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Michael Mauboussin currently is the Director of Research at BlueMountain Capital, a multi-billion dollar hedge fund and asset manager.\\xa0 He spent the majority of his professional career thinking and writing about decision making, behavior and complex systems, with long stints at Credit Suisse and nearly a decade alongside Bill Miller at Legg Mason.\\xa0 Michael has been an Adjust Professor at Columbia Business School for 24 years.

Our conversation covers Michael\\u2019s early career, the paradox of skill, academic research more favorable to active management, decision-making, optimal size and composition of teams, unsettling features in the market, data analysis in sports, career risk, the Santa Fe Institute, and Michael\\u2019s new research on the horizon.

Every time I speak to Michael I come away thinking better and feeling smarter, and this time was no exception.

For more episodes go to\\xa0CapitalAllocatorsPodcast.com/Podcast

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Show Notes

1:48 - What was Michael like as a kid

2:26 \\u2013 How Michael found his way to Wall Street

6:18 \\u2013 His start as an analyst in consumer and packaged goods

7:52 \\u2013 Why there are no .400 hitters in active management and the paradox of skill

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 8:15 \\u2013 Full House: The Spread of Excellence from Plato to Darwin

14:26 \\u2013 Why have there been massive flows into index funds over the last 3-4 years

15:44 \\u2013 Academic research supporting active management

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 16:09 \\u2013 Mutual Fund Flows and Performance in Rational Markets

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 16:25 - On the Impossibility of Informationally Efficient Markets

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 22:52 - Indexing and Active Fund Management: International Evidence

23:12 \\u2013 Do these trends also apply in global markets

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 24:01 - The Mutual Fund Industry Worldwide: Explicit and Closet Indexing, Fees, and Performance

25:22 \\u2013 What has Michael discovered in his new role at Blue Mountain through his new credit lens

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 27:49 \\u2013 Amazon, the world\\u2019s most remarkable firm, is just getting started

30:02 \\u2013 What are some of the lenses that Michael uses when dealing with allocators

35:02 \\u2013 How does Michael go about interviewing for a team while taking into account their biases

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 36:19 \\u2013 The Rationality Quotient: Toward a Test of Rational Thinking

36:37 \\u2013 Biggest risks in the markets today

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 37:31 \\u2013 Banks to Funds: Have Some Leverage With That Deal

39:45 \\u2013 Liquidity in the markets

41:26 \\u2013 What\\u2019s most interesting to Michael about the merging of data and sports

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 41:34 \\u2013 The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 43:42 \\u2013 Big Data Baseball: Math, Miracles, and the End of a 20-Year Losing Streak

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 44:32 \\u2013 Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won

45:57 \\u2013 Psychological bias in sports

\\xa046:16 - Malcom Gladwell Podcast: The Big Man Can\'t Shoot

47:23 \\u2013 Psychological bias in investment management

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 47:40 \\u2013 Scott Malpass on Capital Allocators

48:44 \\u2013 Michael\\u2019s work with the Santa Fe institute

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 53:08 \\u2013 Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies

54:40 \\u2013 Next big piece of research Michael is working on

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 57:53 \\u2013 The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction

57:59 \\u2013 Should Michael be using his skills elsewhere in the context of a world where so many advocate for just indexing

\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0\\xa0 1:01:36 \\u2013 Charley Ellis on Capital Allocators

1:02:31 \\u2013 CLOSING QUESTIONS