Professor Paul Johnson is a 30-year veteran in investment management and an Adjunct Professor at Columbia Business School since 1992.  He heads Nicusa Investment Advisor, an advisory firm focused on assisting CEOs and Boards on strategy, capital allocation, and value creation initiatives.  Additionally, he has co-authored “The Gorilla Game, Picking Winners in High Technology” and History of Value Investing at CBS in the forthcoming book celebrating Columbia Business School’s 100-year anniversary. He was also a contributing annotator for Howard Mark’s “The Most Important Thing Illuminated.

In a far-reaching exclusive interview with The Manual of Ideas, Professor Johnson generously shared his insights on the wisdom of crowds and market efficiency, improving as an investor, personal case studies, and pitching the perfect investment.

In the except below, Professor Johnson shares how he understands and teaches The Efficient Market Hypothesis:

Market efficiency is a mechanism based on three things:


  1. The number of participants,
  2. Diverse opinions,
  3. Marketplace for aggregation of information…


Market inefficiency is the function of same things – in reverse:


  1. Don’t have enough participants,
  2. Don’t have enough diversity,
  3. Some sort of friction in the system.

In the excerpt that follows, Professor Johnson introduces Pitch the Perfect Investment (scheduled release on January 24, 2017, available now for pre-order on, co-authored with Professor Paul Sonkin, which will combine insights from the disciplines of investing and psychology:

(As an early reader, I highly recommend the new book!)