February 17, 2017· 30 min

How Poker Explains the Battle of Passive and Active Investing

Michael Mauboussin

Orality

Model

89%

Highly oral (epic poetry, sermons, hip-hop)

Speaker Breakdown

HostJoe Weisenthal(682 words)

M:93%

HostTracy Alloway(834 words)

M:29%

GuestMichael Mauboussin(4,087 words)

M:94%

Oral Indicators

Agonistic37%

huge, very, amazing

Engagement63%

you, our, your

Memory Aids100%

listen, so, like

Repetition100%

it's (67x), right (53x), about (46x)

Parallelism100%

And I'm Jill Weisenthal...., So, Joe, every once in a while..., And every time, I usually mana...

Sound Patterns100%

72 question(s), alliteration: "markets move", alliteration: "barclays brief"

Formulaic Phrases7%

you know what, i mean

Literate Indicators

Hedging16%

may, quite, maybe

Passive Voice3%

be indexed, be expressed, is when

Abstract Nouns24%

investment, business, chase.com/business

Subordination7%

while, because, though

Sentence Length31%

Avg: 12.8 words/sentence

Word Complexity48%

investment, analyze, anticipate

Academic Markers0%

Impersonal Style37%

379 personal pronouns found

Descriptive Style96%

apply, usually, really

Description

Among the biggest trends in the world of markets is the rise of passive investing. Rather than pay high fees to active mutual fund managers (who often fail to beat the market), people are pouring money into passive strategies that track major indices, but with little cost. So what are the ramifications of this trend for investors who choose to remain active? On this week's Odd Lots podcast, we speak with Michael Mauboussin, who heads global financial strategies at Credit Suisse and is not just an expert on the world of investing, but also on the role of luck in success. As he sees it, trading is like a game of poker, and in poker you want to play against weaker, less-skilled players. But as more and more of those less-skilled players opt not to trade (choosing passive strategies) then the game gets harder. See omnystudio.com/listener for privacy information.

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