James O'Shaughnessy

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"People are willing to die to maintain social hierarchy"

Japanese Fighter Pilots story

Closer we are to people, the more we can tie that feedback loop the better we can create a match of what the customer wants.

Allegory of the cave

"The iron law is cost must be less than the price. Here's the real important part as far as I'm concerned. The price has to be less than the value the customer enjoys."

"our memories are unreliable narrators. Mother nature and evolution think that it's doing us a kindness by updating our memories to what we believed now. "

"hard to overcome when you're trying to tie your decision with the eventual outcome. So one of the ways around that is to start journaling about what you're thinking, what you're feeling, record your decisions, record your predictions, and actually assign some probabilities to them so that you can see, get a sense of your confidence versus your competence. All of these things are just very basic best practices, but that decision making researchers like Daniel Kahneman, he'll tell you, just go get a notebook and write down your decisions, and you'll become an incredibly better decision maker, but no one does it. Right?"

we think journaling is one of the best ways to interface with your brain and get all this stuff out of it and make room for the good ideas to proliferate

Energy
Integrity
Aptitude

Was it Darwin who like, if within 30 minutes he didn't... If he found disconfirming evidence of something that he believed, he would write it down right away because otherwise, he knew his brain would figure out a reason to throw it away and never think about it again and not destroy his identity, not destroy his story, not destroy his cherished beliefs

you can think about anything you want to think about. The world can be a brilliant, wonderful place or a dark horrifying place. But once you decide on something, your thinker gets turned off, your prover gets to work. And what does your prover do? Just what you were talking about a moment ago on free energy. Your prover only is going to prove what you believe. And so it's going to ignore all the contrary evidence and the star one, right? The prover was at work and it was doing its job. That's what people need to understand. So what you need to understand is feed your prover some other stuff, it'll prove it. One of the things about really capturing the erroneous belief or the data that shows that you're wrong, I cannot tell you how much that has saved me in my life. I do the same thing whenever I'm wrong. And again, thank you Apple. I have this super computer that I can immediately capture, "Hey, fuckhead, you're wrong about this?"

I think about it is that every decision should be tried to be made with as close to the source capital T truth that exists in reality. At the end of the day, we're probably all kind of like Plato's cave, right? Where the allegory is that we're all chained up in a cave and we're staring at this wall and there's a fire behind us, and there are objects walking past the fire and they cast this shadow up onto the wall. We look at these shadows and we name the shadows and we call them things. But at the end of the day, they're not even really the real things. They're just our interpretations of them. That's like, everything gets filtered in through ourselves. Right?

Exactly. And then repetition, repetition. I would add the other things you want to see in somebody is both persistence and patience, but also action on ideas. If you have the greatest idea in the world and you take no action against it, guess what? You get nothing.

Listen, I value ideas, as you know, extraordinarily highly, but ideas alone? No, I'm sorry. That's emancipatory in my opinion. What you want is knowledge and action. Right? If you don't marry those two, it simply does not matter how good your ideas are. They'll never make it. Other people won't know about them, and so your network will be N equals one. We use that as a joke, right? About our talking about personal experiences. But the network, that's the value right there is in the world we're in now, are you kidding me? You have to shout from the rooftops even a great idea because there'll be so many people who are either too lazy or have a different point of view or don't think things through and like, great, I'm glad because you want those people to be able to compete against in my opinion.

What you can do is incept them. As they're going to sleep at night, you're that little ear worm that is saying two ideas to them that they're going to wake up the next day in line with Lao Tzu's we did it ourselves, and they're going to think that's their idea. What two things you're going to get people to think about or change the behavior of that you think would really, really benefit humanity, society, the world?

On Free Markets
I love both of those. Again, stealing from the author I told you about, he opens his book by saying, "You know, if you look at all of the religions, all of the societies, all of the mass movements in human history that have promised you that things would get better, that you would have a better life, that your children would be safer, that the quality of your food would be higher, all of them," and he said, and "I'm including, them all, Christianity, Islam, Judaism, all of the major religions, only one system has given all of those to people, and that is the free market." He goes, so are there problems? Yes, there are, and we need to address them. And we need to be honest about them. And I think you mentioned many of them.

But this idea that the free market is not the singular best system if you want to advance human society. I'm certainly open to the idea that some knowledge from the future of which I am unaware is going to come up with a different system that operates even better. And you know what, when that happens, I'll be one of the first people to change my mind and say, that new system is great. We got to embrace that.

