The Success Equation: An Interview with Michael Mauboussin via StartUpTown
We are conducting interviews for our upcoming documentary addressing inequity called I Could Be….
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York Capital Management has decided to focus on longer-duration assets like private equity, private debt and collateralized loan obligations. The firm also plans to wind down its European hedge funds and spin out its Asian fund. Q3 2020 hedge fund letters, conferences and more York announces structural and operational changes York Chairman and CEO Jamie Read More
Michael Mauboussin is the author of The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing (Harvard Business Review Press, 2012), Think Twice: Harnessing the Power of Counterintuition (Harvard Business Press, 2009) and More Than You Know: Finding Financial Wisdom in Unconventional Places-Updated and Expanded (New York: Columbia Business School Publishing, 2008). More Than You Know was named one of “The 100 Best Business Books of All Time” by 800-CEO-READ, one of the best business books by BusinessWeek (2006) and best economics book by Strategy+Business (2006). He is also co-author, with Alfred Rappaport, of Expectations Investing: Reading Stock Prices for Better Returns (Harvard Business School Press, 2001).
Visit his site at: michaelmauboussin.com/
Q: In your paper “Lessons from Freestyle Chess: Merging Fundamental and Quantitative Analysis,” you “explore the applicability of freestyle chess to the world of investing, where fundamental analysts are ‘man’ and quantitative analysts are ‘machine.’” First, what is freestyle chess?
A: A chess match normally pits a person against another person. In freestyle chess, each player can use whatever aids they want to augment performance. Generally, the most common aid is chess-playing computer software, but you can tap other players to help you as well. So the idea is that you augment your own cognitive abilities by whatever means you can.
Q: What is fundamental analysis?
A: In fundamental analysis, an individual seeks to determine whether a stock (or bond, or other asset) is attractive by analyzing the so-called “fundamentals.” These fundamentals include the company’s growth prospects, position in its industry, profitability, valuation, and the quality of management. It is common for fundamental analysts to use their judgment in these assessments.
Warren Buffett, the CEO of Berkshire Hathaway and one of the richest people in the world, is probably the most famous fundamental investor.
Q: What is quantitative analysis?
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