ski racing to studying international relations (12:38) How Anouk got the opportunity to spend her first year as an investor studying compounders (14:44) Henry’s early role as an analyst at T. Rowe Price (18:18) The move from traditional media analyst to managing the T. Rowe Price New Horizons Fund (19:59) What you can learn from studying media companies in the early 2000s (21:00) Why Henry started looking at private companies as investment opportunities (23:37) Creating a systematic approach to investing in private companies (25:38) The foundation for building a network of companies with unique access (26:51) Advantages for public security analysts over venture capitalists in the private market (29:06) What Durable wants to be known for (30:07) How Durable’s perspective on relationships and long-term commitment are in alignment with entrepreneurs (31:18) Durable’s approach to knowledge acquisition (34:01) Looking at Shopify as a company that has gone from Act 1 and 2 to a potential Act 3 (37:05) Durable’s approach to analyzing and supporting company leaders (41:24) Managing the risk of human capital (45:25) The importance of honoring your commitments and managing capital successfully during a crisis (47:46) Eliminating the false dichotomies in the investment industry (51:59) How you can reduce your learning trajectory around compounders (55:19) The advantage of working in collaborative teams at Durable (57:26) Idea sourcing as world-class fundamental investors (1:00:01) Understanding the good to great thesis (1:01:22) The value of deeply human investing (1:04:15) Building on the human skillset (1:06:13) How passive investing is affecting market volatility (1:08:30) And much more!   Mentioned in this Episode: Durable Capital Partners   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Rishi Renjen, Founder and Chief Investment Officer of ROAM Global Management, discusses his deep interest in finance, the advantage of understanding economics, lessons from investment banking, a dynamic approach to value investing, the importance of market distress and shorting opportunities, the future of financial markets, and the significance of risk management in investments.

With the COVID-19 crisis dominating our spring semester, the focus of the podcast shifted slightly, and we had several conversations with distinguished investors talking about the impact of the crisis on financial markets. For this season, in addition to the essential lessons about investing and good asset management practices, we are going to explore broader investment experiences and different approaches. Today, I'm particularly delighted to share this conversation with the great value investor, Richard Lawrence who has made a career as a true pioneer, particularly in Asia, where he built a legendary track record. Richard is the Chairman and Executive Director of the Overlook Investment Group, a firm that invests in publicly listed equities across Asia, and that he founded in 1991. The Overlook Partnership, which Richard founded in 1992, currently has over $6 billion in assets under management, and since inception has achieved an astonishing capital-weighted annual compounded return of almost 14%. On this episode, Richard and I discuss the advantages of learning asset management in a family office environment, why he decided to move to Hong Kong, the evolving Asian investment landscape, the Overlook investment philosophy, the four components of a great stock pick, what to consider when building a team, why passive investing brings opportunities for active managers, and so much more! Key Topics: Richard’s early exposure to investing as a career (3:38) The advantage of learning asset management in a family office environment (5:05) How the connection between economic and social growth influenced Richard’s studies at Brown University (7:03) Richard’s early career journey from telex translation to analyst (8:45) How Richard developed the beginnings of his “superior business” investment philosophy (9:53) Why Richard decided to move to Hong Kong (11:22) The Asian investment landscape in the late 80s (12:43) Creating the foundation for Overlook Investments (17:05) The four components of a great stock pick (18:34) How to assess a company’s pricing power (21:45) Richard’s defense against the lack of corporate governance regulations when he started in the Asian markets (25:06) Using the “tower” to track potential investments (27:51) The Overlook approach to portfolio construction (29:52) The five evils ( 32:19) Why you should keep an eye on current account imbalances (33:26) Why Richard decided to cap the growth of assets under management at Overlook (37:25) Richard’s perspective on cutting fees (38:56) The critical aspects of building a team (40:51) How diversity plays a critical at Overlook (42:32) Why Richard refuses to do post-mortems (44:04) Figuring out the institutional framework in China (45:59) The impact of deteriorating US-China relations on the investment landscape (51:27) How passive investing increases opportunities for active managers (55:00) And much more! Mentioned in this Episode: Overlook Investments  Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Welcome back to a new season of the show! Our first conversation is going to be a little different as we’ll be talking about this year’s picks for the 5x5x5 Russo Student Investment Fund. Joining me today is Tom Russo, who designed and funded this first-ever student investment fund at Columbia Business School in 2014, and