PART ONE: SUCCESSFUL INVESTING - PHILOSOPHY & PROCESS

Successful investing is simple, but it’s not easy…

There’s no sure thing, and there’s no secret to success
🚨 And there’s a lot we know that just ain’t so 🚨
Humans are designed to be bad investors…

We’re crushed by uncertainty
We’re not disciplined when things are bad
And we’re emotional when our money’s at stake
Worse yet, we remember things that didn’t happen…

We see things that aren’t so, and forecast things we don’t know
We panic, chase phantoms, and get caught up in greed
Successful investing defies human nature…
It combats quirks of the mind 
It adopts external fail-safe measures
And it sticks to a plan 
(The last sustainable advantage is to arbitrage our nature)
Check your ego and search for the truth…
(Truth doesn’t abide a big ego)
Have a beginner’s mind and keep it wide open
Happily accept most of your beliefs are wrong
Recognize how little you actually know and admit it
The smartest of the smart are often the least arrogant
Be brutally honest with yourself…
Know who you are 
See yourself clearly
Actively develop a strong mental attitude…
Don’t concern yourself with what others are saying or doing
Don’t attach self-worth to things people aspire to
Allow yourself to be self-reliant and free of illusions
Have agency and control your own fate
Above all, believe you can do it
Think long-term…
Take the long view on returns 
Do not overweight short-term events
Do not succumb to short-term volatility 
Pay attention to what might happen in ten or twenty years
Unglue yourself from the present…
The future flows from the past, and cycles repeat, with variations
Read original books, journals, news articles, and diaries from other eras
Focus on the ones that ring true 
Study how markets have behaved and what moved people to act, believe, and behave the way they did
Learn, learn, and learn some more…
Read broadly outside of finance
Read more than almost everyone else
Study as much as you can about investing
Seek to understand those you might have an aversion to
Build on what you learn…
Sort out gems of knowledge 
Separate wheat from the chaff
Make a never-ending commitment to gain knowledge
Read, synthesize, abandon ideas that aren't working, try new ones, read some more
Challenge your own beliefs…
Don’t wed yourself to an idea or cling to a treasured belief 
Constantly and ruthlessly challenge each belief, no matter how basic
Guard your brain from noxious ideas living there rent-free
The more certain you sound, the less certain you should be
Discard beliefs that are no longer useful…
Ruthlessly remove bad ideas and advice
Improve your mental maps by deleting misperceptions
Throw away poor filters and replace them with better ones
Ask why a lot (then keep asking why)…
Doing so uncovers a lot of bad beliefs
Continually ask "Why do I believe this?"
Continually ask, “Am I seeing things correctly?" 
People who don’t ask questions don’t get answers
Challenge conventional thought…
Most historical beliefs and commonly accepted “truths” have been wrong
Many of a today’s cherished beliefs are castles built on sand
Don’t accept these default settings
Remove yourself from the dominant thinking of our era 
In other words, don’t follow the crowd…

Be willing to hold uncomfortable opinions
Make your investment portfolio very different than the market 
(Just know this will create far higher career risk that the alternative)
Document your thoughts…
Keep a handwritten journal 
Consistently record decisions and beliefs over time
Write about every worry, frustration, and uncertainty you’re experiencing
Date it, put it away, and review your written observations later
You’ll be surprised how you think after the pressure and emotion have dissipated
And seeing things in your own handwriting makes it difficult to fool yourself
Be dispassionate in your judgment…
Maintain a “we’ll see” disposition 
Never let emotions dictate decisions
You can negate your entire track record by just once emotionally overriding your investment model
Real discipline kicks in when things are going against you, sometimes significantly
Search instead for a methodology that’s…
Simple
Passive
Concrete
Cohesive
Consistent
Systematic
Explainable
Rules-based
To the point
Time-tested
And quantitative
(Don't believe willpower will allow you to overcome your fears and emotions)
Enjoy vivid stories, but ask for proof…
Invest in dull facts 
Apply analytical tests 
Favor reams of statistical data
Look for evidence that odds are in your favor 
Prefer impersonal statistics to descriptive data
Prefer options that have a huge amount of empirical support 
Prefer experimental evidence over received wisdom that sounds good
Don’t chase sugar highs…
Ignore predictions
Don’t watch television news
Don’t pay attention to financial forecasts
Distractions sap your mental and even physical energy
People tend to take recent events and forecast similar returns into the future
Look for rare, favorable, and fortunate circumstances…
Look for potentially unusual and random circumstances
Recognize when a situation not of your own making is conducive to a favorable outcome
Take advantage of the spot Karma places you…
Smart luck involves awareness followed by action
Jump in, act quickly on knowledge, and try things
Even if circumstances are ideal, you still need to take advantage of them
You can be in the right place at the right time and still make the wrong choice
Favorable conditions are meaningless if you don’t fight hard 
Persevere…
Remember, this too shall pass
Persist even after you're knocked down ten times
Continue on in a rigorous, unemotional, and consistent manner
Enjoy and embrace the music while it lasts…
Be a pragmatic optimist 
Even if you're wrong, you'll enjoy life a lot more
Be open, be kind, treat people well, and Karma will get your back

