Micheal Mauboussin’s 10 attributes of great Fundamental Investors

Michael was Head of Global Financial Strategies at Credit Suisse and Chief Investment Strategist at Legg Mason Capital Management. Michael originally joined CS in 1992 as a packaged food industry analyst and was named Chief U.S. Investment Strategist in 1999. He is a former president of the Consumer Analyst Group of New York and was repeatedly named to Institutional Investor’s All-America Research Team and The Wall Street Journal All-Star survey in the food industry group.

  1. Be numerate (and understand accounting)
  2. Understand Value (the present value of Free cash flow)
  3. Properly assess strategy (or how a business makes money)
  4. Compare effectively (expectations vs fundamentals)
  5. Think probabilistically (there are a few sure things)
  6. Update your views effectively (beliefs are hypotheses to be tested, not treasures to be protected)
  7. Beware of behavioral biases (minimizing constraints to good thinking)
  8. Know the difference between information and influence
  9. Position sizing (maximising the payoff from edge)
  10. Read (and keep an open mind)

Micheal has done an amazing study on measuring the moat in a business. Folks interested in investing and knowing more about businesses and their competitive advantage should read this 70 page study – Link

Happy Reading!


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