More on this book
Community
Kindle Notes & Highlights
Read between
November 7 - December 16, 2023
The wise in all ages have always said the same thing, and the fools, who at all times form the immense majority, have in their way, too, acted alike, and done just the opposite. —Arthur Schopenhauer
The dead outnumber the living . . . fourteen to one, and we ignore the accumulated experience of such a huge majority of mankind at our peril. —Niall Ferguson
Amazon founder Jeff Bezos once said that he’s often asked what’s going to change in the next ten years. “I almost never get the question: ‘What’s not going to change in the next ten years?’ ” he said. “And I submit to you that that second question is actually the more important of the two.”
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 pe...
This highlight has been truncated due to consecutive passage length restrictions.
As financial advisor Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything.”
Daniel Kahneman says, “The idea that what you don’t see might refute everything you believe just doesn’t occur to us.”
Nassim Taleb says, “Invest in preparedness, not in prediction.” That gets to the heart of it.
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.”
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.
Today’s economy is good at generating three things: wealth, the ability to show off wealth, and great envy for other people’s wealth.
Peter Kaufman, CEO of Glenair and one of the smartest people you will ever come across, once wrote: We tend to take every precaution to safeguard our material possessions because we know what they cost. But at the same time we neglect things which are much more precious because they don’t come with price tags attached: The real value of things like our eyesight or relationships or freedom can be hidden to us, because money is not changing hands.
When asked, “You seem extremely happy and content. What’s your secret to living a happy life?” ninety-eight-year-old Charlie Munger replied: 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.
Reversion to the mean is one of the most common stories in history. It’s the main character in economies, markets, countries, companies, careers—everything. 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.
If you have the right answer and you’re a good storyteller, you’ll almost certainly get ahead.
Mark Twain said, “Humor is a way to show you’re smart without bragging.”
Guiding people’s attention to a single point is one of the most powerful life skills.
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.”
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.
Surprise has six common characteristics: • Incomplete information • Uncertainty • Randomness • Chance • Unfortunate timing • Poor incentives
“Everything feels unprecedented when you haven’t engaged with history,” writer Kelly Hayes once wrote.
“A tree that grows quickly rots quickly and therefore never has a chance to grow old,” forester Peter Wohlleben wrote. Haste makes waste.
Robert Greene writes: “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. Patience to let something grow, and scarcity to admire what it grows into.
The same people with the same intelligence have wildly different potential under different circumstances.
“Nothing can become truly resilient when everything goes right,” Shopify founder Toby Lütke said. “The excess energy released from overreaction to setbacks is what innovates!” wrote Nassim Taleb.
During World War II an unnamed U.S. soldier was interviewed by a newspaper. Asked what he was thinking during combat, the soldier replied: “I was hoping to remember to stay afraid because that is the best way to stay alive and not make careless mistakes.”
President Richard Nixon once observed: The unhappiest people of the world are those in the international watering places like the South Coast of France, and Newport, and Palm Springs, and Palm Beach. Going to parties every night. Playing golf every afternoon. Drinking too much. Talking too much. Thinking too little. Retired. No purpose. So while there are those that would totally disagree with this and say “Gee, if I could just be a millionaire! That would be the most wonderful thing.” If I could just not have to work every day, if I could just be out fishing or hunting or playing golf or
...more
Entrepreneur Andrew Wilkinson echoed the same when he said, “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.
Same for careers, social progress, brands, companies, and relationships. Progress always takes time, often too much time to even notice it’s happened.
“The greatest shortcoming of the human race is our inability to understand the exponential function,” physicist Albert Bartlett used to say.
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?”
A big thing to know about how people think is that progress requires optimism and pessimism to coexist. They seem like conflicting mindsets, so it’s more common for people to prefer one or the other. But knowing how to balance the two has always been, and always will be, one of life’s most important skills.
who acknowledge that history is a constant chain of problems and disappointments and setbacks, but who remain optimistic because they know setbacks
Save like a pessimist and invest like an optimist. Plan like a pessimist and dream like an optimist.
An important lesson from history is that the long run is usually pretty good and the short run is usually pretty bad. It takes effort to reconcile those two and learn how to manage them with what seem like conflicting skills. Those who can’t usually end up either bitter pessimists or bankrupt optimists.
Not maximizing your potential is actually the sweet spot in a world where perfecting one skill compromises another.
The irony is that people can get some of their most important work done outside of work, when they’re free to think and ponder. The struggle is that we take time off maybe once a year, without realizing that time to think is a key element of many jobs, and one that a traditional work schedule doesn’t accommodate very well.
Cash is an inefficient drag during bull markets and as valuable as oxygen during bear markets. Leverage is the most efficient way to maximize your balance sheet and the easiest way to lose everything. Concentration is the best way to maximize returns, but diversification is the best way to increase the odds of owning a company capable of delivering returns. On and on.
The more precise you try to be, the less time you have to focus on big-picture rules that are probably more important.
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.”
Jeff Bezos once talked about the realities of loving your job: 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.
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 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.
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.
The only thing harder than gaining a competitive edge is not losing an advantage when you have one.
