I have been a Morgan Housel fan for over a decade. He’s gone onto earn deserved praise for his exceptional writing style that mixes powerful anecdotes with timeless wisdom about investing and life. So, I was excited about reading “Same as Ever.” Here are 7 lessons that resonated:
(1) The world isn’t crazier than it was before. With 8 billion people, crazy things every day are inevitable.
(2) Calm plants the seeds of crazy. If stocks keep going up, the market is going to get too confident. That, then, will lead to a crash.
The world is calmer and safer than ever before – primarily because of the progress we’ve made against deadly diseases thanks to vaccines. But that made us over-confident and thoroughly unprepared for a pandemic. And so on.
Every time this (recession, pandemic, etc.) happens, we will feel the pain of the wound. The wounds will heal but the scars will last.
(3) Slow progress among a barrage of bad news is normal. Bad news is about what happened, good news is invisible because it is about things that didn’t happen. Improvements in heart disease at 1% per year for 70 years saved 25 million Americans. It’d never make the headlines any given year. But, over 7 decades, it is massive.
(4) Plan like a pessimist, dream like an optimist. The key is surviving the short term to make it to the long term.
(5) It’s supposed to be hard.
In 1990, David Letterman asked his friend Jerry Seinfeld how his new sitcom was going. Jerry said there was one frustrating problem: NBC supplied the show with teams of comedy writers, and he didn’t think they were getting much good material from them.
“Wouldn’t it be weirder if they were good?” David asked.
“What do you mean?” Jerry asked.
“Wouldn’t it be strange if they could all just produce reams of hilarious material day after day?”
Recalling the conversation a few years ago, Seinfeld laughed and told Letterman: “It’s supposed to be hard.”
(6) The grass is greener on the other side because it is fertilized by bullshit. You only get the smell when you come close enough. This idea might have been my favorite.
(7) Incentives are the most powerful force in the world.
