This discussion took place live on June 29th, 2026, on the MicroCapClub Community. Join MicroCapClub and unlock the ability to listen and participate live in these discussions - https://microcapclub.com/#join

Clare Flynn Levy is CEO and founder of Essentia Analytics and co-author, with Lee Freeman-Shor, of "Stock Market Maestros." She spent a decade as a fund manager, including running long/short European tech strategies, before founding Essentia to help other managers improve using behavioral data.

In this episode, she explains how Essentia analyzes fund managers' historical trades by building "investment episodes" to measure hit rate and payoff ratio, and how its "nudges" system has been shown to add 160 basis points of alpha per year for clients who use it. She discusses the structural disadvantages professional fund managers face against individual investors, from benchmark mandates to fund inflows and outflows, and breaks down the "repurchase bias," where managers refuse to revisit a stock after losing money on it. She also talks about how AI is changing both her clients' processes and Essentia's own analysis.

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Chapters

00:00 Introduction & Guest Background

01:57 Analyzing Investment Decisions vs. Outcomes

05:00 The Importance of Payoff Ratios over Hit Rates

07:30 Using Behavioral "Nudges" to Improve Performance

12:11 Professional Fund Managers vs. Retail Investors

17:32 The Onboarding and Data Analysis Process

23:06 The Danger of "Averaging Down"

28:15 Assessing Manager Personality and Engagement

31:41 Turning Data into Behavioral Change

35:25 The Most Common Weaknesses in Investing

41:24 Differentiating True Skill from Bull Market Luck

43:46 Overcoming "Repurchase Bias"

48:40 AI's Impact on the Investment Industry

53:29 Building a Culture of Continuous Improvement

58:06 Career Advice for Young Finance Professionals

01:03:51 Conclusion

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Club Conversation with Clare Flynn Levy, Helping Fund Managers Outperform

MicroCapClub

Club Conversation with Clare Flynn Levy, Helping Fund Managers Outperform