659 Michael Mauboussin — How Great Investors Make Decisions, Harnessing The Wisdom (vs. Madness) of Crowds, Lessons from Race Horses, and More

This is a Google Bard AI summary of the Tim Ferriss Podcast #659- visit www.TinyTim.blog for more AI summaries, or www.Tim.blog for the official Tim Ferriss Podcasts.

In this talk, Michael Mauboussin discusses the psychology of investing. He covers topics such as how great investors make decisions, how to harness the wisdom of crowds, and how to avoid the pitfalls of herd behavior.

**How Great Investors Make Decisions**

Mauboussin argues that great investors are not necessarily smarter than everyone else. Instead, they are better at making decisions. They do this by being disciplined, by thinking probabilistically, and by being aware of their own biases.

**Harnessing the Wisdom of Crowds**

Mauboussin argues that crowds can be wise, but only if they are diverse and well-informed. When crowds are not diverse or well-informed, they can make poor decisions.

**Lessons from Race Horses**

Mauboussin discusses the lessons that can be learned from race horses. He argues that race horses are a good proxy for stocks because they are both subject to the whims of the market. He argues that investors can learn a lot by studying how race horses are priced.

**Key Points**

* Great investors are not necessarily smarter than everyone else. They are better at making decisions.
* Crowds can be wise, but only if they are diverse and well-informed.
* Investors can learn a lot by studying how race horses are priced.

**Conclusion**

Mauboussin's talk provides a comprehensive overview of the psychology of investing. He covers a wide range of topics, including how great investors make decisions, how to harness the wisdom of crowds, and how to avoid the pitfalls of herd behavior.

If you are interested in investing, I highly recommend watching Mauboussin's talk. It is packed with valuable information that can help you make better investment decisions.

Here are some additional key points from the talk:

* Investors should focus on the long term and avoid trying to time the market.
* Investors should invest in companies that have a competitive advantage and are well-managed.
* Investors should diversify their portfolios to reduce risk.
* Investors should rebalance their portfolios regularly to keep them aligned with their goals.
* Investors should not panic sell during market downturns.
* Investors should be patient and let their investments compound over time.

659) https://tim.blog/2023/03/03/michael-mauboussin/