The Five Behavioral Mistakes Investors Make

Featuring Michael Mauboussin

Michael Mauboussin, director of research at BlueMountain Capital Management, discusses the five most common behavioral mistakes he sees investors make. He explains what scientific research can teach us about investor behavior, and discusses how the types of mistakes made can shift over the course of an economic and market cycle. With this background set, Mauboussin provides tips for plugging one’s behavioral leaks. Finally, he explains how one might be able to make better decisions by anticipating the mistakes of others. Filmed on January 25, 2018 in New York.

Published on
12 September, 2018
Valuation, Investment Framework, Portfolio Management
25 minutes


  • TT

    Trenton T.

    26 10 2018 02:14

    0       0

    This could be the most thoroughly rational piece I've seen yet on RV. Well done. I've lived in the PE world since 2007 and the process is absolutely applicable.

  • AC

    Andrew C.

    16 9 2018 02:47

    3       3

    That "blow out your headphones" music is back.... Thanks, RVTV. The people in the coffee shop missed me screaming and throwing down my iPad and ripping out my EarPods in a painful outburst - arrgghhh!

  • CJ

    Coen J.

    15 9 2018 21:10

    1       0

    This guy gets an A for pedagogy. A most useful piece. Thank you.

  • SB

    Stewart B.

    15 9 2018 08:48

    1       0

    Excellent. A really clear and well structured presentation on behavioural finance.

  • CH

    Colin H.

    13 9 2018 06:19

    2       0

    it might be an idea to put a share button on here somewhere so you can post an excerpt to twitter

  • CH

    Colin H.

    13 9 2018 06:16

    2       0

    Clever shit

  • MS

    Mitchell S.

    12 9 2018 23:45

    12       0

    Phenomenal. Concise, well articulated, insightful.

  • DS

    David S.

    12 9 2018 21:51

    2       1

    When you combine the MACHINE LEARNING REVOLUTION interview and the FIVE BEHAVIORAL MISTAKES INVESTORS MAKE interview, you see how powerful Dr. Villani’s machines are. I believe it is the combination of machine learning with market acumen that will provide the edge. Just like having a pilot in the plane when it is on autopilot, it is the combination that will work. Very few people will have both of those skill sets. DLS

  • RM

    Robert M.

    12 9 2018 20:35

    4       0

    It's sobering (being a macro gadfly myself) to hear another investing legend in addition to Buffett say macro is generally beyond their abilities. One of the points made in Superforecasting by Tetlock which expands on many of Michael's points is the primary importance of choosing the most predictable problems on which to focus your forecasting energies. Obviously Michael and Warren have decided that starting point should be narrowed down to bets on companies with a 10yr track record of stable and high ROE, entered with a margin of safety, without leverage, as part of a portfolio, held through drawdowns as long as the thesis is intact, and perhaps reweighted when over valued.

  • rr

    rlw r.

    12 9 2018 16:56

    5       0

    Super critical content really well delivered. Kudos Michael & RV.

  • CS

    Christopher S.

    12 9 2018 14:13

    10       1

    I'd say if you take most people, their real issue is being too risk averse than being too gung ho and risk taking. I recently went round asking just about everyone I know: "If I offer you a 10/1 payout on a coin flip, how much over your net worth would you bet?" And very few people replied any kind of acceptable amount, many people even said "Nothing, I don't gamble." I found the whole thing rather depressing, evidence that I need to surround myself with better people.

    Over the course of a life, a career, you need to actually play a hand. Just make sure you're still standing to play the next one too.

  • TE

    Tito E.

    12 9 2018 13:35

    4       0

    Decision don

  • SW

    Scott W.

    12 9 2018 13:00

    5       0

    This was great! Thank you Michael and RV!

  • AL

    Andrew L.

    12 9 2018 10:11

    14       0

    This is gold. We all need a concrete process to help us mitigate these problems. Journaling is a great start.