students James Shen and Freda Zhuo, whose portfolio picks have performed particularly well. The 5x5x5 fund is run by the students of the Value Investing course at Columbia Business School, with ideas being submitted by the students each year. Five students are selected with five ideas that will be held in their entirety for five years. At the end of five years, the inflation-adjusted original amount is invested back into the fund and any other gains will be used to support scholarships for traditionally under-represented members of the class. As we enter year six of the fund, we’re taking a deeper look at the performance of the fund. On this episode, Tom, James, Freda and I discuss how the 5x5x5 fund is more valuable than others, why James and Freda selected the particular companies for investment, what they have learned since investing in those companies, overall observations of the past 5 years of the fund, and so much more!   Key Topics: Why the 5x5x5 fund is more valuable than other student-run funds (1:35) The higher purpose of the fund (2:42) How Nuance Communications attracted James’ attention (3:41) What James learned from his initial research into Nuance (4:43) The changes James has seen in the months since the initial investment was made (5:57) Why investors should be on the lookout for companies making the transition to cloud-based software (6:42) Getting comfortable with a long investment horizon (8:16) Nuance’s competitive advantages over new players entering the market (9:24) Why Freda became interested in investing in Aon PLC (11:09) What Freda has learned about Aon since investing (12:12) How Freda maintained confidence in Aon despite the hit caused by COVID-19 (13:05) Significant developments in the insurance industry due to COVID-19 (14:32) Aon’s risk management advantage (17:58) Why Aon’s customer-centric model gives them an extra edge in client retention (20:28) How Aon mitigates disintermediation risk (23:00) Using new technology as an advantage for Nuance communications (25:49) How Aon covers risks internally (28:15) The redistributive nature of the shock caused by the pandemic (31:57) Observations from the past five years of the 5x5x5 fund (33:09) What to consider when constructing a resilient portfolio (36:22) Tom’s review of the fund and participants (40:47) And much more!  Mentioned in this Episode: 5x5x5 Student Investment Fund James Shen’s Write-Up of Nuance Communications Freda Zhuo's Write-Up of Aon Plc  Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Today’s conversation is with Kim Shannon President and Co-Chief Investment Officer at Sionna Investment Managers. Kim founded Sionna Investment Managers in 2002 and has more than 35 years of industry experience, and previously served as the Chief Investment Officer and Senior Vice President at Merrill Lynch Investment Managers Canada. Kim is also a board member with the Canadian Coalition for Good Governance, the author of The Value Proposition: Sionna's Common Sense Path to Investment Success, and the recipient of numerous awards, including Morningstar Fund Manager of the Year (2005). I've been looking forward to meeting Kim for quite a while and I finally had the opportunity to do so recently at a panel that we did during the last Berkshire shareholder meeting. Kim has had a fascinating career so far, with a unique perspective as a rare woman in the asset management industry. Near the end of her undergrad degree in science, Kim had an opportunity that showed her a new side to a career in business. That realization set her on an entirely new path toward the investment industry, where she worked her way from the very bottom to top positions at Merrill Lynch Investment Managers, eventually opening her own firm. On this episode, Kim and I discuss why she became a believer in value investing, the importance of mentorship for building your reputation and career, her approach to portfolio construction and investment philosophy, and so much more!   Key Topics: Kim’s journey from a degree in science to a corporate career in the investment world (2:50) Why Kim became a believer in value investing (4:23) The value of viewing business as more than the profit motive (5:42) How worked her way up from the bottom at Royal and Sun Alliance to being pursued by Merrill (7:02) The state of the asset management industry for women in the early 1980s (11:02) How mentorship helped Kim build her reputation and career (11:36) Why the meritocracy of the asset management industry is beneficial for women (13:00) The deteriorating situation for women in the asset management industry (14:49) Shocking statistics for women in leadership positions in the industry (16:04) The mission of Variant Perspectives (16:41) The principles Kim has built into Sionna’s investment approach (19:11) Kim’s approach to search, using a quant model as the first step (23:28) How Kim’s team performs fundamental analyses on potential investments (27:57) How knowledge analysis is structured at Sionna (30:20) Why being a specialist can increase your biases (31:32) Sionna’s perspective on assessing relative value (32:37) The importance of the financial services sector (34:04) The unique aspects of value investing in the Canadian market (35:08) How Kim thinks about sizing positions and risk management (39:17) The three main reasons to exit (41:13) Why this down market is unique (45:03) The Canadian market opportunity which has opened up (47:30) Analyzing the current crisis from the perspectives of big tech and energy (49:04) The problem with over-anticipating the next move in the market (50:09) Why you need to understand financial history (51:18) Getting curious about what happens when value underperforms growth (52:56) Why Kim thinks this is one of the best times to buy value (56:47) The tricky balance between the success of passive investing and the need for active managers (58:54) And much more!   