Same as Ever: A Guide to What Never Changes

by Morgan Housel

Things that never change are important because you can put so much confidence into knowing how they’ll shape the future. Bezos said it’s impossible to imagine a future where Amazon customers don’t want low prices and fast shipping—so he can put enormous investment into those things.

Forecasting events is hard because it’s easy to skip the question “And then what?” Saying “Higher gas prices will cause people to drive less” seems logical. But then what?

We are very good at predicting the future, except for the surprises—which tend to be all that matter.

Nassim Taleb says, “Invest in preparedness, not in prediction.” That gets to the heart of

Two, realize that 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.

Montesquieu wrote 275 years ago, “If you only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.”

Actual circumstances don’t make much difference in all these cases. What generates the emotion is the big gap between expectations and reality. When you think of it like that, you realize how powerful expectations are. They can make a celebrity feel miserable and a destitute family feel amazing. It’s astounding. Everyone, everywhere, doing almost any task, is just in pursuit of some space between expectations and reality.

One day, I realized with all these people I was jealous of, I couldn’t just choose little aspects of their life. I couldn’t say I want his body, I want her money, I want his personality. You have to be that person. Do you want to actually be that person with all of their reactions, their desires, their family, their happiness level, their outlook on life, their self-image? If you’re not willing to do a wholesale, 24/7, 100 percent swap with who that person is, then there is no point in being jealous. Either you want someone else’s life or you don’t. Either is equally powerful. Just know which is which when finding role models.

The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt. —BERTRAND RUSSELL

The core here is that people think they want an accurate view of the future, but what they really crave is certainty.

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?

To suppose that the value of a common stock is determined purely by a corporation’s earnings discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Welles when he told them over the radio that the Martians had landed.

What calm planting the seeds of crazy does is important: It makes us fundamentally underestimate the odds of things going wrong, and the consequences of something going wrong.

After slapping Chris Rock on stage at the Oscars, Will Smith turned to Denzel Washington for advice. Washington said, “At your highest moment, be careful. That’s when the devil comes for you.”

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.

But something interesting happens if you plant a tree in an open field: free from the shade of bigger trees, the sapling gorges on sunlight and grows fast. Fast growth leads to soft, airy wood that never had time to densify. And soft, airy wood is a breeding ground for fungus and disease. “A tree that grows quickly rots quickly and therefore never has a chance to grow old,” forester Peter Wohlleben wrote. Haste makes waste.

An important thing about this topic is that most great things in life—from love to careers to investing—gain their value from two things: patience and scarcity. Patience to let something grow, and scarcity to admire what it grows into. But what are two of the most common tactics when people pursue something great? Trying to make it faster and bigger. It’s always been a problem, and always will be.

The idea of “complex to make, simple to break” is everywhere. Construction requires skilled engineers; demolition requires only a sledgehammer. Even when something doesn’t break easily, the thing that could break it is usually simpler than whatever made

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?”

not going home by Christmas. That’s the balance—planning like a pessimist and dreaming like an optimist. That mix is counterintuitive, but it’s so powerful when done right.

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.

No matter how much information and context you have, nothing is more persuasive than what you desperately want or need to be true. And as Daniel Kahneman once wrote, “It is easier to recognize other people’s mistakes than our own.” 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.

Jim Carrey once said, “I think everybody should get rich and famous and do everything they ever dreamed of so they can see that it’s not the answer.”

This is so vital. In finance, spending less than you make, saving the difference, and being patient is perhaps 90 percent of what you need to know to do well. But what’s taught in college? How to price derivatives and calculate net present value. In health it’s sleep eight hours, move a lot, eat real food, but not too much. But what’s popular? Supplements, hacks, and pills.

The oldest story is that of two sides who don’t agree with each other. The question “Why don’t you agree with me?” can have infinite answers. Sometimes one side is selfish, or stupid, or blind, or uninformed. But usually a better question is, “What have you experienced that I haven’t that makes you believe what you do? And would I think about the world like you do if I experienced what you have?”