Same as Ever: A Guide to What Never Changes

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Things that have remained the same
people falling for greed and fear just like they do in our current world.
You’d see people persuaded by risk, jealousy, and tribal affiliations in ways that are familiar to you.
You’d see overconfidence and shortsightedness that remind you of people’s behavior today.
You’d find people seeking the secret to a happy life and trying to find certainty when none exists in ways that are entirely relatable.

Things that never change are important because you can put so much confidence into knowing how they’ll shape the future. The same philosophy works in almost all areas of life.

I have no clue what the stock market will do next year (or any year). But I’m very confident about people’s penchant for greed and fear, which never changes. So that’s what I spend my time thinking about.

It’s a wild thing to contemplate, and it leads to the question: What would be true in every imaginable version of your life, not just this one? Those universal truths are obviously the most important things to focus on, because they don’t rely on chance, luck, or accident.

Much of life is in the balance of random events

A big lesson from history is realizing how much of the world hangs by a thread. Some of the biggest and most consequential changes in history happened because of a random, unforeseeable, thoughtless encounter or decision that led to magic or mayhem.

“If you went back in time before your birth you’d be terrified to do anything, because you’d know that even the smallest nudges to the present can have major impacts on the future.”

Every big story could have turned out differently if a few little puffs of nothingness went the other direction.

An irony of studying history is that we often know exactly how a story ends, but we have no idea where it began.
What shaped the mortgage market? Well, you have to understand the thirty-year decline in interest rates that preceded it. 
What caused falling interest rates? Well, you have to understand the inflation of the 1970s. 
What caused that inflation? Well, you have to understand the monetary system of the 1970s and the hangover effects from the Vietnam War. 
What caused the Vietnam War? Well, you have to understand the West’s fear of communism after World War II . . . and so on forever.

Ignoring that family tree can muddy your understanding of events, giving a false impression of why things happened, how long they might last, and under what circumstances they might occur again.

Viewing events in isolation, without an appreciation of their long roots, helps explain everything from why forecasting is hard to why politics is nasty.

People like to say, “To know where we’re going, you have to know where we’ve been.” But more realistic is admitting that if you know where we’ve been, you realize we have no idea where we’re going. Events compound in unfathomable ways.

One is highlighting this book’s premise—to base predictions on how people behave rather than on specific events. Predicting what the world will look like fifty years from now is impossible. But predicting that people will still respond to greed, fear, opportunity, exploitation, risk, uncertainty, tribal affiliations, and social persuasion in the same way is a bet I’d take.

The other thing to keep in mind is to have a wider imagination. No matter what the world looks like today, and what seems obvious today, everything can change tomorrow because of some tiny accident no one’s thinking about. Events, like money, compound. And the central feature of compounding is that it’s never intuitive how big something can grow from a small beginning.

We do a bad job planning for a surprise which happens to be all that matter.

“Risk is what’s left over after you think you’ve thought of everything.”

That’s the real definition of risk—what’s left over after you’ve prepared for the risks you can imagine. Risk is what you don’t see.

The biggest news, the biggest risks, the most consequential events are always what you don’t see coming.

The biggest risk and the most important news story of the next ten years will be something nobody is talking about today.

“Invest in preparedness, not in prediction.”

if you’re only preparing for the risks you can envision, you’ll be unprepared for the risks you can’t see every single time. So, in personal finance, the right amount of savings is when it feels like it’s a little too much. It should feel excessive; it should make you wince a little.

People's happiness (and perceptions!) depends on their expectations more than anything else

The first rule of happiness is low expectations.

Your happiness depends on your expectations more than anything else. So in a world that tends to get better for most people most of the time, an important life skill is getting the goalpost to stop moving. It’s also one of the hardest.

Investor Charlie Munger once noted that the world isn’t driven by greed; it’s driven by envy.

Money buys happiness in the same way drugs bring pleasure: incredible if done right, dangerous if used to mask a weakness, and disastrous when no amount is enough.

Rockefeller never yearned for Advil because he didn’t know it existed. But social media today adds a new element, in which everyone in the world can see the lifestyles—often inflated, faked, and airbrushed—of other people. You compare yourself to your peers through a curated highlight reel of their lives, where positives are embellished and negatives are hidden from view.