Mentioned in this Episode: Kim Shannon’s Book | The Value Proposition: Sionna's Common Sense Path to Investment Success Sionna Investment Managers Variant Perspectives Sionna Article | Waiting For   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Today’s conversation is with Dan Davidowitz and Jeff Mueller of Polen Capital, which is a firm that is dedicated to researching and analyzing the highest-quality companies around the globe and investing for the long haul and with a business owner’s mindset. Dan is the co-head of the Large Company Growth Team and the lead portfolio manager of the firm’s flagship Focus Growth strategy. Jeff is co-portfolio manager of the Global Growth strategy and earned his MBA from Columbia Business School, where he was a graduate with honors and distinction of the Value Investing Program. This episode is our third recording since the coronavirus health crisis, and we have kept doing it remotely. Since Spring Break, Columbia Business School has gone fully online and I am absolutely in awe of how the school has been able to pivot to this new format almost seamlessly and we owe this to the terrific people who have been working tirelessly throughout this challenging period and who deserve all our appreciation. My goal with these episodes is to bring guests on who can help us navigate the investment environment and the enormous uncertainty surrounding the economic impact of the virus, which in my opinion is far from clear. I believe our listeners should be focusing on a rigorous, bottom-up approach or on funds that practice a bottom-up approach that is resilient to a variety of scenarios. Thus far the economic impact is probably a bit under-estimated, but it affects different sectors differently and thus the opportunity to build a resilient portfolio is there. On this episode, Dan, Jeff and I discuss how they developed their investment philosophies, what value means in today’s market environment, what you need to know about investing in compounders, the value of guardrails, and so much more!   Key Topics: The impact of the current coronavirus pandemic on life at Columbia University (1:02) How Dan found an interest in business and finance while pursuing studies in Public Health (6:13) What Dan’s first buy-side job taught him about value investing (7:54) Why frustration led Dan to learn more about the modern approach to value investing (9:00) Polen’s compounder approach to value investing (9:42) The importance of being with an organization whose approach aligns with your investment philosophy (11:07) How the events of September 11, 2001 re-routed Jeff’s career (12:15) Why Jeff set himself the goal of attending Columbia University (13:02) Jeff’s philosophy on wealth generation and investment (14:24) The evolution of the US financial markets since Graham’s first writings (15:20) What does value mean today (21:00) The key elements to consider when analyzing compounders (24:32) Why Polen doesn’t seek new investment opportunities based on economic trends (29:53) Polen’s approach to quality analysis of potential investments (34:57) Investing within a small pool of potential companies (40:22) The never-ending quest for knowledge (42:51) What moat attacks reveal about barriers to entry (44:53) Polen’s perspective on building resilient portfolios (50:07) How the Polen Focus Growth portfolio has been adjusted in light of the coronavirus crisis (54:57) The importance of Polen’s guardrails (57:44) The changes to the Polen Global Growth portfolio in the current crisis (59:25) Dan and Jeff’s outlook for the future of value investing (1:02:08) And much more!  Mentioned in this Episode: Polen Capital Value Investing with Legends Season 3, Episode 4 | C.T. Fitzpatrick - Value Investing in Times of Deep Distress  Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Today’s conversation is with C.T. Fitzpatrick, Founder, Chief Executive Officer, Chief Investment Officer at Vulcan Value Partners. C.T. founded Vulcan in 2007 and since then, all five strategies have peer rankings in the top 1% of value managers in their respective categories. Before starting Vulcan Value Partners, C.T. worked as a principal and portfolio manager at Southeastern Asset Management and over his 17-year tenure, his team achieved double-digit returns and was ranked in the top 5% of money managers over five, ten, and twenty-year periods consistently. We’re again taking a different approach to this episode of the podcast. The health crisis has worsened significantly since our last episode and though there has been some stabilization in valuations, the market’s fragility is still apparent as the uncertainty about the extent of the economic shutdown and the long-run impact of the crisis remains. In light of the extraordinary circumstances we find ourselves in, I couldn’t think of anyone better to talk about investing in the current environment than C.T. Fitzpatrick, with the benefit of his more than 30 years of experience in financial markets. On this episode, CT and I discuss how Vulcan has improved their portfolio over the past few weeks, why it’s critical to stress-test your portfolio, how this crisis will accelerate the demise of certain industries while benefitting other companies, the parallels between the global financial crisis in 2008-2009 and the current market behavior, and so much more!   