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]… — 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
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
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
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
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
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
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
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
![“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/i/a6c/michael-mauboussin-45403_ability_at-the-core-of-an-analytical-edge-is-an_2861636.jpg)