Jonathan Haidt says people don’t really communicate on social media so much as they perform for one another. You see the cars other people drive, the homes they live in, the expensive schools they go to. The ability to say, I want that, why don’t I have that? Why does he get it but I don’t? is so much greater now than it was just a few generations ago.

Today’s economy is good at generating three things: wealth, the ability to show off wealth, and great envy for other people’s wealth.

It’s become so much easier in recent decades to look around and say, “I may have more than I used to. But relative to that person over there, I don’t feel like I’m doing that great.”

Same with expectations—they’re easy to ignore because their value isn’t on a price tag.
But your happiness completely relies on expectations. 
Your boss’s impression of your career relies on them. 
Consumer confidence relies on them. 
What moves the stock market relies on them. 
So why do we pay so little attention to them?

The first rule of a happy life is low expectations. If you have unrealistic expectations you’re going to be miserable your whole life. You want to have reasonable expectations and take life’s results, good and bad, as they happen with a certain amount of stoicism.

There are two sides to traits in which we think are singular (The Crazy Genius Theory)

People who think about the world in unique ways you like also think about the world in unique ways you won’t like.

That may perfectly sum up how extremely successful people operate. Of course they have abnormal characteristics. That’s why they’re successful! And there is no world in which we should assume that all those abnormal characteristics are positive, polite, endearing, or appealing.

People love the visionary genius side of Musk, but want it to come without the side that operates in his distorted I-don’t-care-about-your-customs version of reality. But I don’t think those two things can be separated. They’re the risk-reward trade-offs of the same personality trait.

What kind of person makes their way to the top of a successful company, or a big country? Someone who is determined, optimistic, doesn’t take no for an answer, and is relentlessly confident in their own abilities. What kind of person is likely to go overboard, bite off more than they can chew, and discount risks that are blindingly obvious to others? Someone who is determined, optimistic, doesn’t take no for an answer, and is relentlessly confident in their own abilities.

Part of the reason it happens is because the same personality traits that push people to the top also increase the odds of pushing them over the edge.

People don't want accuracy. They want certainty

life is about managing probabilities.

Probability and uncertainty are just so difficult for us to comprehend.

Physicist Freeman Dyson once explained that what’s often attributed to the supernatural, or magic, or miracles, is actually just basic math. In any normal person’s life, miracles should occur at the rate of roughly one per month: The proof of the law is simple. During the time that we are awake and actively engaged in living our lives, roughly for eight hours each day, we see and hear things happening at a rate of one per second. So the total number of events that happen to us is about 30,000 per day, or about a million per month.

When you realize that making people feel better is more appealing than giving people useful figures, you start to see why thinking in probabilities is rare.

The brain of man is programmed with a tendency to quickly remove doubt by reaching some decision.

It often takes too long for a sufficient sample size to play out. So everyone is left guessing.

Distinguishing between unfortunate odds and recklessness is hard when risk has painful consequences. It’s easier to see black and white even when the odds are apparent.

Stories are always more powerful than Statistics

The best story wins. Not the best idea, or the right idea, or the most rational idea. Just whoever tells a story that catches people’s attention and gets them to nod their heads is the one who tends to be rewarded.

People are busy and emotional, and a good story is always more powerful and persuasive than ice-cold statistics.

If you have the right answer and you’re a good storyteller, you’ll almost certainly get ahead. That’s always been true, always will be true, and it shows up in so many areas of history.

Good stories tend to do that. They have extraordinary ability to inspire and evoke positive emotions, bringing insight and attention to topics that people tend to ignore when they’ve previously been presented with nothing but facts.

Mark Twain was perhaps the best storyteller of modern times. When editing his writing, he would read aloud to his wife and kids. When a passage caused them to look bored, he would cut it. When their eyes widened, when they sat forward or furrowed their brow, he knew he was onto something, and he doubled down.

Even within a good story, a powerful phrase or sentence can do most of the work. There is a saying that people don’t remember books; they remember sentences.

We live in a world where people are bored, impatient, emotional, and need complicated things distilled into easy-to-grasp scenes. If you look, I think you’ll find that wherever information is exchanged—wherever there are products, companies, careers, politics, knowledge, education, and culture—the best story wins.