Key Topics: Using your investment horizon as your main risk management tool (3:57) Why Vulcan prioritizes value stability over discount (6:32) How Vulcan has improved its portfolio over the past few weeks (7:28) What it means to stress-test your portfolio (8:14) Why thorough analysis is critical in light of this extraordinary event (8:46) The benefit of a strong balance sheet for weathering this crisis (11:22) Vulcan’s approach to different asset classes (12:58) The strategy behind concentrating portfolios in periods of volatility (15:13) Why CT considers the margin of safety to be the most important risk metric (18:01) How the crisis will accelerate the demise of certain industries (19:44) The evolution of the airline industry and its weaknesses during this crisis (21:24) Companies that will benefit from the behavior changes triggered by lockdowns and quarantines (22:58) The parallels between the global financial crisis in 2008-2009 and the current market behavior (25:17) How the political climate has colored policymakers’ response to market volatility (28:16) A key difference between the global financial crisis and the current crisis caused by the pandemic (29:52) Analyzing potential scenarios and outcomes for companies (33:45) Why you need to monitor the economies in countries which are at a more advanced stage of the pandemic (35:48) The Vulcan investment philosophy (37:26) How CT analyzes a company’s valuation (40:10) The importance of value stability (41:47) Why CT believes value investing is here to stay for the long term (43:23) And much more!   Mentioned in this Episode: Vulcan Value Partners   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Today’s conversation is with Michael Mauboussin, Head of Consilient Research at Counterpoint Global. Before joining Counterpoint Global, Michael was the Director of Research at BlueMountain Capital Management in New York and previously the Head of Global Financial Strategies at Credit Suisse and Chief Investment Strategist at Legg Mason Capital Management. Michael has also authored several books and has been an adjunct professor of finance at Columbia Business School since 1993, where he is on the faculty of the Heilbrunn Center for Graham and Dodd Investing. As of this recording, the university campus is quiet and empty, with classes moving online for the spring semester. Of course, this is due to the coronavirus global pandemic which hit the world quite suddenly and has required extreme public health measures. The markets have responded as expected to the crisis and the economy is in a tailspin. In light of all of this, I wanted to take a slightly different approach to today’s episode and have a discussion about not only how to think about markets, but also the psychological stress caused by the crisis. For that, I couldn’t think of anyone better than our first repeat guest, Michael Mauboussin. On this episode, Michael and I talk about the debate on the economic impact of the coronavirus pandemic, the argument for the centralized implementation of public health solutions, using the expectations infrastructure to analyze companies, how stress affects investment decisions, how risk attitudes are shaped by loss and crisis, and so much more!   Key Topics: The two main sides of the debate on the economic impact of coronavirus (5:11) What pandemics and wars in the past demonstrate about the resilience of the economy (7:14) How Michael believes the economic impact of coronavirus will compare to previous world wars and pandemics (8:48) Why the response to the coronavirus crisis has been so different in Asia, Europe and the US (12:05) The argument for the centralized implementation of public health solutions (14:57) Framing the current crisis as an externality (16:21) Our theories about the sharp correction in equity prices (18:15) Will the current crisis measures result in long-term changes to our collective behavior? (20:03) The consistency of the underlying reality of financial markets (21:38) Assessing the effect of increasing concentration (24:11) Why it’s so important to have a protocol in place for tackling the crisis (26:30) Using the expectations infrastructure to analyze companies (30:37) Measuring volatility as an indicator of risk in the short-term (35:01) Why psychological stress can have a bigger impact than physical stress (38:07) The conditions for psychological stress (38:44) How stress affects investment decisions (39:24) The interaction between psychological and agency issues during periods of massive uncertainty (40:28) How to reduce the stresses of social isolation during the coronavirus crisis (42:51) Teaching without in-person classes (45:04) What is myopic loss aversion? (46:42) How risk attitudes are shaped by loss and crisis (47:44) And much more! Mentioned in this Episode: Michael Mauboussin’s Website Michael Mauboussin’s Books Michael Mauboussin and Alfred Rappaport’s Book | Expectations Investing: Reading Stock Prices for Better Returns Tyler Cowen’s Bloomberg Article | Bill Gates Is Really Worried About the Coronavirus. Here’s Why. Mancur Olson’s Book | The Logic of Collective Action: Public Goods and the Theory of Groups   Thomas Philippon’s Book | The Great Reversal: How America Gave Up on Free Markets     Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!