Odinian Beta

My guest this week is Michael Mauboussin. Many of you will know Michael and his work well. He’s Head of Consilient Research at Counterpoint Global, one of the sharpest investment minds I know, and a frequent guest on this 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. Please enjoy this great conversation with my friend Michael Mauboussin.
 
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Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.
 
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Show Notes
[00:03:46] – [First question] – Overview of Michael’s recent research on market share
[00:05:48] – Market share dynamics in modern history
[00:08:43] – How market share data is useful for investors
[00:12:30] – Investing in early breakout companies from low-concentration markets
[00:14:34] – Surprises from his recent research project
[00:15:29] – Using the value stick for stakeholder satisfaction
[00:19:12] – Examples of value creation using the value stick
[00:23:33] – Market power in relation to markups and willingness to pay
[00:32:00] – Identifying a company’s real ROIC numbers
[00:44:00] – How important absolute ROIC is when picking investments
[00:47:07] – Research on capital generation and allocation trends
[00:54:25] – Characteristics of great capital allocation strategies
[00:59:26] – Surprises in the market since his deep-dive research
[01:02:54] – Artificial intelligence and other sources of disruptive innovation