I really enjoyed this book. It’s like sitting down with your grandfather in the sand on a beach and hearing his observations about life. Like a grandfather’s stories though, there are some insights here that seem more anecdotal than generally applicable. The following are the points that I typed up from the book, so I can look back on them later too:
I will also occasionally add points that stand out to me from the author’s Collaborative Fund blog.
Communication and Influence
People think what they want is an accurate view of the future, but what they really crave is certainty.
Great ideas explained poorly can go nowhere, while old or wrong ideas told complelingly can ignite a revolution.
There is too much information in the world for everyone to calmly sift through the data.
People don’t remember books, they remember sentences.
The most persuasive stories are about what you want to believe is true, or are an extension of what you’ve experienced firsthand.
If the story scratches an itch someone wants to go away, or gives context to a belief they want to be true.
Stories get diverse people to focus attention on a single point.
An expert is always from out of town. No man is a prophet in his own country. It is easier to convince people that you are special if they don’t know you well in enough to see all the ways you are not.
An advisor feels useless if they tell the client “we don’t need to do anything here”. In the quest to be helpful they can add complexity even when there isn’t the need for any.
Complexity sells better. It gives the comforting impression of control, while simplicity can be mistaken for cluelessness.
(Un)Happiness
Rockefeller never had penicillin, sunscreen, or Advil. But you can’t say a low-income American with Advil and sunscreen should feel better off than Rockefeller, because that’s not how people’s heads work. People gauge their well-being relative to those around them, and luxuries become necessities in a remarkable short period of time when people around you become better off.
The world isn’t driven by greed, it’s driven by envy ~ Charlie Munger.
There is no such thing as objective wealth - everything is relative, and mostly relative to those around you. It’s the path of least resistance to determining what life owes you and what you should expect.
Between 1942 and 1945, virtually all wages were set by the National War Labor Board, which flavored flatter pay. Inflation adjusted, the median family income was $30,000 in the 1950s. In 2021 it was $70,000. Similarly, median hourly wages are nearly 50% higher today. However the 1950s is recorded as the time of most optimism in America. Because the comparatively lower wages than felt great because everyone else earned a similar lower wage too.
~ Will Smith
Becoming famous is amazing.
Being famoous is a mixed bag
Losing fame is miserable
My only measure of success is how much time you have to kill ~ Nassim Taleb
I realized that of all the people I am jealous of, I can’t pick little aspects of their life. I couldn’t say I want his body, her money, his personality. You have to be that whole person. Do you actually want to be that person with all their reactions, desires, family and happiness level, outlook on life and self-image. If you are not willing to do a wholesale 24x7 100% swap, then there is no point being jealous.
Buzz Aldrin’s fellow astronaut said this about Buzz - “I think he resents not being first on the moon more than he appreciates being second”.
I think everybody should get rich and famous and do everything they ever dreamed of so that they can see that it’s not the answer.
Ask yourself - How much have things outside my control contributed to things I take credit for?
Ask yourself - Who do I look up to that is secretly miserable?
The grass is always greener on the side fertilized with bullshit.
We neglect things which are 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.
Imagine a life where almost everything gets better but you never appreciate it because your expectations rise as fast as your circumstances. It’s terrifying, and almost as bad as a world where nothing gets better.
The first rule of a happy life is low expectations.
Today social media adds a new element today. People don’t really communicate on social media as much as they perform for one another.
When you are keenly aware of your own struggles, but blind to those of others, it is easy to assume that you are missing some skill or secret that others have.
People expect the optimistic outcome by default. A lot of progress and good news concerns things that did NOT happen, whereas virtually all bad news is about what did occur.
Ask yourself - What events very nearly happened that would have fundamentally changed the world I know if they had occurred?
“I believe pretty strongly that one’s overarching aim in life and work is to always be making one’s self obsolete.” – Tim Hanson
Uncategorized
People will always respond to greed, fear, opportunity, exploitation, risk, uncertainity, tribal affiliations, and social persuasion in the same way.
Risk is what you can’t see coming.
Invest in preparedness, not in prediction ~ Nassim Taleb
The purpose of a margin of safety is to render forecasts unnecessary. The larger your margin, the less you need to know what happens next.
The wider the scope of news becomes, the more pessimistic it becomes. (1) Bad news gets more attention; (2) There is a low chance of finding bad news locally, but likely that something bad is happening somewhere in the world.
Growth is not a strategy, it is a tactic.