The valuation of every company is simply a number from today multiplied by a story about tomorrow. Some companies are incredibly good at telling stories, and during some eras investors become captivated by the wildest ideas of what the future might bring. If you’re trying to figure out where something is going next, you have to understand more than its technical possibilities. You have to understand the stories everyone tells themselves about those possibilities, because it’s such a big part of the forecasting equation.

A few things about good stories worth remembering:
When a topic is complex, stories are like leverage.
The most persuasive stories are about what you want to believe is true, or are an extension of what you’ve experienced firsthand. Poor evidence can be a very compelling story if that story scratches an itch someone wants to go away, or gives context to a belief they want to be true.
Stories get diverse people to focus attention on a single point. Guiding people’s attention to a single point is one of the most powerful life skills.
Good stories create so much hidden opportunity among things you assume can’t be improved.How many great ideas have already been discovered but could grow one hundred times or more if someone explained them better? How many products have found only a fraction of their potential market because the companies that made them are so bad at describing them to customers?
Some of the most important questions to ask yourself are: Who has the right answer, but I ignore because they’re inarticulate? And what do I believe is true but is actually just good marketing?

The world is driven by forces that cannot be measured.

Attempting to distill emotional and hormonal humans into a math equation is the cause of so much frustration and surprise in the world.

Some of the most important forces in the world—particularly those regarding people’s personalities and mindsets—are nearly impossible to measure and impossible to predict. Jeff Bezos once said, “The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There’s something wrong with the way you are measuring it.”

Every investment price, every market valuation, is just a number from today multiplied by a story about tomorrow. The numbers are easy to measure, easy to track, easy to formulate. It’s getting easier as almost everyone has cheap access to information. But the stories are often bizarre reflections of people’s hopes, dreams, fears, insecurities, and tribal affiliations. And they’re getting more bizarre as social media amplifies the most emotionally appealing views.

The most important variable was the stories people told themselves. And that was the only thing you couldn’t measure and couldn’t predict with foresight. That’s why the results don’t compute. Whenever something like this happens you see people shocked and angry about how the world has become detached from fundamentals.

If you’ve relied on data and logic alone to make sense of the economy, you’d have been confused for a hundred years straight.

“The concept of economic value is easy: whatever someone wants has value, regardless of the reason (if any).” Not utility, not profits—just whether people want it or not, for any reason. So much of what happens in the economy is rooted in emotions, which can, at times, be nearly impossible to make sense of.

The ones who thrive long term are those who understand the real world is a never-ending chain of absurdity, confusion, messy relationships, and imperfect people.

There is a common and recurring cycle between calm and chaos. Stability is Destabilizing

There is a very common life cycle of greed and fear. It goes like this: 
First you assume good news is permanent. 
Then you become oblivious to bad news. 
Then you ignore bad news. 
Then you deny bad news. 
Then you panic at bad news. 
Then you accept bad news. 
Then you assume bad news is permanent. 
Then you become oblivious to good news. 
Then you ignore good news. 
Then you deny good news. 
Then you accept good news. 
Then you assume good news is permanent. 
And we’re back where we began. 
The cycle repeats.

Stability is destabilizing.

Surprise has six common characteristics: • 
Incomplete information
Uncertainty 
Randomness
Chance
Unfortunate timing
Poor incentives

A final word about why things have a tendency of getting out of hand. It’s that optimism and pessimism always have to overshoot what seems reasonable, because the only way to discover the limits of what’s possible is to venture a little way past those limits.

Are stocks overvalued? What is bitcoin worth? How high can Tesla go? You can’t answer those questions with a formula. They’re driven by whatever someone else is willing to pay for them in any given moment—how they feel, what they want to believe, and how persuasive the storytellers are. And the stories change all the time. They can’t be predicted any more than you can predict what kind of mood you’ll be in three years from now.

That’s why markets don’t stay within the limits of sanity, and why they always overdose on pessimism and optimism. They have to. The only way to know we’ve exhausted all potential opportunity from markets—the only way to identify the top—is to push them not only past the point where the numbers stop making sense, but beyond the stories people believe about those numbers.

Growth at a certain point begins to have debilitating downside

“Growth, we now know all too well, is not a strategy. It is a tactic. And when undisciplined growth became a strategy, we lost our way.”

