Summary

The reference has not verified this book in detail; the summary states only what the title, author and subject establish.

Michael Mauboussin has written extensively on decision-making in investing, on the interaction of skill and luck, on expectations investing and on the base rates that should discipline forecasts, in books including More Than You Know, Think Twice and The Success Equation, and in research published at Credit Suisse and Morgan Stanley.

The reference has not verified the contents of this particular book. Its subject and author are established by the title and by Mauboussin's publication record, and this entry does not assert more. Readers should go to the book itself for its argument, and can find Mauboussin's established positions in his earlier work and in his published research notes.

Key takeaways 6

Mauboussin's established work argues that skill and luck contribute to outcomes in proportions that differ by activity and that investing sits far toward the luck end.
The paradox of skill holds that as participants become more uniformly skilled, outcomes depend increasingly on chance.
Base rates from comparable situations discipline forecasts better than detailed analysis of the specific case.
Expectations investing asks what a share price implies about future performance rather than forecasting that performance independently.
Process rather than outcome is the correct basis for evaluating a decision in an environment with substantial randomness.
The reference has not verified this book's specific contents, and this entry describes the author's established positions instead.

Who should read it

Investors interested in decision quality and in Mauboussin's work, with the caveat that this entry is not a verified reading of this particular book.

About Michael Mauboussin

Head of Consilient Research, Counterpoint Global, Morgan Stanley Investment Management; previously Chief Investment Strategist at Legg Mason and Chief U.S. Investment Strategist at Credit Suisse

His research reports and Expectations Investing are primary sources that other investors, academics and strategists build directly on.

Counterpoint Global, Legg Mason, Credit Suisse

Michael Mauboussin’s page →Counterpoint Global →Legg Mason →Credit Suisse →