I’m a libertarian at the federal level, a republican at the state level, a democrat at the local level, and a socialist at the state level ~ Nassim Taleb
The best financial plan is to save like a pessimist and invest like an optimist.
It’s good to be optimistic in the general and skeptical in the specific. It’s very dangerous to be pessimistic in the general and optimistic in the specific. – Naval
The tendency for evolution to create larger species is counterbalanced by the tendency of extinction to kill of larger species. Body size in biology is like levarage in investing. It can accentuate gains, but also amplifies losses.
Psychological factors that can eat away at competitive advantage:
Hubris. Being right instills confidence that you can’t be wrong.
Strategies are different at different stages of growth. What once worked does not always work.
Hard work is in pursuit of a goal. Realizing that goal is met with relaxation that removes paranoia that led to it.
Demand is fleeting. Skills that were once valuable need not always be.
Luck.
Red Queen Hypothesis - You need to keep running to stay in place. Comes from Alice in Wonderland, and is also a theory of evolution.
Fisher’s Fundamental Theory of Natural Selection: Variance equals stregth. The more diverse a population is, the more chances it has to come up with new traits that can be selected for.
Many people can resist financial incentives. But cultural and tribal incentives are more seductive. People don’t want to upset or be banished from their social groups.
Ask yourself - Which of my current views would change if my incentives were different?
There are 2 types of information - Permanent and Expiring. Expiring knowledge catches more attention. Permanent information is harder to notice because it is buried. But it’s benefit is huge and it never expires.Read more books and history and be less distracted by news.
Ignorance is an advantage. Many people are attracted by the thought of rare things and distracted by averages.
Wounds heal, but scars last.
People tend to forget about short-term bad experiences, but hard core stress leaves a scar.
A mind that is stretched by new experience can never go back to its old dimensions.
Instead of asking “Why don’t you agree with me?”, ask “What have you experienced that I haven’t that makes you believe what you do?”
Ask yourself - What haven’t I experienced first hand that leaves me naive about how something works?
Market Dynamics
A 100-year event does not mean that it happens every 100 years. It means that there is about a 1% chance of it occuring in a given year.
Technology Hype cycle:
I’ve never heard of it.
I’ve heard of it, but don’t understand it.
I understand it, but don’t see how it is useful.
I see how it could be fun for rich people, but not me.
I use it, but it’s just a toy.
It’s becoming more useful for me.
I use it all the time.
I could not imagine life without it.
Seriously, people lived without it?
It’s too powerful and needs to be regulated.
KPIs are great, but the danger is assuming that if something (people’s moods, fears, hopes, grudges, goals, triggers, and expectations) can’t be measured it doesn’t matter.
Stability is destabilizing:
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.
It’s good to always assume that the world will break about once a decad. Historically it has.
Evolution reminds us that if you have a big number in the exponent slot (time), you do not extraordinary change to deliver extraordinary results.
Every current event has parents, grandparents, great-grandparents, siblings, and cousins. Ignoring that family tree can muddy your understanding of events, giving a false impression of why things happened, how long they might last, and under what circumstances they might occur again.
It’s better to be approximately right than precisely wrong.
Career
The only way to know where the top is, is to experience the decline. Quit while you are ahead.
Peter principle: Talented workers will keep getting promoted intil they are in over their head, when they will fail.
Most succesful people are just a walking anxiety disorder harnessed for productivity.
Ask yourself - Who has the right answer, but I ignore because they are inarticulate.
The secret to doing good research is being a little underemployed. Most people come back from vacation with new ideas and energy for their work, because if your job requires thinking, it does not stop at 5pm. But we’ve normalized a culture of ‘hustle porn’ where people think being busy all the time is noble.
Not maximizing your potential is actually a sweet spot in a world where perfecting one skill compromises another.
Interesting History
In 1943, FDR effectively capped incomes at the equivalent of $400K/yr, with everything above that taxed at 94%. He was reelected in a landslide the next year.
NASA was created two weeks after the Societs launched Sputnik, and landed on the moon eleven years later.
Militaries are engines of innovation because they occasionally deal with problems so urgent, so vital that money and manpower are removed as obstacles.
Spending on road construction int he US went from 2% of GDP in 1920s to 6% in 1933. Less than 1% today.
Electricity introduced washing machines, vaccum cleaners, and refrigerators which freed up hours of labor in a way that let female workforce participation rise.
A driving factor of knowledge work in the US in 1930s was that more young people stayed in school during the depression since they had nothing to do. These levels of enrollment not seen again for another 30 years.