Nassim Taleb says he’s a libertarian at the federal level, a Republican at the state level, a Democrat at the local level, and a socialist at the family level. People handle risk and responsibility in totally different ways when a group scales from 4 people to 100 to 100,000 to 100 million. Same for corporate culture. A management style that works brilliantly at a ten-person company can destroy a thousand-person company, which is a hard lesson to learn when some companies grow that fast in a few short years.

Stress focuses your attention in ways that good times can't

Aconstant truth you see throughout history is that the biggest changes and the most important innovations don’t happen when everyone is happy and things are going well. They tend to occur during, and after, a terrible event. When people are a little panicked, shocked, worried, and when the consequences of not acting quickly are too painful to bear.

Innovation is driven by incentives, which come in many forms.

Stress focuses your attention in ways good times can’t. It kills procrastination and indecision, taking what you need to get done and shoving it so close to your face that you have no choice but to pursue it, right now and to the best of your ability.

When everything is great—when wealth is flush, when the outlook is bright, when responsibility is low, and threats appear gone—you get some of the worst, dumbest, least-productive human behavior.

Because what makes life mean something is purpose. A goal. The battle, the struggle—even if you don’t win it.

Good news comes from compounding, which always takes time, but bad news comes from a loss in confidence or a catastrophic error that can occur in a blink of an eye.

Show me a new technology that was immediately recognized for its full potential and instantly adopted by the masses. It doesn’t exist.

Growth always fights against competition that slows its rise.

The idea of “complex to make, simple to break” is everywhere.

A lot of progress and good news concerns things that didn’t happen, whereas virtually all bad news is about what did occur.

It is so easy to discount how much progress is achievable.

Ordinary things compound into extraordinary things

Most catastrophes come from a series of tiny risks—each of which is easy to ignore—that multiply and compound into something huge.

The time, not the little changes, is what moves the needle. Take minuscule changes and compound them by 3.8 billion years and you get results that are indistinguishable from magic.

“The greatest shortcoming of the human race is our inability to understand the exponential function,”

If you understand the math behind compounding you realize the most important question is not “How can I earn the highest returns?” It’s “What are the best returns I can sustain for the longest period of time?”

Progress requires optimism and pessimism to coexist.

Pessimism is more intellectually seductive than optimism and captures more of our attention. It’s vital for survival, helping us prepare for risks before they arrive. But optimism is equally essential. The belief that things can be, and will be, better even when the evidence is murky is one of the most essential parts of everything from maintaining a sound relationship to making a long-term investment.

The best financial plan is to save like a pessimist and invest like an optimist. That idea—the belief that things will get better mixed with the reality that the path between now and then will be a continuous chain of setback, disappointment, surprise, and shock—shows up all over history, in all areas of life.

An important thing to recognize here is that optimism and pessimism exist on a spectrum. At one end you have the pure optimist. They think everything is great, will always be great, and see all negativity as a character flaw. Part is rooted in ego: they’re so confident in themselves they can’t fathom anything going wrong. At the other end you have the pure pessimists. They think everything is terrible, will always be terrible, and see all positivity as a character flaw. Part is rooted in ego: they have so little confidence in themselves they can’t fathom anything going right. They’re the polar opposite of the pure optimist, and just as detached from reality. Both are equally dangerous, but either can seem the most logical if you view optimism and pessimism as black-and-white, like you need to be one or the other. In the middle is the sweet spot, what I call the rational optimists: those who acknowledge that history is a constant chain of problems and disappointments and setbacks, but who remain optimistic because they know setbacks don’t prevent eventual progress. They sound like hypocrites and flip-floppers, but often they’re just looking further ahead than other people. — The trick in any field—from finance to careers to relationships—is being able to survive the short-run problems so you can stick around long enough to enjoy the long-term growth. Save like a pessimist and invest like an optimist. Plan like a pessimist and dream like an optimist. Those can seem like conflicting skills. And they are. It’s intuitive to think you should either be an optimist or a pessimist. It’s hard to realize there’s a time and a place for both, and that the two can—and should—coexist. But it’s what you see in almost every successful long-term endeavor.

There is a huge advantage to being a little imperfect.

People don’t like to leave opportunities on the table. A common urge is to squeeze out as much efficiency and perfection as you can from whatever you’re pursuing. It feels like the right thing to do, like you’re maximizing your chances of success. But there’s a common downside to perfection that’s so easy to overlook.

