My guest today is Michael Mauboussin, an author ("More Than You Know", "Think Twice: Harnessing the Power of Counterintuition"), investment strategist in the financial services industry, professor at the Columbia Graduate School of Business, and board of trustees at the Santa Fe Institute (an independent, nonprofit theoretical research institute).
The topic is his book The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing.
In this episode of Trend Following Radio we discuss:
- Luck and skill, how they cross over and play off each other, and how both of those factors have played a part in both Covel and Mauboussin's careers
- How Mauboussin came to start working on "The Success Equation"
- How losing on purpose can define skill
- How sports can provide great examples of what Mauboussin contends regarding skill and luck
- The human desire and emotional need to tell stories, and how that plays into peoples' difficulty untangling skill and luck
- Stephen Jay Gould's notion of the .400 hitter in baseball and the paradox of skill
- Physical limits and improvement in skill over time
- Sample size issues
- Process vs. outcome
- What to do when you're the underdog and how complicating the situation can help when you're in that position
- Improving your guesswork on where you are in the luck-skill continuum
- Persistence and predictive value
- Building skill
Jump in!
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I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.
To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/
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