Same as Ever: A Guide to What Never Changes

by Morgan Housel

Historian David McCullough once told interviewer Charlie Rose that “if the wind had been in the other direction on the night of August twenty-eighth [1776], I think it would have all been over.” “No United States of America if that had happened?” Rose asked. “I don’t think so,” said McCullough. “Just because of the wind, history was changed?” asked Rose. “Absolutely,” said McCullough.

George Washington and the revolutionary war

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 absurdity of past connections should humble your confidence in predicting future ones.

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

The space suit should have been watertight and buoyant. But since Prather had opened his faceplate, he was now exposed to the elements. Water rushed into his suit. Prather drowned.

Victor prathel 1961 incident

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

risk can never be mastered.

“Invest in preparedness, not in prediction.”

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.

His appendix was ruptured, almost certainly from Whitehead’s punches. And then Harry Houdini died. He was probably the most talented person in history at surviving big risks. Tie him up in chains and throw him into a river? No problem. Bury him alive in sand? No issue, he could escape in seconds—because he had a plan. But a little jab from a student that he didn’t see coming and wasn’t prepared for? That was the biggest risk.

The first rule of happiness is low expectations.

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.

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.

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

Bad news gets more attention than good news because pessimism is seductive and feels more urgent than optimism. • The odds of a bad news story—a fraud, a corruption, a disaster—occurring in your local town at any given moment is low. When you expand your attention nationally, the odds increase. When they expand globally, the odds of something terrible happening in any given moment are 100 percent.

we just see more of the bad stuff that’s always happened than we ever saw before.

Everyone knows the story of the sinking of the Titanic, which claimed fifteen hundred lives. But almost no one ever mentions a word about the 1948 sinking of the Chinese ferryboat SS Kiangya, which claimed nearly four thousand lives. Or the 1987 sinking of the ferryboat MV Dona Paz, which killed 4,345 people. Or the capsizing of the MV Le Joola, which claimed 1,863 lives off the coast of Gambia in 2002. Perhaps the Titanic sticks out because of its story potential: the famous and wealthy passengers, the firsthand accounts from survivors, and, of course, the eventual blockbuster movie.

the best story wins.

Mark Twain said, “Humor is a way to show you’re smart without bragging.”

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.

Stories get diverse people to focus attention on a single point.

Good stories create so much hidden opportunity among things you assume can’t be improved.

Visa founder Dee Hock once said, “New ways of looking at things create much greater innovation than new ways of doing them.”

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?

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

Investor Jim Grant once said: 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.

The first step toward accepting that some things don’t compute is realizing that the reason we have innovation and advancement is because we are fortunate to have people in this world whose minds work differently from ours.

A financial bubble might seem irrational, but the people who work in industries that are in bubbles—mortgage brokers in 2004 or stockbrokers in 1999—make so much money from them that there’s a powerful incentive to keep the music playing.

Minsky’s big idea was that stability is destabilizing.

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.

The irony of good times is that they breed complacency and skepticism of warnings.

“A wet year reduces fires while increasing vegetation growth, but then the increased vegetation dries out in subsequent dry years, thereby increasing the fire fuel,” the National Oceanic and Atmospheric Administration wrote.

2011 book Onward: “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.”

Travis Kalanick, the former CEO of Uber, is a great example. No one but him was capable of growing the company early on, and anyone but him was needed as the company matured.

a good idea sped up too fast quickly becomes a terrible idea.

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.”

Electricity becoming a “willing servant”—introducing washing machines, vacuum cleaners, and refrigerators—freed up hours of household labor in a way that let female workforce participation rise. It’s a trend that lasted more than half a century and is a key driver of both twentieth-century growth and gender equality.

1930s were a turning point for a lot of Americans

How would you react if you saw a news headline that read, “Heart Disease Deaths Decline 1.5% Last Year.” You’d yawn and move on. So that’s what we’ve done. We do it all the time. The most important things come from compounding. But compounding takes awhile, so it’s easy to ignore.

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.”

It’s good to always assume the world will break about once per decade, because historically it has. The breakages feel like low-probability events, so it’s common to think they won’t keep happening. But they do, again and again, because they’re actually just smaller high-probability events compounding off one another.

“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?” Little changes compounded for a long time create extraordinary changes. Same as ever.

The American Dream actually may have gained popularity because things were so dire. You didn’t have to see the American Dream to believe in it—and thank goodness, because in 1931 there was nothing to see. You just had to believe it was possible and then, boom, you felt a little better.

J T Adams book "The epic of America" is where the phrase American dream comes from

setbacks don’t prevent eventual progress.

Not maximizing your potential is actually the sweet spot in a world where perfecting one skill compromises another.

Discuss

The most efficient calendar in the world—one where every minute is packed with productivity—comes at the expense of curious wandering and uninterrupted thinking, which eventually become the biggest contributors to success.