Not all jobs require creativity or critical thinking. But those that do function better with time devoted to wandering and being curious, in ways that are removed from scheduled work but actually help tackle your biggest work problems.

Everything worth pursuing comes with a little pain. The trick is not minding that it hurts.

This is one of the most useful life skills—enduring the pain when necessary rather than assuming there’s a hack, or a shortcut, around it.

Hacks are appealing because they look like paths to prizes without the effort. But in the real world, those rarely exist. Charlie Munger once noted: “The safest way to try to get what you want is to try to deserve what you want. It’s such a simple idea. It’s the golden rule. You want to deliver to the world what you would buy if you were on the other end.”

If you can get your work life to where you enjoy half of it, that is amazing. Very few people ever achieve that. Because the truth is, everything comes with overhead. That’s reality. Everything comes with pieces that you don’t like. You can be a Supreme Court justice and there’s still going to be pieces of your job you don’t like. You can be a university professor and you still have to go to committee meetings. Every job comes with pieces you don’t like. And we need to say: That’s part of it.

A simple rule that’s obvious but easy to ignore is that nothing worth pursuing is free. How could it be otherwise? Everything has a price, and the price is usually proportionate to the potential rewards.

But there’s rarely a price tag. And you don’t pay the price with cash. Most things worth pursuing charge their fee in the form of stress, uncertainty, dealing with quirky people, bureaucracy, other peoples’ conflicting incentives, hassle, nonsense, long hours, and constant doubt. That’s the overhead cost of getting ahead. A lot of times that price is worth paying. But you have to realize that it’s a price that must be paid. There are few coupons, and sales are rare.

A unique skill, an underrated skill, is identifying the optimal amount of hassle and nonsense you should put up with to get ahead while getting along.

Once you accept a certain level of inefficiency, you stop denying its existence and have a clearer view of how the world works.

A good rule of thumb for a lot of things is to identify the price and be willing to pay it. The price, for so many things, is putting up with an optimal amount of hassle.

Most competitive advantages eventually die.

Five big things tend to eat away at competitive advantages. One is that being right instills confidence that you can’t be wrong, which is a devastating characteristic in a world where outlier success has a target on its back, with competitors in tow. Size is associated with success, success is associated with hubris, and hubris is the beginning of the end of success. Another is that success tends to lead to growth, usually by design, but a big organization is a different animal than a small one, and strategies that lead to success at one size can be impossible at another. There is a long history of star investment fund managers from one decade underperforming in the next. Some of this is the unraveling of luck. But success also attracts capital, and a big investment fund isn’t as nimble as a small one. The career version of this is the Peter Principle: talented workers will keep getting promoted until they’re in over their head, when they fail. A third is the irony that people often work hard to gain a competitive advantage for the intended purpose of not having to work so hard at some point in the future. Hard work is in pursuit of a goal, and once that goal is met the relaxation that feels so justified removes paranoia. This allows competitors and a changing world to creep in unnoticed. A fourth is that a skill that’s valuable in one era may not extend to the next. You can work as hard and be as paranoid as you’ve always been, but if the world no longer values your skill, it’s a loss. Being a one-trick pony is common, because people and companies that are very good at one specific thing tend to be the highest paid during the boom. The last is that some success is owed to being in the right place at the right time. The reversion to reality that unmasks good luck is often only obvious with hindsight, and is both humbling and tempting not to believe. The idea that advantage has a shelf life is a fundamental part of growth.

One takeaway is that you should never be surprised when something that dominates one era dies off in the next. It’s one of the most common stories in history. Few companies, products, musicians, cities, or authors remain relevant for more than a few decades, tops. The ones that have (the Beatles, Levi’s, Snickers, New York City) are rare exceptions. Another takeaway is to keep running. No competitive advantage is so powerful that it can let you rest on your laurels—and in fact the ones that appear to do so tend to seed their own demise.

Housel, Morgan. Same as Ever: A Guide to What Never Changes (p. 151). Penguin Publishing Group. Kindle Edition.

It always feels like we’re falling behind, and it’s easy to discount the potential of new technology.

