Michael Mauboussin, the director of research at BlueMountain Capital Management (BlueMountain), has recently published some of his foundational work on how to compare effectively. It’s a pretty interesting read. Here is a brief excerpt from the introduction by Andrew Feldstein, BlueMountain’s chief investment officer: “we are in the business of making comparisons. If we want to generate alpha, then every single investment decision comes down to how that investment compares to an alternative. But what alternative should we use to compare? What is the best analog?” He further notes that “comparing is hard work. It requires a lot of thought, discipline, and creativity. It’s a skill we (at BlueMountain) constantly seek to hone.”