PART TWO: QUOTES ON INVESTING MINDSET AND THE SEARCH FOR TRUTH

Don’t look for the meaning: Look for the use!
-Wittgenstein

They were muddy like unreflecting water. The mud will settle, but it is hard to wait for it. If you can, then you can act. If you follow the Tao without pretension you will never burn yourself out.
-Lao Tzu, Tao Te Ching, Verse 15 (reflecting “ancient times” and the masters of those days being “minutely subtle, mysteriously comprehending, and too profound to be known.”)

The race may not always be to the swift nor the victory to the strong, but that's the way to bet.
-Damon Runyon

O Fortune, like the moon
You are changeable, ever waxing, ever waning;
Hateful life
First oppresses and then soothes as fact takes it;
Poverty and power
It melts the like ice.
-Carl Orff, Carmina Burana

If you’re going to kick authority in the teeth, you might as well use both feet.
-Keith Richards

In the realm of ideas, everything depends on enthusiasm, in the real world, all rests on perseverance.
-Goethe

You are the music while the music lasts.
-T.S. Eliot

You just can’t beat the person who never gives up.
-Attributed to Babe Ruth

Discipline is the bridge between goals and accomplishment.
-Jim Rohn

When, in disgrace with fortune and men’s eyes, I all alone beweep my outcast state, and trouble deaf heaven with my bootless cries, and look upon myself and curse my fate…
-Shakespeare, 29th Sonnet

Many people simply weren’t born with the correct wiring to be so unemotional…The ability and willingness to take risk are not always equal for most investors. Charlie Munger is a one-of-kind. It’s good for investors to remind themselves of this when trying to emulate him. Very few can.
-Ben Carlson, discussing Charlie Munger’s ability to withstand drawdowns

Having, and sticking to a true long term perspective is the closest you can come to possessing an investing super power.
-Clifford Asness

Perception doesn't create reality, it is reality.
-Jed McKenna

We find that a long list of investment biases—e.g., the reluctance to realize losses, performance chasing, and the home bias—are human, in the sense that we are born with them. Genetic factors explain up to 45% of these variation in those biases across individuals. We find no evidence that education is a significant moderator of genetic investment behavior.
-Henrik Cronqvist and Stephan Siegel

If you can’t describe what you are doing as a process, you don’t know what you’re doing.
-W. Edwards Deming

Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude.
-Thomas Jefferson

It’s not what happens to you, but how you react that matters.
-Epictetus

The only thing you control is your mind.
-Napoleon Hill

There is nothing either good or bad, but thinking makes it so.
-Shakespeare

To map out a course of action and follow it to the end requires courage.
-Ralph Waldo Emerson

Success is not final, failure is not fatal: it is the courage to continue that counts.
-Winston Churchill

I can calculate the motions of heavenly bodies but not the madness of men.
-Newton

Wait for the wisest of all counselors, time.
-Pericles

I have no use whatsoever for projections or forecasts. They create an illusion of apparent precision. The more meticulous they are, the more concerned you should be.
-Warren Buffett

Because of the rapid change of the world around us since our birth, we humans are living anachronisms. Our world has changed dramatically in the past 150 years. Human physiology, in contrast, took millions of years to create and has not changed much in 150,000 years. Your body—even if it is in mint condition—is designed for success in the past. It is an antique biological machine that evolved in response to a world that no longer exists. Although we live in a world in which computer processing speed doubles roughly every twenty-four months, human information processing has not expanded substantially over the past 150,000 years. Our physiology is clearly behind the times.
-Philip Zimbardo