There’s a typical path of how people respond to what eventually becomes a world-changing new technology: • I’ve never heard of it. • I’ve heard of it but don’t understand it. • I understand it, but I don’t see how it’s useful. • I see how it could be fun for rich people, but not me. • I use it, but it’s just a toy. • It’s becoming more useful for me. • I use it all the time. • I could not imagine life without it. • Seriously, people lived without it? • It’s too powerful and needs to be regulated.

You can never tell what apparently small discovery will lead to. Somebody discovers something and immediately a host of experimenters and inventors are playing all the variations upon it.

And that’s why all innovation is hard to predict and easy to underestimate. The path from A to Z can be so complex and end up at such a strange point that it’s nearly impossible to look at today’s tools and extrapolate what they might become. Someone somewhere right now is inventing or discovering something that will utterly change the future.

Housel, Morgan. Same as Ever: A Guide to What Never Changes (p. 156). Penguin Publishing Group. Kindle Edition.

One takeaway here is that it’s easy to always feel like we’re falling behind. In most eras it can feel like we haven’t invented anything useful for ten or twenty years. But that’s merely because it can take ten or twenty years for an innovation to become useful. When you realize that progress is made step-by-step, slowly over time, you realize that tiny little innovations that no one thinks much of are the seeds for what has the potential to compound into something great.

The value of every new technology is not just what it can do; it’s what someone else with a totally different skill set and point of view can eventually manipulate it into.

That’s called emergent effects, and they can be wildly powerful. Same with new technology. One boring thing plus one boring thing can equal one world-changing thing in a way that’s hard to fathom if you don’t respect exponential growth.

“The grass is always greener on the side that’s fertilized with bullshit.”

You never know what struggles people are hiding.

You think your pain and your heartbreak are unprecedented in the history of the world, but then you read. It was books that taught me that the things that tormented me most were the very things that connected me with all the people who were alive, or who ever had been alive.

Everyone’s dealing with problems they don’t advertise, at least until you get to know them well. Keep that in mind and you become more forgiving—of yourself and others.

Incentives are the most powerful guiding force in the world

When the incentives are crazy, the behavior is crazy. People can be led to justify and defend nearly anything.

No matter how much information and context you have, nothing is more persuasive than what you desperately want or need to be true.

What makes incentives powerful is not just how they influence other people’s decisions but how blind we can be to how they impact our own.

“People follow incentives, not advice.”

Most people are blind to their own faults. To paraphrase Ben Franklin: Vice knows it’s ugly, so it hides behind a mask.

Incentives can be cultural and tribal, where people support things because they don’t want to upset or become banished from their social group. A lot of people can resist financial incentives; cultural and tribal incentives are more seductive.

It’s just so hard to be purely objective when incentives push you toward one direction.

Three Things on Incentives
When good and honest people can be incentivized into crazy behavior, it’s easy to underestimate the odds of the world going off the rails.
Unsustainable things can last longer than you anticipate.
A good question to ask is, “Which of my current views would change if my incentives were different?”

Nothing is more persuasive than what you’ve experienced firsthand.

Nothing is more persuasive than what you’ve experienced firsthand. You can read and study and have empathy. But you often have no clue what you’re willing to do, what you want, and how far you’re willing to go until you’ve seen something with your own eyes.

The big takeaway here is that we really have no idea what policies we’ll be pushing for in, say, five or ten years. Unexpected hardship makes people do and think things they’d never imagine when things are calm. Your personal views fall into the same trap. In investing, saying “I will be greedy when others are fearful” is easier said than done, because people underestimate how much their views and goals can change when markets break.

Having Long Time Horizons is much easier said than done

Long-term thinking is easier to believe in than to accomplish.

Housel, Morgan. Same as Ever (p. 178). Penguin Publishing Group. Kindle Edition.

Long term is harder than most people imagine, which is why it’s more lucrative than many people assume. Everything worthwhile has a price, and the prices aren’t always obvious. The real price of long term—the skills required, the mentality needed—is easy to minimize and often summarized with simple phrases like “Be more patient,” as if that explains why so many people can’t.

The long run is just a collection of short runs you have to put up with. Saying you have a ten-year time horizon doesn’t exempt you from all the nonsense that happens in the next ten years. Everyone has to experience the recessions, the bear markets, the meltdowns, the surprises, and the memes. So rather than assuming long-term thinkers don’t have to deal with short-term nonsense, ask the question, “How can I endure a never-ending parade of nonsense?”

