Why Do Companies Die? Value Creation in Public Equity Markets - Michael Mauboussin (Morgan Stanley)

In his report ‘Birth, Death, and Wealth Creation’, Michael Mauboussin observes and then claims that corporations are surviving longer and winning more.
This week, we welcome Michael Mauboussin, Head of Consilient Research at Counterpoint Global, Morgan Stanley Investment Management, to discuss the unique patterns of wealth creation in public equity markets.
After explaining the similarities between ice hockey and investing, Michael discusses why corporate ‘death rate’ is higher than firms’ ‘birth rates. He describes why firms are increasingly choosing forgo IPOs, opting to stay private for longer.
He also covers Hendrick Bessembinder’s theory of wealth destruction, the distinction between value investing and value factors, and why investors may want to look beyond the headlines when it comes to tech.
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Michael Mauboussin was interviewed by Simon Brewer at the Quality-Growth Investor Conference in London. The next in-person event to be held by the organizers of the conference will be Value Invest New York on December 12. Use this link and enter “MONEYMAZE_VINY” at checkout to enjoy a 40% discount on tickets (worth $600; offer valid until 30th November 2023).
Subscribe to stay up to date with our range of fascinating interviews, featuring some of the biggest names in global finance and business!
TOPICS:
00:00:00 - Intro and Guest Background
00:03:19 - Birth, Death and Wealth Creation
00:05:20 - Goliath's Triumph - The Listing Gap
00:08:31 - Value Creation: Private Versus Public
00:10:21 - Aggregate Wealth Creation in US Public Markets - Hendrick Bessembinder
00:13:49 - Power Laws - Gibrat and Zipf
00:15:33 - Value Investing Versus The Value Factor
00:16:32 - Superstar Firms
00:19:02 - Outro
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All content on the Money Maze Podcast is for your general information and use only and is not intended to address your particular requirements. In particular, the content does not constitute any form of advice, recommendation, representation, endorsement or arrangement and is not intended to be relied upon by users in making (or refraining from making) any specific investment or other decisions. Guests and presenters may have positions in any of the investments discussed.