People are, by and large, quite poor at judging correct absolute values but are astute about determining relative values. Psychologists call this coherent arbitrariness, which suggests that individuals are coherent when they compare prices on a relative basis but arbitrary… — Michael Mauboussin Copy Share Image
Edge also implies what Ben Graham…called a margin of safety. You have a margin of safety when you buy an asset at a price… — Michael Mauboussin Copy Share Image
Humans have a strong desire to be part of a group. That desire makes us susceptible to fads, fashions, and idea contagions. — Michael Mauboussin Copy Share Image
A thoughtful investment process contemplates both probability and payoffs and carefully considers where the consensus - as revealed by a price - may be… — Michael Mauboussin Copy Share Image
Onlookers frequently confuse edge with style...Edge means generating excess returns because of mispricing. Style suggests being in the right place at the right time.… — Michael Mauboussin Copy Share Image
We have no control over outcomes, but we can control the process. Of course, outcomes matter, but by focusing our attention on process, we… — Michael Mauboussin Copy Share Image
Emphasising what's in your control allows you to adopt an attitude of equanimity toward luck. You've done what you can, and from there you… — Michael Mauboussin Copy Share Image
People are, by and large, quite poor at judging correct absolute values but are astute about determining relative values. Psychologists call this coherent arbitrariness,… — Michael Mauboussin Copy Share Image
At the core of an analytical edge is an ability to systematically distinguish between fundamentals and expectations. Fundamentals are a well thought out distribution… — Michael Mauboussin Copy Share Image
![“At the core of an analytical edge is an ability to systematically distinguish between fundamentals and expectations. Fundamentals are a well thought out distribution of outcomes, and expectations are what's priced into an asset. A power metaphor is the [pari-mutuel] racetrack. The fundamentals are…” quote by Michael Mauboussin](https://sms4smile.com/quotes/img-quotes/a6c/michael-mauboussin-45403_ability_at-the-core-of-an-analytical-edge-is-an_2861636.jpg)