Your belief in the long run isn’t enough. Your partners, coworkers, spouses, and friends have to sign up for the ride.

A lot of the challenge comes from the gap between what you believe and what you can convince other people of.

Patience is often stubbornness in disguise.

Doing long-term thinking well requires identifying when you’re being patient versus just stubborn.

Long term is less about time horizon and more about flexibility.

“The purpose of the margin of safety is to render the forecast unnecessary.” The more flexibility you have, the less you need to know what happens next.

There are two types of information: permanent and expiring. Permanent information is: “How do people behave when they encounter a risk they hadn’t fathomed?” Expiring information is: “How much profit did Microsoft earn in the second quarter of 2005?” Expiring knowledge catches more attention than it should, for two reasons. One, there’s a lot of it, eager to keep our short attention spans occupied. Two, we chase it down, anxious to squeeze insight out of it before it loses relevance. Permanent information is harder to notice because it’s buried in books rather than blasted in headlines. But its benefit is huge. It’s not just that permanent information never expires, letting you accumulate it. It also compounds over time, leveraging off what you’ve already learned. Expiring information tells you what happened; permanent information tells you why something happened and is likely to happen again. That “why” can translate and interact with stuff you know about other topics, which is where the compounding comes in.

Housel, Morgan. Same as Ever (pp. 182-183). Penguin Publishing Group. Kindle Edition.

Difficulty and Complexity is Alluring Because it Signals a Story

There are no points awarded for difficulty.

Simplicity is the hallmark of truth—we should know better, but complexity continues to have a morbid attraction.

When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles—generally three to twelve of them—that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.

Why Complexity is Appealing
Complexity gives a comforting impression of control, while simplicity is hard to distinguish from cluelessness.
Things you don’t understand create a mystique around people who do.
Length is often the only thing that can signal effort and thoughtfulness.
Simplicity feels like an easy walk. Complexity feels like a mental marathon.

But a truth that applies to almost every field is that there are no points awarded for difficulty. It’s possible to try too hard, to be too attracted to complexity, and doing so can backfire spectacularly.

Different Experiences = Different Thinking. The More Significant, The Stronger it Affects Thinking

An important component of human behavior is that people who’ve had different experiences than you will think differently than you do. They’ll have different goals, outlooks, wishes, and values. So most debates are not actual disagreements; they’re people with different experiences talking over each other.

People tend to have short memories. Most of the time they can forget about bad experiences and fail to heed lessons previously learned. But hard-core stress leaves a scar.

Two things tend to happen after you get hit with something big and unexpected: • 
You assume what just happened will keep happening, but with greater force and consequence. • 
You forecast with great conviction, despite the original event being improbable and something few, if anyone, predicted.

The more impactful the surprise, the more this is true. And, importantly, the more those who didn’t experience that big event will struggle to understand your point of view.

Disagreement has less to do with what people know and more to do with what they’ve experienced. And since experiences will always be different, disagreement will be constant.

Useful Questions

Who has the right answers but I ignore because they’re not articulate? 
Which of my current views would I disagree with if I were born in a different country or generation? 
What do I desperately want to be true so much that I think it’s true when it’s clearly not? 
What is a problem that I think applies only to other countries/industries/careers that will eventually hit me? 
What do I think is true but is actually just good marketing? 
What haven’t I experienced firsthand that leaves me naive about how something works? 
What looks unsustainable but is actually a new trend we haven’t accepted yet? 
Who do I think is smart but is actually full of it? 
Am I prepared to handle risks I can’t even envision? 
Which of my current views would change if my incentives were different? 
What are we ignoring today that will seem shockingly obvious in the future? 
What events very nearly happened that would have fundamentally changed the world I know if they had occurred? 
How much have things outside my control contributed to things I take credit for? 
How do I know if I’m being patient (a skill) or stubborn (a flaw)? 
Who do I look up to that is secretly miserable? 
What hassle am I trying to eliminate that’s actually an unavoidable cost of success? 
What crazy genius that I aspire to emulate is actually just crazy? 
What strong belief do I hold that’s most likely to change? 
What’s always been true? 
What’s the same as ever?

Unstarred

Dunk (exclude from study)

Same as Ever: A Guide to What Never Changes

Review Questions

Todos

Sensemaker