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That’s hardly intuitive, but here again—calm plants the seeds of crazy.
“At your highest moment, be careful. That’s when the devil comes for you.”
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.
the only way to know where the top is, is to experience the decline, which he had no interest in doing. Maybe the show could keep rising, maybe it couldn’t. He was fine not knowing the answer.
We insist on knowing where the top is, and the only way to find it is to keep pushing until we’ve gone too far, when we can look back and say, “Ah, I guess that was the top.”
Is this greed?
The second is realizing the power of enough. Being more like Seinfeld.
A proper state where things work well but break when you try to scale them to a different size or speed. It applies to so many things in life.
A good summary of investing history is that stocks pay a fortune in the long run but seek punitive damages when you demand to be paid sooner.
“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.”
Corporate mergers often fall for the same trap. Growth by acquisition often occurs when management wants faster growth than customers think the business deserves.
People handle risk and responsibility in totally different ways when a group scales from 4 people to 100 to 100,000 to 100 million.
forester Peter Wohlleben wrote. Haste makes waste.
“The greatest impediment to creativity is your impatience, the almost inevitable desire to hurry up the process, express something, and make a splash.”
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.
Then there’s “If I figure this out I might help people and make a lot of money.” That will produce creative sparks.
Is monetary reward neexded for innovation?
The same people with the same intelligence have wildly different potential under different circumstances.
“The excess energy released from overreaction to setbacks is what innovates!” wrote Nassim Taleb.
“Most successful people are just a walking anxiety disorder harnessed for productivity.”
A carefree and stress-free life sounds wonderful only until you recognize the motivation and progress it prevents.
Warren Buffett says it takes twenty years to build a reputation and five minutes to destroy one.
We do it all the time. The most important things come from compounding. But compounding takes awhile, so it’s easy to ignore.
But people don’t remember the world when they were born. They remember the last few months, when progress is always invisible.
Most catastrophes come from a series of tiny risks—each of which is easy to ignore—that multiply and compound into something huge. The opposite is true: Most amazing things happen when something tiny and insignificant compounds into something extraordinary.
Big risks are easy to overlook because they’re just a chain reaction of small events, each of which is easy to shrug off. So people always underestimate the odds of big risks.
But so what? None of those things are a big deal in isolation.
“Eleven separate coincidences and mistakes, most of them minor . . . had to fall precisely into place” for the crash to occur. Lots of tiny mistakes added up to a huge one.
“The greatest shortcoming of the human race is our inability to understand the exponential function,” physicist Albert Bartlett used to say.
A big thing to know about how people think is that progress requires optimism and pessimism to coexist.
The best financial plan is to save like a pessimist and invest like an optimist.
The opposite of depressive realism is “blissfully unaware.” It’s what many of us suffer from. But we don’t actually suffer from it, because it feels great. And the fact that it feels good is the fuel we need
They sound like hypocrites and flip-floppers, but often they’re just looking further ahead than other people.
Plan like a pessimist and dream like an optimist.
“More than I want big returns, I want to be financially unbreakable. And if I’m unbreakable I actually think I’ll get the biggest returns, because I’ll be able to stick around long enough for compounding to work wonders.”
But an overlooked skill that doesn’t get enough attention is the idea that wasting time can be a great thing.
Not looking for immediate gratification
This is the opposite of the concept of “hustle porn,” where people want to look busy at all times because they think it’s noble.
A little inefficiency across the whole supply chain would have been the sweet spot. Room for error is often viewed as a cost, an anchor, an inefficiency. But in the long run it can have some of the highest payoffs imaginable.
There’s an investing quip that it’s better to be approximately right than precisely wrong. But
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.
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.
The only thing harder than gaining a competitive advantage is keeping one.
Someone somewhere right now is inventing or discovering something that will utterly change the future. But you’re probably not going to know about it for years. That’s always how it works.
When you are keenly aware of your own struggles but blind to those of others, it’s easy to assume you’re missing some skill or secret that others have. The more we describe successful people as having superhuman powers, the more everyone else looks at them and says, “I could never do that.”
“People follow incentives, not advice.”
Vice knows it’s ugly, so it hides behind a mask.
It’s just so hard to be purely objective when incentives push you toward one direction.
I’ve wondered why the next generation can’t profit from the generation before, but they never do until they get knocked in the head by experience.
“If you find the right balance between desperation and fear, you can make people do anything.”
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.
Long term is harder than most people imagine, which is why it’s more lucrative than many people assume.
