More Than you Know: Michael Mauboussin

Not the best book I’ve ever read. Not terrible either. Mauboussin is an experienced and creative thinking investor with a number of great insights – I’ve listed a few below. I just didn’t really get into the book and it took a while to read so there wasn’t much enjoyment.


Investing is more about temperament than intelligence. Once you’ve established a foundation, learning, hard work, focus, patience and experience get you over the line.

You’ll be a better investor if you approach problems with a multi-disciplinary perspective.

Don’t assess investment outcomes, asses the decision-making process. Good decisions can result in bad outcomes and bad decisions can result in good outcomes. Good decisions are a matter of weighing probabilities. Uncertainty always exists.

Part of the problem with active managers is navigating the shift from investment profession to an investment management business, where the focus changes from long-term investment returns to generating earnings. Maximising the business value involves; more relationship managers because retention boosts profits, cross-selling products, developing a brand, expanding into new markets, strong relations with investment consultants, growing products lines to diversify revenue streams and sticking close to the index in order to reduce business risk. Most of these goals compromise investment returns, making it difficult to beat the market.

Babe Ruth effect: win big when you win and you don’t need to be right all of the time.
Past averages are only relevant if they capture current circumstances.

We need to be aware of our need, as humans, to explain all outcomes, to rationalise. Awareness of this need can be an inoculation against making mistakes. Investors who insist on understanding the causes for market moves risk focusing on faulty causality or inappropriately anchoring on false explanations. Complex adaptive systems don’t accommodate cause and effect calculations at every turn.

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