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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[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