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