There’s someone in my head but it’s not me.
-Pink Floyd

If the sage refuses to be proud then people won’t compete for his attention. Not to value treasures that are hard to come by keeps people from wanting to steal them…You see, if there is nothing to fight for then there is nothing that can break the flow.
-Lao Tzu

Listen, give up trying to be so learned and things will go a lot easier…Between yay and nay how much difference is there? Is there really much difference between being angry and pretending not to be? What others fear I must also fear.
-Lao Tzu

Humans are fear-based creatures. We are primarily emotional and our ruling emotion is fear…and [almost] all fear is fear of the unknown.
-Jed McKenna

My mind is that of a fool—how blank! Vulgar people are clear, I alone am drowsy. Vulgar people are alert, I alone am muddled. And the people, the people are so busy! But I have nothing to bother about. The multitude all have a purpose. I alone am foolish and uncouth. Most people seem to be bright and sharp. And how do I feel? Like a blunted sword.
-Lao Tzu

Human judgment is far more limited than we think. We have a surprisingly restricted capacity to manage or interpret complex information.
David Faust, The Limits of Scientific Reasoning

Fear is the mind-killer. Fear is the little death that brings total obliteration.
Frank Herbert, Dune

The first principle is that you must not fool yourself and you are the easiest person to fool.
-Richard P. Feynman

There is no more miserable human being than one for whom nothing is habitual but indecision.
-William James

Beware of words. The moment you look away, they will take on a life of their own; they will dazzle, mesmerize, terrorize, lead you astray from the reality they represent, lead you to believe they are real.
-Anthony De Mello

Without disasters, the wise could not distinguish themselves.
-Robert Veres

For us, there is only the trying.
-T.S. Eliot

The average man can't prove of most of the things that he chooses to speak of
And still won't research and find out the root of the truth that you seek of
-Nas and Damian Marley, Patience

Everything in the world may be endured except continual prosperity.
-Goethe

The art of being wise is the art of knowing what to overlook.
-William James

Destiny is no matter of chance. It is a matter of choice. It is not a thing to be waited for, it is a thing to be achieved.
-William Jennings Bryan

I know of no more encouraging fact than the unquestionable ability of man to elevate his life by conscious endeavor.
-Henry David Thoreau

Too much of a good thing can be wonderful.
-Mae West

Is the Universe a Computer?... In the study of anything outside human affairs, including the study of complexity, it is only simplicity that can be interesting.
-Steven Weinberg, Nobel Prize–winning physicist

There are old fools.
There are bold fools.
But, there are no old, bold fools.
-Old Wall Street saying

All theory, dear friend, is gray, but the golden tree of life springs ever green.
-Johann Wolfgang von Goethe

All conflict is self-conflict.
-Kapil Gupta

Truth never comes into the world but like a bastard to the ignominy of him that brought its birth.
-Milton

To understand is to know what to do.
-Wittgenstein

With a game, you shouldn’t do anything as vulgar as play it.
-Simon Norton, British mathematician

Mu means “no thing.” Like “Quality” it points outside the process of dualistic discrimination. Mu simply says, “No class; not one, not zero, not yes, not no.” It states that the context of the question is such that a yes or no answer is in error and should not be given.
-Robert Pirsig

Not only may questions remain unanswered; all the right questions may not even have been asked.
-Seth Klarman

The average expert was roughly as accurate as a dart-throwing chimpanzee.
Philip Tetlock, after an academic career analyzing expert predictions

It's more complicated than you realize. I am here because of you and you are here because of me.
-Nasrudin

Every time change is in the offing, you’re going to run into conflict because people hate change. They don’t want change. They want progress without change.
-Anthony De Mello

Never let the truth get in the way of a good story, unless you can’t think of anything better.
-Mark Twain

When the eye is unobstructed, the result is sight. When the ear is unobstructed, the result is hearing. When the mouth is unobstructed, the result is taste. When the mind is unobstructed, the result is truth.
-Anthony De Mello

The world is full of sorrow. The root of sorrow is attachment. The uprooting of sorrow means the uprooting, the dropping of attachments.
-Anthony De Mello

Buddha formulated it beautifully. He said, “Monks and scholars must accept my words not out of respect, but must analyze them, the way a goldsmith analyzes gold: by cutting, scraping, rubbing, melting.”
-Anthony De Mello

Anytime you find yourself on the side of the majority, it’s time to pause and reflect.
-Attributed to Mark Twain

The map is not the territory.
-Korzybski

A great many people think they are thinking when they are merely rearranging their prejudices.
-William James

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