Michael Mauboussin - Sharpening Investor & Executive Toolkits

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money.
Invest Like the Best is part of the Colossus family of podcasts and you can access all our podcasts, including edited transcripts, show notes and other resources to keep learning at joincolossus.com.

**SPEAKER_2** (1:42)
Patrick O'Shaughnessy is the CEO and founding partner of Positive Sum and the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum or O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of Positive Sum or O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:16)
Many of you will know Michael and his work well. He's the head of Consilient Research at Counterpoint Global and one of the sharpest investment minds I know and a frequent guest on the show. In this discussion, we go deep into his recent work on market share, returns on capital and capital allocation, all of which are coming under increasing scrutiny for different reasons. Before we transition to the episode, I want to highlight the Founders Podcast, which is part of our Colossus Network. David Senra, who hosts Founders, has devoted his life to learning from history's greatest entrepreneurs and every week he distills the lessons of a different founder. If you want an entry point, I highly recommend starting with episode 136 on Estee Lauder. I hosted David on Invest Like the Best this summer and it's hard not to walk away insanely energized after listening to any episode with him. You can find a link to Founders and that episode in the show notes of this conversation. And you can search all past transcripts on our website, joincolossus.com.
Please enjoy this great conversation with my friend, Michael Mauboussin.
So Michael, if you can believe it, it's actually been almost two and a half years since you and I last did this. I think this will put you back on top as the all-time guest leader for Invest Like the Best, beating out our good friend, Bill Gurley, who I think currently has the title.
And it's a good occasion to do it because you have had, from what I can remember, the most prolific research publishing period, I don't know, of your life or something, in the last three months, putting out huge, huge reports on big central issues for business and investing. So really excited to do this with you today. We've got a lot to choose from, but I think the one that I'd love to begin with is the research that you've done recently on market share. And the reason I'm picking that is there's a lot of new stuff in there, especially around markups, which I'll have you explain. But I think it's a great entree into strategy and into some really helpful ideas for business leaders and for investors that are investigating business strategy inside companies they invest in. So maybe you can begin there with your motivations. Why did you choose to do such an exhaustive deep dive into the dynamics of market share? And then we'll start to pick apart some of the lessons that you learned.