Same as Ever: A Guide to What Never Changes

by Morgan Housel

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.

As financial advisor Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything.”

The first rule of happiness is low expectations.

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.”

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.

A researcher once ranked the sentiment of news over time and found that media outlets all over the world have become steadily more gloomy over the last sixty years.

Stories are always more powerful than statistics.

Athletic performance isn’t just what you’re physically capable of. It’s what you’re capable of within the context of what your brain is willing to endure for the risk and reward in a given moment.

Economist Per Bylund once noted: “The concept of economic value is easy: whatever someone wants has value, regardless of the reason (if any).”

Minsky’s seminal theory was called the financial instability hypothesis. The idea isn’t heavy on math and formulas. It describes a psychological process that basically goes like this: • When an economy is stable, people get optimistic. • When people get optimistic, they go into debt. • When they go into debt, the economy becomes unstable. Minsky’s big idea was that stability is destabilizing.

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

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.

You cannot compare the incentives of Silicon Valley coders trying to get you to click on ads to Manhattan Project physicists trying to end a war that threatened the country’s existence. You can’t even compare their capabilities.

author Yuval Noah Harari writes: “To enjoy peace, we need almost everyone to make good choices. By contrast, a poor choice by just one side can lead to war.”

Many people strive for efficient lives, where no hour is wasted. But an overlooked skill that doesn’t get enough attention is the idea that wasting time can be a great thing.

if your job is to be creative and think through tough problems, then time spent wandering around a park or aimlessly lounging on a couch might be your most valuable hours. A little inefficiency is wonderful.

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.

But changing your mind is hard because fooling yourself into believing a falsehood is so much easier than admitting a mistake.

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 information tells you what happened; permanent information tells you why something happened and is likely to happen again.

I read newspapers and books every day. I cannot recall one damn thing I read in a newspaper from, say, 2011. But I can tell you in detail about a few great books I read in 2011 and how they changed the way I think. I’ll remember them forever. I’ll keep reading newspapers. But if I read more books I’d probably develop better filters and frameworks that would help me make better sense of the news. The point, then, isn’t that you should read less news and more books. It’s that if you read good books you’ll have an easier time understanding what you should or shouldn’t pay attention to in the news.

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.